Economics is difficult enough without the head games. Speaking about head games, the old comedy routine of Bud Abbott and Lou Costello gives me an idea:

Lou: Bud, I read in the news how the economy is going down.

Bud: Can’t you ever get anything right? It’s going up.

Lou: But I see here the industrial production index went down for the past four quarters.

Bud: So?

Lou: But they’re shutting down production and laying off workers.

Bud: So what?

Lou: But that means layoffs and outawork people going broke.

Bud: Listen, knucklehead, don’t you understand it yet?

Lou: Is steel production going up or down?

Bud: It doesn’t matter.

Lou: How about food, can we produce enough?

Bud: It doesn’t matter.

Lou: Whadya mean it doesn’t matter? You have to eat, don’t you?

Bud: Certainly.

Lou: Then why doesn’t it matter?

Bud: How many times do I have to explain it to you? The economy is going up because the Gross Domestic Product is going up. If it’s going up, we’re doing well.

Lou: I’m doing good?

Bud: We’re doing well

Lou: Good or well, we’re doing it, right?

Bud: Yes, we’re doing well.

Lou: So we’re in good shape, right?

Bud: Right.

Lou: Okay, okay, but not so fast! I know I’m not doing good.

Bud: No you’re not.

Lou: Then who’s doing good?

Bud: We.

Lou: We’re in good shape.

Bud: That’s right.

Lou: But I’m not doing good.

Bud: That’s right.

Lou: Then who’s the we that’s doing good?

Bud: Us.

Lou: Just a minute! I’m out of a job. My friends are out delivering pizzas for next to nothing, swimming in student-loan and medical debt. So who’s us?

Bud: Get is through your head. Us is the Gross Domestic Product.

Lou: Gross domestic who?

Bud: The sum of everything that everybody ever sells in the economy.

Lou: That’s us?

Bud: Yes.

Lou: Let me get this straight: I’m broke. My friends are broke, out of work and in debt, but mister domestic whatever you call it is fat and happy, so it means we’re fat and happy.

Bud: That’s right. Now you’re catching on.

Lou: Catching on to what? Take that suit you’re wearing, where does it come from?

Bud: China.

Lou: Well, what’s domestic about it?

Bud: I bought it, right? I’m wearing it, right? And where am I standing?

Lou: You’re standing right here.

Bud: And right here ain’t China, is it?

Lou: Right here is the USA.

Bud: There you go. That’s called domestic.

Lou: Wait just a minute! What goes into that suit?

Bud: Textiles.

Lou: And what’s happened to all the textile mills here in domesticland?

Bud: They’re all shut down.

Lou: Okay, so then, where’s the product?

Bud: The same place the domestic went.

Lou: Which is right here?

Bud: Right.

Lou: So again, where’s the product?

Bud: I’m wearing it.

Lou: Okay, then what the heck is going up?

Bud: The gross, dummy.

Lou: This is some sort of trick, right?

Bud: Can’t you ever get anything straight? Every time I explain something to you, it goes in one ear and out the other. Let me explain it again.

Lou: I’m getting a headache.

Bud: Relax! I’m just going to show it to you very slowly and very simply.

Lou: Wait a minute — wait a minute — you’re not going to pull one of your hocus-pocus stunts on me!

Bud: Relax!

Lou: Every time you pull one of your stunts, my cash disappears.

Bud: Relax, will you? This is just an exercise. Now think! You like to play the horses, right?

Lou: Horses, lottery — how else can I make some extra cash?

Bud: Never mind that, Lou. You do bet on the horses, right?

Lou: Bud, if you get a hot tip, whadya supposed to do?

Bud: OK, so what happened to that laptop of yours?

Lou: You know what happened. I had to pawn it to play that hot tip you gave me on that horse that came in seventh, remember?

Bud: That’s exactly my point. How much did you pay for it?

Lou: $200 on sale.

Bud: OK, that’s $200. So then what?

Lou: I got $50 to bet on that dumb horse.

Bud: So now we’re up to $250 of Gross Domestic Product. Where’s the pawn ticket?

Lou: Right here in my pocket.

Bud: Let’s see it. Yes, yes. I see. It’s pretty straight forward. How about I buy it back from you for twenty-five dollars?

Lou: You got twenty-five bucks?

Bud: No.

Lou: So what are you talking about?

Bud: For once, get it through your thick skull. You’re going to lend me $25 to buy the pawn ticket.

Lou: I am?

Bud: That’s right. Now I’ll own the laptop and owe you twenty-five dollars.

Lou: What are you talking about? You don’t have twenty-five bucks, and even if you did, all you have is a pawn ticket. You’d still have to get more money to get it out of hock.

Bud: That just goes to show you. You understand nothing about our economy. I suppose you want your laptop back.

Lou: Of course I do.

Bud: Just as a theoretical exercise, let’s say I sell you back the pawn ticket for forty dollars.

Lou: But I don’t have forty bucks!

Bud: Look, Lou, we’ve been friends for a long time. How about I lend you the $40?

Lou: You’re lending me forty bucks?.

Bud: Yes, I just did.

Lou: How?

Bud: Through our imaginary ledger.

Lou: What?

Bud: All the banks do it.

Lou: They do?

Bud: Sure. They electronically stream it. We can go to a computer and do the same thing right now. So here’s the pawn ticket back. And remember, I owe you twenty five dollars, so that leaves only fifteen that you owe me.

Lou: And I get my laptop back?

Bud: Of course, when you get some more money, and meanwhile, between us, we just added another sixty-five dollars to the Gross Domestic Product. Everybody is doing this every day. That’s what makes that GDP work for us.