O/T Bar Stool Economics..

[Alan]

Saw this on a company BB and thought it an interesting read.
Make of it what you will...


" 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 bar, the men began to compare their savings.

"I only got a Euro 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 Euro, too. It's unfair that he got ten times more than I did!"

"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 20% tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up any more. In fact, they might start drinking overseas.

For those who understand, no explanation is needed.

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

[ezz]

Haha brilliant post Alan, I would be one of the first four men
Even though I shouldn't I felt sorry for man number 10 all the way through
Shall we try this out at the York? Would we get the £20 discount?

[wonder shrimp]

what an odd story!?

where in history have the rich paid the most taxes?

anyway the rich bloke would be drinking champagne on his own, whilst the others watch from the window...

[bigreddog]

The tenth man was a banker and had only made enough money to be able to pay so much in the first place because all the other nine had bailed his money grabbing, incompetent creed out to the tune of £800 billion. But it was okay because the supreme court had said it was fine for him to charge £35 for a letter to his customers telling them something they already knew, so he'd soon be able to pay it back.

Of course the landlord ,who was desperate for customers because supermarkets were selling alcohol at a loss, wasn't aware that the tenth man had shares in ASDA and Morrisons and so was quids in either way thanks to his hedge fund. Meanwhile the first three men were cutting hedges as result of a new welfare to work programme to stop spongers, but couldn't get a decent job because the local corus steel plant had closed down so that the parent company could relocate to the far east to maximise shareholder value, which was good because corus was also in the tenth man's portfolio. the fourth and fifth men had requested that the bank look on their credit history kindly, having fallen on tougher times thanks to the credit crunch, unfortunately it seemed only to be crunching the poor and people on middle incomes and the bank had told them to get lost when they fell behind on their mortgage repayments, so now they were both sleeping in a hedge.

the rest were unfortunately small business owners and holding on by a slender thread, partly because none of the other men, except the tenth, could afford to patronise their shops any more. As a result they ended up with a mountain of debt, which the bank then called in via the courts so that the one asset they had left, their homes, would forever be the banks first dibs, which was brilliant because that meant a bigger bonus for the tenth man which was of course paid in share options. And as they sat there in the bar the tenth man said "cheers! Good health" before turning to the others and saying:

"And who says trickle down economics doesn't work eh???!!!"

[Alan]

Like the reply bigreddog...is it O.K. with you if I paste your response on the BB from where I took the original ?

Cheers, Alan

[P/T Indie]

I hope you have included the new NI rise

[marky No.1]

I hope you have included the new NI rise

Which is a 10% rise on the current amount not just 1% !!!!

Every £100 we pay is now £110 (not £101)

I look forward to falling off my stool tonight ...

[bigreddog]

Like the reply bigreddog...is it O.K. with you if I paste your response on the BB from where I took the original ?

Cheers, Alan

yes of course fill your boots mate, don't mind at all.

[marky No.1]

Here is the drunkenomics versions in pictures which may make it easier for some to understand

http://www.slideshare.net/slides2407/dr ... -economics

[Keith]

All of this problem could have easily been avoided if the bar man, instead of giving them a discount, had laid on twenty Euro's worth of sandwiches that they could all have enjoyed equally! The barman would have rewarded his loyal customers by providing a better service and all three would have remained happy drinking buddies.

[RedRedWine1]

If you can't run a business properly, in good time or bad, then that is the individuals fault in a free market, venture capitalist society (or should be). Nobody should be bailing anybody out. End of. But now, I'm not so sure.

What is wrong is the way that the government has bailed out banks, though such has the dependence become of them, it is easy to see why this had to happen. It has prevented the current economic crisis (based on borrowing) worsening. IMO it is very worrying for the future, as it has offered a clear safely net for more reckless spending in private sectors to occur in the future. Worrying because banks et al have a strong 'Friedman' position (the business of business is business, benefits shareholders), a system that has now been proven to be propped up by society, effectively giving (none of this lending balls) as a whole.

Businesses exists in our society, they do not operate in isolation as has been so cruelly proved by the many. The benefit of such organisations has only been attributed to the few. Pick up any company report and they will be heavily laden with CSR statements about what charities they donate to and what they are doing to help the environment. It is all rubbish, even the accounts. A sucker punch to let a few idiots believe that we think they care about our well-being.

No matter what your political elegance is, surely you can see that the few that can operate in such a way that they can then be subsequently subsidised by the many (I'm not talking about entrepreneurship, creating your own fortune by taking on a task or idea that is independent of others), is a wrong. What we have seen recently transcends the political ideal of the socialists and capitalists. Strangely, you'd think that the traditional working man's party would be in a position of strength at the current time, alas not. It is that party who has gotten us into this mess, again!