This one is a little longer, but worth the read:
Suppose that every day, ten men go out for beer and they order 10 glasses of beer (or 120 ounces of beer). If they split up the beer the way that wealth is distributed in the U.S.A, it would go something like this:
The first five men (the poorest) would get a sip of beer each or 0.672 ounces.
The next four men would get a small glass of beer each or 8.22 ounces.
The tenth man (the richest) would get 7 glasses of beer or 83.76 ounces.
The ten men went to the bar every day and the tenth man seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Inflationary pressures are rising," he said, "I'm going to reduce the amount of your daily beer by 20 ounces. You will now receive 10 glasses of 10-ounces each, or 100 ounces total."
The group still wanted to split up the beer the way that wealth is distributed in the U.S.A. How could they divide the loss of 20 ounces of beer so that everyone would lose his 'fair share?' They realized that 20 ounces divided by ten is 2 ounces.
But if they subtracted that from everybody's share, then the first five men would have to pay the bartender 1.328 ounces of beer each. So, they decided to only take 0.672 ounces of beer from each of the first 5 men and take the remaining 16.64 ounces from the remaining 5 men.
Each of the first five men would give up the sip of beer (0.672 ounces) that they received (a loss of 100%).
Each of the sixth, seventh, eighth, and ninth men would give up 1.17 ounces each (a loss of 14.2%).
The tenth man would give up 11.95 ounces of beer (or a loss of 14.2%).
The result:
Each of the first five men would receive no beer.
Each of the next four men would receive 7.05 ounces.
The tenth man would receive 71.81 ounces of beer.
Each of the first five was worse off than before, having lost all of their beer. The next 4 were worse off, since they no longer received a full 8-ounce glass of beer. The tenth man still received 71.81 ounces (~ a six-pack), and was still happy.
But once outside the restaurant, the men began to compare their losses.
The first five men said, "We lost a sip of beer each. We don't get beer any more."
"Well, we lost more than a quarter of our beer" said the next four men "It's unfair that you only lost a sip of beer. We lost twice as much as each of you did."
"Wait a minute!" yelled the tenth man. "I gave up a whole glass of beer! I gave up more than all of you combined!!! The poor get all the breaks! First, they get free beer, and then they complain when they lose their free beer! The middle class are always whining about everything because they're too dumb to get as much beer as I do."
The tenth man called security, and the first 5 men were told to leave the premises, since they could not afford to pay for any beer.
The next 4 men stood silently watching, not wanting to risk the loss of any of their remaining beer.
The tenth man got into his chauffeured limo and went home.
The next night the first five men didn't show up for drinks, so the remaining five sat down to have beers without them. But, they discovered something important.
The first five men didn't show up to:
* harvest the grain and hops to make the beer
* drive the trucks to bring the beer to the bar
* clean the beer glasses and sweep the floor of the bar
* serve the beer
* and, most importantly, work as the security guards to protect the tenth man and his beer
And that, boys and girls, journalists and college professors, wing-nuts and supply-siders, big-c and little-c conservatives, is how wealth is distributed in the U.S.A. The people who have the most money get the most beer. Take too much "beer" from the poorest people, belittle them for being poor, and they just may not show up anymore to make and serve your beer.
Please remember:
There are three kinds of lies: lies, damned lies, and statistics.
However, let's continue this thought experiment:
Let's imagine that the above example happened in 1983. How would the 120 ounces of beer be divided in 1998?
The first four men would have their 0.672 ounces reduced to 0.159 ounces.
The fifth man would have his 0.672 ounces increased to 0.739 ounces.
The sixth man would have his 8.22 ounces increased to 9.04 ounces.
The seventh and eighth man would have his 8.22 ounces increased to 9.92 ounces.
The ninth man would have his 8.22 ounces increased to 10.17 ounces.
The tenth man would have his 83.76 ounces increased to 103.17 ounces.
Or, let's divide the 120 ounces of beer according to the share of total ownership of stocks, mutual funds, and retirement accounts (basically, as a share of the stock market):
The first 9 men would each receive 2.84 ounces.
The tenth man would receive 94.44 ounces.