Prosperity is Closely Linked To Wealth Creation

 

The video above is a super video but long. Two thirds of it is questions and answers so if you just stick with the first 50 minutes you will get the meat of the talk.

 

You have heard it here time and again, “Democrats do not know how to grow the economy.” Or if they know how they don’t care to because there focus of attention is on F-A-I-R-N-E-S-S.  Fairness translates in to REDISTRIBUTION. The Liberal/Left/Democrat/Socialist/Marxists want to institute an equality of outcome. Since they can’t find a way to bring everybody up to the level of the 1%, they then must bring the top down to the lowest common denominator.

This involves punishing the successful, usually through high taxation (confiscation) and sometimes through draconian regulations. When everybody is equal in outcome then there is no envy, no self loathing that Dinesh D’Souza talks about in the video above.

What is missing here is what D’Souza says is what brought nations, especially America, out of riches by conquest to riches by creation of wealth. WEALTH CREATION is the single biggest component of what is missing from the Liberal/Left/Democrat’s playbook. When you create more wealth you raise the standard of living. You make more products and services available at lower prices. You have the money to make better roads and cheaper transportation, provide cheaper energy and increase the expansion of business and the creation of new companies that result in more and more higher paying jobs. Higher and higher GDP is the outcome of more wealth creation. Now you have prosperity.

Some on the Left, however, feel that an economy doesn’t grow, that it’s stuck in the same GDP forever. Others feel that it is the government that has provided the tools for the successful to be successful. Hence you can hear Obama and Elizabeth Warren say, “You didn’t make that.” That becomes a rationalization for the government to take from them and redistribute it to others.

Redistribution takes from some and gives to others, usually from those who have a lot to those who have little. But when you do that you destroy the incentive and the motivation of those who work their butt off to become successful. We already have a very progressive tax system in place in America but Obama wants even more from the successful.  Once you take away more than 50% aggregate – federal, state and local taxes – from a person you have destroyed that person’s will to succeed. If he does not succeed then there is less left over money to redistribute. And so you get into one of these cycles where the more you tax the less tax revenue you raise. (see the Laffer Curve).

An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama’s socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, “OK, we will have an experiment in this class on Obama’s plan”.. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A…. (substituting grades for dollars – something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy. When the 3rd test rolled around, the average was an F.  As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. Could not be any simpler than that.

These are possibly the 5 best sentences you’ll ever read on this experiment:

  1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
  2. What one person receives without working for, another person must work for without receiving.
  3. The government cannot give to anybody anything that the government does not first take from somebody else.
  4. You cannot multiply wealth by dividing it!.
  5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

What I am reading now is liberals, progressives or those that dismiss the STORY because it’s a scenario and not real. They can’t cope with the real truth that you can’t move poor people into prosperity by legislation from Washington, DC.  Government doesn’t have the authority to take from Citizen A and give to Citizen B to make things even.

(This Story of a Prof Who Fails His Entire Class to Illustrate Obama’s Socialism Has the Left Furious, By Wayne Dupree, IJR – http://www.ijreview.com/2014/01/107990-story-prof-fails-entire-class-illustrate-obamas-socialism-left-furious/)

But you can move poor people into prosperity by having a successful growing economy that has more jobs than people to fill them. This is where business steps up and trains the unskilled free of charge to get the labor they need. The newly trained worker is then placed in a job sometimes at twice the salary he was earning before and much more if he was unemployed. Because he is making more money this worker is contributing more taxes to run the government. When the economy grows so does the tax revenue.

Ronald Reagan and Nancy Reagan greet Prime Min...
Ronald Reagan and Nancy Reagan greet Prime Minister Margaret Thatcher and Denis Thatcher of the United Kingdom for the State Dinner at the North portico of the White House. (Photo credit: Wikipedia)

Obama has tried to model the United States on Western European socialism. Western European is in the process of collapsing and soon will go bankrupt. When that happens all the entitlement programs of these governments will be no more. The United States can fall into that trap or it can choose to swing back to free markets, low taxes and fewer regulations.
“The trouble with Socialism is that eventually you run out of other people’s money”Margaret Thatcher

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