The Economy Is a Circle — And Someone Keeps Cutting the Line
Why the phrase “other people’s money” misunderstands how an economy actually works.
One of the most repeated lines in modern political rhetoric goes like this: “The trouble with socialism is that sooner or later you run out of other people’s money.” The phrase is attributed to Margaret Thatcher, and it gets repeated whenever someone wants to dismiss public spending as naïve or irresponsible.
The line works because it sounds like common sense. It conjures a picture of the economy as a collection of separate piles of wealth — a productive pile and a dependent pile — and warns that the dependent pile will eventually drain the productive one dry.
But that picture of the economy is wrong. And understanding why it’s wrong turns out to matter quite a lot right now.













