Tuesday, October 14, 2008

Math sucks

I just got an e-mail suggesting an alternative to the $85 BILLION bailout of AIG (that happened something close to a month ago).


“Rather than give $85 billion to AIG, I propose we give that money to ‘bailout’ the average American citizen.  The population stands at 301 million (actually closer to 306m today, but what’s a few million?) and a fair estimate of the total adult population is 200 million.  If we give every man and woman a share of that 85 billion dollars each and every person would get…  $425,000!!!”


It goes on from there, but now is a good time to stop and pull out a calculator (or excel spreadsheet).

What can you do with $425,000?  Let’s just assume you put it in an interest bearing account for the next 20 years earning a meager 3.25% (like a good money market fund).  You’d have, just by doing nothing, a whopping $143,000,000.  That’s good times.

Of course, half of that money would have already been taxed, so you’d really only have $297,000 or so to put in the bank.  All the same, that $297,000 would be a whopping $100,000,000.  That’s no chump change.  That’s family tree changing money.  That’s the kind of money that will allow you to go and feed the starving and fund space ventures and such and so forth.

Of course, it’s also likely that EVERYTHING would instantly become more expensive due to the old, precedent setting court case of Fool v Money where the court ruled that the one would always be separated from the other.  And as a lot humans are stupid and greedy and think they absolutely must have the newest and shiniest baubles right NOW AND I MEAN NOW OR I’M GOING TO START MAKING SOME SERIOUS TROUBLE!!!!


But, more importantly than all that, $85,000,000,000 divided by 200,000,000 is only $425.


Not $425,000.


Yea, it’s true.  Math is a bitch.  No matter how hard you try, you just can’t get around basic, immutable laws of primal math.

Nonetheless, if you can take $85,000,000,000 and divide it among 200,000,000 people and somehow make the shares equal to $425,000 I’m all for the plan.  I’ve also got some loaves and fishes for you to share among your true believers, too.  Maybe some water for you to walk on before changing it to wine.


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