Governments set up a couple of hacks to counter this effect : taxes, and tax deductions for donations.

There are probably better solutions, and we'll probably be reading about them here :)

Is there a more detailed psychological evaluation of the "spending money is like losing hitpoints" side of things? What bugs us the most? I don't think it's losing money as much as "spending money on something on which other people don't", with the associated mental image of being a sucker. It's some kind of reverse "keeping up with the Joneses", and I wouldn't be surprised if people (including me!) had the same kind of psychological resistance to unusual spendings that would actually benefit to themselves, such as taking a (paying) course in personal finance.