A lesson on using other people’s money

Well, maybe it’s not all so bad after all that the Harris County Sports Authority used junk debt to finance construction of Reliant Stadium. Check out what’s going on in St. Louis (H/T Craig Depken):

Eight years ago, as the St. Louis Cardinals aimed to build a new baseball stadium, team owners signed an agreement with the city worth millions of dollars a year in tax breaks.

In exchange, the team agreed to a series of annual perks for the region’s residents – 100,000 free tickets, 486,000 seats for under $12 and $100,000 in donations to recreation for disadvantaged youths.

The Cardinals also agreed to give the city a cut of profits made if any portion of the team was sold.

Then, last year, owners sold a sizeable chunk of the Cardinals – more than 13 percent. Now, a group of anti-public-stadium advocates is alleging that the team owes the city hundreds of thousands of dollars.

And, despite another multimillion-dollar budget gap anticipated for the coming year, the city isn’t checking into it. City officials acknowledge that they have never really kept tabs on the agreement.

.    .     . Several city officials, including Barb Geisman, the former deputy mayor for development, said there was no reason to double-check. They trust the Cardinals.

Which reminds me of what the late Milton Friedman used to say about the dynamics of using other people’s money:

“There are four ways in which you can spend money.”

“You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money.”

“Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.”

“Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!”

“Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get.”

“And that’s government .   .   .”

3 thoughts on “A lesson on using other people’s money

  1. “”And that’s government . . .”
    Government at all levels needs to drastically cut
    corporate welfare. Let these “welfare queens” pay for their own facilities. M. Friedman may be a conservative icon, but his views are honored mainly
    by their breach by so-called conservatives.
    These hypocritical handouts to greedy rich people —
    and yes, that includes you, Mr. McClain, are one reason why we have to have things like red-light cameras, DWI dragnets etc. to make up for the welfare given to fine businesses everywhere.

  2. Clear Think THIS:
    The “rule of law” is a precisely defined law. It is the highest law of mankind, stated below:
    “the suppression of forceful and fraudulent methods of goal seeking”
    “all are treated equally by the law”. This means ALL, including king and judges
    “absolute property rights”
    This in turn is based on the fact that human behavior (the topic of law) is about goal seeking. In the seeking of any goal, there are only three possible methods: force, fraud and honest trade. Any transaction that is not an honest, mutually agreed trade will cause a self-defensive response (conflict) from the victim whose survival has been affected.
    “The Rule of Law” is the glue that keeps all of mankind acting together in common interest, tied together by mutual dependence of trade, on an evolutionary path to excellence. Force and fraud creates conflict and destroys civilizations. Mankind is now on a devolutionary path to extinction because the co-operation once forced by “the rule of law” has been replaced by legitimizing force and fraud for those who incorrectly believe they wield power.
    Rule of Law, Defined: http://www.nazisociopaths.org/modules/article/view.article.php/c1/34
    Darwin PROVED: Survival EQUALS ability to adapt to environment EQUALS ability to choose correctly EQUALS freedom: http://www.nazisociopaths.org/modules/article/view.article.php/36
    Mathematics of Rule (explains current economic stall):
    How to THINK and solve problems:
    Social Contract:
    Justice Defined: We are all free to profit or suffer and learn (adapt to excellence) by facing the consequences of our OWN choices. Injustice is to be forced to suffer the consequences of choices of unaccountable (irresponsible) others..
    “The danger is not that a particular class is unfit to govern. Every class is unfit to govern. The law of liberty tends to abolish the reign of race over race, of faith over faith, of class over class.” ~ Lord Acton
    Bill Ross
    (Electronics Design Engineer)

  3. Tom, it is ironic you use Craig Depken’s blog. I have known him since he was a kid, given he grew up on my street. (He is a good bit younger than I am.) Craig is an excellent economist and I am glad to see that you are using his material.

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