He now has $2000 less than he had last year, due to the tax increases. What should he do? Unless he wants to go into deficit spending, he must cut $2000 from his expenditures.

He has listed several possibilities. He could eat 25% less food. He could stop paying the mortgage. He could stop paying the sitter. None of these alternatives are good, but he must choose one.

If he eats 25% less food, his kids go to bed hungry. If he stops paying the mortgage, he presumably loses the house and must sleep in the gutter. So he stops paying the sitter. Now he must work 200 hours less, and ends up losing $15000.

He now must now cut another $15000 from his spending. So he gets rid of the car, eats 25% less food, and stops paying the mortgage. He ends up starving, carless, and sleeping in the gutter.

If instead he had kept the sitter and cut the food he would be starving but could have kept the car and house. Still a bad situation but better than losing everything. Or he could sleep in the car and have enough to eat. Or keep the house and food, and sell the car.

None of these alternatives are good, but for some reason I can’t comprehend, he has chosen the worst alternative, and lost everything. That’s the part I don’t understand.

@Alan, I don’t think this is what the multiplier effect means. The multiplier effect refers to the negative effect on the college student from working fewer hours, but I have never seen it applied to a multiplication of gains or losses for a single person.

@Sabra, the difference between his hourly rate and the sitters is huge ($50 minimum), so working more hours is still a net benefit.

I myself am an Independent. This means when I write, the Democratic minds label me a Conservative Republican and the Republicans label me a Liberal Democrat. Crazy to think that a person could be supportive of gay marriage and limited government, no?

Anyway… in your article you talk about how having increased costs (such as your 2k tax) will result in your loss of ability to spend on daycare.

This example illustrates your complete inability to relate to the government issue at hand.

Why not, pay the $2k in taxes and keep paying the student? (By the way, are you paying the student under the table or is she paying taxes?) Our government has no problem paying for things without the income to cover it, so why should you do it different?

Seems stupid, no?

Then why not flip it around and have the government only spend what it has?

“I lose $2K, and in effect the community loses more than $2K.”

And since it costs David Eric Nelson more to get the same amount of work done, he’s losing more than $2K and his sitter is losing maybe all of $2K.

Working more won’t solve the problem; the problem is he won’t be able to afford a sitter so he can work effectively, period. Much less more.

Re: #3: Whinge is an old English (British) variant of whine. It’s pronounced to rhyme with hinge.

As an aside: how do you pronounce “whinging”? I’ve only recently started to see that where I would put “whining”. Is this a Michigan thing?

I hope that what you mean is that the money is important to you, but you don’t want President Obama to give away our social safety net and award the rich a much bigger benefit just to save your $2K.