Wednesday, March 11, 2009

Bill Gates' net worth - a view from "below".

Just read on BBC the latest net worth (apparently the world's richest have all had their net worth slashed thanks to the recent crunch) of Bill Gates - US$40 billion dollars.

What does this mean for an individual?

Imagine spending US$1 million every day. If Bill Gates liquidated all his assets, he can do so for 109 years.

Now, let us imagine Bill Gates giving away all this money to others (FYI, he has a charitable foundation for helping the world on health and other issues:

Say he's trying to support people with US$50,000 a year (Singapore's PPP-adjusted per-capita GDP for the year 2007 - He would succeed in supporting 7,300 people for 120 years, which means 14,600 people for most of their adult lives. That's about 3% of Singapore's current population, including all foreigners.

I happened to be expecting the tyranny of large numbers to kick in when I initially did the math. Needless to say, I was still surprised by the scale of the impact he would actually have (were he to simply give his money away).

Now curious, I am going to see what our S$4.9 billion package drawn from our reserves for servicing the JCS would do. Right now, we're looking at 1.00 SGD = 0.653253 USD. This gives us US$3.2 billion. As a repeat of the previous exercise, this lasts 8.77 years if we spent US$1 million a day.

I am going to more directly calculate how many people we can help directly with US$3.2 billion: Assuming a modest salary of US$25,000 (S$3,189 a month) a year, this translates to 128,000 people sustained for 1 year or 25,600 people over the expected 5 years of recession. So, idealistically (I'll explain later), if we expect 51,200 people to lose their jobs over the next 5 years, US$3.2 billion will keep these people afloat with approximately S$1594.50 a month over the 5 years.

Ok, end of idealism ... social realism kicks in. Lots of other factors also muddle the issue (eg. 51,200 job losses over 5 years is too static a number given the dimensions involved - some will lose their jobs for a few months, etc ...) but I will not even attempt to discuss those. The real problems are - Who gets the money? - If I knew I was getting about S$1600 a month just by being unemployed, would I deliberately become unemployed? (I consider myself a principled person, but even I'm tempted at these rates!)

Having said that, I think I now have some inkling of why many have criticize the Singapore government for not openly considering other ways of distributing the S$4.9 billion from our reserves. The very tough question (I have no answer to), is how do we do this fairly (while helping the ones in trouble)?

My criticism of JCS is that we're being "too fair" with the money. A big proportion of the people benefiting from JCS will not be in danger of unemployment. It just seems like the Singapore government is using a shot-gun to kill a smattering of cockroaches - you use up a lot of resources to solve a small percentage of your problems. I feel a more targeted approach is probably more appropriate.

I also now see the JCS as being very similar to the (imho, flawed) US Republicans' idea that you can give money to the rich (companies being subsidized for retaining their employees), the money will trickle down to the poor (the employees the companies retain as a result of the JCS scheme).

Heh, I had not expected this article to move from Bill Gate's fortune to this, but it flowed somehow ...

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