Donald Trump: Making America Economically Literate Again
Thank you for the lesson, Mr. President!
While expressing his displeasure with a New York Times report about his taxes, President Donald Trump inadvertently increased Americans' interest in economic literacy.
The Times story accuses Trump of accumulating at least $413 million from his father's real estate company using tax fraud and evasion. The authors of the report clarify that the dollar amount found in their investigation was adjusted to reflect its 2018 worth.
The adjustment is what Trump chose to criticize this morning:
The Failing New York Times did something I have never seen done before. They used the concept of "time value of money" in doing a very old, boring and often told hit piece on me. Added up, this means that 97% of their stories on me are bad. Never recovered from bad election call!
— Donald J. Trump (@realDonaldTrump) October 3, 2018
Google trends show that searches for "time value of money" leaped mere minutes after the president tweeted.
I'll spare you the Google search: The "time value of money" is not, in fact, a malicious calculation. In fact, it is key when exploring investments. Various factors, including interest rates and opportunity costs, help determine how much money will really be worth in several years. To borrow an example from the Houston Chronicle's Jim Woodruff: If someone were to give you the option of receiving $1,000 now or $1,200 in five years, it is possible that the $1,000 now would be more valuable by the time that $1,200 is scheduled to arrive. If you invested the $1,000 in a bond paying 5 percent, the money will be worth $1,276 in five years.
