Saturday, October 20, 2007

Word for the day: fungible

My latest blog posting at Mises.org(Mises.org):









Word for the day: fungible

Fungible means interchangeable. The word comes into play when (inter alia) earmarked funds end up in a general account. These funds are then free to be used for purposes other than intended.

Example: You would like to go on a vacation but you have unpaid car repair bills. A wealthy uncle hears that you are having financial trouble and sends money to help. However, he would never agree to pay for your vacation –- he’s nice, but not that nice.

Once your uncle’s money is deposited into your checking account, you are free to spend it as you please. You then get to pay off your bills and go on vacation. In essence, you paid your bills (a necessity) while your uncle funded your vacation.

On Wednesday, NPR had a
report on SCHIP and those who would have benefited from it. Sure, SCHIP is gone for now, but like a toothache, it will return with a vengeance at night or over some weekend -- when we least expect it.

Read one likely recipient's story:

Baron and her son live in Southern California, where housing costs are high. Their rent and utilities run $24,000 a year. Barron is the executive director of a nonprofit group, Guitars in the Classroom, and makes $32,000 a year. Between rent and health insurance, "We've now overspent my pretax income and I haven't bought groceries yet," Baron says. "That's why my sofa is 11 years old and I'm driving around a falling-apart van with no automatic wheelchair lift."

Barron isn't complaining. She has savings that will last her another year or two. She's hopeful that her nonprofit will begin to do better, and she has the smarts to check out her options.


Would SCHIP have assisted Baron with her medical expenses, or would it have allowed her to continue chasing her dream: Guitars in the Classroom? You be the judge. I say she should get a day job and pursue her dream after hours. With programs like SCHIP, the taxpayer simply ends up funding Guitars in the Classroom.

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