What Money Is and How We Spend It

By David Heyman

Dr. Heyman realizes that doctors use jargon to speak with other doctors. When they use jargon to speak with patients, there is a lot of misunderstanding. The same is true for economists who communicate with words that sound like double-speak or gibberish to the uninitiated. The author uses cartoons, where an economist would use a graph. He uses basic vocabulary, and shuns esoteric terms. There are no long lists to memorize. The plot goes behind-the-scenes to show what a family ready to buy a new car feels and experiences.

• Language: English
• Publisher: Xlibris US
• Release date: Jan 26, 2009
• ISBN: 9781450002011

David Heyman

David C. Heyman, M.D., retired after forty-three years in the medical practice of anesthesiology. Renewing his interest in creative writing, he is now pursuing ideas that he recalls from talking with patients, raising four children, and keeping up with current events.His first printed book is Money Grows on Trees! Economics for Teens, in which his main motive was to tell his grandchildren how hard their parents had to work to provide for them. Next, he wrote two eBooks—the first two plays of a series called Neighbors—based on families in rural Pennsylvania during the gas-drilling boom. Recently, he wrote Slip of the Tongue, a dark morality play about a small-town radio talk-show host. Coming soon will be a series of iconoclastic, humorous stories called Ether Frolics.He lives in Montoursville, PA, and enjoys reading and participating in local cultural events. He also plays the piano for challenge and relaxation.

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Copyright © 2009 by David Heyman.

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the copyright owner.

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Contents

Preface

Do You Really Want Your Parents To Buy A New Family Car?

What Money Is

Not Enough Gold

Monetary Policy

How Much Money?

Inflation And Deflation

The Great Depression

Responsible Debt

Fiscal Policy

Who Decides How Much Tax Americans Must Pay

More About Taxes—Ugh!

Buying The Car

Who Was Adam Smith? What Is The Invisible Hand Of The Marketplace?

Conclusion

Brief Answers To Thought Questions

PREFACE

I’m not sure how my teenaged grandchildren learned so much about science, math, social studies, and art. It could be the work of good teachers and good parents. Or I say with some humility, good genes. But my grandchildren haven’t a clue about family finances or economics. They expect too much from their parents. I remember when my own children asked for something ridiculous (expensive). Do you think money grows on trees? That was a fair answer in those days but not in today’s world. The perception of money or wealth varies from one generation to the next and from rural to urban populations. It is not easy to explain wealth and value to children who watch TV shows in which teens live in comfortable homes on treelined streets and who seem to have all the latest electronic gadgets and clothes.

Yet the main thing is this: when they ask questions, they really want to know the answers. And I can’t talk down to them. So this book is for kids who want to know. Contrary to the recent spate of instructional books for dummies, I want to reach the smarties. And when my grandchildren make outrageous requests for things they think their parents should buy for them, I try to explain why they can’t have everything they want. I then outlined the following pages, which I hope will help to explain family finances. Because I believe the economy of families correlates closely with that of our nation, I will discuss terms that apply to both. As far as what you need to know before you read this book—only some basic math and knowledge of percentages are necessary. The material is not supposed to be a course nor an investment guide. It should help kids become more economically literate. It’s information for young smarties.

In some places, after I have defined or explained a concept, I have asked questions intended to provoke thought or discussion. Suggested answers will be found at the end of the text.

David Heyman

DO YOU REALLY WANT YOUR PARENTS TO BUY A NEW FAMILY CAR?

Learning about money might be boring to the McDevitt children, but it will help them spend it wisely when they are older. It’s like learning lifelong lessons about nutrition. Knowing what foods are high in calories and how much fat and carbohydrate they contain will help a person decide what to eat and how to stay healthy. As a rule, children like Ty and Kerry McDevitt don’t give much thought to healthy eating, even when they are developing habits they will keep the rest of their lives. When it comes to money, young people would be happier if they would learn how to spend and save and understand how an economy worked. Just as in nutrition, there are ads for both healthy and unhealthy foods. In economics, people face good and some bad choices. They will hear from sly politicians trying to become popular by twisting economic theories to win votes. And there are biased, uninformed people who want financial support or tax money to support questionable needs. The McDevitt children are about to receive a lesson in family spending. They will discover what their parents can afford and why.

Ty McDevitt is fourteen and listening to Flo Rida and T-Pain singing Low from a tape he just downloaded. He doesn’t feel like doing his algebra homework. He