Sunday Wisdom #1: On spending…

A few weeks I was enjoying listening to Dan Bongino’s Podcast while heading over to the barn to ride. Bongino mentioned a bit of wisdom he wanted to share. It was not his own — it was from renowned economist Milton Friedman. Who said,

“Nobody spends somebody else's money as carefully as he spends his own. Nobody uses somebody else's resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property.”

Bongino then played a clip of Friedman further discussing this concept. I found it to be such a common sense approach to economics, especially when one considers the gross spending our government (both parties) routinely engages in at taxpayer expense.

In his book Free to Choose, Milton Friedman described four ways to spend money.

1. You spend your own money on yourself — you’re pretty careful when doing so and weigh necessity against budget priorities.

2. You spend your own money on someone else — you’re quite thoughtful in your approach.

3. You spend someone else's money on yourself — hmmm…great, their loss/my gain.

4. You spend someone else's money on someone else — this is government spending. The government feels no pain in the spending and spends your money accordingly and often capriciously.

Watch/listen to Friedman speaking in this clip on YouTube — it may be the best 2 minutes you spend today.