Macroeconomics for kids

One of the unanticipated joys of fatherhood is coming up with explanations that are simple but not simplistic.

The 7-year old: "Appa, you know how China makes all the stuff that is in the stores? Why do they keep sending the stuff to America?"

Me: "Well, some of the money we pay at the store goes back to China. That's why they send us the stuff they make."

The 10-year old: "But in China, they have different money.  What will they do with our dollars?"

Just when I was wondering how to explain treasury bonds and China's need to industrialize to the kids, I found out that I didn't have to because the 10-year old had found an acceptable answer  "Oh, yeah. ATMs."

One of these days, I need to talk to them about unexamined assumptions. But today's not the day. Today, I'm glad of my narrow escape.