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(And his twin, Stimulus Package,
who couldn’t either)
Bob makes $100,000 per year
Bob has his own business.
Living expenses are $70,000 per year
Fred makes $75,000 per year
His living expenses are $45,000 per year
Roy makes $25,000 per year
His expenses are $25,00 per year
Josh has no income.
His living expenses are paid by family members
and the government.
The tax people take $25,000 from Bob.
The tax people take $25,000 from Fred.
The government gives Roy $15,000 from taxes so
his income is more in line with Bob and Fred.
The government gives Josh $35,000 because not
having any income is not fair.
Bob cannot expand his business because he has
just enough left after taxes to cover expenses.
Fred makes just enough to cover his expenses.
Roy is doing well enjoying the money he is
Same for Josh.
There can be not economic growth because no person
has enough income to expand a business and Josh
has no incentive to work since his money is for
Bob decides he is not really in love with Josh taking
his earnings and lays off employees and reduces
his earnings, cuts his expenses, and makes only
$50,000 a year, cutting his tax bill by 2/3.
Fred also decides paying 1/3 of his earnings to the
government is not what he wants and cuts back his
working hours. He has less disposable income
As a result of Bob and Fred’s actions, Roy
continues to receive some government payments,
though there are complaints from some people
that the country cannot afford this.
Josh loses part of his compensation, but continues
to live comfortably with the help of relatives.
The economy simply cannot grow with this
scenario. There is no money for growth, just
money shuffled around and eventually lost
because there is no reward for working.
Bob retains 90% of his income. He can expand his
business or he can use the extra income to
make purchases and go on vacations.
Fred retains 90% of his income and puts much
money into savings, allowing banks to have
more capital for loans to those needing them.
Money that went to subsidizing projects, many of
which were not actually economically viable,
now goes into the private sector and creates
products that salable.
All four individuals are free to follow whatever
path they chose without losing the fruits of
their labor and without dependence on the
government for support.
Roy is motivated to try and increase his income
and moves up to a better paying job.
Josh can now find work because of business
expansion by Bob (or due to other “Bob’s”
spending on goods) and those stores hire Josh
We have Bob, Fred, Roy and Josh stranded in the
Bob has 5 bottles of water, Fred 3, Roy 2 and Josh
did not bring water.
The “fair” way of dividing water says: Bob gets 2
½ , Fred gets 2 ½ , Roy gets 2 ½ and Josh gets 2
However, it is impossible to walk out
of the desert using 2 ½ bottles of
water so all 4 perish in the heat.
Bob realizes he has a chance of making it out if he
keeps all 5 bottles of water and strikes out at
Fred, Roy and Josh have 5 bottles between them
and use the water sparingly.
Bob makes it out of the desert and brings back
water and help.
What if Bob is an evil corporate dude who takes
the water and leaves the other three stranded?
He lives, they die. Not fair, you say. No, it is
not fair. But remember, they all die with equal
shares. Certain death versus possible rescue.
You do the math.
What if Roy, Josh and Fred can’t survive on the
water left. Again, sharing equally among the
four means certain death.
Bob inherited a huge mansion with 3 floors. He has over
15,000 square feet in his home.
It is unfair that Bob inherited a huge
home. To make this fair, Fred
moves into the second floor of the
Roy and Josh move into the third
Now it’s fair—no one
has house payments
and everyone lives in a Our beautiful,
huge, beautiful house. happy, free home
As this practice spreads—those
with less moving in with those
who have more than they are
entitled to or unfairly received a
free home from their parents,
houses start going empty.
The housing market collapses. The
construction market collapses. With
realtors out of business, furniture and
home furnishing salesmen losing the
majority of their business (Fred, Roy and
Josh have no need to buy furniture, etc,
as Bob is providing this), and
construction workers laid off country
wide, the economy takes a serious
Bob’s business begins to suffer as
people lose their incomes and
move in with others. More and
more people are needing “fair
housing” from the people who
had high incomes, but the
incomes are being lost.
The “fairness doctrine” of each
person giving their fair share and no
one being allowed to benefit unfairly
from the work of their parents or
grandparents has collapsed what
could have been a robust economy.
No matter what a politician
claims, taking money from one
group and giving it to another,
CANNOT GROW THE
Soak up billions of dollars that could have been
used to create jobs in corporations.
Hold the record for the highest costs of any type
of job creation.
Encourage projects that are doomed to fail.
Make your congressperson look like a hero for
taking all the money he/she could from others
and sending the money back to your state.
Couldn’t save the economy because shuffling
money around does not make jobs or allow
people to purchase more.
Couldn’t prop up a business that was poorly
planned, even with massive amounts of
Couldn’t make people want a product they didn’t
want in the first place.
Couldn’t make life “fair” and give everyone equal
Couldn’t save the day.
The Little Subsidy (and his twin, the Stimulus
Package) couldn’t save the economy, couldn’t
save jobs and couldn’t push poor ideas to be
successful in the marketplace. What he did
was drain the budget, encourage poor planning
and eventually drive the country into a bad
credit rating and possible bankruptcy.