One major problem with our general thought in the United States is the alphabetical way in which we move throughout our “youth” (from point A, to point B, to point C, etc.).
There is a definitive lifestyle we adhere to before we are able to gain, oddly enough, what we admittedly label as “emancipation:” we believe that we are unable to take care of ourselves, and/or that we can not embrace freedom before our time is up.
This normative behavior even transcends social classes.
We usually begin school (private or public) when we are around five years of age, and then we start our first job (good or bad) by the time we are sixteen years of age, and then, we may move out of our “guardian’s” house (large or small) by the time we are eighteen years of age.
Once time and society have declared it is fine, we part ways.
The elite class often inherits a large amount of wealth from their time out of the magical gate of eighteen years of age, or they are able to find a fantastic job right away due to the extremely important role of higher social connections, despite the fact that some elitists may attend an Ivy League School as some sort of formality, as it is much easier for them to at least pass their classes in comparison to those that require low-paying jobs in combination with their education in order to pay for rent, let alone tuition.
The middle-class will generally attend a respectable University (although a substantial loan is often necessary in most cases). When their schooling is complete, they may establish small businesses, and/or do the majority of the brain work for corporations/governmental agencies.
One could also be of the lower-class, in which case they more than likely take a low-income job immediately once their “high” schooling is complete, or possibly fulfill the necessary training for a basic vocation of some sort, whereby they are then substantially tied to a landowner, and/or government aid.
Although the poor person may attain more wealth than the middle-class child for a few years, in the long-run, the latter individual eventually earns far more riches than the former as a result of their degree (in theory; at the very least, college-educated persons should enjoy their careers much more).
When the middle-class reaches their mid-fifties, they may finish paying off their final mortgages; thereafter, they settle down into their own homes.
And then, most people of all classes retire at around sixty years of age.
In one’s “golden years,” the lower-class will almost certainly be overly reliant on the government or charity to aid them, while they may continue to work in minor jobs out of necessity; those in the middle and upper-classes may still work for pleasures, or luxuries.
For even though there are definitely exceptions to this linear lifestyle and social stratification, inasmuch that class mobility is more than theoretically possible in America, as a few of us graduate college at a very early age, while others among us may drop out of school altogether and begin prosperous businesses—most of us are “normal.”
If we are to understand why we are a certain form of an adult, however, it is wise to examine who we were as “children,” for the past holds more and more weight the longer we live. When one examines our nation’s ancient history, and even other parts of the modern world, they shall find that ten-year-old youngsters are easily capable of laboring for over sixty hours a week in jobs that many American adults would find to be far too difficult and boring. In fact, even today, such a lifestyle as thus would be good for many people of foreign countries: most tedious and long-houred jobs are better than a constant state of starvation, and it is better to encounter dangers in an occupation than it is to watch one’s family raped and murdered by warlords.
It was not uncommon in our own nation’s factorial period to find an entire family working enormous amounts of time every week in very tough positions (five-year-old children sometimes performed jobs whereby they risked their lives, and a few kids worked from 7 a.m. until midnight), only in order to come home to a dilapidated “apartment” with hardly any of the “necessities” we are blessed with in the modern world—that was when they cooperated with one another! And yet, many of our forefathers were in worse positions than this: they not only worked exceptionally hard, but what is more, they were true slaves, insofar that they were not given hardly any wages whatsoever—other than the bare essentials for their survival; instead, they were mostly paid by the cracks of whips.
Therefore, if there is any question as to whether or not nurture is superior to nature, one must first eliminate whatever systematic belief system is present in a society, as our direct ancestors have proved our genes allow for us to labor far more ardently than we often imagine ourselves to be capable of. Not only did many of our ancestors perform feats when they were children that would be incomprehensible to modern adults, but what is more, past generations also found the time to create much more meaningful equalities among our nation in comparison to the instances of social justice our last two generations have accomplished. In a number of ways, our modern generations are not only failing to progress, but we are potentially undoing that which was laid forth by our ancient ancestors; there are definitely many instances of genius and compassion among the newer masses of the United States, but then again, we also stand upon the shoulders of giants that would dwarf those of Isaac Newton.
One must wonder why American “teenagers” (fourteen-year-olds are still considered to be adults in certain developing countries) are now only given a thirty hour air-conditioned school week today, plus five hours of homework, the latter of which they may not even perform well, despite the fact that such tasks as thus are not even work so much as they are an expense—and a lost one at that when viewed in light of the aforementioned benefits many of us are not truly given from our supposed “education” past middle school (if not past a large portion of elementary). After all, as was stated before the end of the last section, many of our people do not feel a desire to read much independently after their schooling is complete, and newspapers are rarely written above an eighth-grade reading level, which means that parts of this book will likely fly over many people’s heads that I would like to speak to the most greatly (I am not even sure what an “eighth-grade” reading level is to be honest, but I assume I write above this given my own education). But just in case this work is not too difficult, allow me to issue yet another famous quote:
Should I keep back my opinions at such a time, through fear of giving offense, I should consider myself as guilty of treason towards my country, and of an act of disloyalty toward the Majesty of Heaven, which I revere above all earthly kings.
Most of our educational institutions are not only relatively useless—they even harm our society more than they aid us! In fact, this is even true for those of us in elite private schools to as great extent: these latter organizations are much more expensive than they should be on an individual basis than those which are public, as the free market price of all education is drastically increased as a result of the subsidies of the public sector eliminating an enormous amount of competition. Of course, higher education is generally more efficient than primary, as even “state-run” institutions are not completely mandated, or even funded by the government (graduate schools are even more efficient still), which means they must justify their existence somewhat; yet, even many collegiate systems are exceptionally wasteful in most instances. Schools exist for the main purpose of creating irrational economic “signaling:” most employers do not have the time, or the ability, to thoroughly test potential employees’ levels of knowledge, intelligence, and willpower; therefore, they use simple sheets of paper and referrals to aid them in this regard.
Before we continue, however, allow me to say that I mean no general disrespect to my own instructors—even those that taught me on a primary level—although many were beyond atrocious. Ironically, I have encountered a number of teachers that have helped me understand the need for personal independence and free thought; surely, I have been blessed to learn from some similar to Aristotle, in that they have taught me to fish rather than to repeat rhetoric. Nevertheless, the majority of the teachers I have encountered drilled our classes with needless intellectual challenges and mandated readings—this is not to say that I wish to insult such past instructors’ intelligences; rather, I wish to complement many of my wasteful teachers as well, and to give them some advice, for it seems a number of brilliant individuals waste a great deal of time and effort in their service of bureaucratic and regulatory nonsense: they could be far more productive, original, and helpful, if they did not attempt to aid dull and uncaring persons at the expense of bright and driven ones.
While it is true that some scholars benefit from tutors, the vast majority of our teachers do not spend their time resolving students’ questions on a case by case basis; instead, instructors often focus on the repetition of information from slides (if they are wise enough to have as much—many literally rewrite loads of material on the board, which they then expect their students to copy yet again). And although this may not be intentional in some cases—as not only do many teachers give material that is outside of their required textbooks and fail to identify it as being such, insofar that they also fail to provide handouts of such specific information (such knowledge will more than likely reappear on an “important” quiz/test of some sort)—some instructors go so far as to require attendance as a part of their grading system. In such a case as thus, a student will often feel as if they are in more of a prison system than a school. Many literate people read far faster than they are able to listen—even a video would be better for those that may not—at the very least, a video would allow students the ability to rewind and fast forward without needing to physically copy symbols using archaic writing utensils.
After all, such knowledge as that gained in school is often unimportant to begin with. Even a great deal of the general material in a specific major chosen by a student may never be applicable to their life, but when it is, it will likely be learned in much more depth later on, at which point the former student may even be required to relearn the basic materials over again, for most students forget much of their rote after a few months time—at best. Real professionals read highly specialized operating manuals, trade journals, etc., if they wish to be successful. When a particular problem needs a practical solution, it is not often wise to turn to the information found in most textbooks; if one desires to argue against this, however, such a counter-argument would surely be proof that we should not need to replace many of our highly expensive hardcover textbooks with “updated” editions every three (or even ten) years in most instances, for most textbooks only cover the foundations of their various schools of thought, while most professionals do not need to earn their fundamental degrees over and over again. It is certainly ludicrous to spend well over a hundred dollars or more for “new” books covering basic mathematics, history, etc., when students could find even more detailed information on the Internet for free—if one wishes to have physical pages at their disposal, one could definitely use seventy-five year old Calculus and even Physics books with great success without so much as paying the fees of their accompanying copyrights: Einstein did not learn from books much newer than thus, and the Theory of Relativity is well above the heads of even most college students.
If the textbook print industry were a competitive market, and if such “informative” works were entertaining, it may make sense to pay a great deal for them, but the “upper-division” Marketing and Management textbooks I myself encountered during my junior year at a University literally defined what “learning” is, as if people that have attended school for fifteen years (or longer) are severely retarded enough to not understand what school is supposed to have helped them accomplish in the first place: this is not a joke; I can assure the reader—even our collegiate book content is this bad at times. And books such as thus are wide-spread throughout many major Universities across our nation, as I am sure some may feel my alma matter, UNLV, is not as good as many others (partially as a result of the fact that UNLV does not have a great amount of needless square footage, research money to burn, etc., which are often the standards by which colleges are rated). Indeed, some of the reviewers from one of my textbooks audacious enough to define “learning” are from the University of California, Berkeley, which is ranked by many educational “critics” as being one of, if not the best public school(s) in the country, although even Berkeley is normally behind our best private institutions in most major media rankings. The horrible textbook phenomenon should not surprise the reader—one need only count the number of publishers found in most University bookstores across the country: most textbooks are produced by two or three major firms, and these same companies are those which supply the majority of our primary schools.
And there is no doubt students often sign up for electives that will be the easiest for them to “earn” a good grade in. This has occurred nationally, and even Internationally, for decades (if not for millennia), although in modern times, some websites even list the easiest instructors of any particular class at one’s school. Many instructors even go so far as to allow the highest scoring students to earn an “A” for the course if no As are to be given otherwise, which is an excellent example of game theory, especially when this rule is printed on the course syllabus, which is to say that it would be best for all of the students to form a union and refuse to show up for class altogether (unless their grades are not already equal), insofar that the highest scores would end up being equal (if not zeros), which would result in automatic As for everyone! After all, transcripts do not usually explain a student took classes requiring one-fourth the effort as those that are similarly labeled, although it may be reasonable to feel a “lazy” student was brighter than normal, in that they were able to bypass needless suffering through an efficient manipulation of the system.
Certain methods of beating society at its own game are surely fine, especially if one is simultaneously engaged in their own highly productive private studies, but if one understands schooling is not directly helpful to their circumstances to begin with, in that the entire experience merely serves the purpose of allowing one the ability to place a few letters and digits on their résumé, it should make sense for such an enlightened person to spend even more of their time learning truly needed materials on their own. Any company that cares about one’s “schooling” more than they do an in-depth and direct measurement of one’s abilities is too foolish to work for. Indeed, I would be rather cautious before I would hire a straight A student if I ran my own business, as I would have no need for an uncreative, yet domineering person in my company!
If the point of school is to “learn,” which is a word one of my aforementioned textbooks ironically claimed is defined by most people as being “what happens when one is in school,” rather than being “a relatively permanent change in behavior based upon experience, which occurs throughout one’s lifetime,” then one should understand it makes much more sense to never enroll in a college of any sort (unless, perhaps, one is attempting to infiltrate the social hierarchy of stupidity for one reason or another).
Imagine, for a moment, if a learning institution freely listed all of the books their students may read independently (in reality, one is often able to use a combination of the Internet, degree worksheets, course catalogs, and instructors’ syllabi to discover such readings). If students were to share their books in libraries, much less digitally, they would be able to save all of the costs that are lost when their books are resold to numerous stores and bought back at higher prices. Even if required information is new and unique, it makes much more sense to pay for cheap photocopies, much less digital ones, than it does to pay to sit in expensive classrooms for hours upon hours. Students could also form study groups in libraries, or even online, inasmuch that the “students” could also be the tutors unto one another (which is what usually occurs the majority of the time in paid institutions)—students could merely pay their instructors for difficult and/or personally intriguing questions (I am sure many instructors would appreciate their roles far more if they were only required to help the students that wanted to be helped!). If a school operated as thus, a large administration would be also be much less necessary than that which is often found in most traditional schools, which makes sense, as an effective education systems’ high paid instructors would really need to possess at least a “Master’s” (if not a “PhD”) degree in their subjects if they desired to logically and consistently answer the trickiest of questions not found in textbooks and/or student study groups.
If such an extremely cost-efficient institution covered a broad range of disciplines, the Computer Science majors could supply the online functionality of the school as a part of their degree—they could even demand payment from the school beforehand if they proved themselves to be highly skilled. The online system would not need to be incredibly fancy in order for it to be functional, although the Graphic Art majors could aid the system aesthetically. The Marketing majors could help the students form social connections with the outside world, and the Accounting majors could help ensure the students receive excellent tax breaks. In fact, some corporations may even pay the students to use the formers’ research facilities—at the very least, such corporations would have a jump start on the competition were the students’ works to become “freely” available in the public domain. If such an imaginary school had Law majors, the students and their professors could even make sure their corporate partners stay “honest.”
Of course, in reality—this institution already exists.
It is decentralized all around us in the free market.
Although many large and small private organizations contribute to our wasteful formal school systems through their own volition—many simply find that it is more cost-effective to piggyback certain research and/or training efforts through state-run systems, as they do not directly pay for the majority of the states’ facilities, equipment, and labor—instead, all of society must pay for such matters. In other words, even if state-run organizations pay three times more than the private sector would for similar research/developmental inputs, a corporation that desires theoretical work to be accomplished may not complain much about governmental tyranny—altogether, the combined burdens on the rest of the taxpayers in the society and the burdens on the students themselves are cheaper for many firms than the additional costs of in-house research and development. Of course, most importantly, this is not to mention the fact that private donations to Universities often help build irrational goodwill—a business may not care whether or not society makes sense, so long as it “helps” them socially: it is politically incorrect, to say the least of the matter, to mention the tragedy of schooling.
In most ways, however, schools are nothing short of being large fraternities/sororities of sorts—the students that have graduated have no financial incentives to aid the newcomers, as a shortage in young labor will allow the aged to demand higher wages, as they have already suffered and (if not subconsciously) feel others should suffer as well.
If “traditional” Universities were eliminated, however, companies would have far more incentives to collaborate on even more massive joint ventures than they currently undertake—the private sector is already the major reason for the vast majority of the world’s inventions. And although the elimination of public research would surely result in more applications being filed for various patents—even the United States’ government is not foolish enough to accept claims on ideas or natural occurring phenomena: these are by far the major underlying elements of any creation, for nothing is not natural or at least an idea (in other words, all discoveries and creations are “public” goods). This entire book in its complete context is surely not a “public” work in a legal sense (or is it?), but its important concepts could be broken down and reworded somewhat easily, which is why I have no idea why I should even bother submitting this manuscript to the USPTO, but then again, I hope that my style is lovable, as meaningless as it may be, although I would be more than happy to read the works of those that may build on the ideas discussed herein and/or present them much better than I—surely, however, if most of society gave away their labor for free (especially that which I need the most: food, clothing, and shelter), I would be more than happy to give this book away, even though my exact work will still be available, word for word, at hundreds of public libraries across the country, although I also hope that people will want to have a copy of this for their own home, inasmuch that they shall find it entertaining enough to read multiple times. This is surely unreasonable and unrealistic on my behalf, as I myself have never read a book more than twice, to the best of my recollection, other than this one for editorial purposes, but then again, I too have a growing personal library, and I have bought many books quite needlessly. But then again still, there are some books that are often difficult to find at one’s library, which could easily be solved if such works were made freely available online, as a major Internet search company attempted to accomplish recently, but let us be happy that governments are the only entities legally allowed to steal from authors, as public libraries are at least inefficient enough to exhaust their budget allowances by purchasing texts in traditional and limited paper forms.
Yet, we have not even delved into the economic details of why our general schooling system is so tragic to be almost laughable, especially when we examine the primary level of such, for although my home state ranks particularly low in most measures of “education,” my local economy continues to boom. Some may even go so far as to claim that Nevada’s economy is “unfair,” but it is hardly our fault if the rest of the nation’s “fantastic” schools have not taught their students basic statistics, and instead, taught their students to follow one another around in a fashion similar to farm animals.
We often justify our irrational educational systems by claiming people need good and balanced foundations, and that we must “socialize” people, for that matter, which I agree with; yet, these are shallow excuses as well, for we hardly even do these things (according to this type of “logic,” we could simply fill people’s shoes with cement and instruct them in gymnastics while they build pyramids for their masters of society).
For it hardly makes sense for most, if not all students, to retake advanced English and Mathematics courses in college when basic Financial and Economic understandings are rarely mandated in standard K-12 education. Of course, technically speaking, one learns basic financial concepts in Pre-Algebra (if not by learning simple exponentials in one’s later elementary years); nevertheless, the applications of such mathematical matters are usually only briefly given, especially since most children do not realize how difficult hard labor shall be for the rest of their lives. And yet, a person will have an exceptionally difficult time surviving in the world without understanding market forces and interest rates—on the other hand, it is rather easy to get by in life without constantly reciting the Pledge of Allegiance, the Star-Spangled Banner, the Preamble of the Constitution, the various state capitols, etc. etc. I shall present various simple, yet detailed financial problems momentarily, but if one desires to know how to perform the tedious work in even more detail than I shall present, it would only take a moment to explain. However, this is not a financial textbook, much less a “free” calculator’s manual.
Of course, if the reader is slightly economically learned, in that they have read common textbooks on the subject, they may tell me that “there is no such thing as a free lunch,” but accompanying calculator manuals, and even material on the Internet, are incredibly low marginal costs, as such matters are bundled with other “necessities,” which many of us already pay for, as the majority of us now possess high-speed computers, much less super high speed Internet, which are mostly present in order that we may play violent video games with such devices, which may not necessarily be bad, as the video game market in particular is one of the best examples of a modern industry relatively close to perfect competition: the market of virtual slaughter is surely a better example of competition than the microeconomic wheat farms we often read about in economic textbooks; modern farming corporations are highly monopolistic, but the government hardly aids gaming companies—in fact, most of the time, authorities declare war upon such imaginary designers (unless games are sponsoring the U.S. military, whereby “violence” becomes patriotic, even though official military games have hardly been quality creations worth playing thus far).
Indeed, I myself did not even learn how to use a financial calculator until nearly my third year at a University, despite the fact that I was a business major for years; in fact, only roughly 30% of my classes in college were directly related towards my major—I could only imagine how frustrating general schooling must be for people that wish to become dentists and such, for economics is only a step below philosophy in its level of abstractness (hence the reason so many economists have felt a need to use math in recent times in order to “prove” their theories). Yet, if we are not at least preparing people for their specific trades early on in life, and if there are general understandings American people must know, the operation (and creation) of the dollar is one of them.
So let us not specifically speak of Universities any longer, as these are actually more difficult to argue to be as unnecessary as our primary and secondary schools are. One has a choice to attend college, and sometimes, it is worth jumping through hoops in life, especially after one has already been forced to jump through so many by the time they figure out how corrupt the system is that it does not matter if they must complete another year or two until they reach the “promised land” of graduate school—even more especially when their degree may ironically give them at least slightly greater credentials to speak about how ridiculous their “credentials” are to begin with, which has been my personal case somewhat.
It was once my personal dream to become a formal attorney in Nevada, insofar that I may eventually help my state become one of the first to abolish most forms of our local government, but this has unfortunately required an undergraduate degree of some sort and a Juris Doctorate, although I am certain that I could pass my state’s bar exam through independent studies if it were allowed. Surely, however, there are not many schools that are cheaper than UNLV has been for me (their law school’s tuition is set to double rather soon, which is outright atrocious given the fact that the students are receiving hardly any addition benefit, especially since many were saving for years only to find themselves severely disappointed), and as I do not have much to complain about in comparison to the costs of schooling others have accumulated thus far—but then again—I figured writing a book would hopefully allow me to skip law school, as I have found it shall be quite expensive, even though I could abolish most forms of even the federal government simply by convincing others of the necessity of such (and perhaps I may even be paid a fair amount of money immediately). In any case, if this book isn’t a great success, I will surely finish graduate school and find myself in a severe amount of debt from an entirely useless student loan—whereby I may eventually become a great leader of power and influence, insofar that I may have hardly any passion for life whatsoever by such a time, at which point I will absolutely strangle the even younger generation.
It may be enough to end this section by stating that economists have a difficult time measuring underemployment, which is to say that people have more skills than are necessary for the jobs they are accomplishing (much less that laborers have more potential skills they may learn rather quickly). But, of course, basic unemployment itself is a very slippery definition: many people are not included as being theoretically more useful to society whatsoever, simply because they are unwilling, or unable, to look for a job, which could be the result of a number of factors—prison was one reason mentioned earlier, yet, as should have already been made clear by now, education before one is able to leave their parents is an even more major cause of hidden unemployment.
Indeed, if we studied prohibition in our history classes with wisdom as a guide, we may understand how the “War on Drugs” ties into the historical material, and furthermore, if we studied the history of warfare itself, we may realize how oxymoronic it is to state for there to be a “War on Drugs” to begin with, unless we are to say that wars are usually conducted by soldiers that are either intentionally the guinea pigs of chemical reactions, and/or voluntarily addicts as a result of pain and stress: morphine users became prominent during the period of the Civil War; heroine was soon imported from Germany in order to “aid” the former victims, even unto the point whereby 200,000 Americans were addicted to the latter substance, until Congress attempted to curve the over-the-counter sale of opiates in the 1920s—by then, it was too late; soon enough, World War II would begin, and with this conflict, methamphetamines were introduced to the market (the Nazis in particular are notorious for their use of this controlled substance); in the 1950s, the C.I.A. began conducting heavy experiments utilizing a drug that was, at the time, being heavily promoted by psychiatrists and academics—that drug was LSD—and the C.I.A. felt that it may be an effective method of mind control: they later apologized for this incident, which is commendable, although some have stated that this admittance was inconclusive; when Vietnam broke out years later, amphetamines (and other drugs) were rampant among the United States’ military; the recent War on Terror has allowed opium farmers in Afghanistan to produce record numbers of the crop: today, Afghanistan is responsible for the main ingredient in 90% of the world’s heroine supply.
For it seems unto me that our schools are obviously not working according to their supposed functions. Not only is the gap in our nation’s wealth continually increasing, but drug use is just as high as it was during the mid-eighties, even though, once again, we maintain a much greater amount of persons in the prison system today, despite the fact that we are supposedly teaching our youths the dangers of such toxins.
The problem, of course, is that some unschooled drug producers have learned advanced genetic engineering on their own, as even basic marijuana has become a highly modified and potent crop: it is strange, after all, to think that THC production is the result of formally educated people, as the “learned” are at an increased risk of hyper-active forms of drug use, which is the result of their need for personal achievement and perfection (as a matter of fact, if I may confess a sin to the reader, this book was written on many, many cups of coffee, which I am sure is not exceptionally surprising).
But let us not examine unemployment in this section, as underemployment alone is an exceptionally large economic problem—it is a much larger problem in the long-run than the “absolute” term; for an example of underemployment, allow me to delve further into the story of my life.
At the beginning of 2007, the corresponding cash flow shortage that resulted from my aspiring authorship led me to employment in the aforementioned labor position (that required my missing social security card) where little specialized training was necessary, much less a large amount of general education.
And yet, the latter task paid approximately $11.00/hr.
This amount of pay would be fantastic for a large number of people in the world as of this moment in time, and it would be good for some lower-class Americans for that matter, but it was hardly enough to survive upon in my local economy (when one is a full-time student and writing a book on the side), unless, of course, one has their family and friends to aid them, which I have been more than fortunate enough to have. Nonetheless, I would say that my potential economic output was certainly not maximized whatsoever in the labor position of $11.00/hr, and that I could have produced far more important things for society during that time given my range of skills—which was quite a waste considering I did not enjoy the work a great deal, as it was extremely monotonous and boring.
I am sure that some may say that I should have, at the very least, found a better temporary job as soon as possible, and that my complaints are mainly my fault, which is true: I did actually find better employment within a month or two of starting the $11.00/hr task, and I have felt content enough to remain in my new job to this day. As of this moment, I am now averaging roughly $17.00/hr, which is more than enough money for my immediate financial purposes, even though my current job could still be performed without the vast majority of the skills I possess, for I work as a valet, or a simple servant, inasmuch that I park other peoples’ vehicles for them.
In fact, the difference in pay between my current job and my past job is as great as the federal minimum wage at the moment (even though I am still underemployed); nevertheless, this lost productivity would not have been included as being a part of any major economic statistic, for anyone that so much as accepts a job at the minimum wage is no longer counted as being unemployed. In other words, if I had accepted a job at the minimum wage itself, I would have been underemployed by at least three times my potential amount of pay (as proved by my valet job), which would be enough money for my local economy to “employ” nearly three additional persons at the minimum wage itself. This is why unemployment statistics are so meaningless as a method of measuring the wellbeing of a society, for everyone could be employed if the minimum wage were completely eliminated (which is not very far removed from the truth given how much the minimum wage actually purchases today).
It may also be worth noting here that my newer job has granted me an exceptional benefit in addition to my much higher level of income: I am able to test drive very expensive cars in the most important manner possible (by merely sitting in them in order that I may admire their interior), and as a result, I have since come to an even greater understanding as to why I would never need to buy such models given their costs. Any relatively pleasing artistic value a vehicle possesses is soon lost after one has driven such for hours at a time, although some cars were slightly impressive at first. It is not as if we pay tens of thousands of dollars more for cars that merely “perform” better than average, for if speed and acceleration are one’s goals, it is much more economical to buy a motorcycle than it is to buy a heavier vehicle, especially if the circumstances are available to allow such a cost-effective method of adrenaline to be relatively safer than those which are found on normal streets: it is probably less dangerous to one’s self, and to others, to ride a motorcycle on a known, monitored, and closed race track with a helmet and safety gear than it is to travel at similar speeds in a car on the public highway system. And yet, speed and acceleration are only indirect goals towards adrenaline, for if one desires nothing more than a fun mode of transport, a snowboard would be an even cheaper and safer method of excitement for many young adults than a motorcycle would be in a controlled environment, although a skateboard would be an even more economical and safer method of adrenaline than a mountain rush of chemicals, although both of the latter “uppers” rely upon their individual users more than mechanizations (it takes a good amount of guts to drop in from high and steep ledges of wood and/or concrete, although there are incremental steps to such thrills, insofar that one may ride smaller ledges with lesser inclines and eventually work their way up).
But to regress, one could easily live quite a happy and fulfilled life through my job as a valet, despite the fact that a basic driving class is the major type of education necessary for employment—one need not even understand most public traffic laws. It would not be difficult to train an almost completely uneducated person (a 1st grade education would more than suffice) to perform my current job’s duties in two weeks, as the following set of skills is all that is required to earn $17.00/hr: how to drive and park cars at speeds no more than twenty-five miles per hour; how to match ticket numbers; how to copy license plate symbols, car brand names, basic colors, parking space numbers, and one’s name (such basic writing skills would be the most difficult part for some to learn); and although it may also be necessary for one to know how to perform simple addition and subtraction in order that one may monitor the number of cars the business picks-up and delivers throughout the day, the latter task could be performed through the use of a calculator, even unto the point whereby an intelligent person may memorize the various numerical outcomes, which is really all that “learning” is in school to begin with (although the process may be reversed, in that an idiotic person may have the bright idea to apply their memorization once they leave school).
Yet, to regress even furthermore, my prior and lower-paying job was necessary for society, even though it was even more basic than my newer one. As a matter of fact, the $11.00/hr work I performed was arguably more important for society than my current line-of-work may be parking cars (at least in a direct sense), although my valet function does help people save time, which is incredibly important, as it is an opportunity benefit for them—surely, if the rich have opportunity costs when they lend the poor money, they have larger opportunity benefits when they purchase the poorer people’s services! Of course, a number of the upper-class I serve may not have earned their money through hard work, or even through a brief moment of intelligence, but even so, I also serve the middle-class, and even the lower-class when they are out on special occasions, which is more than fine with me, as I have found the lower-class may tip just as well, if not better, than some of the upper-class (in reality, it is difficult to tell what class a person belongs to based upon the vehicle they drive, which says something in and of itself). But it is important and fair to note that the most luxurious car drivers my company serves are often willing to tip $20.00 in order that they may wait for their cars two or three minutes less (and/or in order that their vehicles may not need to be driven more than a few feet for insurance purposes or pride), even though there are times when such a cost may be worthwhile to even the middle-class, especially when many people are waiting for their cars to be brought down, as the time one must wait for their vehicle correlates with the number of parking spaces available near the building’s entrance, whereby at very busy moments a valet driveway will shortly thereafter become an unspoken auction of sorts.
The reason I mention the unspoken auction is because it is an example of an intriguing economic truth—people are often willing to tip more if they are made to do so for the same type of service. It is humorous that we often justify low-paying jobs as being the reason why people have incentives to become more “productive,” for if I became a valet for one of the larger and more extravagant casinos in my area, I would be making an even greater amount of money than I am now, even though I would not need to work as hard for my income. It is not uncommon for many valet services in Las Vegas to “close” their parking lots at peak times of the year in order that they may create artificial shortages, which allow them to capture the consumer surplus of the especially snobbish people in their market, which may be an astronomical amount of money at times. It is more than possible for a valet in Las Vegas to average at least $25.00 an hour, if not far more than thus in some instances, as by producing less than my company is allowed to, other servants may simply skim the cream from the top of their market’s area of demand, as most rich people believe by default that they should not need to tip more than whatever the unspoken average is of society (even though their time should be more valuable to them), unless they face great bargaining power, although, to be fair, some are quite generous at times on a purely moral basis: there was one instance at my work whereby a gentlemen tipped $1,000 to park his highly expensive car, which was likely too generous!
As I was saying, however, I wish to discuss my prior, yet lower-paying job more, as it may be more universally applicable to most disadvantaged American workers, as one must often possess social connections in order to be blessed as much as I have been as a valet, although this is not necessarily the case at my company—so long as one has built up a good driving record, and so long as one is willing to run in extremely hot weather for hours at a time. Surely, however, social connections are likely incredibly important for the very high paying valet jobs in my community (I have honestly not felt a need to apply elsewhere), but in any case, I feel everyone should perform a function that pays relatively low wages for a portion of their life, as such jobs are necessary, and as such work will make one appreciate what riches they may gain and the difficulties of others. Nonetheless, I would not desire to legally require such honorable work upon anyone that would not desire to handle such “meaningless” tasks, especially in situations whereby such jobs truly should be meaningless. Indeed, some of our jobs are unnecessary, despite them being highly complicated positions that pay extremely well!
But let us discuss my $11.00/hr job specifically.
Even though I was making less than half the amount of money some people earn parking cars, and even though I was making much less money than some people earn dealing cards (and bad odds) to their customers, insofar that the latter workers harm the majority of their patrons (Texas hold ‘em and blackjack dealers may be exceptions to this rule for experienced players—most people are not experienced, of course, despite their self-serving bias), while I could say, perhaps, that I was producing a truly needed service for society rather than “entertainment,” I do not wish to seem ungrateful, for my lower-paying work was an incredibly well-paying job given what I have suffered in comparison to my ancestors, which should not be surprising, as the work involved a rather lucrative contract from my local government, and since I was mostly digitizing utility blueprints, no less, which is probably why my employer could afford to pay me such a large amount of money for something so incredibly simple nonetheless. After all, even an $11.00/hr wage was roughly 40% higher than the minimum wage of my state at the time, despite the fact that I was told I needed to work for probationary pay during my first month on the job (at a wage nearly equal my state’s minimum of $6.25/hr), despite the other fact, which was that my hands were being sliced slightly by the nature of the work, and despite yet an additional fact, which is that I already held nearly two years worth of experience in the industry, as I had transferred from another company that provided similar services.
Then again, even a 40% higher wage than my state’s minimum is hardly anything to brag about in modern times, as, once again, U.S. wealth has become increasingly polarized since around 1970: almost all gains in income since this time have floated up to the elite part of the workforce, which has been especially difficult for the younger generations of America, as we have not simultaneously enjoyed the high real estate prices of the past few years (it should not have been shocking that the real estate market was on the verge of collapse recently, as even the “adjusted” real estate market of 2008 will be unaffordable for many young workers—unless we are to move in together). It should be even more apparent that the real estate market of today is inaccessible to the modern youth of America when one considers the fact that higher education is also becoming increasingly expensive while more and more schooling is required in order that one may work in high paying jobs.
One may not be sure as to what an average worker’s potential is, insofar that one may never realize how great our nation’s underemployment statistic may be, but in my particular situation, I had been working for over six years by the time I took the $11.00/hr job. Although my amount of schooling had increased substantially during that time, along with my work experience, my real wage in my local economy remained near where it was originally—if not below such when the increased price of housing is taken into account. Others may have been more or less fortunate than I, to be certain, and the point I am making here is not to give my life’s history, but it is dishonest, to say the least, to say that schooling is necessarily important if one wishes to live a free and happy in life (one may not necessarily need to flip burgers should they fail to attend school, although my first job doing such paid its managers quite decently). Many people in our nation are, in fact, in much worse situations than I, in that they may even work for the federal minimum wage for years after being forced to endure so many years of public education.
The minimum wage is so relatively low today, in fact, that many of us are in a hidden economic depression of sorts; indeed, expectations of inflation alone will easily counteract some of the effects the recently planned federal minimum wage increase may have. Yet, even the minimum wage can be exceptionally fantastic to one of the lower-class in the long-run—if one is willing to live a unique lifestyle deprived of mandated schooling (and not one deprived of education), for it is strange that many of us continue to feel threatened by illegal immigration, even though a large number of such immigrants hardly even speak our native tongue! Therefore, allow me to show the reader how one can not only survive in the world on low wages, but even thrive on such, for part of the reason the Latin culture has a distinct advantage over the general population of the United States is as a result of their willingness to cooperate with one another—we are not only failing to socialize our children—we are compounding their problems to an extent that many of us are unaware of, as we, quite frankly, have been indoctrinated not to see the virtual feudal system we have replaced real capitalism with.
As an example as to how one can do quite well with very little income, inasmuch that one may live their own American dream, so to speak, let us assume that nearly every fourteen-year-old is able to perform my prior, yet low-paying labor duties of $11.00/hr, so long as such individuals hold the right amount of effort in mind, despite the reality of many modern teenagers being quite undisciplined and wasteful with what little funds they have. There is definitely enormous room for entrepreneurial competition in the $11.00/hr job market that has been mentioned previously, and I myself would take the time to start a business of such a nature if I did not have this book to write, along with my collegiate studies, especially if I could find hard-working teenagers willing to accept low amounts of pay.
Let us imagine that I would do this, and that I would furthermore pass some of the competitive benefits of such cheap “child labor” on to the middle-class of Las Vegas, as some of our casino jobs are still not being created as quickly as they could be as a result of the Megaresorts being taxed somewhat more than is necessary, although our local economy is built around gluttony and idiocy for the most part. Of course, in reality, I could not begin such a company for another year (as of this writing), as I signed a non-compete agreement with the aforementioned company of $11.00/hr, despite the fact that it would likely be unenforceable in court, since the business methods involved are so basic (which are not patentable), and since many of the contracts in the industry are made through government bids (which are not trade secrets), and since the vast majority of my experience in the industry was formed through another company to begin with; however, it is with this in mind that I do not plan on disclosing any significant details of the work involved, as I am surely not an attorney, despite having taken three college classes on such legal matters thus far, two of which were focused towards business law in particular: my publisher will, after all, more than likely have a legal department that will understand the matter much more thoroughly than I—thank God for specialization.
Let us, therefore, merely assume that I would begin such a business by training a normal person of fourteen years of age to be about 75% as efficient as I was at the labor tasks involved in only a month’s time. I would only start a person of such an age at a wage of $6.25/hr (my state’s minimum, and I could still make a decent profit during their training: technically speaking, I could pay the worker the new federal minimum wage of $5.85/hr by offering the worker horrible health insurance, but let us not discuss loopholes in my state’s local wage laws, as most readers could probably care less: Nevadans certainly didn’t when we voted). Amazingly, however, even at my state’s theoretical minimum wage, this should still be a good deal for the fourteen-year-old in comparison to their option of attending high school; perhaps I should at least briefly and very generally describe the type of work involved in case there is any doubt such tasks would be possible for most children to accomplish.
This job is one whereby a person unrolls groups of blueprints, writes a number on each one for identification purposes, and thereafter scans them into a computer. The scanning itself is quite simple, and a far more detailed methodology could be examined in the operating manual of the equipment and/or software packages involved. One simply enters the number of the blueprint to be scanned into a computer, pushes the blueprint into the scanner’s slot, and thereafter watches as the scanner feeds the blueprint through (sometimes, the blueprint may need to be guided by hand). If the blueprint shows up on the computer screen as being too dark, or too light, one may quickly adjust the computer program’s settings and rescan the blueprint, but this is not usually needed, especially considering the programs have become so advanced in recent times that they may auto-adjust the scans to the required settings. At the job of $11.00/hr, I did not have one of the more advanced programs available (which I had at the former company), although I did make a suggestion on the matter, which was not taken up right away, which was fine by me, as it helped me understand to a great extent that it was not incredibly important for me to be efficient in order for me to continue to hold my job, which is why I did not feel too bad completely slacking off half of the time, as I was on probationary pay to begin with.
Anyhow, each blueprint usually takes slightly more than a minute to scan (for a drawing of roughly six square feet); the typical price charged for such a scan is around a dollar; therefore, revenues should be in an amount of at least $40/hr per worker/station, as the scanning equipment may require periodic cleaning, and since the scanner must calibrate itself once and awhile (at times, however, revenues may climb higher than $50/hr per worker/station).
Considering the advanced scanning equipment is the most expensive part of the operation, even though such machines are only worth around $20,000 in retail prices, which many such businesses do not pay for in full, as they are often simultaneously the dealers of such equipment, the fixed costs of the machines involved are somewhat negligible. As far as the variable costs of the machinery are concerned, the devices can scan 20,000 sheets without any major maintenance if the scan technician is being very careful, while the consumables of such machines are not more than a few hundred dollars to completely replace; the jobs themselves are often accomplished on-site at the customer’s facilities—there is, therefore, often no theoretical need for such a scanning company to pay rent, and/or utilities—unless they are dealers, of course.
But since we are to theorize a purely production-oriented scanning business herein, it should not be difficult to see why a wage of $6.25/hr would be nothing short of unconscionable if such a business had a nearly unlimited amount of blueprints needing to be scanned, especially in light of the fact that the fixed costs of the equipment may only be temporary at best, as the scanners may be resold for a good portion of the original amount paid for them, while the equipment may be depreciated for tax purposes in the meantime, especially since such equipment is likely classifiable as a computerized type of machinery, which would grant such a device accelerated depreciation in the books (I am not a certified public accountant, however, although I took two classes on this matter in college as well).
To make a long story short, if I began such a purely production-oriented business, inasmuch that I was not even given all of the benefits of a scanner retailer, it would not be difficult for me to earn average profits in an amount of roughly $30/hr, even though I could have teenagers complete most of the work for me. I would simply need to win a few government bids, which would be quite easy considering I could lower the price I would charge such entities to $0.65 a scan for black and white images, and in so doing, I would charge significantly less than the other businesses of the area (this may cut my average profits down to $20/hr per worker if I were to pay such workers $6.25/hr to start, which is still a good amount of income for my behalf when one understands private clients would likely begin to call me at such low rates). In fact, for purely black and white jobs, one of the less capable scanner models would be more than sufficient, as a $20,000 scanner would only be necessary for color images, the latter of which generate much higher marginal revenues, even though they are just as easy for laborers to complete.
But to see how much a teenage worker could gain, even though they have been given the short end of the stick far more than anyone else (except for, perhaps, the end of the stick the other scanning businesses would receive, as they would certainly have a difficult time selling equipment to private business when such labor could be outsourced to my company—unless a governmental organization of some sort is involved, at which point they would still be able to sell expensive scanners, since governmental organizations make any excuse they can to completely consume their budget for the year), let us pretend, for a moment, that we stop a hard-working fourteen-year-old from entering high school, and allow them to work for me at a wage of $6.25/hr (to start). If we substitute their cost of labor for the cost of his/her schooling for 6 months, we shall find their opportunity cost of school for such a period, which, to reiterate, is simply the “greatest” possible alternative they would give up by attending such. We shall not even look at the most significant part of this analysis immediately; this is only a very shallow grasp of a common student’s potential, but I will show my simple mathematical equations in a detailed manner in order that the reader may draw their own conclusions.
35 hours of schooling substituted for labor (first 6 month period) = $218.75 a week * 4 =
$875 a month * 6 =
$5,250.00 for the semester
It is safe to say that the above amount is the minimum opportunity cost of most persons’ first semester of high school. In fact, I am sure that randomly selected teenagers with a middle school education could perform far more difficult tasks than thus on average, insofar that they should theoretically deserve much higher wages than those outlined above. But surely, after 6 months on a scanning job site, a hard-working teenager should deserve a raise, insofar that the new hire could then make $9.00/hr if they are of even somewhat below average intelligence, so long as they have proved themselves to be focused and productive. It is good, after all, to make laborers feel as if their efforts are valued: a manager may generate greater profits if they pay their workers slightly more, as the laborers may work harder in order to deserve yet another raise in the future, although the worker’s increased experience levels should also make them more efficient. In the scanning situation listed above, the now slightly more experienced teenager would only need to scan an additional 4.23 blueprints per hour in black in white in order that their additional wages may be repaid: in other words, I would only be asking for a 10% increase in the teenager’s output, even though the teenager would be making roughly 45% more money than they had been beforehand—this should seem reasonable to them if they realize I am monitoring their output, which is important for any manager to do. I could even use my first laborer to help train an additional worker, while I could buy another scanner and lower the price I would charge various organizations even furthermore to $0.55 per black and white scan, which would make my selling job even easier than before, as I could also accomplish projects at double the rate of speed.
If the reader understood the financial statements I could make a reality, they would probably see a $9.00/hr wage as still being unconscionable, especially if the first laborer were now training others, but even then, this would be better for many people than their attendance of school. By this time, the fourteen-year-old would now have 6 months worth of experience at a particular job site, which should make them even more productive than I would be at such a specific task, as various organizations’ blueprints often possess slightly unique attributes, and as clients usually develop special needs as such projects unfold.
Surely, however, the teenager’s next six months of labor should be worth slightly more.
35 hours of schooling substituted for labor (second 6 month period) $315.00 a week * 4 =
$1,260 month * 6 =
$7,560.00 for the semester
By adding the possibly lost wages of the teenager’s first two semesters of high school together, we find the opportunity cost of their freshman year to be an amount of $12,810.
One may say that a significant part of this opportunity cost finding could be negated by the fact that school children might work during the summertime, which I have included, but this is somewhat arguable, as their attendance of school would limit their labor options, for many companies do not desire seasonal employees. Nevertheless, to be fair, let us eliminate three months worth of wages from the $12,810 amount, even though part of this total is the accumulation of wages at a rate of $9.00/hr, for we should only be reducing their opportunity cost by $6.25/hr to account for the summertime at best, as the teenager’s additional $2.75/hr in wages is based upon their six months work experience; but even by eliminating three months worth of wages at $9.00/hr (let us say their freshmen year of education grants them higher wages during the summertime), we shall still discover a gross opportunity cost of $9,030.
Of course, it would be good if we could say that $9,030 would be the teenager’s net opportunity cost of schooling, as one would hope that the government would not be harsh enough to tax a poor fourteen-year old when they would be going to school for “free” otherwise. Let us, therefore, assume that this would be the case temporarily then, as it will be simpler to analyze. To be as “realistic” as possible, however, we will examine potential income taxes in a second possible scenario later on.
By the end of their freshman year, the teenager will now be fifteen years old. Let us say that I do not think it is fair to give them a second raise right away, however, as their first one was so large (I would promise them higher wages in another six months if they continue working hard). Once again, they will be paid $7,560.00 for the first 6 month period of the year.
At this point, the laborer will have a year-and-a-half of experience with my company, which is far more experience than I had at the company of $11.00/hr, and the teenager will have nearly as much experience as I had in the industry before I began this theoretical business. So let us say that I will give them a raise just before the second part of what would have been their sophomore year, and that this will bring their wage nearly equal to what was my personal rate in the real world, even though their wage is still much less than mine was, as eighteen months have passed and we have yet to adjust their income for inflation, which the teenager does not likely think about. Let us therefore say that I will give them a raise to $10.50/hr during their fourth potential semester of high school, if not merely in order to make sure the teenager continues working hard for their money.
We therefore need to perform some additional calculations.
35 hours of schooling substituted for labor (fourth 6 month period) $367.5 a week * 4=
$1,470 a week * 6 =
$8,820.00 for the semester
By adding the last two periods together, we find the teenager’s sophomore year of high school will have cost them $16,380 in possibly foregone wages, which we could subtract another 3 months of summertime wages from at the highest wage yet in order to find their total gross opportunity cost of $11,970. By adding the $11,970 amount from their sophomore year with the $9,030 amount from their freshman year, we find $21,000 to be their opportunity cost of high school by the time the teenager is sixteen years old, which is a rather decent amount of money.
We have not assumed any cost-of-living expenses for the teenager thus far, as a person of such an age should be able to have their rent and other such expenses paid for by their parents as a matter of law, but let us assume that the teenager has at least needed to pay for a bus to take them to their job, even though the government provides public transportation to children free of charge when they are in school. Let us therefore subtract an unlimited bus pass, at an amount of $40 a month for two years, from the total opportunity cost listed thus far, even though, in reality, this would have also helped them in any second job they may have had as well—we have not been considering a second part-time job in this analysis, as we are only examining what such a teenager would have given up from their weekly attendance of 35 hours of school alone. Their transportation will have therefore cost them $960 for the past two years; the bus pass therefore brings the teenager’s opportunity cost of school down to an amount of $20,040.
At this point, however, the teenager will have two years of work experience behind them, and they are of the age to operate a vehicle. Let us say that they will buy a slightly new economy car (five years old) with very good gas mileage. When adjusted for expected inflation—it would now be 2009—this car should not cost them more than $8,500, especially if the child is not a very foolish consumer. Therefore, after buying their car, and paying all of the taxes on it, let us say that their car’s total cost will be $9,980, and that they will also have high insurance costs of $250 a month, as they are shown to be a “liability,” for they are a high-school drop-out (our society assumes this must be an indication of irresponsibility).
Our teenager will now only have $10,060 in potential savings, and we must also now begin to subtract their newly enacted monthly expenses for insurance and gasoline. Yet, their car should last at least six more years if they maintain it correctly. At a price of $8,500 for a five year old economy car, it should also be covered by a warranty at a dealership for a year or two in case it is a lemon.
By now, let us say that I begin to pay the child $11.25/hr (even if their output has not changed); this is a decent amount of pay, although it is still about 30 cents less an hour than what I was making in the real world when adjusted for two year’s of potential wage inflation at an amount of 3% annually.
In the case of another wage increase, we must perform some new calculations yet again.
35 hours of schooling substituted for labor (fifth 6 month period) $393.75 a week * 4=
$1,575 a month * 6 =
$9,450.00 for the semester
Remember: the child would now have much less money to put in their savings account than the newly listed amount of $9,450.00 as a result of the variable expenses of their vehicle, insofar that these costs may result in the teenager losing almost an entire week’s worth of pay every month!
This leads me to a major point in this book: why would a reasonable person do such a thing?
Even if the teenager is making $11.25 an hour, their car would need to save them at least an hour of time every day they work in order for their variable economic profit to be equal to the same amount of money they would gain by leaving work an hour early while continuing to use the bus (a penny saved is a penny earned). In other words, if their car was justified in order that the teenager may make more money at their job as a result of them being able to work more hours instead of waiting for the bus every day, the teenager could instead simply work 25 hours less every month and ignore their “need” for a vehicle—what is more, they would still have all of the money that they spent on their car’s fixed costs in the bank! After all, it took many hours of hard labor in order for the teenager to afford their car in the first place—at their highest wage yet (at 35 hours a week)—it would take them more than six months on the job in order for them to pay for the same vehicle’s fixed expenses alone! What is more, “earning” money through the use of a bus would be much easier (and less boring) than scanning blueprints: one could simply plop down in a seat and study a book (if such is their desire); if the teenager were planning on learning independently, a car would provide virtually no economic benefit to them, as the bus would be “free time;” by using the bus, the teenager could knock out two birds with one stone!
Even an “economy car” is truly oxymoronic.
After all, the common excuse for the purchase of an automobile by a young person is not financial; instead, it is often related to one being able to date and fool around—which is fine, to some extent—even though a teenager would likely be able to save even more money if they did not date and fool around in the short-run, which would eventually allow for them to date and fool around a great deal more in the long-run. For although this is certainly beyond the point of this section, many modern people are hardly worth dating to begin with, as evidenced by recent social statistics of divorce and persons desiring to remain single, even though people could still date if they rode the bus.
What type of people judge others based upon their vehicles?
Would it be worth marrying a person that is in love with one’s mode of transportation?
And if one is merely “dating” for sexual purposes, would they not need a car even less than one that is worried about impressing another financially?
Even if one merely desires to fool around with a whore, it would be more cost-effective to simply pay prostitutes money directly rather than it would be to drive them all over town.
But even though people are not often this reasonable, let us assume that they are (economists usually assume people examine alternatives and understand why they are doing things).
So, let us say that the teenager bought their car because more options would become available to them in jobs that require extensive driving (such as pizza delivery)—let us suppose that they are able to earn at least a dollar more an hour at a second part-time job of 25 hours a week, plus tips (it would be hypocritical of me to not discount this, as I would not be a valet if I did not take advantage of our massive quantities of automobiles, although, to be honest, I never thought of these things when I was younger, insofar that I would have ended up in a much better financial position myself if I had invested my time and money otherwise). With their car helping them earn $100 more a month in wages, let us say that their tips eventually cover the fixed expenses of their vehicle (we will keep this extra income in a separate account however, as it will take awhile for them to earn this money back, which will be important in an upcoming financial scenario), and that the teenager’s car only costs them $100 a month from an accounting perspective in the short-run, which is not really a loss so much as what the student views to be an investment for an ability to work in even better driving jobs in the future. Even so, their $100 monthly accounting loss will bring down their potential personal savings for the aforementioned fifth six month period of school to an amount of $8,850, which will give them $18,910 in savings (plus the worth of their vehicle and future job investment) by the time the teenager is sixteen-and-a-half.
Let us say that the student is not given another raise at their scanning job during the sixth six month period, and that they would save another $4,125 by not going to school (this amount was found by subtracting the teenager’s summer income at the highest wage yet and by deducting the accounting cost of their vehicle); this will bring their total opportunity cost of high school up until their senior year to an amount of $23,035 in savings (plus the worth of their vehicle and future job investment).
But let us deduct another $2,000 from their opportunity cost of high school thus far, for their vehicle may require major maintenance, as there is a slight possibility their car may need to have its engine completely replaced, which their warranty may not cover after all, especially since the teenager may have been unable to read very well, as they did not attend high school (supposedly), which will bring their total opportunity cost of high school down to an amount of $21,035 in savings (plus the worth of their vehicle and future job investment) by the time they are seventeen years old. However, their vehicle should now last quite awhile longer—until their transmission goes out. Then again, all of these major expenses could be substantially reduced if the teenager has a friend that dropped out of high school in order to become an auto-mechanic, in which case the teenager would have probably paid less for their car in the first place, as they could have had their friend help them inspect and buy one from a private seller, but let us not assume that mechanics are worth more than lawyers and crooked (or incompetent) business men, as that may be far too ridiculous of a concept for our society to handle at this point in time.
In any case, let us assume that the child’s wages finally rise to $12.00/hr before what would have been their senior year of high school, which is about the same amount of pay as the real world amount I myself made when my past nominal wage amount is adjusted for possible wage inflation at a rate of 3% annually for three years.
35 hours of schooling substituted for labor (1st semester of senior yr.) = 420 a week * 4 =
1,680 a month * 6 =
$10,080 for period
$9,480.00 for period after insurance
The next semester’s end will stay the same for the teenager, minus their potential summer income worth $5,040 at a wage of $12.00/hr; after subtracting another $600 for the accounting cost of their vehicle (the child would now have two years of experience on the road), we then add the final amounts of the last two semesters together, and thereafter, we add all four years together, and finally…
WE HAVE THE “NORMAL” OPPORTUNITY COST OF HIGH SCHOOL!!!
$34,955 + Six Year Old Vehicle + Future Job “Investment”
(I figured I would present this total in the manner of a get rich quick scheme by bolding and underlining the above text in order that the amount may be more convincing to some readers, even though there should be no need for this given my highly conservative and slightly technical estimates).
Let us throw some income taxes in the pot now in order that we may be even more realistic!
Let us nail the teenager at an income tax rate of 20% (since they are a “dependent”).
Their tax-adjusted opportunity cost of high school is $27,964, plus the aforementioned benefits.
Let us say furthermore that the teenager is kicked out of their home at the age of eighteen, as their parents thought that they should begin going to college and wanted to “teach them a lesson.” Luckily for the teenager, however, they love a girl a whole lot, and she loves him. This other girl is very similar to them, in that she is willing to work very hard—instead of merely desiring to take time off from school in order to goof around and do usual teenage things. In this case, their combined savings total would now be worth $55,928, plus their vehicles and future job investments.
Of course, the two teenagers may be as dumb as door posts, as they would not know hardly anything about geometry, chemistry, and all of the other important things we may have learned about in high school, such as the anatomy of frogs, especially since it is not guaranteed that they would have used their bus passes as time creation devices in order that they may have read when they had nothing better to do; however, let us ignore their possible lack of knowledge for a moment; shall we?
Assuming that the two lived in a housing market similar to that of Las Vegas, the price of an entry-level two bedroom, one bathroom condominium would probably not be much more than $229,504 by this point in time (this is assuming a similar $180,000 condo of 2007 would be compounded annually in price by approximately 6.3% for four years). If housing prices were much higher than this, general wages would also be (reasonably) higher as well by the time the two teenagers are eighteen years of age, as the real cost-of-living in such a city would be atrocious. But let us simply assume that this is the price the two will pay for a home, even though this would seem to be a higher rate of “inflation” than is usually reported, as some may not wish to throw their money away by paying rent to landlords.
At this point, we could say that the two love birds would use their $55,928 opportunity cost of high school as a down payment on such a condominium, which may actually be a slightly greater down payment still—if they had earned a small amount of income from their bank in the form of interest (even a savings account would more than likely pay around 1.5%). Let us ignore potential prior investments for now, however.
With the above in mind, the teens would still need a mortgage of $173,576.
Of course, in reality, if the two had been working a second job at a minimum time of 25 hours a week, their loan may be less than thus, assuming that the two were very good at saving (they would have been working a lot and would not have had tons of “free” time), but let us say that they were not very responsible, although it may have been truly necessary for them to have spent some of their additional wages on minor personal needs, such as clothing and food, as their parents may have wanted to teach them a lesson in becoming independent, which seems reasonable. I was actually made to learn about life in this manner when I turned sixteen: I rarely asked for the clothes I wanted, I paid for a car and insurance, and I often fed myself at restaurants—even though I was attending school—much of this is not a good example of frugality in my case, despite the fact that my father is a very frugal person and taught me more than well in this regard. Even so, aside from my personal foolishness as a teenager, I was able to end up with over $2,000 in savings by the time I was eighteen years old (in only two years time), despite the fact that I took a few months off work at one point, although my job did not pay much more than my current state’s minimum wage today. In other words, it is safe to say that the two would only need a loan of about $165,000 if they each saved $1,000 a year from their second job, assuming they are not quite as frugal as I (which should not be too difficult): I should clarify furthermore that I often bought expensive brand name shoes and other clothing such as thus. But in any case, let us ignore my personal account of waste, despite the fact that I am certain many teenagers could greatly surpass my savings amount if they are very good at making themselves appear to be fashionable through the use of cheap clothing—or if they care less what other powerless people think about them.
Let us also say that both children have maintained perfect driving records up until this point—they have no speeding tickets, and they have been in no accidents (once again, I know that this should not be expected of most of today’s youth, even though this would justify the continuation of their taking the bus even furthermore). At this time, their insurance rates would drop for three reasons: firstly, they are now over eighteen years of age; secondly, they have “invested” money in an insurance company; thirdly, they are now married.
However, assuming that neither had parents that taught them how to establish a good credit line beforehand, they would likely still be burdened with a rather high mortgage payment given their income levels, partially as a result of what would likely be an astronomical interest rate for them, although the principal of their mortgage is also rather small given their income levels.
So let us go so far as to say that both teenagers could finally replace their scanning jobs with a decent line of work starting at $13.00/hr (this would be worth about $11.55/hr in 2007 at a 3% wage inflation rate), and that the two are now making $10.00/hr at their part-time jobs (this is about $9.00/hr in 2007 at a 3% wage inflation rate). Each of their annual incomes will therefore be $21,840 gross as a result of their first job (at 35 hours a week), and $12,000 gross as a result of their second job (at 25 hours a week), which will give them a combined income total of $67,680 gross.
At this point, the government would probably raise a progressive tax on them, so let us say that their income taxes are a combined rate of 35% (in order to keep things fair for the people that are even poorer than them); even though the government shall use part of this money in social welfare programs and schooling, the majority of this will go towards defense spending, interest payments on the national debt, and social security, the latter of which they will likely never receive, while the defense spending portion of their income shall be discussed in excruciating detail later on in this book.
To get back on track, however, this will give them a combined net income total of $43,992 with a mortgage equal to $165,000; although this is still a good amount of debt given their income levels, it is manageable.
To be truthful, we have ignored a great deal in this analysis thus far, and yet, even this shallow understanding shows reality well enough. People can more than survive on low wages—they can thrive on such: this is already a far better outcome than what many of our ancestors were given for their amount of labor, as these youngsters would be relatively financially independent at this point in time in comparison to the levels of debt some Americans put themselves in today.
However, let us see how the two teenagers could easily be even freer than thus!
I am not sure what their monthly mortgage payment would be given the aforementioned scenario, as I am not a bank, and as I am not sure what type of a loan they have asked for, but their $43,992 of net income does seem to still be rather small given other possible expenses adjusted for inflation, especially since most banks are rather horrid in their terms and conditions of loans.
Let us, therefore, instead of assuming that the lovers moved out of their parent’s home right away, assume that their parents were nice enough to allow both of them to live in one of their three bedroom homes for free, as one of the older couples had an older child who already move out with their mate, which would still allow the family an additional room for their computer, books, and other possessions, as the adults would likely not be bothered by the two new children very much—they may even sincerely enjoy the youth’s company (I realize this is also a shocking thought). In the meantime, the two teenagers could save even more money and keep the old amount in the bank.
But if I have not completely lost the reader by now, let us also say that at eighteen years of age, the two young adults need an average of $20,000 a year in order to pay for their living expenses: this “cost-of-living” would be worth an amount of $17,769 in 2007 at an inflation rate of 3%.
Let us examine a possible budget they could make.
Potential Budget in 2007 dollars
$17,769 = $48.68 per day
$17,769 = around $1,480 a month
Food expenses: eating at a restaurant for every meal = $39 a day at $6.50 a meal;
This leaves about $290 a month for their other living expenses.
Let us, therefore, say that they eat breakfast at home at a cost of $3.00 a meal;
This gives them an extra $210 per month (milk and cereal are very cheap).
Let us say they make sandwiches for lunch and drink water at a cost of $7 for both of them;
This gives them an extra $180 a month.
Their total food savings are now $390 a month.
This would leave them with $680 a month for anything else they may need.
They could have slightly more, but this has been somewhat sloppy math.
Let us say that their combined insurance costs were still $400 a month;
They would still have $280 a month left to spend.
This should be enough for clothing if they shop at cheap stores.
What need do they have to “impress” one another when they have great personalities?
They are not paying rent, or utilities, after all.
However, they must still pay for gasoline.
Let us say that they cut their dinner expenses to $4.00 a meal;
This will give them $6 a day in order to pay for gasoline.
We could cut these expenditures down even further, but let us be somewhat liberal.
By the time the two are twenty-one years old, they would therefore save another $71,976 by living with their parents free of charge ($23,992 in savings per year in 2011 terms; we are assuming their wages would be adjusting for an increasing “cost of living” after this point); when this latter amount is combined with their original savings total, the two would then have $127,904 in their bank account—assuming they were not paid any interest by their bank thus far.
By now, of course, the condominium they had always wanted would have risen in price to an amount of $275,334, which means the two would still need a mortgage of $147,430. However, this is a slightly more manageable loan given their increased income level, and this lesser loan was achieved at very little additional cost, assuming the teenagers enjoyed their family’s company as much as the parents did: if they all really loved one another, this would have been a benefit from a benefit.
Can one picture being this young, yet being able to afford such a home with such wages?
The benefits of love and hard work are very great in combination.
After all, this analysis is quite pessimistic compared to what is possible.
Let us show how I have stacked the odds against our theoretical newlyweds.
Even if we say that low-income wage inflation was only 3%—by the time the two are twenty-one—the $11.00/hr wage that I made in the real world should be worth $13.53/hr (in 2014 dollars).
I am sure that most workers could earn much more than what has been given here, as the two kids would more than likely be able to find much better jobs once they turn eighteen (especially once they turn twenty-one) given the Las Vegan economy; this analysis has assumed the two would be making hardly more money than I did in their primary job after they had been with a company for five years, while the real world wages I made were from a part-time job after I had only two years of experience in an industry. What is more, we have assumed that the two have been taxed at a rate of 35% ever since they turned eighteen, even though they would have hardly any large amount of relative wealth in that type of an economy, despite the fact that they did not use as much schooling as others.
Furthermore, we have said that the two never made any interest whatsoever from their savings account—much less a 3% annual return from a money market account of some sort.
We did not include any of the opportunity cost wages based upon work experience for the summers—or summer wages at all for that matter (we were simply finding the opportunity cost of school)—in which case we have negated an entire year of potential savings! Let us say that this previously ignored year of labor was only worth an average of $7.50 an hour after taxes (to remain on the safe-side); this will give the couple an additional savings total of $25,200. If we merely include this amount, we find that their loan will drop to $122,230 by the time the two are twenty-one years old!
Even if the two were to take out a fairly high interest only loan from the bank, let us say at a rate of 10% annually, the two would be able to handle the cost somewhat, as they would only have a monthly mortgage payment of $1,018.58. Once again, since their basic living expenses would have been manageable when they were with their parents, they could easily have a nominal amount of $26,216 leftover (in 2011 terms), which they could use in the future to pay for their home and the utilities on such.
To be more specific, after their interest only expense is taken care of for the year, they would still have $13,993 left to spend, although the utilities on their home would likely be somewhat unbearable at that point in time, assuming that we do not have any scientific breakthroughs in the next seven years, but then again, they would not be at home a great deal, and they could turn down their heater and air-conditioner somewhat.
It is very safe to say that the two could be relatively “unknowledgeable” compared to most of society, but they would be able to survive, for at the rate that their home’s value would be appreciating, they would be doing rather well heading into the future, especially if they had been investing their money when they were younger, which we shall now discuss.
Of course, if they knew how to invest in other methods aside from real estate, and if their parents were very loving, they could possibly live with the adults for another three years (until they are 24); I will not even perform any calculations for the latter possibility, as that would be an incredibly ridiculous notion according to how our society usually operates, although it is something that my own parents have done for me, which is why I am so greatly indebted to them.
On the relatively more optimistic side, let us say that the two teenagers placed all of their savings from the opportunity cost of high school into basic certificates of deposit at their bank (we will still not include any of the wages they could have made during the summers, and we will take out income taxes at a rate of 20%, which is a very conservative assumption).
Let us list the expected return on their investments at a rate of 3.5% to be extra careful the money will be there when they need it: this percentage should be very close to the “risk free” rate—it is only about 1.5% above it.
Let us create a timeline of these amounts.
Year 1 (when they were 14) – Present Value = $14,448 (joint income after tax)
Interest rate = 3.5%
Number of years compounded = 6
Future Value = $17,760
Gross gain of $3,312
Let’s tax this investment income at 50%, to be fair, since this is money they earned doing nothing.
Net Gain from year 1 investment = $1,656
Year 2 (when they were 15) – Present Value = $19,152 (joint income after tax)
Interest rate = 3.5%
Number of years compounded = 5
Future Value = $22,746
Gross gain of $3,594
Net Gain from year 2 investment = $1,797
Year 3 (when they were 16) – Present Value = $5,560 (approximation of taxed joint income with cars)
Interest rate = 3.5%
Number of years compounded = 4
Future Value = $6,380
Gross gain of $820
Net Gain from year 3 investment = $410
Let us ignore the years after this as the returns are becoming small (their vehicles are the major reason for this, which we could add as a part of their transportations’ opportunity cost, even though I shall not trouble the reader with the details on this matter). Even so, this small amount of investment income will bring the children’s principal down by a significant amount ($3,863), which will give them about $386 more to spend a year by the time they move out in the case of an interest only loan of 10% (this would pay for a decent Christmas their first year alone; at the very least, it could pay for some cheap furniture if they are lacking such things).
However, let us say that their parents did not completely own their own three-bedroom home when the teens lived with them; in other words, the elders still held a good amount of outstanding debt themselves. Luckily for the two children, they trusted their parents (once again—I realize this is a shocking thought).
Therefore, instead of investing in CDs at their bank, let us say that the children loaned their opportunity cost of school to their parents at a 5% fixed-rate (can we really trust banks more than our parents?), which would be a fairly decent interest rate compared to what many people pay for their mortgages, which would be much lower than the 10% interest only rate we have assumed the children would be paying in order to live in their own initial future dwelling.
This type of investment would generate the following amounts:
Year 1 (when they were 14) – Present Value = $14,448 (joint income after tax)
Interest rate = 5%
Number of years compounded = 6
Future Value = $19,361
Gross gain of $4,913
Once again, at an investment tax of 50%....
Net Gain from year 1 investment = $2,456
I hope the reader can trust that I can perform these calculations now in order that we may save forest life, even though these are quite uncertain financial assumptions to begin with, despite my exact dollar amounts and interest rates, which I am certain have made the reader feel at least somewhat secure thus far.
Net Gain from year 2 income invested for 5 years = $2,645
Net Gain from year 3 income invested for 4 years = $599.00
For this investment scenario, let us continue computing the returns of the years afterward, as it seems more valuable to do so a priori.
Net Gain from year 4 income invested for 3 years = $1,755
To make this a very convincing story of survival for the reader, let us even include one complete year of savings after the kids turn eighteen (this is an initial investment of $23,992).
Net Gain from year 5 income invested for 2 years = $2,459
This will bring the two’s total investment gain up to an amount of $9,914 (their annual future interest only payment would now be brought down by almost $1,000 a year), even though, once again, none of their underage summer incomes have been included in any of these latter investment figures, while this investment assumption also raises the opportunity cost of their vehicles by an incredibly large amount (from an economic perspective, one is always paying interest for their vehicle in the form of opportunity interest, even if one pays for their vehicle with cash).
But let us imagine the young adults’ theoretical utility costs in detail, just for fun.
Remember: this is a two bedroom condo (by this, I mean they still have a small living room and kitchen). I am not exactly sure how much money their utility bills shall be, especially adjusted for inflation, as technology would hopefully be better by then, but I will give the inflation rate at the standard 3%, as to raise it even greater than thus given the enormous assumed increase in home prices would be quite ridiculous—at an even higher rate of inflation for such utility expenses, jobs should be readily available, or wages should be much higher. Today, it would be strange to see the electric, gas, water, and even cellular phone bills combined for such a residence greater than $400 a month during the hottest and coldest times of the year, so let us say that all of these payments will cost an average of $500 for the peak months of 2014.
This means that the youths’ past investment income (which helped pay off their parents’ homes) would save them enough additional money in the form of lessened future interest only payments that such savings would essentially cover nearly two months worth of the youths’ future utilities during the harshest times of the year. Remember: these two young adults are very conservative spenders. They are away from home most of the day, and in the wintertime, they are under a good number of blankets at night; since the two really love each other, they also generate a lot of body warmth—their average bills should be well below those of society’s to begin with, especially since the two rarely use their cellular phones (only in emergency situations), and instead, use emails in order to plan meetings with friends ahead of time. In the future (2014), it is reasonable to assume that if computers continue to develop at the pace that they have, that the two young adults may even possess a programmable climate control system that automatically turns on and off during certain hours of the day (we could have this now as a matter of fact—although in the future they may have a system that works with their digital organizer and/or they may turn on/off their utilities remotely from work). In any case, their utilities would only be expensive during the worst two-thirds of the year—even in the hellish environment this approximates—the real Las Vegas: their bills would be rather small in March and October.
Even after paying for their annual interest only expense, utilities, food, clothing, and other essentials, the two would still have at least $9,000 a year to spend on their now decrepit cars. It should not even be difficult for them to save roughly $1,500 a year, which they could use in order to start paying off the principal of their home—by merely utilizing this small amount of savings in such a manner, the next year, they will have $150 more to pay off the bank with (their savings would also now be 3% higher), and by reinvesting this amount with a somewhat larger amount of savings the year after thus, they would be able to pay off the bank at least $315 less the next year, while they would be able to pay off the bank around $480 the year after, and so on, and so forth, especially since their cars should be completely operational by then (if not nearly new), which would allow them to pay the bank off at least $1,500 less the year they turn twenty-five, at which point they would likely be able to refinance their debt with a more competitive bank, which may lower their annual interest only payment to a rate of 8%, which would allow for them to pay the bank off at least $2,500 the year they turn twenty-six, while their ballooning savings would allow for them to pay the bank off at least $3,500 the year they turn twenty-seven!
They would not likely wish to start a family until they are at least thirty-two, as children would substantially reduce one of their sources of income; nevertheless, they would be able to upgrade their dwelling to a three bedroom house of their own by the time they are thirty-seven, or even sooner than this—depending on their exact circumstances, which we can not be sure of, as this is very far into the future; what is more, it would be possible for them to have children in their late-twenties, so long as one of their parents agrees to help watch the grandchildren a fair amount. The new couple’s grandparents (the great-grandparents) may even be able to help as well, as the latter’s own three bedroom house would surely be paid off by then, insofar that they may be retired.
But I do not wish for one to think that I am advocating child labor, as that is far from my point, for I would like the reader to consider my assumptions—even if they are off by a large margin, I would say that the couple’s ultimate end (a three bedroom house and a lovingly small family that they could easily afford) is better than what many modern Americans ever find in life—let alone at an early age. This is true despite the fact that the “normal” material means I have listed are relatively negative compared to the potential of most human beings; many young and relatively “uneducated” people could be making much more income than this, especially in the real estate market that we are basing this example around. It is not impossible whatsoever for many high school drop outs of Las Vegas to make at least $13 an hour in 2007 dollars (plus health insurance, and even 401K—working full-time) once they turn twenty-one years old (one could become a cocktail waitress, taxi driver, etc., etc.).
Our laws and social mores are much more of an economic problem than any “lack of abilities” are, and even in this regard, our social mores are worse than the law at times, as work permits and “home school” could allow teenagers to have a fantastic jump start in life regardless of the law.
In fact, I would even go so far as to say that if many young people began working full-time as teenagers in major metropolitan areas they could make wages in amounts whereby they would easily be able to have a three bedroom home paid off by the time they are twenty-five, especially if they live in cities such as San Francisco, which pay extremely high wages, and then relocate to real estate areas that are relatively cheaper. This is actually a major reason why Las Vegas grows so quickly, although one would think that a Californian homeowner would move to an incredibly less populated area if their desire is to raise a family cheaply—most Californian homes are at least four times more than their Midwestern counterparts.
In any case, one would hope that humanity is not too much like the lion; many of these creatures kill their young when they feel threatened by them.
If we treat our families as empires, at this very moment, no bank can hold us down.
Instead of destroying our families, why do we not work towards our children’s future?
There are plenty of options available to us in the world if we only open our minds to the possibilities around us rather than complain about how the government must aid our stubbornness.
And what is there to stop many extended families from moving in together temporarily until they are able to pay off their mortgages at a much more rapid rate than before?
If we do not have close families, then why do we not cooperate with our fantastic friends?
In the short-run, we might find such scenarios uncomfortable, but after a year or two, life would become easier, and easier, and easier—in the long-run, we would be able to retire much quicker—at the very least, we could perform careers we enjoy!
If we have the same genetic aptitude of our ancestors, which we surely do, our productivity has made us fully capable of earning a good living when we are young; we could become far freer very early in life and we could merely perform jobs that we love: our careers would not even be work so much as they would be play. I am not able to examine all of our different local economies, much less every particular person’s unique situation, but generally speaking, if all of us were to join together, and if we were to save and invest, it is easy to see that we would be much better off than we would be on our own—one must simply perform some basic math in order to see the enormous benefits of cooperation.
What has been illustrated above is truly feasible for a large number of “poor” people in this country; many of us are in a much better situation! Those of us that are already a part of the middle-class often write checks for interest payments on homes filled with extra bedrooms we hardly even use—we also pay for the accompanying utilities of such, and the opportunity cost of our waste, the latter of which we could use in order to buy rather safe mutual funds.
The irony in our society today is that it takes originality, and more importantly, courage, and even more importantly, faith in one another, to live a life of true freedom. Most of us are simply far too “independent” in America, even though our own self and the next generation would be in a much better position than before, especially if we are willing to break the mold before everyone else does, as our children would have a competitive advantage by not participating in senseless forms of education and labor. We have hardly even begun to discuss possible options!
For although we assumed in the example above that the children were unknowledgeable, our greatest men in history often learned independently, and they loved doing so!
If there is any meaningful correlation between one’s schooling and their level of income, it is likely the result of an indirect causality—intelligent, social, and hard-working people are more likely to attend school; nevertheless, they are also those that would perform exceptionally well independently.
We must simply have the right foundations in place.
What good is a great deal of “education,” or money, when we have little social discipline and compassion?
How is our technology exceptionally useful when we do not even love one another in the way that our ancestors were required to, insofar that we should surpass them in our understanding?
After all, most of the above calculations were nothing less than an “opportunity cost”—we have not even delved into the fact that the government had not only been saving money from the teenagers not attending school, but furthermore, that it made tens of thousands of dollars off of their wages.
When this entire work is taken in its entire context, one will find that the youth could have made even more money than what has been stated herein if a large majority of needless taxes were eliminated. Although some problems would surely be “created” if our entire society followed similar types of scenarios, in the long-run (and even in the short-run), the vast majority of our population would be far better off, as we would surely become much more economically efficient. After all, in reality—no problems would be created—they would simply be exposed.
Wages for many jobs may be driven down temporarily, as children would be able to “compete,” and as they may demand less money from their employers than adults would (this may first solve the problem of illegal immigration somewhat, however). Many of our “specialized” and intelligent teachers would suddenly be forced away from their comfort zones: this would suddenly shift our economy’s supply of skilled workers to the right, which would lower the price of advanced labor as well. However, with cheaper labor at hand, prices for many goods would also be driven down in the long-run, especially if our society were to save our incomes rather than purchase unnecessary matters. For some teachers may form their own businesses in their desperation, in which case the demand for labor would shift to the right as well, at which point real productivity would skyrocket. Surely, any decrease in wages would be counterbalanced by a decrease in the working classes’ interest payments to banks were they to move into the same homes temporarily. If this occurred on a macroeconomic scale, our beliefs would be immediately reflected in lower interest rates, as such figures would be driven down by an exceptional amount with banks being desperate to earn money on loans. Of course, our unemployment numbers may skyrocket for a few years—but this would only be if our statisticians suddenly include all fourteen year olds as being part of the labor force, and allow such young adults to “look” for jobs, if, God forbid, that is what they freely desire.
The most important matter to consider herein, however, is whether or not happiness and freedom would sky rocket, which they surely would were we to believe in such. To be honest, however, I am not exactly sure what may happen in the future; I do not have any data to base this off of, and our society is far from dreaming as thus at this moment in time. But when one examines the ever-decreasing percentages of the farming and manufacturing communities as a part of the rest of the labor force of the United States, they shall see why it would be incredibly difficult for any of us to starve and/or freeze to death—we do not need to put many citizens to work whatsoever in order for our truly basic natural essentials to be taken care of.
For although social security has already been briefly rebutted in a former section of this book, let us now briefly examine this matter in slightly more detail.
If the two teenagers in the above scenario did not need the government to “invest” their money for them, they would have had even more net income to personally invest when they are young.
When one examines the aforementioned opportunity cost of schooling for these two children, they find that their first year of high school cost them a combined amount of $18,060. At a social security tax rate of 6%, they would have needed to have placed $1,083 of their money into the government’s system—this amount would be worth quite a bit more if the teenagers used such in order to pay off their home as quickly as possible. It is highly doubtful that the government earns returns on the social security system equal to the returns banks may earn through loans to high risk borrowers.
For although the average social security payment is rather high today, the government will have an exceptionally difficult time in paying the relatively poorer youths of today such amounts in the future; the governmental system has been artificially propped up for years by an abnormally large labor force (the baby bombers) as a percentage of the older population. If the government plans to carry on this illusion any further, Generations X, Y, and possibly C will not see hardly any of the money that they put into the federal system, much less the inflation adjusted amounts that the currently elder generation enjoys—unless, perhaps, they have a good amount of children immediately, which does not seem likely, as we are already excessively supporting the aged at the expense of our infants, which is partially the reason why families are not very important to our society anymore to begin with.
And yet, we have not even discussed the national debt of our society in detail, and the enormous interest payments that we must make on such. The United States’ government paid over 400 billion dollars to its creditors in 2006—yet, the government only continues to increase its debt even further. To put this debt into perspective, the social security system of today only pays out 650 billion dollars to the population. To make a long story short, this means that the supposed “bankrupt” social security system is only 39% more expensive than the interest payments we make towards the government’s debt!
If the government were to lower its debt, we could cut taxes even furthermore, which would allow people to invest even more into their homes and businesses, which would increase the opportunity cost of high school even furthermore.
Indeed, a great deal of our national debt is present as a result of enormous and needless militaristic waste, as has been mentioned already, so let us delve into this latter problem in all of its “glory,” as the entire scope of such will soon be shown to be a far larger cost to society than anything else that has already been explained, especially when one considers that its burdens on the world are not merely “economic.”