Quotes of the day

The high unemployment we are experiencing now is due to low private investment rather than low government spending. By reducing some uncertainty and the threats of exploding debt, the House spending proposal will encourage private investment.--John Taylor

It's rather amazing that so much money can disappear like that, but given the Department of Education spends $60B and the CIA spends $28B on nothing I am aware of, I guess one should never underestimate the ability of a bureaucracy to spend.--Eric Falkenstein

The whole government is a Ponzi scheme.--Bernie Madoff

Today's taxpayers contribute money that is funneled to today's Social Security recipients, and hope that tomorrow's taxpayers will put in enough money to fund their retirements. Something similar is true of government finance in general: Those who buy Treasury securities and municipal bonds do so on the assumption that future taxpayers (and bond investors) will keep pouring in enough money to allow governments to make good on their commitments.--Justin Fox, in 2008

Money will always flow toward opportunity, and there is an abundance of that in America. Commentators today often talk of “great uncertainty.” But think back, for example, to December 6, 1941, October 18, 1987 and September 10, 2001. No matter how serene today may be, tomorrow is always uncertain. Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born. The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential–a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War–remains alive and effective. We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead.--Warren Buffett

Our country’s social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford. ... The fundamental principle of auto racing is that to finish first, you must first finish. That dictum is equally applicable to business and guides our every action at Berkshire. Unquestionably, some people have become very rich through the use of borrowed money. However, that’s also been a way to get very poor. When leverage works, it magnifies your gains. Your spouse thinks you’re clever, and your neighbors get envious. But leverage is addictive. Once having profited from its wonders, very few people retreat to more conservative practices. And as we all learned in third grade – and some relearned in 2008 – any series of positive numbers, however impressive the numbers may be, evaporates when multiplied by a single zero. History tells us that leverage all too often produces zeroes, even when it is employed by very smart people--Warren Buffett

... attending a college with higher SAT scores clearly lowered the wages of women 17-26 years after starting college (in 1976) — a school with a 100-point higher average SAT score reduced earnings by about 6-7%! The two estimates there are significant at ~0.01% level! (The other three, for other periods after starting college, are significant at the 5% level.) One obvious explanation is that women at more elite colleges married richer classmate men, and so felt less need to earn money themselves. Why don’t the study’s authors want us to hear about that?--Robin Hanson

The benefit-cost evaluation of any suggested widespread [medical] screening would depend on the net effect of the factors I discussed. First of all, benefits depend on the size of the gain in treatment from early detection of a disease or other medical problems. This gain has to be adjusted for the probability of finding a serious problem since the lower that probability, the less the expected gain from extensive screening. Costs start with the cost of the methods used to screen, including the value of the time and inconvenience of individuals being screened. The likelihood of various side effects from these methods also must be weighed. The fear engendered by false positives can be important, although that has to be balanced against the peace of mind that comes from getting (true) negative results. Preventive care is often considered the gold standard of good medical practice. It is easy to get both doctors and patients to agree when either the government (i.e., taxpayers) or insurance companies (i.e., others who are insured) pay the vast majority of the costs. A rethinking of this standard is warranted, and such a rethinking would be encouraged if individuals paid a much larger fraction of their out of pocket medical expenses.--Gary Becker

The world is filled up to groaning with untruths. They hook themselves into our flesh and hearts, tugging us in wrong directions, distorting us. We learn hunger for what does not fill, thirst for what does not slake, longing for what brings no comfort. We are taught that none of us is beautiful. We come to feel we do not belong. We come to believe that home is a house, and love a feeling. The world overflows with untruth, and our children are tempted to drink from this arid fountain every day.--Tony Woodlief