Sunday, December 31, 2006

Expense vs. Waste

I just re-read Andrew Tobias' My Vast Fortune. This book isn't nearly as good as his seminal The Only Investment Guide You'll Ever Need (it really is), but it still contains some interesting nuggets. It was the first book that helped me understand that if the US government maintained a budget deficit every year from now until eternity, it did not necessarily mean we'd eventually go bankrupt (as long as the GDP grows at a faster percentage rate than the deficit).

Anywho, the interesting nugget yesterday was Tobias' view on waste. Getting a parking ticket, says he, is not a waste. You're just transferring money from your account to the government's but that money doesn't disappear and the government will spend it on something (probably something wasteful, but that's not his point). So really, you can't feel too bad about a parking ticket. Think of it as a forced donation to charity. Digging for gold, however, is a waste. The world already has all of the gold that it requires for industrial uses, and it's value for other uses depends upon it's scarcity as a precious metal. Digging for gold expends resources (fuel, labor, parts) and reduces the scarcity of the existing gold, hence it is wasteful.

And I guess by that logic, I was incredibly wasteful on Friday when I ate three quarters of a pizza, and subsequently worked out for 45 minutes in a fit of remorse.