Like perhaps many of us, I played a lot of “Monopoly” as a kid. For the fat part of my personal bell-shaped curve of board-game playing (perhaps ages 8 to 13 or so), it was my favorite game. Of course, my friends and I thought it was only a game and not a metaphor for real-life adult decision-making we make as individuals, business owners or even governments. Well, it was, it was and it was. Big time.
Playing exactly as the rules stated resulted in long and occasionally boring games. The chief reason for this was inadequate cash flow for all players. Properties, utilities, mortgaging and home construction all cost money. Sometimes they cost a lot of money and one had to make tough but judicious decisions, not unlike a how a family lives within its budget without going into credit card debt. There were no millionaires and usually no paupers, until boredom or the hour prompted deliberate reckless playing just to force a conclusion.
We came to experiment with the rules of Monopoly. This might be like rewriting the tax-code or having Congress pass an entitlement mandate bill, metaphorically speaking. We did not understand or bother thinking about the consequence of our rules alteration, but we catered to our base instincts (which usually meant finding ways to infuse more cash into the game). The most obvious of these, known to many, is the “Free Parking” rule. There was a crispy, goldenrod $500 for whomever landed there, for doing nothing! The state lottery had come to Monopoly.
We came to modify the rules further, again in the interest of wildly accumulating wealth without concern for the consequences. We waived mortgage interest, real estate taxes and the various other niggling rules that generally required some form of Math higher than adding the pips on two dice. These rules were deflationary, and their absence increased income. For everyone, including for the Monopoly holders.
Monopoly came to teach us to be careful what we wished for, and that absolute power corrupts absolutely. Quick rises in earnings made it possible to purchase and construct houses before the conventional rules otherwise would permit because of the game’s intrinsic cash flow limitations. This was the 2000’s real estate bubble, of course.
In time, we were infusing the game with so much capital because we were tinkering with the rules. Cash accumulated beyond the wildest dreams of players accustomed to the conventional rules. Not only did the scads of expensive hotels seem as unsustainable as a pre-hurricane resort, but it placed a real constraint on the money available in the bank. Players would pass Go and be unable to collect $200 because the bank was bankrupt; all of its cash was in play.
So we did exactly what the federal government has done from time to time, when its expenditures greatly exceed its revenues: we printed more. We got some goldenrod and canary paper, cut or tore the sheets into Monopoly bill sized rectangles, and within a few minutes, we had infused our economy with more currency. No muss, no fuss, and not a care in the world for the devaluation of the dollars already in play.
We had cut taxes to the bone (income and luxury tax spaces had other effects), we removed the “Chance” cards (which assessed real estate taxes for street repairs) from the deck, and made other rules customization because PACs and special interests (our own collective greed) trumped all reason and discretion. Any suggestion to renew limits on income growth was met with howls of derision. We thought we were having fun, but what was lost in these rules modifications was any sense of balance, perspective and compromise.
We came to assess a tax on ourselves to re-fund the bank. Recall how each player starts with $1,500? Our tax was simple: everyone pays back to the bank half of all holdings greater than $15,000, $1,000 for each owned hotel and $100 for each owned house. Wealthier players paid back more, kind of like our progressive tax code. No one liked it and the wealthy liked it least of all, but the special tax assessment enabled everyone to keep playing and having fun.
Now from Washington comes stories of plans for tax cuts and corresponding spending increases. I went about trying to find a one-graph, does-it-all illustration of the present tax code and how it works. I found one online. It’s far form perfect, but I must admit that I kind of like the tax code as it is, However, the graphic does not illustrate the effect of loopholes, which would be interesting if complicated. I concluded that it would be far easier to mess it up the existing tax code than to effectuate meaningful improvement.
My Monopoly experience teaches that the money has to come from somewhere, if not from the taxpayers themselves, including the wealthiest among us (with the greatest capability to afford taxes without meaningful quality of life impacts). If we are unwilling to tax ourselves sufficiently to “keep money in the bank” (i.e., allow the Federal government to operate), the government merely will print money from the ream of goldenrod paper in Congress’ playroom closet, which will lessen the buying power of all of our bankrolls.
Now some in the White House or Congress may seek to “pay for” the planned tax cuts with sharp slashes to “entitlement spending” on programs such as welfare, Medicaid and social security. You thought health care reform lacked consensus and resulted in a whole lot of governmental paralysis? You haven’t experienced the collective, desperate stupidity of teenage Monopoly players. It won’t be pretty. I have a better idea.