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On Finance: Building an Economy Chapter 6
The summer picnic is always a wonderful introduction to summer. This year’s was particularly so. The day was brilliant with a few soft puffy clouds. A cool breeze came off the lake. James made a wonderful BBQ brisket, Patty a vegetable medley, and Mary such a blueberry pie that everyone couldn’t get enough. Must to everyone’s pleasure John cleaned up afterward… which considering what happened with his mystery casserole last year, was probably for the best. Everyone sat happily around the fire as the sun set into the east… which everyone considered a little odd but were much too polite to comment about it, and far too well fed and relaxed to worry.
As they head into the hot months and plan vacations they are all pretty pleased with spring. James has two people looking at the house he built on spec… One is a cousin of John and another is a couple from the next village. Mary installed the new cable months ahead of time, spurred on by John’s offers to start early. That put the higher speed internet access into James' new house which was of great interest the couple looking for houses. Mary had two quotes out for moving the household belongings of Jame’s perspective buyers.
All in all it was a particularly busy spring for everyone and the summer was beginning to look more so. Mary wanted an addition to her house and some new kitchen cabinets. Jame’s was looking forward to getting a large payment for house. John new there would be the work for Mary’s house, plus that for whoever purchased James' house, Patricia for all the moving and the normal incoming items for the winter stockpiling. Mary new a new custom would be coming to town and more income from everyone with the new features she could offer on the new cable.
A quick review of where things were for people:
Mary spent quite a bit on the new cable so her total spring expenses were about $2,000 while she made $640 during the winterending up with $3,640.
Patricia spend nearly $1,100 catching up on things she did without during the winter. She felt able to spend the money because she mad $1,100 as she carefully kept the pile at $2,500.
James didn’t do quite a well keeping the funds even as he put a lot of finishing touches on the new house with less time for items which brought in money. He did manage toe earn $1,000, but spend nearly $2,100 on supplies and transportation. As a result he was down to just $900. He was looking forward to the income from selling the house he built.
John was doing better having worked on everyone items, particularly the early work for Mary. He earned $2,260 and only spent $800 ending up with $1,960. He felt much better than he did at the end of the long winter.
So the total winter income for all the village was $5,000 (compared to $1,740 for the winter). Spending was $5,000 compared to $1,740 for the winter.Again, those number are equal because no one borrowed any money and there is no trading with other villages.
Posted by Paul Gernhardt on Monday, November 24, 2008