T Nation

US Economics Simplified: 'Barstool Economics'

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, thats what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. Since you are all such good customers, he said, Im going to reduce the cost of your daily beer by $20. Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? 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 everybodys share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each mans bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

I only got a dollar out of the $20,declared the sixth man. He pointed to the tenth man, but he got $10!

Yeah, thats right, exclaimed the fifth man. I only saved a dollar, too. Its unfair that he got ten times more than I!

That?s true!! shouted the seventh man. Why should he get $10 back when I got only two? The wealthy get all the breaks!

Wait a minute,yelled the first four men in unison. We didnt get anything at all. The system exploits the poor!

The nine men surrounded the tenth and beat him up.

The next night the tenth man didnt show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didnt have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. 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.

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.

Wait, if that is the American economy, where is the Chinese guy that lends them the money to consume Chinese beer?

[quote]orion wrote:
Wait, if that is the American economy, where is the Chinese guy that lends them the money to consume Chinese beer?[/quote]

Great point!!! thank you for that.

[quote]JASE72 wrote:
orion wrote:
Wait, if that is the American economy, where is the Chinese guy that lends them the money to consume Chinese beer?

Great point!!! thank you for that.[/quote]

That is a great point. And it’s also worth mentioned that a 22 ounce beer in China costs 25 cents! So why bother drinking in America in the first place.

Ahh fond memories of getting drunk in Beijing at dumpling shacks for a dollar…

Really simplified version ‘weightroom economics’:

You work hard 5 days a week to pack on lbs of muscle in order to achieve your ideal physique, and be satisfied when you look in the mirror.

Then, Obama gets elected.

Suddenly, you have to give away 1-2lbs of muscle a month to the rest of the skinny gym goers who just want “hawt abz,” because it would be unfair for you to have all of the muscle, and some people to not have as much or any muscle.

Who would continue to work hard 5 days a week in this situation?

[quote]oneforship wrote:
Really simplified version ‘weightroom economics’:

You work hard 5 days a week to pack on lbs of muscle in order to achieve your ideal physique, and be satisfied when you look in the mirror.

Then, Obama gets elected.

Suddenly, you have to give away 1-2lbs of muscle a month to the rest of the skinny gym goers who just want “hawt abz,” because it would be unfair for you to have all of the muscle, and some people to not have as much or any muscle.

Who would continue to work hard 5 days a week in this situation?[/quote]

But again the analogy falls flat because it offers no explanation as to how the muscle was ever achieved in the first place. China has agreed to lend us some steroids which will help us in the short term but ultimately we will be lost when our dealer decides to quit lending it to us…and even worse since we don’t really know about training we will not keep the short term gains provided to us by the steroids.

[quote]LIFTICVSMAXIMVS wrote:
But again the analogy falls flat because it offers no explanation as to how the muscle was ever achieved in the first place. China has agreed to lend us some steroids which will help us in the short term but ultimately we will be lost when our dealer decides to quit lending it to us…and even worse since we don’t really know about training we will not keep the short term gains provided to us by the steroids. [/quote]

I think the short term gains are already gone…

[quote]JASE72 wrote:
The nine men surrounded the tenth and beat him up.[/quote]

If this site is anything to go by, there are a lot (A LOT) of poor people who will defend and even die for the rich guy.

That’s a very neat trick, for the few rich guys, to manage to convince the extremely larger poor majority to support their side.

Many CEOs aren’t yet earning 500 times what their average employee earns. What can we do to help?

[quote]pookie wrote:
JASE72 wrote:
The nine men surrounded the tenth and beat him up.

If this site is anything to go by, there are a lot (A LOT) of poor people who will defend and even die for the rich guy.

That’s a very neat trick, for the few rich guys, to manage to convince the extremely larger poor majority to support their side.

Many CEOs aren’t yet earning 500 times what their average employee earns. What can we do to help?
[/quote]

Poor people don’t create jobs. Rich people do.

[quote]pookie wrote:
JASE72 wrote:
The nine men surrounded the tenth and beat him up.

If this site is anything to go by, there are a lot (A LOT) of poor people who will defend and even die for the rich guy.

That’s a very neat trick, for the few rich guys, to manage to convince the extremely larger poor majority to support their side.

Many CEOs aren’t yet earning 500 times what their average employee earns. What can we do to help?
[/quote]

According to this site, there are a lot (A LOT) of poor people who think that the money the rich guy is making should be theirs, and have no problem supporting a presidential candidate who will help them even things out.

The poor want to be rich without working for it. What can we do to help?

[quote]orion wrote:
Wait, if that is the American economy, where is the Chinese guy that lends them the money to consume Chinese beer?[/quote]

And then some dipshit comes in, orders a beer, and wants to pay for it in gold. He promptly gets the shit kicked out him and his gold stolen.

Pretty shitty analogy but if the Chinese are invited, we might as well include the gold standard freaks.

All the madness!

In the last week or 2 i’ve had conversations with a few people that adamantly believe that it is right to take more from the rich simply because they are rich. I try to explain how fundamentaly wrong that is in so many ways but they dont seem to want to get that. The reasons i hear are, “im not rich, so why should i care if they take from the rich if its going to benefit me?”

My answer to them is, this country is based on equal rights, so how is it right to take more from the rich simply because they are? Dont they have the same right to do with their money whatever they want? They made sacrifices in their lives & worked hard for what they have earned so why the double standard?

The next line of questions is, “Your not a millionaire so why do you care so much?” RIGHT IS RIGHT FOR EVERYONE & what if you become a millionaire, will your views change? FUCK YEAH THEY WILL!!

[quote]JASE72 wrote:
In the last week or 2 i’ve had conversations with a few people that adamantly believe that it is right to take more from the rich simply because they are rich. I try to explain how fundamentaly wrong that is in so many ways but they dont seem to want to get that. The reasons i hear are, “im not rich, so why should i care if they take from the rich if its going to benefit me?”

My answer to them is, this country is based on equal rights, so how is it right to take more from the rich simply because they are? Dont they have the same right to do with their money whatever they want? They made sacrifices in their lives & worked hard for what they have earned so why the double standard?

The next line of questions is, “Your not a millionaire so why do you care so much?” RIGHT IS RIGHT FOR EVERYONE & what if you become a millionaire, will your views change? FUCK YEAH THEY WILL!!

[/quote]

Right on Make more Take more = Wrong and Un-American.
Shit was started to get us out of the depression by hoover then roosavelt took the top tax bracket to almost 80%

[quote]rainjack wrote:
pookie wrote:
JASE72 wrote:
The nine men surrounded the tenth and beat him up.

If this site is anything to go by, there are a lot (A LOT) of poor people who will defend and even die for the rich guy.

That’s a very neat trick, for the few rich guys, to manage to convince the extremely larger poor majority to support their side.

Many CEOs aren’t yet earning 500 times what their average employee earns. What can we do to help?

According to this site, there are a lot (A LOT) of poor people who think that the money the rich guy is making should be theirs, and have no problem supporting a presidential candidate who will help them even things out.

The poor want to be rich without working for it. What can we do to help?[/quote]

Average real wages are actually lower than they were in the early '70s, which is really missing from this debate. Simply put, the rising tide of the U.S. economy has not lifted all boats, as it did in the 1950s, leaving many hard working lower income people(you seem to assume all lower income people are lazy) disgruntled and frustrated.

[quote]abcd1234 wrote:
rainjack wrote:
pookie wrote:
JASE72 wrote:
The nine men surrounded the tenth and beat him up.

If this site is anything to go by, there are a lot (A LOT) of poor people who will defend and even die for the rich guy.

That’s a very neat trick, for the few rich guys, to manage to convince the extremely larger poor majority to support their side.

Many CEOs aren’t yet earning 500 times what their average employee earns. What can we do to help?

According to this site, there are a lot (A LOT) of poor people who think that the money the rich guy is making should be theirs, and have no problem supporting a presidential candidate who will help them even things out.

The poor want to be rich without working for it. What can we do to help?

Average real wages are actually lower than they were in the early '70s, which is really missing from this debate. Simply put, the rising tide of the U.S. economy has not lifted all boats, as it did in the 1950s, leaving many hard working lower income people(you seem to assume all lower income people are lazy) disgruntled and frustrated.
[/quote]

Poor people who choose to remain poor ARE at best not motivated enough by their situation to do better. At worst - yes, they are extremely lazy.

I know. I was extremely poor.

I don’t give a fuck about “average real wages”. I was working 65 hours a week for $4.58/hour - no overtime, as well as my 1 day off per week to support a wife and a son.

The Whiner’s Support Group does not meet here. Go find someone to cry to that hasn’t been there and decided to leave.

[quote]rainjack wrote:
abcd1234 wrote:
rainjack wrote:
pookie wrote:
JASE72 wrote:
The nine men surrounded the tenth and beat him up.

If this site is anything to go by, there are a lot (A LOT) of poor people who will defend and even die for the rich guy.

That’s a very neat trick, for the few rich guys, to manage to convince the extremely larger poor majority to support their side.

Many CEOs aren’t yet earning 500 times what their average employee earns. What can we do to help?

According to this site, there are a lot (A LOT) of poor people who think that the money the rich guy is making should be theirs, and have no problem supporting a presidential candidate who will help them even things out.

The poor want to be rich without working for it. What can we do to help?

Average real wages are actually lower than they were in the early '70s, which is really missing from this debate. Simply put, the rising tide of the U.S. economy has not lifted all boats, as it did in the 1950s, leaving many hard working lower income people(you seem to assume all lower income people are lazy) disgruntled and frustrated.

Poor people who choose to remain poor ARE at best not motivated enough by their situation to do better. At worst - yes, they are extremely lazy.

I know. I was extremely poor.

I don’t give a fuck about “average real wages”. I was working 65 hours a week for $4.58/hour - no overtime, as well as my 1 day off per week to support a wife and a son.

The Whiner’s Support Group does not meet here. Go find someone to cry to that hasn’t been there and decided to leave.

[/quote]

Perhaps you should take a lesson from the “Civility in debating” thread. I’m not here to personally attack anyone. I was citing facts based on economic data, not making any normative statements.

[quote]rainjack wrote:
Poor people who choose to remain poor ARE at best not motivated enough by their situation to do better. At worst - yes, they are extremely lazy.

I know. I was extremely poor.

I don’t give a fuck about “average real wages”. I was working 65 hours a week for $4.58/hour - no overtime, as well as my 1 day off per week to support a wife and a son.

The Whiner’s Support Group does not meet here. Go find someone to cry to that hasn’t been there and decided to leave.
[/quote]

Yea for you!

Poor people are not necessarily poor by choice. In fact I would wager that the vast majority are poor because of ignorance. It is a matter of having the capacity to understand where wealth comes from and knowing how to act on that understanding.

This is not an inborn trait. People that are wealthy can get that way a variety of different ways but the majority are wealthy because they figured out how best to serve society with the best possible goods at the cheapest price.

If it were easy to do this everyone would be very wealthy but the fact of the matter is this not the case. Most of us will only be average and have to work for someone else. An equally small number will live in extreme poverty without the ability to even serve society on a most basic level.

In a free society, however, the poor are better off because of the excess of wealth created by everyone else. Wealthy people are more charitable. There are also no shortage of jobs in a free society so even when marginally employed the average poor person can subsist.

The worst possible condition for poor people is to have the government subsidizing poverty with welfare. The majority of people receiving welfare do not need to be on it and would not have to be on it if government would just get out of the way and let the market create jobs.

Minimum wage jobs are also at the root of the problem too. This causes unemployment at the margins.

[quote]LIFTICVSMAXIMVS wrote:
Poor people are not necessarily poor by choice. In fact I would wager that the vast majority are poor because of ignorance. It is a matter of having the capacity to understand where wealth comes from and knowing how to act on that understanding.
[/quote]

The American Dream is work hard, play by the rules and you can succeed in America. You may not be rich beyond your wildest dreams, but you can succeed. You don’t even necessarily have to have some great skill either. I know a few laborers who live pretty well simply because they worked hard for a number of years.

This is the American Dream. Anyone, and I mean ANYONE, can work hard and be successful if they REALLY want it bad enough. Thousands of success stories are out there. No one can convince me that poor people don’t have the ability to rise above and become successful.

[quote]LIFTICVSMAXIMVS wrote:
rainjack wrote:
Poor people who choose to remain poor ARE at best not motivated enough by their situation to do better. At worst - yes, they are extremely lazy.

I know. I was extremely poor.

I don’t give a fuck about “average real wages”. I was working 65 hours a week for $4.58/hour - no overtime, as well as my 1 day off per week to support a wife and a son.

The Whiner’s Support Group does not meet here. Go find someone to cry to that hasn’t been there and decided to leave.

Yea for you!

Poor people are not necessarily poor by choice. In fact I would wager that the vast majority are poor because of ignorance. It is a matter of having the capacity to understand where wealth comes from and knowing how to act on that understanding.

This is not an inborn trait. People that are wealthy can get that way a variety of different ways but the majority are wealthy because they figured out how best to serve society with the best possible goods at the cheapest price.

If it were easy to do this everyone would be very wealthy but the fact of the matter is this not the case. Most of us will only be average and have to work for someone else. An equally small number will live in extreme poverty without the ability to even serve society on a most basic level.

In a free society, however, the poor are better off because of the excess of wealth created by everyone else. Wealthy people are more charitable. There are also no shortage of jobs in a free society so even when marginally employed the average poor person can subsist.

The worst possible condition for poor people is to have the government subsidizing poverty with welfare. The majority of people receiving welfare do not need to be on it and would not have to be on it if government would just get out of the way and let the market create jobs.

Minimum wage jobs are also at the root of the problem too. This causes unemployment at the margins.[/quote]

You guys are essentially saying the same thing in different ways.

If you want to work hard and choose to surround yourself with successful people then you can and probably will no longer be poor.

Start with taking advice on how to be manager at McDonalds.

Next become manager and start talking to the corporate guys how they got there…

If you want to hang around with the lifelong burger microwavers and complain how you are poor then fuck it.