George Orwell is Alive in Iowa

“Marketing: Using fraud and deception to sell crud to fools.”
--Frank Van Alstine

An AP news item today begins: “A Powerball ticket sold at a convenience store is worth $200 million, Iowa lottery officials said yesterday.”

But wait. The same news item, one paragraph later: “The prize, if taken in payments over 30 years, would be $140.5 million after taxes, a lottery official said. A lump sum payment would yield a check of $67.1 million after taxes.”

So, the ticket is not worth $200 million now. It is worth $67.1 million, after taxes, now.

For the last 15 years or so, lottery and contest officials have pulled this trick, which allows them to advertise a prize (usually an enticingly tidy round number) much bigger than what is awarded.

I remember discovering this years ago while sitting in my car looking at a contest ticket I had just gotten at McDonalds. It said “Enter and win a million dollars!” On the back the ticket said that the prize was $50,000 a year for 20 years.

I talked back to the ticket. I said, “Wait a minute. Here’s the deal I want. OK, so you don’t really want to part with a million dollars. So, if I enter and win this contest, I’ll pay it back. You give me a million dollars, and I’ll pay you $50,000 a year for 20 years.”

We have all been trained to be elementary actuaries in the service of bringing Orwellian doublespeak into the world. $200 million = $67.1 million. And it’s OK with us. After all, we say to ourselves, “it’s still a hell of a lot of money.”