Business: Ben's Bad Calculation

Long-range financial forecasts can embarrass anyone—even so savvy a money manager as Benjamin Franklin. Eager to demonstrate that a penny saved is indeed a penny earned, Ben at his death in 1790 left a bit less than $9,000 in trust for 200 years to the cities of Boston and Philadelphia; he directed that it be loaned to "young married artisans" who had finished apprenticeships and were setting up their own businesses. Interest on the loans, he predicted would build up the funds to $18 million by 1990.

No way. The funds were drained in the mid-19th century by defaults among borrowers who...

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