Tuesday, April 10, 2012

Economics

Let's say you have fifty people in a cooperative enterprise. They like beer and they agree that they will each pitch in one dollar a week to a fund. Then the fund will buy beer for the ten oldest members of the combine out of the contributions. Only the older members get the beer. Does it work? Sure! Fifty contribute and ten drink.

Everybody likes the program and hopes to one day qualify for that segment of the group that gets free beer.

Over time, more people manage to get into the free beer demographic and fewer newer people are joining the club at the entry level. Along the way beer goes up in price. What is going to happen to the club?

Maybe the club will only be able to subsidize the beer for the old folks. Some of the beer expense will be paid, but the old folks will have to pick up a bit of the tab themselves. To keep the beer taps open, it may be necessary to restrict what kind of beer can be purchased. No micro-brews or imports allowed. The younger folks will have to pay a bit more and they may have to wait a bit longer before their beer is subsidized.

The beer club is collapsing. It isn't working any more.

But wait! Here's comes a group of people, riding galloping black horses and with bugles playing a cavalry charge. They have a plan.

Here's what we are going to do. We are going to give beer to everybody, not just the old folks. We will give you all of the beer you want and it will be better beer than the current drinkers are getting. The contribution for better beer for everybody will be less than the current fee for economy beer for only old members. More, better, cheaper! What's not to like? Let's do it!

Let's Do the Debt Warp Again

Do the numbers add up? It makes sense to me. There is not now and there never has been such a thing as a free lunch. You can't get more and better for less in any rational universe. Is that partisan accounting legerdemain?

Who do you trust? Who would tell you the truth? Have they lied to you before? Does the story pass the common sense test?

3 comments:

immagikman said...

Common Sense is a very rare beast these days...

The Donald said...

Yet, unfortunately, those cork soakers still stand a very good chance of getting re-elected in November.

Anonymous said...

In reality, there are more people contributing and STILL the system doesn't work because its still a ponzi scheme.