Bar Stool Economics

Festival was better than I expected. The political atmosphere was not what I expected, and all pretentiousness seems to exist more in my mind than actuality (although there are some in the organization that did not show up to festival I reserve judgement for). Stephen Hayes is a man that promotes this truth: he is a man. He has accomplished much. He is extremely intelligent. He believes what he believes and he knows why. He is an amazing martial artist. These things aside, he is a man (a mortal even) - and he knows it. I pretty much figured that was going to be my impression of him, but it was nice to see it in person. The training was two full days of butt kicking. In addition to the large group training, we had our options for what they called "breakout sessions". There were three total. I chose to do two knife seminars and one randori (Japanese for free response) seminar. The fire is under my butt more now than ever to keep on with this art.

I made a montage of some of the incredible demonstrations performed on the first evening. When I format it to something this blog can play back, I will add it. Either as an edit to this post, or as its own separate.

So, my brother sent me an email with a very interesting explanation of how taxes in this country work. It explains in simple metaphoric English why the Bush tax cuts work (one of his few well thought policies), and why Obama's would not. This passage is so full of flavor, I absolutely had to share:

"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 paid $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."

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.