Follow That Dollar! Whenever a news story used to break about political wrongdoing, my college economics professor, Mr. Hanes, would lay a finger alongside his nose and say “follow the money.” It sounded like sage advice but I never could understand how one would do that. Follow the money? How? Where do you start? Only recently did I get around to enlisting Mr. Hanes’ advice. I was watching the presidential debates and the question of inflation reared it’s ugly head. I never completely understood what caused inflation. I just knew it meant too much money was in circulation. “Follow the money.” Mr. Hanes’ voice echoed. I decided to take a frontal lobe approach. I called my private detective friend, Benny the Loop. “What’s up boss?” He asked. “I need you to do some tracking for me. Meet me at Al’s?” “Be there in ten.” Benny said and hung up. I pulled up a stool and bought Benny a beer. When the check came I pulled out a crisp dollar bill and with a marking pen put a big red ‘X’ on it. I explained to Benny that I wanted him to follow the dollar for one week and let me know where it went. Benny scratched his head but agreed. I handed the bartender the buck and went back to my office. Five days later Benny walked in. He was a mess. Realizing the seven days hadn’t passed I raised an eyebrow to invite an explanation. “I did my best boss. It wasn’t easy.” Benny began. “You remember that bartender? Well he took that dollar out of the register within minutes of you leaving. He gave it to a secretary who had come in for lunch. I followed her to a lingerie shop where she used the dollar to purchase some unmentionables and she paid 7% sales tax. So the government got 7¢ back on that transaction. Within the hour the owner of the shop paid the dollar to the guy who washes windows at the mall. I figure that guy is probably in the 18% bracket. So the government got back another 18¢ on that deal.” “Go on Benny.” “It gets worse. The window washer stopped at a service station on the way home. He bought a tank of gas and paid with the dollar. The state got 20¢ and the feds got 18.3¢. Not ten minutes later the dollar was given in change to an elderly gentleman driving a late model Caddy. There was a good lookin’ blond in the car with him. They drove straight to a jewelry shop. The old guy pops for a diamond ring that would choke a horse. The dollar moved again and the jewelry store collected another 7% sales tax plus a luxury tax of 15%. Now the owner of the jewelry store dips in the til at closing time and tucks the dollar (along with some others) in his pocket. He stops by his house for luggage then drives to Decatur where he takes a motel room for the night. They have a 22% bed tax in Decatur. I got out my calculator as Benny talked. Each time the dollar moved I added the amount of tax the government was getting back. By the fourth day that dollar had generated $28.16 in revenues! So what did you do then? He looked sheepishly at the floor. “I did a bad thing.” Benny admitted. “I intercepted the dollar at a liquor store and put it in my wallet. A banker friend told me a dollar could circulate as long as seven years. I didn’t think the taxpayers could afford to have that one moving around anymore.” Benny handed the offending dollar back as I clicked some more numbers into my calculator. “Good Lord Benny! If this dollar had been allowed to continue in circulation for seven years at that rate the government would have gotten it back 17,987 times!” “Where would all those dollars come from boss?” Benny asked. “From the mint Benny. The same place this one came from!” “You mean each of THOSE dollars would circulate 17,987 times and.....is that inflation?” Benny’s voice trailed off in a whimper. "I’m not sure Benny.” I said, holding the bill up to the light. “Got a match?”