Friedman Explains Spending

Sorry about the poor condition of this video but source is not very good. Still Friedman makes the point about spending money.

According to Milton Friedman, there are only 4 ways to spend money.

1. You spend your own money on yourself. You care the most about how much you spend and what you buy.
2. You spend your own money on someone else. You care about what you spend but you don’t care as much about what you buy.
3. You spend someone else’s money on yourself. You don’t care as much about the money as you do to make sure you buy something nice for yourself.
4. You spend someone else’s money on someone else. You care the least about how much you spend and what you buy.

The forth way to spend money is the least responsible way. You care the least because you don’t have a vested interest in either what you get or what it costs. The fourth method of spending is government entitlement spending. Controlled by people who care really don’t have much of an interest in making sure the moneys is spent wisely.

The first way is the best for everyone. The first way has you actually spending your own money. Milton is trying to say, get more money in people’s hands because they will spend it the wisest.