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# Northrop Grumman Corporation Message Board

• yeoman3025 yeoman3025 Oct 13, 2010 1:29 PM Flag

## Bar Stool Economics

Suppose that every day, ten men go out for beer and the bill for all ten comes to \$100 and 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." So 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, ladies and gentlemen, 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

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

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• I knew the election would knock any remaining sense out of you. calm down. The poor can always get a job and take care of themselves.

• Why didn't any of you genii reply to this note about Ronnie Raygun and Ollie North?

Is thre truth beyond your capability to respond?

Is there any thinking power among anu y of you?

Thius country became the Divided States of America on that SOB's watch.

We might never get over his impact on our natoin.

• Yeah but were any of the drinkers in a union?

that story hits the nail on the head.

How do you feel about a 70% tax rate?

Some people will never get it, EVER. They really think with Obama they will get free stuff. And just where will the gov't get the money for the free stuff?

How can so many people not get it?

Trickle down is the only way, it can't trickle up from the UNeducated.

And what genius now has the ida to make minimum wage \$10 and a cost of living increase every year on it?

Why get an education?

How can these people be so stupid?

• 2 Replies to tiglet2l
• "Trickle down is the only way, it can't trickle up from the UNeducated."

And now we move up.........stimulus is a form of trickle up, didn't work, won't work, Obama learned a lesson as I said he would. Dumb man.

• Hey, my brainiac debater friend,

Those drinkers were all members of the US Chamber of Commerce who never looked a donor in the eye.

No one has ever suggested a \$10 hour minimum wage.

No one is looking for something for nothing except for Wall St and banking/mortgage industry thieves who saw a bill written by Dodd/Frank as a license to steal.

When we had a 70% tax rate, we put men on the moon and we can't do that today without borrowing from godless Communist China.

When we had a 70% tax rate we were a nation that exported stuff we made in our factories and now we are a debtor nation, thanks to Ronnie Raygun and Alfred E. Bush the 43rd declaring war on america's middle class workers.

How do you and the party of nopes and dopes plan to fix what is a very serious problem?

They've killed off their own customer base.

Carly Forioni is going to help create jobs and the 1st people she'll hire is the 30,000 Silicon Valley techs and engineers she laid off?

Maybe she'll donate part of the 100+ million dollars she made standing on those peoples backs to unemployment, d'ya think?

The other whiner running for governor also claims she'll create jobs starting with the 10% of E-Bay employees she canned, funding it with the kick back she's gonna get from the LAPD pensioners she prostituted herself with.

Some people will never get it, you're right, and those people are conservative in nature.

They have no sense of the common good and are shocked when things don't always work out in their favor.

As for not getting an education and trying to run a business, wake up and try living on \$7.25 or whatever the minimum wqage in Calif might be.

I have never read a stupider group of words than "Why get an education? Why run a business?, "How can these people be so stupid?"

How can you be so stupid?

• That's a very clever essay, too bad it doesn't border on reality.

The 2nd scenario is what we got with Bush Lite ecomomics.

The anteater hit the nail on it's head.

• Therein lies the problem... the rich in Berkley, Ca drink wine... so no one is buying these Ga boys any beer.

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