Over the weekend I stumbled on this great video that explains what’s actually happening in the economy. Then the Treasury Secretary announces his revised plan, which sounds conceptually like the initial TARP money plan. And like Brad DeLong, I happen to feel that this is the best way forward.
I read this article last week on the NY Times website with some amusement. Here’s my question: is money fungible?
These lines are what I’m referring to:
Mr. DiNapoli said in an interview with Mr. White that it was unclear if banks had used taxpayer money for the bonuses, a possibility that strikes corporate governance experts, and indeed many ordinary Americans, as outrageous. “The issue of transparency is a significant one, and there needs to be an accounting about whether there was any taxpayer money used to pay bonuses or to pay for corporate jets or dividends or anything else,” Mr. DiNapoli said in the interview.
If money is fungible (which basically means that any item of the type in question can be substitued for any other), then by definition taxpayer money was used for bonuses. Even if it came from a separate line item in a “budget”, that’s just an artificial boundary.