Billion Dollar Powerball Jackpot!

Why Big Powerball Jackpots are Bad For Us. This week, someone, somewhere is set to become very rich, very quickly. Wednesday’s billion-dollar Powerball payout will be the largest lottery winning in history. But its startling enormity is overshadowed by the startling enormity of the mindless greed and reckless foolishness that has made this Powerball possible.

Indeed, in an irony of equally enormous proportions, one of the defining elements of modern American life is the increasingly angry disgust at Big Greed – the greed of big banks, big corporations, and big government – and yet, right now, millions of Americans are so busy drooling over a billion dollar jackpot, so blinded by the dollar signs in their own eyes, that they cannot see the hypocrisy of the fact that lottery participation is itself propelled by greed.

And never mind that playing the lottery at all means voluntarily giving money to those same supposedly corrupt and greedy institutions that so many people so loudly bemoan – the banks, corporations, and governments that make up and prop up Powerball.

Wednesday’s winner will not, of course, win the advertised billion plus bucks. Millions upon millions of prize dollars will instantly return to the government in the form of taxes. And this, by the way, is the same government that once outlawed private lotteries and sweepstakes until realizing how profitable such gambling can be, at which point the lottery was promptly re-legalized under government control as a government revenue source. Gotcha!

This should be appalling to everyone, especially to those who claim to pity people in lower income brackets (who are more likely to purchase lottery tickets on a regular basis) since for all intents and purposes the lottery is a tax disguised as a game, and its cost falls heaviest on the people who can least afford it.

That being said, a tax is compulsory, the lottery is not. No one is required to throw their money away for that list of numbers. (And the comparison to treating money like trash is quite valid: the odds of winning this lottery are roughly one in three hundred million. The winner is as likely to win as to get struck by lightning, oh, one hundred thousand times in their life. Go ahead, roll the dice.)

Given the odds of winning, buying a lottery ticket is pretty much a tax on one’s stupidity. But it’s even worse because of the money taken out of the private sector economy, which is where all money comes from. The payout is 50% of ticket sales so a billion dollar payoff has taken 2 billion dollars out of the economy. The winner will be forced to give about half the winnings back to the government in taxes, so it’s net drain of 1.5 billion dollars transferred from private hands to government. The lost opportunity costs of gains not to be realized in private economic transactions is much higher than that.

On the upside it’s 70% likely that the winnings will be pretty quickly recovered in the private economy since that is the percentage of lottery winners who end up broke after about 7 years. Unearned wealth has a way of disappointing those who get it.

See also: Powerball mania masks lottery scandal with Colorado ties What? You mean the odds of winning could be even worse than 1 in 300 million? The odds of winning could be zero? Oh, Noooo….Did you just buy a $100 worth of tickets! Suckerrrr…..

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