Atlas Walked Into A Bar And Shrugged

> Bar stool 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, that’s 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,
> ‘I’m 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 everybody’s 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 man’s 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, that’s right,’ exclaimed the fifth man.
> ‘I only saved a dollar, too.
> It’s 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 didn’t 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 didn’t 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 didn’t 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.
>
> David R. Kamerschen, Ph.D.
> Professor of Economics
> University of Georgia

13 Responses to “Atlas Walked Into A Bar And Shrugged”


  1. 1 Allison November 4, 2008 at 6:19 pm

    When are you going to cave and get on Facebook? There are hours a day that you could be wasting along with the rest of us, looking at pictures and wondering if we were ever that young. Oh yeah, and pictures of our young ‘uns.

    Peeeerrr pressure! Come on, Brad! All of the cool kids are doing it!

    Hope you guys are well. Hugs to the Drell clan!

    Allison

  2. 2 John in the Middle November 4, 2008 at 7:46 pm

    From David R. Kamerschen’s web site: http://davidk.myweb.uga.edu/

    “Complete vitae available online. Contrary to Internet folklore, Dr. Kamerschen is NOT the author of “Tax Cuts: A Simple Lesson in Economics” or “Bar Stool Economics” or anything similar to that. Additionally, he does NOT know who wrote it and he has no opinion on its merits.”

  3. 3 Whit November 4, 2008 at 11:23 pm

    emailStripper, available for free from http://www.papercut.biz/emailStripper.htm

    Brad, this is not what it sounds like. It a cool little freeware that will remove the do dads from the side of your e-mails like in this post.

    Whit+

  4. 4 John Delmore November 5, 2008 at 4:51 pm

    Wait!! We’re getting more info! It seems #1 used to work at #10’s clothing factory for a decent wage, but then #10 realized he could make a bundle by moving production to a sweatshop in Jakarta. Now, #1 is on unemployment…while it lasts…

  5. 5 Rick in Louisiana November 5, 2008 at 6:16 pm

    Thanks join – even if I rather like this little parable as soon as I saw the purported author I was a tad suspicious. (Too many hoax emails over the years – one gets a feel for what is legitimate and what is not.)

  6. 6 John in the Middle November 6, 2008 at 1:45 am

    I guess that suckers like Sir Andrew Lloyd Webber, Nigella Lawson, Warren Buffett (big fool), Bill Gates (huge idiot), William Barron Hilton, Anita Roddick, Sir Elton John, Donald Trump ( big sucker) and Oprah haven’t seen this email yet or they would have quit producing by now.

    They’re getting beat up and just keep coming back for more.

  7. 7 Sarah November 6, 2008 at 2:23 am

    RE: “We’re getting more info! It seems #1 used to work at #10’s clothing factory for a decent wage, but then #10 realized he could make a bundle by moving production to a sweatshop in Jakarta.”

    Wait — more info. The government added on yet another regulation beyond the ADA, Sarbanes Oxley, carbon emissions, and the thousands of others, and he realized that it would be simply better to avoid all of those regulations and outsource the production component of the products he sells, while keeping the services/IT/administrative functions in the US.

    If he can make it through the next four years, he can take early retirement and move on.

  8. 8 John Delmore November 6, 2008 at 4:05 pm

    I hear you, Sarah–it’s a vicious circle. And it would be nice if we didn’t need all these regulations; if people would excercise Christian charity to the disabled on their own, not lie to investors about their financial position, not poison God’s green Earth…

    But, as Herbert Hoover said, “The only problem with capitalism is capitalists…they’re too damn greedy.”

  9. 9 Sarah November 7, 2008 at 2:53 am

    RE: ” . . . .if people would excercise Christian charity”

    How sad that you believe that the ADA actually allows corporations to “exercise Christian charity” when in actuality it merely uses the power of the State to enforce often stupid, impersonal, mechanistic, bureaucratic, cold, Stalinesque systems and processes on “the disabled”, at immense cost to those who actually need to buy things inexpensively and instead end up with bloated prices, lost jobs, and relocated facilities. Or that Sarbanes Oxley actually keeps people from lying “to investors” — that’s a hoot as anyone within the accounting industry can attest to.

    But hey — what matters of course is if the bureaucrat is sincere and means well in what he is trying to do. It’s the intention that matters, not the actual real result, since the intention helps people feel like they’ve been really useful, and helps assuage their guilt.

    Oh well, at least we get to see the stark, clear differences between one group’s vision of the “exercise” of “Christian charity”, and another’s — that’s the kind of division that a completely opposing foundational worldview produces.

  10. 10 John Delmore November 7, 2008 at 3:02 pm

    Well, Sarah, if you want perfect laws, vote in perfect people. Unfortunately, I didn’t see any of those on the recent ballot…

    For the last several years, Shreveport has been building ‘curb cuts’ into the sidewalks at intersections. I’m sure it’s quite expensive. I’m equally sure that they are not doing it due to huge surpluses in the budget. And there is a disabled man I see all the time near where I work “running the roads” in his scooter chair. Ya think the ADA has improved his life? Ask the next random person you see in a wheelchair what they think about ADA.

  11. 11 Sibyl November 7, 2008 at 11:58 pm

    Here’s another chilling take on the economy…by a Harvard professor – The Coming Collapse of the Middle Class: http://www.youtube.com/watch?v=akVL7QY0S8A

  12. 12 Sherri November 17, 2008 at 5:26 pm

    Sarah,
    ADA enables me to get into American stores and shop like everybody else – what a terrible suck on the economy. It also makes it – through rules governing workplace accessibility (the only expense to my employer – a grab rail in the restaurant and slightly taller than standard toilet) – possible for me to work 50+ hours a week, returning a large amount of my earnings to the federal and state governments in the form of income taxes – what a waste! And it enables my employer to get by with one person doing the work that used to be done by two while paying the salary of the lower-paid one of the two to boot. Yes, we disabled people are just leeches on the American economy. Somebody ought to shoot us and put us out of our misery.

  13. 13 James Lueckenhoff November 19, 2008 at 1:06 am

    i have my bumper stickers ordered on which i have the following message. Less I make, Less they take, Why Work? keep fooling around with taxing people and for sure they won’t show up just to be puniahed for doing so.


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