I know ATSers hate it when people repost emails, but I couldn't help sharing the simplicity of these two examples! I hope you all like it, and it provides some good discussion!


#1

An economics teacher made a statement that he had never failed a single student before, but had once failed an entire class.
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That class had insisted that President Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The teacher then said, "OK, we will have an experiment in this class on Obama's plan".

All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A.

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy.

As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.
The second test average was a D! No one was happy.

When the 3rd test rolled around, the average was an F.

The scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

All failed, to their great surprise, and the teacher told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great,
but when government takes all the reward away, no one will try or want to succeed.

Could not be any simpler than that.

#2
Heidi is the proprietor of a bar in Detroit . She realizes that virtually all of her
customers are unemployed alcoholics and, as such, can no longer afford to
patronize her bar. To solve this problem, she comes up with new marketing
plan that allows her customers to drink now, but pay later. She keeps track
of the drinks consumed on a ledger (thereby granting the customers loans).

Word gets around about Heidi's "drink now pay later" marketing strategy and,
as a result, increasing numbers of customers flood into Heidi's bar. Soon she
has the largest sales volume for any bar in Detroit .

By providing her customers' freedom from immediate payment demands, Heidi
gets no resistance when, at regular intervals, she substantially increases her
prices for wine and beer, the most consumed beverages. Consequently, Heidi's
gross sales volume increases massively.

A young and dynamic vice-president at the local bank recognizes that these
customer debts constitute valuable future assets and increases Heidi's borrowing
limit. He sees no reason for any undue concern, since he has the debts of the
unemployed alcoholics as collateral.

At the bank's corporate headquarters, expert traders transform these customer
loans into DRINKBONDS, ALKIBONDS and PUKEBONDS. These securities are
then bundled and traded on international security markets. Naive investors don't
really understand that the securities being sold to them as AAA secured bonds
are really the debts of unemployed alcoholics. Nevertheless, the bond prices
continuously climb, and the securities soon become the hottest-selling items for
some of the nation's leading brokerage houses.

One day, even though the bond prices are still climbing, a risk manager at the
original local bank decides that the time has come to demand payment on the
debts incurred by the drinkers at Heidi's bar. He so informs Heidi.

Heidi then demands payment from her alcoholic patrons, but being unemployed
alcoholics they cannot pay back their drinking debts. Since, Heidi cannot fulfill
her loan obligations she is forced into bankruptcy. The bar closes and the eleven
employees lose their jobs.

Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%.
The collapsed bond asset value destroys the banks liquidity and prevents it from
issuing new loans, thus freezing credit and economic activity in the community.

The suppliers of Heidi's bar had granted her generous payment extensions and
had invested their firms' pension funds in the various BOND securities. They find
they are now faced with having to write off her bad debt and with losing over 90%
of the presumed value of the bonds. Her wine supplier also claims bankruptcy,
closing the doors on a family business that had endured for three generations, Her
beer supplier is taken over by a competitor, who immediately closes the local plant
and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives
are saved and bailed out by a multi-billion dollar no-strings attached cash infusion
from the Government.

The funds required for this bailout are obtained by new taxes levied on employed,
middle-class, non-drinkers.

Now, do you understand?

example number two is quite close to correct, although it describes the dangers of free market corporatism rather than socialism.

example number one is an oversimplification of socialism that misses some important details.

the most important factor missed is the fact that once people pass childhood they tend to want to do something worthwhile with their lives, where employment exists, 96% of people are employed. this has been shown to be true consistently.

the other 4% of people will be supported by the 96% weather they like it or not. if you don't pay them as a society, they'll just rob you.

EDIT: just to note, america has virtually no support for this 4%, instead it has the highest incarceration rate in the west. the cost of paying for all the prisons that are used to lock up people who are forced into crime would pay them enough so that they don't need to turn to criminality.

[edit on 5/11/09 by pieman]

Those are both old stories and the Obama part was added to the first one. When I heard it originally there was no Obama in it. More anti-Obama propaganda from corporate zombies.

I can't believe the amount of people that are angry out there because they believe that obama is a socialist. He is NOT a socialist, he is just in favour of a few socialist policies that nearly every western nation have already ratified. Why are people so scared of a bit of socialism? Look how well pure capitalism turned out for america in the last 100 years. 2 massive economic crashes, coupled with many other small ones. Although no socialist nation is free from its effects, the effects themselves are far less severe. Here in Canada, the only industry that has been severly affected by the recession is the manufacturing industry, specifically the car industry. If it wasn't for world war 2 and the cold war, america would have gone down like this many more times.

As for socialism though, pure socialism, and even small doses of it will never really work in america, as long as people are putting the betterment of themselves ahead of others. As long as greed and personal gain are the main driving force in everyone's lives, socialism will never ever ever work.

I see another over-simplified, vague, chain email, and not a whole lot else.

And for that reason, i'm out.

Capitalism is the best form of an economy, as long as the government is there to use COMMON SENSE and prevent monopolies and "to much power" situations.

I am not saying millionaires/billionaires should not exist from their inventions, but government needs to use LOGIC when determining if a company is becoming to intrusive to the rights of the people and country.

edit - One thing to add...all "pure" forms of all of these ideologies are horrible ideas. When we realize that a mixture is needed, then we will succeed.

[edit on 5-11-2009 by FritosBBQTwist]

Originally posted by FritosBBQTwist
Capitalism is the best form of an economy,

based on what criteria?
if overall wealth is your criteria for success then capitalism works but if you use social justice, the mental well being of the general population, the health of the people or the ability of any individual to effect change in their own lives, then capitalism is a complete failure.

capitalism is not the best form of government, it is the form that suits those that control the media, the government and the education system. that's why the media, your government and the education system have been telling you it's the best system we have for the past 80 years.

it does not free you, it makes you a slave.
it does not make you feel happy, it makes you feel inadequate.
it does not make you healthy, it uses you up and then replaces you.
it does not allow you to become rich, it takes your value and gives you a credit line.

capitalism sucks.

[edit on 5/11/09 by pieman]

the first story reminds me of military units, during basic training. if one F's up the entire unit is punished...doesn't sit well obviously and the rest of them pitch in next time, so all can achieve. if the same guy F's up again he's thrown out from the unit. your story can go both ways

your second story would have never happened like that. why? because heidi would have gotten burned the first few times by doing this very same thing in the past, and didn't want to lose her own money on these alcoholics. and the bank would not have done that because they had been burned by lending to small businesses without knowing exactly where the profits would be coming from, for that business to legitimately pay back the loan. so they would not want their loans defaulted on by false profits promised by heidi's business without establishing income first.

only way this would happen is if both heidi and the banks were crooked enough to set up a classic ponzi scheme