Wednesday, 17 October 2012

Our Economic Anchor of Reality

Generally....socialism is valued in Europe, and tends to the mechanism of almost every single government there.  Most will admit....it's a socialism-lite model that they use....simply carving off the a few pieces and trying to appease the public with "free stuff".  The public in Europe likes this concept and generally never  complains.

This past month, you can view various problems going on in Europe....between Greece, Spain, Italy, and France.....and there's some discontent. The socialism lite model....probably has burned up as much fuel as it can, and there's no map or direction for political folks to head toward.

So you come to the five significant issues around socialism-lite.

First,  if you as a society or government....start talking legislation as a vehicle to crank up prosperity, and you start with the idea that the wealthy has to give up measurable amounts of their prosperity, for society to move....it's a virtual guarantee of failure for your legislation.  With the exception of Robin Hood....there's no point in history where society cranks up prosperity by starting with the rich as part of the problem.  Do your research, but there simply isn't such an example to discuss.

Second....when you assign a value to work....say "X".....then someone has to earn it or make it....for it to exist.  When you dictate "X" has to be divided up amongst two folks....it means that one guy made up "X", and the other guy didn't.  If you have ten folks making up "X", and twelve folks enjoy "X" in the end....someone wasn't in the process or helping.  Folks tend to stand around after a while and notice this.  It's hard for someone to convince folks for the long-run....that your "X" has to be shared out.  Eventually, they will ask questions and make demands over how sharing will work.  Sharing....becomes a harsh reality at some point.

Third....to share out profits of society....a government has to eventually take from someone, in order that someone else can receive it.  This generally works as long as you make each "taking" a small minor issue. A cent or two on a gas tax, a cent or two on some registration fee, or some cents for temporary-add-on tax......you don't notice it and it's simple to convince you to accept it.  Four years later, you start to notice that you are $75 less a month on money in your pocket, and just don't know where that $75 went. As long as people don't notice each little money-game....sharing out the profits is simple.  Eventually, people start to ask stupid questions.

Fourth.  Briefly, if you had a wealth of $100....it cannot be multiplied in any fashion, by dividing it.  Economic professors will stand there for hours and tell you over and over....a $100 is a $100.  You cannot make it more, unless you take risks and invest it.

Fifth and final....once you broach the fifty percent point on taxes to the wealthy or middle-class....they will eventually ask why bother with their efforts or risks?  It might take ten, twenty, or thirty years.....but a guy who works, and gives up more than half of his income....won't see any incentive to continue.  So the government who thinks significant taxation....even on the rich....has no impact....are simply lying to themselves in the end.

To some degree...almost every single government in the world has moved onto a socialism-lite model.  Even the US has some features of socialism-lite in existence today.  Some societies might tweak it and run lighter than usual.....some heavier than usual.  The inherent problems are like an anchor....it limits life to some degree.  If you like the limits.....keep going.  If you want something extra out of life.....you might have to look at change.

No comments: