[ExI] economic parableRe: Sudden outbreak of democracy baffles US pundits

gts gts_2000 at yahoo.com
Tue Oct 7 22:22:53 UTC 2008

> The wealth that the U.S. recently lost never really existed to begin with 
> except in people's minds. Suppose that there is an economy composed of 
> three people

> Alice, Bob, and Carrol. Alice has the only dollar in the
> economy. Fiscal year 1 passes and Alice being the only one
> with any wealth clutches it tightly. At the end of year 1,
> the GDP of this economy is $1.00 and per capita GDP is
> $0.33. 
> Now in year 2, Alice pays Bob the dollar to fix her
> toaster. Bob then pays Carrol the dollar for a cup of
> coffee. And Carrol pays Alice the dollar for a deep tissue
> massage. At the end of year 2, Alice is still the wealthiest
> of the three but the GDP of the their economy is now $3.00,
> their per capita GDP is $1.00, and there was still ever only
> one dollar in the economy.
> What happened?

What happened? Well...

1) Alice got a fixed toaster, 
2) Bob got a cup of coffee, and 
3) Carroll got a deep tissue massage. 

These events did not happen only "in people's minds". They really happened, and they made people's lives better. 

It was a good year for Alice, Bob and Carroll, just as your economic statistics suggest.


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