Feeds

Middle-class peeves cost more money than exists

Statistics confirm our worst fears

The Power of One Infographic

A simple thing prompted this inquiry: a recent story by Forbes that we happened upon, in which we encountered the startling news that this year's National Collegiate Athletic Association (NCAA) tournament will cost US businesses billions in lost productivity. The figures come courtesy of consulting outfit Challenger, Gray and Christmas - and Forbes, to its credit, expressed skepticism about them.

This led us to wonder just how much money is lost to enjoyable things that finger-wagging middle-class farts disapprove of, such as smoking, drinking, gambling, overeating, watching sports, and the like. The figures we obtained (about which more below), are staggering.

To get a proper handle on this question, we also calculated the social costs of crime, and the monetary losses to businesses from particular crimes such as computer trespass, insurance fraud, shoplifting, and so on. Finally, we factored in unavoidable, mandatory costs such as federal and state government budgets. We wanted to know just how expensive life really is, and just how badly thoughtless, self-indulgent people are stuffing it up.

It turns out that when we allow for unavoidable costs like crime and taxes, the burden to society of our bad habits and voluntary indulgences pushes the cost of living to a sum that actually exceeds the amount of money in existence. And please note: we have not included the costs of health care for diseases and accidental injuries that are not our fault, or the costs of pensions. No wonder the finger-wagging farts are so worried.

First, the methodology. We felt that it was right to use the statistics as supplied, rather than do our own primary research. After all, we're comparing what's claimed to reality, not reality to reality. And the reality just alluded to comes from the US Federal Reserve, which knows more than anyone about how much money there is. That's what they regulate, after all.

According to the fed's very conservative M-1 metric, there was a total of 1.38 trillion dollars in circulation in January of 2006. But we rejected that measure because it consists of little more than cash, traveler's checks, and checking account balances. (We also rejected the M-3 metric, because it includes barely-liquid assets.)

We decided to go with the fairly generous M-2 metric, which includes M-1, plus savings account balances and mutual fund deposits. This gives us a very reasonable money supply of $6.74 trillion for January 2006 -- basically all the money that we Americans, collectively, have on hand at any given moment.

Now for the unavoidable demands on our money supply: first up, we have a federal budget of $2.2 trillion (and yes, some of it is in circulation, and yes, some of the money supply is left over from paying it, while some will yet be needed to accommodate it. This imprecision is a necessary part of dealing with statistics. The trick to doing statistics like a pro is to press on in spite of any doubts you might have).

The Essential Guide to IT Transformation

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.