Friday, March 23, 2018

The Free Money Mentality

People think the government is going to hand out free money.  Failing that, they think that borrowing money is free money.   How the heck did people get this way?

We had a hurricane hit the island - sort of a glancing blow - that knocked down a few trees and flooded some basements in the historic district.   The Parcheesi club was flooded out.   So much loss!  Several game boards were damaged, and many playing pieces floated away.   But intrepid members cleaned up the game boards and let them dry out in the sun, so they are OK for now.  And one member made new playing pieces in his wood shop.  Good old American self-reliance and know-how!  That's what our country is all about - right?  Well, maybe.

Other members were afraid that the club was "missing out" on free money from Uncle Sugar!  FOMO - Fear of Missing Out is prevalent in our country, and no more prevalent that with regard to free money from the government.  One guy has made a career out of free government money FOMO, selling books that tell you that, well, basically you don't qualify for a lot of this "free money" unless you really need it or are breaking some laws in asking for it.  There ain't no such thing as a free lunch, sadly.  But he'll sell you a book, anyway.

So one of the Parcheesi club members trots off to FEMA and tells them a tale of woe - of damaged Parcheesi and Ouija boards, missing playing pieces and card tables with bent legs.  Of course, not all this damage is due to the storm, but the FEMA person encourages them to add up everything they can think of and apply for government relief!   If you work for FEMA, your job is to hand out money, not to say "No" - so they encourage payouts even when, perhaps, they are not really necessary.

So they concoct a list of broken things and stuff and managed to pad it out to a couple of grand.   The nice man at FEMA suggests they apply for a small business loan to pay for these "repairs" and "damaged equipment."   He explains that the loan will likely not be approved, in which case, they might get a grant from FEMA.

So they apply for the loan - and FEMA accepts the application!   So the conundrum.  Do they take this loan to buy stuff they really don't need, now or in the future, and saddle the Parcheesi club with debt?  Why were they looking for free government money in the first place?  Oh, right.  Everyone else is getting free government money, why not us?

But of course "everyone" isn't getting free government money, and quite frankly, the biggest problem with our government and our society as a whole is this attitude that the government has this bottomless well of money to draw from, that is just handed out willy-nilly.  It's raining nickels - bring a bucket!

The second biggest problem with our society is the idea that borrowing money is the solution to all of life's problems.  The problem with borrowing money is, you have to pay it back with interestIt doesn't solve your problems, it makes them worse.   And in this case, the Parcheesi club had no real problems or real need for money - government, borrowed or otherwise.  Parcheesi boards just are not that expensive.  We just bought a new one.  And we've owned about five.

Fortunately, calmer heads prevailed, particularly when the SBA asked the officers of the Parcheesi club to personally guarantee the note, which is akin to co-signing a loan.   They may be batshit crazy in the Parcheesi club,  but they ain't that batshit crazy.

But, still, crazy enough.  It is decided that they should buy flood insurance, so that if they get flooded out again, they can play insurance lottery and maybe win big.   They are willing to pay $1000 a year for insurance that might pay out a grand or two for damaged Parcheesi boards or lost pieces.   The old "something for nothing" mentality raises its ugly head once again.   And here, it is "free government money" at work as well, as flood insurance is indeed subsidized by the government, so then there's that.

The idea of moving out of the basement of a building with an 8-foot deep basement in a building that is 6 feet above the high-tide level (do the math on that), was soundly voted down, of course!

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