Socialism; a model, using bar stool economics.

[henryclay]

Maybe some have seen this before.

How Socialism Works in the Real World
by Terry Easton 4/14/2009

David Kamerschen is a professor of Economics at the University of Georgia who has fun teaching economics to new students fresh to the field. Lots of people who teach economics, including yours truly, have used a variation of David's illustration over the years. It never fails to hit the mark -- if not Marx.

Econ 101 or its equivalent is usually a required course for most college students, most of whom groan when they are forced to take a class in the "dismal science". That's because they never were exposed to real-world lessons in economics when they were in grade school. If we begin to teach our children the facts about how things really work when they are 8 instead of 18, we'd get much smarter voters at 18 -- and far less mushy-thinking socialist "progressives".

Bar Stool Economics:

Let's suppose that a group of 10 graduate students regularly go out to a pub for beer, and the tab for the 10 comes to $100 total. If they pay for their bill the way Americans pay for our taxes (based on our so-called "progressive" tax system), the breakout would be like this:

The first 4 people (the poorest) pay nothing. They get to drink for free.
The fifth pays $1
The sixth pays $3
The seventh pays $7
The eighth pays $12
The ninth pays $18
The tenth person (the richest) pays $59.

Being good friends and liberal progressives, that's what they all agree to do. It seems only fair that each person should pay what they can afford to pay, remembering the old adage they learned in school: "from each according to his ability, to each according to his need" (Karl Marx).

Every few days, the 10 good friends would meet up in the pub and would pay up as agreed upon.

Then one day, the proprietor gave them a deal. "Since you are such good customers, from now on", he said, "I'm going to reduce the cost of your tab by $20. You can just pay me $80!"

Everyone wanted to continue to pay their bill just the same way as they had before. So the first four people (the poorest) are unaffected. They continue to get to drink for free.

But what about the remaining 6 people? How should they split up the unexpected $20 savings "windfall" so that everyone would get "his fair share"? They figured that $20 shared by 6 comes out to $3.33 each. But if they simply subtracted that amount from each of the 6 paying friends, then person #5 and person #6 would actually be paid to have their beers since person #5 only paid $1 anyway and person #6 only paid $3!

What to do?

The pub owner came to their rescue. He suggested that each person's bill should be reduced by roughly the same amount, and he used his calculator to work out what that should be:

Persons 1-4 continue to get to drink for free
The fifth person, like the first four, now pays nothing and drinks for free (100% savings!)
The sixth pays just $2 instead of the original $3 (33% savings!)
The seventh pays just $5 instead of the original $7 (28% savings!)
The eighth pays just $9 instead of the original $12 (25% savings!)
The ninth pays just $15 instead of the original $18 (17% savings!)
The tenth pays just $49 instead of the original $59 (16% savings!)

All 6 friends were better off then before. And their first four buddies continued to drink for free, because they didn't have a lot of money.

They all felt pretty good about it.

After they thanked the pub owner and left to walk back to campus, they began to compare their savings under this new deal.

The sixth person was very quiet, though. Finally he blurted out. "You know, splitting up the bill that way wasn't fair! I only got a dollar out of that $20 we all saved, and yet (he pointed to the tenth person) he got $10!"

"Hey, you're right", shouted the seventh person. "I got cheated too. I only saved 2 dollars. It's unfair that he got back 5 times more than me!"

"Damn it! I've been ripped off too", yelled the eighth. "Why should he get back $10 when I got back only $3. The wealthy get all the breaks!"

"Wait a minute", screamed friends one through four. "We didn't get anything at all! The system exploits the poor!"

The first nine people surrounded the tenth person and beat him up.

The next day, tempers had cooled down and the nine friends showed back up at the pub. They were sorry for what they had done and they wanted to apologize to their tenth friend.

But the tenth person didn't show up for drinks. So the nine proceeded to drink without him.

When it came time to pay the tab, they discovered that they had a problem. They didn't have enough money among all nine of them to pay for even half of the bill!

"And that, boys and girls, journalists and college professors, is how our tax system works", says Professor Kamershen. "The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier."

President Obama and the Democratically-controlled congress, good wannabe socialists all, should remember this lessen before all of the rich people (mostly Democrats, by the way, but that's the topic of another article) stop going to the pub with all their other good friends. Raising taxes using a "progressive" tax system penalizes the productive, wealthiest members of our society much more than the average taxpayer. And I'm against that even though it would hurt the many Democrat billionaires far more.

And once we tip over the edge where 50% of the population don't pay income tax at all (the first five "good friends"), we create an us-and-them mentality where the first five vote in the politicians they want to continue to get their beers for free.

But there's no such thing as a free lunch. Someone always pays. Until they can't or don't anymore.

John Galt couldn't have said it plainer.

[Mkitty is pro kitty]

notmsnmoney.proboards.com/index.cgi?action=display&board=politics&thread=7673&page=1

[henryclay]

Oops, didn't see it. Maybe the mods will lock this one, or something.

But first, you had a post on that thread that never was answered, , , except it was already answered in the opening post.

How could they divide the $20 windfall so that everyone would get his fair share?

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

And that is pretty much what we have in America today. Every time there is a jump in inflation the people who pay no taxes always get more of the pie. But not the working people. They pay more taxes because of inflation, and it's the bottom tier that gets the benefit. They weren't paying before, the government was paying, , , , and the government just pays them more each time the inflation numbers go up.

[Deleted]

But Henry, the liberals stand on this issue is that the rich will go on paying more than their fair share & then as taxes go up (on them) they will kick in even more than that. You see the rich are a bottomless pit full of money that you can keep taking an endless supply of money from. Not only that, but as their capital is drawn down they will find even more ways to make more money to support their poor comrades (either that or new rich people will step forward to take up the slack).

The liberals have a 2 part plan. 1. Increase the number of social program & the number of people eligible for them. 2. Get the rich to pay for all of it. You see, they have it all worked out so your example just must be wrong.

[jkapp]

I've stated that for years: if someone pays a large portion of taxes then of of course they will get bigger tax breaks. That's how a progressive, tiered system works for christ's sake! If all the tiers drop by one percent, then only those that hit all tiers will get the full tax cut - the others will only get the tax cut for the tiers they hit.

This is the tax system liberal progressives wanted yet they complain about it as being unfair!!! Unbelievably insane!!

[Mad Dawg Wiccan]

Credit goes to Artemis for this:

New Federal Golf Rules

Since these new golf rules will be in effect in May of 2011, please share with fellow golfers.

President BHO has recently appointed a Golf Czar and major rule changes in the game of golf will become effective in April 2011. This is only a preview as the complete rule book (expect 2000 pages) is being rewritten as we speak. Here are a few of the changes.

Golfers with handicaps:
- below 10 will have their green fees increased by 35%.
- between 11 and 18 will see no increase in green fees.
- above 18 will get a $20 check each time they play.


The term "gimmie" will be changed to "entitlement" and will be used as follows:
- handicaps below 10, no entitlements.
- handicaps from 11 to 17, entitlements for putter length putts.
- handicaps above 18, if your ball is on green, no need to putt, just pick it up.

These entitlements are intended to bring about fairness and, most importantly, equality in scoring. In addition, a Player will be limited to a maximum of one birdie or six pars in any given 18-hole round. Any excess must be given to those fellow players who have not yet scored a birdie or par. Only after all players have received a birdie or par from the player actually making the birdie or par, can that player begin to count his pars and birdies again. The current USGA handicap system will be used for the above purposes, but the term "net score" will be available only for scoring those players with handicaps of 18 and above.

This is intended to "re-distribute" the success of winning by making sure that in every competition, the above 18 handicap players will post only "net score" against every other player's gross score. These new Rules are intended to CHANGE the game of golf.

Golf must be about Fairness. It should have nothing to do with ability, hard work, practice,, and responsibility. This is the "Right thing to do."

[henryclay]

I must be missing the stories by the liberals that counteract and nullify the ones about conservatism. Maybe someone will post at least one.

Anyway, here is conservatism in a nutshell. . . but they're "ALL" in a nutshell, so this is just "another" nutshell:

A young woman was about to finish her first year of college. Like so many others her age, she considered herself to be very liberal.

One day she was challenging her father on his opposition to higher taxes on the rich and the need for more government programs.

The self-professed objectivity proclaimed by her professors had to be the truth and she indicated so to her father. He responded by asking how she was doing in school.

She answered proudly that she had a 4.0 GPA, and let him know that it was tough to maintain, that she was taking a difficult course load and was constantly studying, which left her no time to enjoy the good life like other people she knew. She didn’t even have time for a boyfriend because she spent all her time studying.

Her father listened and then asked , “How is your friend Audrey doing?’ She replied, ‘ Audrey is barely getting by. All she takes are easy classes, she never studies, and she barely has a 2.0 GPA. College for her is a blast, and lots of times she doesn’t even show up for classes because she’s too hung over.”

Her wise father asked his daughter, “Why don’t you go to the Dean’s office and ask him to deduct 1.0 off your GPA and give it to your friend who only has a 2.0. That way you will both have a 3.0 GPA, and certainly that would be a fair and equal distribution of GPA.”

The daughter was shocked by the suggestion, and angrily fired back, “That’s a crazy idea, how would that be fair! I’ve worked myself to death for my grades! I’ve invested time and hard work! Audrey has done next to nothing but piddle her time away. She played while I busted my backside! I won't do it, father, and I sure don't understand your attitude!”

The father smiled, put his arm around her shoulder and said gently, “Welcome to the world of conservatism.”

[billisonboard]

May 21, 2011 15:55:43 GMT -5 henryclay said:

I must be missing the stories by the liberals that counteract and nullify the ones about conservatism. Maybe someone will post at least one.

...

She answered proudly that she had a 4.0 GPA, and let him know that it was tough to maintain, that she was taking a difficult course load and was constantly studying, which left her no time to enjoy the good life like other people she knew. She didn’t even have time for a boyfriend because she spent all her time studying.

Her father listened and then asked , “How is your friend Audrey doing?’ She replied, ‘ Audrey is barely getting by. All she takes are easy classes, she never studies, and she barely has a 2.0 GPA. College for her is a blast, and lots of times she doesn’t even show up for classes because she’s too hung over.”

Her wise father asked his daughter, “Why don’t you go to the Dean’s office and ask him to deduct 1.0 off your GPA and give it to your friend who only has a 2.0. That way you will both have a 3.0 GPA, and certainly that would be a fair and equal distribution of GPA.”

The daughter was shocked by the suggestion, and angrily fired back, “That’s a crazy idea, how would that be fair! I’ve worked myself to death for my grades! I’ve invested time and hard work! Audrey has done next to nothing but piddle her time away. She played while I busted my backside! I won't do it, father, and I sure don't understand your attitude!”

The father smiled, put his arm around her shoulder and said gently, “Welcome to the world of conservatism.”

[/blockquote][/quote]

From each according to his ability, to each according to his need

Obviously the daughter had the ability to apply herself seriously to her studies while her friend did not. Her friend had the ability to relax and skate by while the daughter had a compulsion to excell. Obviously the daughter had a need to earn high marks while her friend did not. Her friend had the need to party while the daughter did not. ;D

[Mkitty is pro kitty]

Every time there is a jump in inflation the people who pay no taxes always get more of the pie.

Except wages for the bottom have been pretty flat, and the top have been giving themselves double digit percentage increases. Of course, anything to do with wage fairness scares Conservatives off in a hurry, and your silence on that topic is deafening.

The liberals have a 2 part plan.

oldtext has a 2 part plan. 1. Make shit up about liberals 2. Cry and piss and moan about how he's the victim and people call him names, "everyday" even.

That was before I started hanging out on these boards & being called a baby killer every day.

notmsnmoney.proboards.com/index.cgi?action=display&board=politics&thread=8522&page=1

Not that I'm expecting it, but if you'd like to prove your accusation, now would be a good time. Otherwise, I'll put it in the giant backlog of Conservative lies to be filed.

So, which one of you are winning that "secret" Conservative hypocrisy contest? It's a tough call.

I must be missing the stories by the liberals that counteract and nullify the ones about conservatism.

You can keep your stories that have no basis in reality, and we'll just keep using facts. Once you Conservatives do that, "welcome to the world of reality!" (sorry I have to story to go with that).

if someone pays a large portion of taxes then of of course they will get bigger tax breaks. That's how a progressive, tiered system works for christ's sake!

No, the idea of a progressive tax isn't so those that are supposed pay more get a bunch of tax breaks and actually pay less, that's a regressive tax system. And regressive "thinking" goes well with Conservatives in more ways than one.

This is the tax system liberal progressives wanted yet they complain about it as being unfair!!! Unbelievably insane!!

Not nearly as insane as laughing at imaginary people.

[hello fromWarsaw]

Maybe the rich pubs who don't want to pay their fair share, but do want to pollute and screw their workers, ought to leave if they don't like it. Selfish bastids anyway. SEE YA!!
And that professor is a bought off moron, like most rw academics...must've been hired by the Koch bros...

[Deleted]

oldtext has a 2 part plan. 1. Make shit up about liberals 2. Cry and piss and moan about how he's the victim and people call him names, "everyday" even.

Actually Mkitty I'm doing pretty well under our present form of government. I'm in the middle so I don't get taxed to bad, yet make enough that I'm very comfortable. The problem is that retires don't do that great under socialism (but then no one does except the people at the top) & so I of course don't look forward to it.

Oh & what part is made up??? Start new social programs (Obamacare) & get the rich to pay for it (no way can you say that isn't true after all the comments on these boards about taxing the rich)? That is EXACTLY the liberals agenda.

[Deleted]

Maybe the rich pubs who don't want to pay their fair share, but do want to pollute and screw their workers, ought to leave if they don't like it.

I'm betting that they will leave & they will take their money with them. As a matter of fact I just saw a show about people from the U.S. buying houses in Mexico for a quarter of a million.