Tutorial: How American Markets Work

Once upon a time, in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each.

The villagers seeing that there were many monkeys around, went out to the forest, and started catching them. The man bought thousands at $10 and as supply started to diminish, the villagers stopped their effort. He further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer increased to $25 each and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it! The man now announced that he would buy monkeys at $50!  However, since he had to go to the city on some business, his assistant would now buy on behalf of him.

In the absence of the man, the assistant told the villagers. "Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $40 and when the man returns from the city, you can sell them to him for $50 each." The villagers rounded up with all their savings and bought all the monkeys. Then they never saw the man nor his assistant, only monkeys everywhere!

Now you have a better understanding of how the American markets work.

;D

Here's how taxes work

A brilliant explanation of our tax system using actual percentages , the
impact of a tax cut , and the public reaction that everyone should be
able to understand.
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 conti
nued 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

OK.

Now that I understand how American markets and American taxes work, would some one explain how American politics works?

Hang on Smoky, we'll let you know when it does.

Wel dang Carl!  I think you just explained it!  ;D

Anyone figure out how families work?

P.S. I have some cool electronics and a nice RV, but am at a loss here!  ???