Spending more won't save the country
I had in mind a simple thought experiment. Now that we have all decided that being rich is evil and "the Rich" should pay for everything I wanted to see just how much we can rip out of their bloodsucking, evil, selfish hides. At first I thought the best way would be to just put the marginal tax rate at 100% for all income for everyone on the Forbes 400 list of the richest people in America and then I thought, "you know, that is not enough. Obviously since these people have money at all it means that they stole it all from the poor so the only right thing to do is to take everything they have and leave them poor. Serves the bastards right." So be it. The sum total of all the wealth of the top 400 is $1.27 trillion (as of the 2009 list). Oops, that won't even cover the 2010 deficit! It covers less than 1/3 of the US budget for 2010! Obviously we are going to have to dig deeper. Since in this exercise we have already cleaned out the top 400 and they will now be living under an overpass somewhere there is a whole new group of the richest 400 so let's take all their money too!
Hmm, I see a problem though. If one plots the net worths of the top 400 it looks very much like a power curve of some sort. As an indication, the top guy has $50 billion and the bottom guy a measly $950 million, a factor of over 50! If we assume the power law follows the next 400 down the #800 guy has less than a $130 million and the total net worth of the #400 to #800 is somewhere around $160 Billion (I will be doing more modeling of this using the 400 data and the household wealth data from the US govt). OK, so we have cleaned out the top 800 now and still have not covered the deficit for 2010 so that means we must dig even deeper! Let's wipe out the next 20,000! Oops, that only comes to about another $24 billion! Oh shit, we need to go EVEN DEEPER! Of course it becomes clear that the end game here for a budget that is roughly 25% of the GDP is that you have to dig well into the group formerly known as the Middle Class and obviously must now be known as the Middle Rich in order to justify cleaning out all their net worth too. Of course one problem with this model is that once we have cleaned someone out they won't be paying much in taxes the next year and they have nothing left to take so we will just need to keep moving the line further down. Of course most of those cleaned out will probably not be inclined or able to keep a lot of employees around so those newly unemployed will not be paying any taxes either. It will only take a few years (less than 10 I would estimate) before all the wealth of the country has been spent by the government. Oh well, at least then we will all be equal! Pity the poor suckers in year 11 since not only the country but all of it's citizens will be flat broke by then.
Here is a graph of the Forbes 400 net worths:
Hmm, I see a problem though. If one plots the net worths of the top 400 it looks very much like a power curve of some sort. As an indication, the top guy has $50 billion and the bottom guy a measly $950 million, a factor of over 50! If we assume the power law follows the next 400 down the #800 guy has less than a $130 million and the total net worth of the #400 to #800 is somewhere around $160 Billion (I will be doing more modeling of this using the 400 data and the household wealth data from the US govt). OK, so we have cleaned out the top 800 now and still have not covered the deficit for 2010 so that means we must dig even deeper! Let's wipe out the next 20,000! Oops, that only comes to about another $24 billion! Oh shit, we need to go EVEN DEEPER! Of course it becomes clear that the end game here for a budget that is roughly 25% of the GDP is that you have to dig well into the group formerly known as the Middle Class and obviously must now be known as the Middle Rich in order to justify cleaning out all their net worth too. Of course one problem with this model is that once we have cleaned someone out they won't be paying much in taxes the next year and they have nothing left to take so we will just need to keep moving the line further down. Of course most of those cleaned out will probably not be inclined or able to keep a lot of employees around so those newly unemployed will not be paying any taxes either. It will only take a few years (less than 10 I would estimate) before all the wealth of the country has been spent by the government. Oh well, at least then we will all be equal! Pity the poor suckers in year 11 since not only the country but all of it's citizens will be flat broke by then.
Here is a graph of the Forbes 400 net worths:
Labels: US is bankrupt
posted by gene at
4:09 PM
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