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YourHub.com \\ Franktown \\ Stories \\ Holidays \\ Christmas

The DeadWeight Loss of Christmas

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Contributed by: Francis Miller on 6/11/2006

The other day I was avoiding the Christmas crowds and sought refuge in the Parker Library. Who did I come across but old Joel Waldfogel, that curmudgeon of a Yale professor. You have probably never met Dr. Waldfogel but he is the premier expert on the "Deadweight Loss of Christmas". I sat down with him to review whether anything has changed regarding deadweight loss.

Turns out that most of us still would not pay for our Christmas presents what the giver paid. Most of us would pay about 30% less and most of us would prefer cash.

This is no small matter. Christmas gifts tally up to something under $60 billion dollars. The fact that 30% of it is economic "dead-weight" ( a technical term I hesitate to bore you with) means that somewhere between $15 and $20 billion dollars are flushed down the drain every December.

Even worse money spent on Christmas muliplies as it circulates through the economy and $1 becomes $3 over time. That means about $50 to $60 billion dollars are at stake.

Now, we have been told that most merchants make 70% of their profits at Christmas. What they do the rest of the year is beyond me. We are also told that about 40% of our economy is retailing. So run the numbers.

As I contemplate Joel Waldfogel's idea, I cannot help but shift to government expenditures. Basically government collects money from us and spends it on gifts to us, such as government services, education, and medical ( I call them G.E.M.s). My guess is that if you and I scrutinized those expenditures on gifts of g.e.m's to us, there would be a lot of deadweight loss. Government, continually in an intoxicated "State" (no pun intended) spends freely because it is not their money.

When expenditures, be it Christmas gifts or tax moneys, are detached from reality deadweight loss sets in. Much of it is wasted, but, what the heck, it's Christmas. We gave government a gift with Referendum C and I am sure they value every last penny of it. Personally, I would rather still have the cash. Then I could give people gifts without deadweight loss.

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Showing 1-3 of 3 comments

Submitted By: Jack Meehof

posted on 12/4/2007 @ 6:36:13 PM

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why is this author published?

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Submitted By: Jack Meehof

posted on 12/4/2007 @ 6:35:46 PM

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blah blah blah

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Submitted By: Jack Meehof

posted on 12/4/2007 @ 6:29:58 PM

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offensive to jews and this story is just as bad as with Don Ismus. How does the author sleep at night?

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Showing 1-3 of 3 comments

CONTRIBUTOR INFORMATION

Francis Miller

Parker , CO

Francis Miller has posted 699 stories and 9 comments since joining on 11/17/2005. Francis Miller's average story rating is 4.19.

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