ShmoopTube
Where Monty Python meets your 10th grade teacher.
Search Thousands of Shmoop Videos
Banking Videos 367 videos
What is Collateralized Mortgage Obligation (CMO)? A CMO is a mortgage bond that consists of a large number of different individual mortgages bundle...
When a bond is secured, it means it's protected, i.e. there are assets that would be forfeited if repayment is not made. When it's unsecured... it'...
What is Counterparty Risk? Counterparty risk is the risk to either party within a transaction that the other will not or be unable to abide by the...
Finance: What is the Free Rider Problem? 10 Views
Share It!
Description:
What is the Free Rider Problem? The free rider problem occurs when people take more than their contributed fair share of a common resource. In the case of public services that are supported by taxpayer dollars, such as schools, medical treatment, and food stamps, those that do not pay any taxes who collect on these services are essentially free riding.
- Social Studies / Finance
- Finance / Financial Responsibility
- Life Skills / Personal Finance
- Finance / Finance Definitions
- Life Skills / Finance Definitions
- Finance / Personal Finance
- Courses / Finance Concepts
- Subjects / Finance and Economics
- Finance and Economics / Terms and Concepts
- Terms and Concepts / Accounting
- Terms and Concepts / Banking
- Terms and Concepts / Bonds
- Terms and Concepts / Forex
- Terms and Concepts / International
- Terms and Concepts / Real Estate
- Terms and Concepts / Regulations
- Terms and Concepts / Stocks
- Terms and Concepts / Tax
- Terms and Concepts / Tech
- Terms and Concepts / Trading
- College and Career / Personal Finance
Transcript
- 00:00
finance a la shmoop. what is the free rider problem? free rider not Easy Rider
- 00:08
but a great film ask your parents about it and go watch it someday.
- 00:11
alright and if there was any confusion this video is not about ebikes either. [kid holds up VHS in a movie rental store]
- 00:16
you know those battery-powered bikes? okay so you're a tax derelict. you hate
- 00:21
paying taxes so much you just don't. but then North Korea sends over a nuke.
Full Transcript
- 00:27
well it's about ten miles off the coast just about to make you glow in the dark
- 00:31
forever, when one of our homing robot defense missiles shoots out the belly of
- 00:36
a nuclear sub, and blows that nuke from North Korea all the smithereen. thank you
- 00:41
very much. so now the country is safe not so much North Korea but that's a
- 00:46
different story. well you didn't want to pay your taxes. [missile flies through the air]
- 00:49
you didn't want to fund that sub or the brave sailors in it or the homing drone
- 00:55
or the myriad other fancy tech things that powered it. you deadbeat tax non
- 01:00
payer that you are, you wanted a free ride. a free ride on everyone else's hard
- 01:06
earned money that they paid taxes on. all right so how do we avoid this problem
- 01:11
like you? well we have the IRS and they have an army of geeks who make sure you
- 01:16
pay your taxes, so you can't just freeride on the rest of our backs. and if
- 01:21
you don't pay your taxes you face serious jail time and we'll have to end
- 01:24
up paying more than if you just fallin in step and pay your taxes on time along [man is thrown in jail.]
- 01:28
with everyone else. got it all right free-rider problem solved.
Related Videos
GED Social Studies 1.1 Civics and Government
What is bankruptcy? Deadbeats who can't pay their bills declare bankruptcy. Either they borrowed too much money, or the business fell apart. They t...
What's a dividend? At will, the board of directors can pay a dividend on common stock. Usually, that payout is some percentage less than 100 of ear...
How are risk and reward related? Take more risk, expect more reward. A lottery ticket might be worth a billion dollars, but if the odds are one in...