That is true – when the government is trying to eliminate or reduce the poverty with the wealth-redistribution-based welfare system, it brings more poverty. It brings more poverty not because of government mismanagement or corruption but – although it may sound very strange for many – of violation of one of the Ten Commandments – “Do not covet”. Not yet discovered at the times of the Mount Sinai, the economic principles of the better world for everybody are at the heart of this Commandment.
Many of our politicians have not discovered yet those principles even they are in work over three millenniums.
From the news media:
In the Democratic presidential primary, Bernie Sanders is calling for a political revolution, saying his movement can sweep in policy changes that would seem impossible in traditional American politics.
One of the ideas Mr. Sanders has advanced is much higher taxes on the highest earners. Mr. Sanders has proposed a headline top tax rate of 52 percent. But that’s just the federal income tax. When you combine it with other taxes that apply to income, like existing payroll taxes and new ones Mr. Sanders would impose to pay for Social Security, single-payer health care and family leave, and then add those on top of taxes levied by state governments, it would add up to a combined tax rate of over 73 percent on the highest incomes, more than 20 points higher than today. That is in the average state — maximum rates in high-tax jurisdictions like California and New York City would be even higher.
Thus, Mr. Sanders proposes massive wealth redistribution, as his self-proclaimed socialism mind-set demands, from those who create the wealth to those who consume the wealth created by somebody else. And Mr. Sanders is not alone – the wealth redistribution, under the slogans of social justice and human rights, is the chief political strategy of all so-called liberal political movements including the USA Democratic party and a liberal part of the USA Republican party.
The wealth-redistributed money, that is the money confiscated from the hard-working entrepreneurial people by a god-like government, would be used, as Mr. Sanders and all his soul mates proclaim, to provide free college education, free medical services, free housing and food for the underprivileged, and much more that can be proposed to do social justice and enhanced human rights. Of course, the confiscated money would be used for paying the national debt that is over $19 trillion. The chief idea is that the confiscated wealth of the 1% wealthiest people would provide all money needed to reach the heavens of social justice and human rights.
Unfortunately, the socialism-minded liberal people are not trained in the true economics of wealth creation. Therefore, their mighty efforts to institute the politically correct social justice and human rights bring the economic injustice and more suffering to the people they wish to help. Below is why it is so.
Let us begin with the national debt, which has reach recently $19 trillion or $58,000 per person – every person including even small children.
The Sanders and Co. are telling us that the government would force the famous 1% richest people to pay this debt. Unfortunately, it is impossible. The total wealth of the 1% richest people in the USA is about $15 trillion. Thus, if we confiscate everything what is in possessions of the 1% richest people, and incarcerate all of them, we are short $4 trillion. Moreover, if we do all that and continue the same socialism-minded system, we would not have anymore this 1% richest to pretend somebody else will pay. Our children and grandchildren have to be prepared to pay $58K per person.
Let us continue with the welfare system.
Although there is no fully agreed upon data, the taxpayers’ expenses for one welfare family, including both federal and state money and all items for a “politically-correct” dignified living, may be between $60K and $100K. About same amount of investment is required to create one job.
The politicians are interested in creating the welfare families since not only these families but also the entire “politically-correct” social kingdom would vote for them and therefore secure their elected positions and material wellbeing.
The entrepreneurs are interested in creating the working families since – ultimately – that is the only way to make profits, become wealthy and do charitable work – of course, for the entrepreneurs with the Judeo-Christian mind-set and we have many of them.
So, the nation has to decide what to do with the wealth created by the nation – either to spend it for creating more welfare families who rely on the government support through the wealth redistribution or to spend it for creating more working families who are creating the wealth.
Of course, the nation would always have the less fortunate who need public assistance. The question is what the best way to help them is. One way is through the government, which legally confiscates the wealth from the people who made it. The other way is through the people who are making the wealth by legally supporting their charitable work.
The government will be trying to maximize the welfare benefits making them comparable with work-earned benefits that eliminates any incentives to search for a job. The entrepreneurs will minimize the charity-based benefits to create incentives to look for a real job with much better benefits. The charity-dependence way creates much more incentives to leave the welfare realm and join the creative workforce. This way is much closer to the Judeo-Christian principles.