Saturday, December 20, 2014

Barstool Economics

Suppose that every day, 10 men go out for beer and the bill for all 10 comes to $100.00.If they pay their bill the way we pay our taxes, it would go something like this:
• The first 4 men (the poorest) would pay nothing.
• The 5th would pay $1.00.
• The 6th would pay $3.00.
• The 7th would pay $7.00.
• The 8th would pay $12.00.
• The 9th would pay $18.00.
• The 10th man (the richest) would pay $59.00.

So, that's what they decided to do. The 10 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, I'm going to reduce the cost of your daily beer by $20.00."Drinks for the 10 now cost only $80.00.
The group still wanted to pay their bill the way we pay our taxes, so the first 4 men were unaffected. They would still drink for free.But, what about the other 6 men (the paying customers)?How could they divide the $20.00 windfall so that everyone would get his fair share?They realized that $20.00 divided by 6 is $3.33. But if they subtracted that from everybody's share, then the 5th man and the 6th man would each end up being paid to drink his beer. So, the bar owner suggested... to be fair, to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:
• The 5th man, like the first 4, now paid nothing (100% savings).
• The 6th now paid $2.00 instead of $3.00 (33% savings).
• The 7th now paid $5.00 instead of $7.00 (28% savings).
• The 8th now paid $9.00 instead of $12.00 (25% savings).
• The 9th now paid $14.00 instead of $18.00 (22% savings).
• The 10th now paid $49.00 instead of $59.00 (16% savings).

Each of the 6 was better off than before. And the first 4 continued to drink for free. But once outside the bar, the men began to compare their savings.

"I only got a dollar out of the $20.00," declared the 6th man. He pointed to the 10th man, "But he got $10.00!"
"Yeah, that's right," exclaimed the 5th man. "I only saved a dollar too. It's unfair that he got 10 times more than I!"
"That's true!!" shouted the 7th man. "Why should he get $10.00 back, when I only got $2.00? The wealthy get all the breaks!"
"Wait a minute," yelled the first 4 men in unison. "We didn't get anything at all. The system exploits the poor!"
The 9 men surrounded the 10th and beat him up.

The next night, the 10th man didn't show up for drinks, so the 9 sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between them for even half of the bill! (The 10th man was originally paying $59.00 of $100.00, then $49.00 of $80.00).

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.

• -David R. Kamerschen, Ph.D.
• Professor of Economics, University of Georgia

Saturday, May 10, 2014

Mother's Day Once Again

Mother's Day Once Again

Happy Mother's Day to Mom, the original seat belt!

Today is Mother's Day and this is the card I got from Numero Uno child in 2007. It really cracks me up, because I spent their formative years throwing my arms across the chest of the child sitting next to me on the front bench seat of the car to prevent their being thrown through the windshield. Lord knows how they managed to live through no car seats and certainly no seat belts. One absolute rule was that they couldn't sit too near any door, because who knew whether or not the lock would hold and one could possibly fall from the car during a turn and get run over by the back wheels. However did I manage to get them safely through infancy, school, college and to the altar without killing anyone?
I think motherhood started for me when I was about ten or eleven and our neighbor had a baby boy. I was allowed to play with him on a blanket in their backyard while my Mom chatted with the new mother.
I fell in love with the smell, feel, touch, the enchanting smiles and the cuddly little body of any baby. Little girls are programmed to desire babies in their lives. Shortly after marrying at seventeen, my mind turned to thoughts of having my very own baby to cuddle and smell and love. Luckily, God knew that we were not ready financially for parenthood. He made me wait until I was twenty-one, before He felt I could be trusted with an infant of my own. I couldn't believe it when after all those months and years of trying, I finally knew I was pregnant.
Every since that very first day, when I knew there was a baby coming to our home, I have been the most blessed of all creation --- a mother. If there is to be a special day --- it should be a day for rejoicing in the fact that God has seen fit to give us children to raise and love and then set free.
This is a picture of me with my first child when she was two years and six weeks old. My second child was only six weeks old and I was six weeks away from getting pregnant with my third. How ironic that after almost four years without children, we had three in less than three years. Motherhood has been a joy every step of the way and I am still thanking God for the children he sent my way almost fifty years ago. I love you Lesley, Matthew and Stacey and the ten children you have brought into my life in the last twenty-seven years. The pastor praised moms in church this morning, but it is we who should be thanking God for the privilege He has given to us. I cannot imagine a life without my children. To quote Ben Folds, " I Am the Luckiest!"