I can’t work until the Iowa results are in. So, consider the following dialog:
BOB: (writing checks) Man, this is painful. I have to write two $1,000 debt payments this month. Fortunately, only one is really a burden, since I owe the other one to myself.
STEVE: What do you mean?
BOB: Well, the one debt I owe to a credit card company from my Christmas purchases, so that $1,000 payment is obviously a burden. But the other “debt” is really just money that I moved from my business checking account into my personal checking account last month, when I was worried I might bounce a check. But the danger is over, so I’m moving the money back by paying off the “loan” to myself. So that particular payment isn’t really a burden, since I owe it to myself.
STEVE: Hmm, I thought you understood economics. Whether you are paying the credit card company or your business is irrelevant. You owe both debts to yourself.
BOB: (puts down the pen, closes his laptop, and looks straight at the professor) Steve, what in the heck are you talking about?
STEVE: (gets excited) Think about it. Last month, you bought $1000 worth of presents and charged it, right? If you hadn’t done that, but instead had spent the money out of your other assets, then you would now be $1000 poorer. The real burden was your decision to buy those presents, not to finance them with credit cards.
BOB: (goes cross-eyed) OK…but the reason it was a burden, is that I’m now in the position of having to send $1000 to an outsider. In contrast, the $1000 payment to my business isn’t a burden, because I own the business.
STEVE: (sighs) We’re moving in circles. No, your financing decisions are irrelevant. It’s your lifetime consumption and income that matter.
BOB: Fine, but what I said is still true. Of COURSE it matters if I owe $1000 to a credit card company, versus to my own company. The payment to the credit card is a burden to me.
STEVE: No it isn’t.
BOB: Yes it is.
STEVE: No it isn’t.
BOB: Aggghhh! Steve, you are changing the meaning of English words. If you’re saying it’s not a burden for me to have to pay an outsider some of my money, then what does ‘burden’ mean?
STEVE: I think you could benefit from a lecture on Peano Axioms.
BOB: (dialing furtively)
STEVE: Who are you calling?
BOB: Uh, a pizza.
STEVE: No you’re not, that’s long distance. Who are you calling?
BOB: (sighs) Yoram Bauman.
BOB: I’m going to see if he’ll contribute to my plot to blow up your blog host. Yoram doesn’t strike me as selfish, so I think he will.
STEVE: That’s the most idiotic thing I’ve heard in a while. How would paying to hurt me, be an act of altruism?
BOB: I don’t know, but Yoram will.