The Government can’t fix your Problems

It usually makes everything worse…

By: Hayden Cunningham

Photo Courtesy of the White House Photographic Office

The United States Postal Service dating back to the creation of our country offered the service of delivering mail across the country. From horsemen carrying letters, to wagons bringing items into a town, to trains pulling packages, the mail service has been a part of U.S. history. But the U.S. mail service was not as fast as it could be. For a person waiting for a letter, it got there when it got there. There was no incentive for the Postal Service to bring your mail quickly. That is, until they had competition. When UPS was founded, followed by FEDEX, incentives were now in place for the Postal Service to be quick and convenient. Because if they weren’t, individuals would use a competitor and the Postal Service would lose money.

Who benefits from this competition? Surely the consumers are happy to watch companies fight over their favor by lowering prices and offering faster delivery. Technology improves as well, as each company researches new ways to speed up their time. When you lose a monopoly, you’re forced to cater to the consumer.

This is the driving factor of the economic system that is capitalism. Individuals are given the freedom to insure risk, operate a business at their own free-will, and innovate. In a business, the workers benefit from the business owners. The workers do not incur risk, they don’t incur the potential debt of bankruptcy should that business fail. Their labor is meaningless without the business. In American capitalism, it’s the government’s job to ensure that every individual has an equal access to resources. Notice how this is different From both equal opportunity, which is impossible, and equal outcome, which is immoral.

Socialism, or at least modern socialists, can broadly be defined as an argument for equal outcome. In a socialist society, the people and community own the means of production. Commonly heard statements about socialism is that “it is a great concept in theory, but not in practice” or “it has never been done properly, therefore it cannot be compared to past failures.” The honest truth is that socialism is a horrible idea in theory and any form of its implementation is failure.

The ideology of the modern American socialist movement can be explained as redistribution of income. The left argues that it is morally wrong for an economic system to produce people in poverty at the same time it produces billionaires. They advocate for free college tuition, universal healthcare, heavy taxes on millionaires/billionaires, and making the minimum wage a living wage.

Let’s take several of their arguments one-by-one:

Claim 1: A country’s economic system should not be producing people in poverty while at the same time producing billionaires.

Why not? The hypocrisy is that this advocated system by Elizabeth Warren, Bernie Sanders, and Alexandria Ocasio-Cortez REQUIRES billionaires to fund the system.

Wealth in America is largely self-earned. In 1984, The Forbes top 400 list of richest Americans saw roughly 50% of individuals having self-earned money. By 2018, it had risen to 67% (1). Forbes also points out that inherited wealth is difficult to maintain or even grow.

In a free country, gaining wealth is contingent on the decisions you make. Wealth is received by economic risk. In socialism, you don’t own your time, your labor, or your freedom. That belongs to the society as a whole. In Capitalism, those things are your own; you have the opportunity to trade with others who also have their own free labor. Capitalism is freedom, Socialism is tyranny.

The rich may be getting richer, but the poor and the middle class are getting richer as well. In every civilization throughout history, there has always been poverty and there always will be poverty. But looking at America to the rest of the world shows the privilege of wealth in America. If you make $32,400 a year (presumably defined as lower middle-class) you are a member of the top 1% of wealth-earners in the world (2). Poor people in America, while still having financial burdens, are better off than numerous countries. Marxism is deeply flawed, evil, and greedy. But people study it and desire a Utopian society. There’s never been a system of economics that has ended poverty. Ever.

Claim 2: It is immoral for billionaires to have that much money

Business owners are often vilified in American politics. Business owners incur risk, invest in their company, then get the benefit. Instead of thinking about how much money Bill Gates and Jeff Bezos make in a year, think about how many people they employ and how many people their businesses benefit.

The left attempts to make a moral argument for socialism; if two friends are going to an amusement park together and one has $90 while the other has $10, why shouldn’t they split their money and each have $50? If they didn’t do that, friend one would get to go on attractions and eat food that friend two would not be able to enjoy with him.

The simple answer is that the money you have is yours. If you do not want to share that money, you should not have any legal obligation to do so. What is moral about stealing someone’s money from them? Even if everyone voted for this system of economics it would not make it moral.

Who decides how much money is ‘too much’ to posses? Far left democrats like Warren and AOC have different numbers, but why should the government have the right to decide how much money a person is allowed to have without consequence? That system makes the government authoritative. Support for these types of policies are driven out of the emotions of greed and a hatred for competence. It’s theft. Bernie Sanders and those similar to him try to convince the American people this: more money equals less morality. That’s not true.

Claim 3: The government has an obligation to give financial help to the poor

In some ways this can be true, but as a whole not so much. Common arguments like this are often given:

https://twitter.com/QasimRashid/status/1213830990344413184?s=20

It’s not the government’s job to hand out money to whoever wants it. Take for example the $20,000,000,000 in money to “end homelessness in the USA.” What exactly does that money go towards? If you’re California, then it’s building luxury apartments for homeless individuals to live in (3). Handing out money to the homeless and then stating “we fixed the homelessness crisis” is morally reprehensible. The government’s job is to protect each individual’s life, liberty, and property (interchangeable with ‘pursuit of happiness’ as Thomas Jefferson put it). they ensure that everyone has an equal access to resources, and they build a strong national defense to protect those rights and defend the union.

This counter-argument is also why President Trump has rolled back power on government departments and agencies like the EPA (Environmental Protection Agency). Why should an executive branch Agency filled with unelected bureaucrats have the power to make and change laws? These polices being instituted need to go through the legislative branch.

Claim 4: The Scandinavian countries have instituted similar socialist policies that work

An important thing to point out is that these countries will have what’s called a “Social safety net” while still having a foundation in capitalism. Regardless, it’s difficult to compare the United States with countries like Norway, Sweden, and Denmark. The population is largely homogeneous in regards to race, culture, and physical appearance, they don’t have much of a defensive budget (America pays for a lot of that), and their taxes are absurdly high to the point of bankruptcy and absurd prices on goods.

Claim 5: Tax cuts are bad, but the wealth tax is good

The current tax system, the marginal tax rate, is a system where an individual pays more in taxes depending on what bracket of income they are in:

Alexandira Ocasio Cortez is advocating for a 70% tax bracket on all income over $10 million. Elizabeth Warren is proposing a ‘wealth tax’ where an annual tax is placed on the net wealth a person holds, not just the income they earn in that year.

The first policy is just absurd. The richest people in America are already contributing significant amounts of money to the government. This goes hand-in-hand with the argument of ‘is taxation theft.’ In simple terms, taxation should be qualified as theft when the money is not used in a way that contributes to you and the society. For example, if your taxes go towards the street you drive on, the police you call during an emergency, and the fire department that puts out your fires, it is not theft. Regardless of this, how can taking 70% of someone’s money they earned possibly be fair?

The second policy is unconstitutional. A wealth tax imposed on the riches Americans would essentially tax them twice, since they already paid taxes on their income. The wealth tax would violate Article I, Section 8 of the Constitution, as well as the 16th Amendment that regulates the powers Congress has to collect taxes

The left also disregards the Laffer Curve and Republican desire for tax cuts. Rather than giving people money, why don’t we just give them back the money they earned through tax cuts?

Claim 6: Keynesian theory is superior to Hayek’s theory

America follows the Keynesian theory of economics. Simply put, the government should be heavily involved in the markets. This is commonly scene when the economy enters a recession or depression. Government spending stimulates the economy, and the government bails out big corporations and banks to put the economy back on track.

Friedrich Hayek’s theory is not interventionist, bur rather the government should leave the economy alone. He argues that the Keynesian theory ignores human interaction and human choices. When the government spends to help the economy, the national debt raises and causes far more issues. In the short run, Keynesian theory works, but in the long run it falls apart.

Should we follow Hayek’s theory by decreasing government spending, balancing the budget, lowering taxes, and let the market sort itself out rather than adding a stimulus, it could prove to be a long-term benefit to the economy.

Claim 7: America’s capitalistic system contains institutional racism, sexism, and was founded on all forms of discrimination

No it wasn’t. America brought slaves into its country since its birth but that is not to say that the country was founded with those beliefs. America is founded on liberty, freedom, and individualism. No one should justify the United States for its history of oppression and racism. We should, however, remember that every civilization has it’s fair share of faults. What’s more important is looking at the attributes of our country that made it so successful.

2020 America is not 1776 America. We leave in a society today where the opportunity to become successful is greater than ever, regardless of race, ethnicity, sex, etc. Conservatives are often accused of racism because of their political beliefs. On the contrary, conservatism is the belief that every individual regardless of physically characteristics are equal. No person should get special treatment because of their race. And for this reason, conservatives deem policies such as affirmative action as wrong. Conservatives see the individual, progressives see group identity. The left clumps people into groups and sees them as their group, rather than who they are as an individual and what individual thought they may have. Which one is more racist?

America’s capitalism is founded on the idea of individual rights, and in an economic context, a right to individual labor. Similarly when we look at the middle east, it was at the time that Islamic countries valued freedom that their technology and innovation was leading the world. Once they shifted to their fundamental ways of living, that began to decline. A civilization with open market and a value for individual freedom is most likely to succeed in creating new technology, advancing research, and advancing education.

Claim 8: The minimum wage should be a living wage

Working at a company for the mutually agreed upon wage is voluntary. If a company wants to charge you $15 or $2 an hour, you make the decision to determine whether or not that is a wage you want to receive. When a minimum wage law occurs, the choice has been removed. Telling employers they have to hire a person at a certain price could inevitably lead to them not hiring that person because their labor is not worth that.

It is for this reason that most economics can tell you that any minimum wage at all is worse for the open market than having no minimum wage. And presumably, a higher minimum wage would hurt small businesses more, and elite corporations less. Which in result would make those large corporations more powerful.

The better answer to solving unfair and low wages is a social one, not a government one. This is where unionization and linking arms with your fellow coworkers come in hand. If a company does not want to pay a fair amount, then the union should agree not to work there. A minimum wage law removes the option to bargain for your wage. Wouldn’t you rather fight for your wage and get what you feel you deserve, rather than the government telling you how much to make?

Claim 9: Universal healthcare, or ‘Medicare for all,’ should be imposed

Imagine tomorrow while you’re driving to work your tires blow out and you need to replace them. As a smart consumer what do you do? You would call Walmart, Discount tires, Pep Boys, and other companies to get their quotes for the specific tires for your vehicle. Then you would compare all of them and choose the cheapest option. Knowing this they set their prices keeping their competitors’ charge in mind.

In the health insurance world, you can’t do this. You cannot call multiple companies to get an X-Ray or an MRI, for example. You go to the doctor and they don’t even give you the cost but instead talk with your insurance provider.

You don’t have a free market in healthcare, you have an over-regulated one. Cheaper prices are caused by competition. But in healthcare, there is no competition for these services.

Healthcare is not a right. If you want cheaper prices, you need more supply. If you want more supply, you need to give an opportunity for companies to create a supply. Treating healthcare as a commodity rather than a right makes it cheaper and makes the service better. When politicians like Bernie Sanders declare it to be a right, the incentives are taken away. Doctors are forced to work. Less people will become doctors and surgeons because the incentives have been removed. When the market is gone, so are the incentives.

Socialized healthcare, in Canada for example, is great for the little things (if you are willing to wait in line at the doctor’s office all day). But if you want a surgery, you’ll most likely end up waiting six months. To no surprise, they’re facing a shortage of doctor’s in Canada because of this healthcare system.

Besides, getting our healthcare as cheap as other countries isn’t as important as making sure we have better quality than them. The hope is making it both affordable as helpful. It’s hard to compare America to other countries for reasons as stated earlier. Some researches look to statistics such as life expectancy but the U.S. has a serious obesity problem that’s a cultural issue. But what should be looked at first and foremost is that America leads in quality. The U.S. leads in new drugs produced and medical studies released yearly.

Claim 10: “But Socialism just hasn’t been executed properly”

In Bernie Sanders’ political history, he has praised the likes of Communist USSR and the Cuban Revolution. The argument that socialism and communism in theory could be helpful is just not true. All forms of socialism ever occurring has led to the death of many and the power resting in the hands of the few elite. The inequality gap between rich and poor will widen, not narrow. Just remember that the term NAZI stood for the “Nationalist Socialist Party.”

Conclusion

Socialist activists in America want a sense of belonging to the community, as opposed to being an individual. Socialism is that economic structure that gives them group identity. Whereas in a capitalism-based society, freedom and responsibility go hand-in-hand. Having freedom and liberty means you are responsible for your own well-being. The government should not help one individual at the expense of another’s rights.

Stop having contempt for those who are successful. Stop being jealous that someone has more than you. Stop being greedy by attempting to take away someone’s money they rightfully deserve. This country provides more opportunity than any other country to make yourself wealthy. Utilize your resources, be unique and innovate, and make a name for yourself. Sitting at home and complaining that there’s white old men out there with one hundred billion dollars will not make your life better.

The argument isn’t what economic system the country should use, the argument is who’s more willing to work for a brighter future.

Footnote Citations

(1) https://www.forbes.com/sites/rainerzitelmann/2019/06/24/amazing-facts-that-prove-inheritance-is-mostly-overrated-as-a-reason-for-wealth/#52af922a1eca

(2) https://www.investopedia.com/articles/personal-finance/050615/are-you-top-one-percent-world.asp

(3) https://www.usatoday.com/story/news/nation/2019/10/08/los-angeles-la-california-homeless-shelter-housing-apartments-condos/3882484002/

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