QUOTE: Warren Buffett On Incentives
Economists will give elevator dissertations on the power of incentives, and the classic book Freakonomics (and its excellent podcast) often go into following the incentive trail to understand a certain behavior/non-behavior. In a recent interview, Warren Buffett gave his his own take on the power of incentives, offering forth this example to emphasize his point:
“I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection.”
Boom. Incentive.
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