Bryan Caplan  

Stringham's A Winner... Again

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My Bizarre Monetary Theory, Co... 10,005% Nominal GDP Growth...

Two years ago, my co-author Ed Stringham and I won a First Prize in the Templeton Enterprise awards, all thanks to Ed's initiative.  Now another lucky co-author has Stringham to thank for a big prize:

Trinity College Associate Professor of American Business and Economic Enterprise Edward Stringham, and his student Gavin Romm, a senior economics major from Rye Brook, NY, submitted the winning Generational Theft Contest entry to PJTV. Based on their default assumption calculations, the $10 trillion 2008-2009 bailout alone will cost the average 22-year-old a total of $148,035 or $280 per month until they are 79. In March 2009, PJTV launched the Generational Theft Contest on its website at www.PJTV.com and invited college students to join forces with their professors to calculate the financial impact of the current economic environment on a 2009 college graduate. In particular, PJTV sought the best method or tool to forecast a bachelor's degree holder's annual income in 2014, 2019, 2024 and 2034 after factoring in the cost of current government programs, including TARP and TALF, and stimulus packages, including their associated interest payments, health-care reform, inflation, taxes, etc. "I had been concerned with all of the government bailouts, so PJTV's challenge for college students and their professors to calculate the cost of all of the government's deficit spending intrigued me," Stringham said from his Hartford, CT office. "After we put together all of the formulas and did the actual calculations, I was shocked to see how much these bailout programs are going to cost the average young person."
Congrats to Ed and Gavin!


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COMMENTS (6 to date)
RL writes:

Is it just my browser, or does everyone see the boxed text above as stretching into the right-adjacent column of "Most Recent Entries" so that it becomes unreadable?

Daublin writes:

That can't be right. $148,035 is a house. Does that mean younger Americans basically buy the equivalent of a second home in order to finance this bailout?

I know the federal budget is growing dramatically, but a house for one bailout? Can anyone clarify?

Arnold Kling writes:

RL,
Fixed. thanks

Charley Hooper writes:

I shared this with my seventeen-year-old son and he's livid. He's also laughing because he thinks this is so ridiculous. "And this is just one thing governments do," he said.

Jeremy, Alabama writes:

I find it a great relief that we should rescue my retirement prospects by transferring it from your 17-year old's entire working life. He will hardly notice the $280 a month, because we have already obligated $2800 a month from his pocket.

I'm glad that our Constitution allows this, because without some very satisfactory Commerce Clause scholarship, this would not be possible.

My next project is to terminate some medically-expensive 80 year olds, and seize their assets with a death tax. My reading of the Constitution is that this too is legalistic.

tjames writes:

But of course, today's 22 year old will not bear the burden of this bailout, at least not right away, as our government continues to fund our current consumption with borrowing. This game of musical chairs will end at some point, and most people are betting, either explicitly or implicitly, it won't be them left without a chair when the music stops.

If the existing citizenry had been told they would need to begin making $280 monthly payments today, essentially for the rest of their lives, in order to fund these bailouts + stimulus packages, or else no bailout or stimulus, I have no doubt in my mind there would have been no bailouts or stimulus whatsoever.

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