What The Toot!

Each dollar(or any unit of money) we spend doesn’t actually contribute only $1 to our economy. Think about it, if you earn $1, and you save say… 20% of that, you end up spending $0.80, meaning, somebody will earn $0.80. He in turn will safe 20% of that, and somebody else will earn $0.64. The process goes on and on and on….

So, to calculate the sum of the money earned by everybody, we get a sum geometric series.

X = a(1-r^n)/(1-r)
Where:
X = sum of money earned
a = initial amount
r = percentage of earning spent
n = number of times the process repeats itself (in this case, n approaches infinity)

So, for the above case, we get X = $5. Which means, your $1 actually contributes about $5 to the economy.

Now, think of corruption. You know how people say “easy come, easy go”. The corruption one gets usually comes easily, which means it goes easily as one tends to spend all of it. So, we get r = 100% (or approaching) = 1

By the above calculation, you’ll see that X = infinity (or approaching)! Think about it, each $1 actually worth something approaching infinity, and that, my friend is how we can contribute to the economy by means of corruption.