A fable for our times…
Tim and Nancy have a fairly typical marriage. Tim keeps the books, and Nancy decides how much to spend. Nancy really, really likes to spend. So much so that in almost every year, she spends more than the couple takes in. Tim gets the job of borrowing money to make up the excess. Nancy tells Tim how much he is allowed to borrow but leaves the details up to him.
Tim is really good at borrowing money. Even though most of the people in the neighborhood think that Tim and Nancy are big bullies who don’t care about the feelings of others, they all want to lend Tim money. Perhaps it is because Tim and Nancy are very well-armed and, compared with other people in the neighborhood, they have the nicest place and their family more or less gets along. Plus, Tim has never failed to pay back their debts (though mostly by borrowing more money).
Every year, part of their large income is supposed to go into a trust fund to pay for their kids’ education. But it didn’t take Nancy very long to figure out something about the money in the trust fund: she could spend it. Their conversation went something like this:
Nancy: We said we’d make this trust fund for the kids, but I really want to spend it now.
Tim: Go ahead, Dear. Whatever you say.
Nancy: OK then. But the kids might get really ticked about not having any money in the trust fund.
Tim: No problem. I can cover it. I always do, don’t I?
Nancy: Oh, so we’ll get some money from your buddies to replace the money in the trust fund. That’s cool.
Tim: Not exactly. I’m thinking more along the lines of writing a little note to the kids saying I’ll give them the money when they ask for it. We’ll put these notes in the trust fund; won’t even take up much space.
Nancy: Hey, but the kids know that you never do anything unless I tell you to, and they don’t trust me anymore. They think I never see a dollar I don’t want to spend. They just don’t understand that I do it all for them. Why can’t they get that?
Tim: Well…they kinda have a point don’t they?
Nancy: Oh, shut up. Just tell me where the money is coming from.
Tim: Well, we’ll do it this way. We’ll get Uncle Mike to hold onto the notes I write, and he’ll be in charge of giving the kids their money when it is time. And here is the kicker: we’ll tell them that you don’t get to stop Mike from giving them their money. He has the notes. We’ll even call the notes bonds. Sounds much more secure.
Nancy: Come on! Mike is a wimp. He does whatever I tell him. The kids won’t believe it. They are not stupid.
Tim: You’d be surprised.
Nancy: Fine. We’ll let Mike hold the money.
Tim: Ummm…Remember there isn’t really any money. You already spent that.
Nancy: Yea, I know, but we gotta get our story straight, don’t we? It’s for the kids.
Tim: Absolutely. They should trust us more.
Nancy: You’re telling me.