Koan,
mel is right. You aren't seeing the forest for the trees. QE, ZIRP, and all the other Fed shenanigans has diverted vast wealth from the 99% to the 1%. It is massive reverse robin hood. Keynesianism has been proven to be a false god.
I am for a safety net, as long as that safety net remains a small portion of the overall use of capital in this country. In economics, it has been proven that reallocation of productive capital to larger safety nets reduces long term growth. It's simple, really. If you have $10M to spend each year, what do you do with it?
Person A, who does what you advocate, might take $5M and give it to charitable causes and $5M to invest in projects with a decent ROI. If those projects yield 10%, then in Year 2, you now have $5.5M + $5M = $10.5M to spend. Your GDP increased 5%, so you are feeling generous, so you increase your charitable spending to $5.5M in year 2.
Person B, believes in a lower safety net, but is also charitable. He gives 10% of his income, or $1M to charity, and invests the other $9M in projects yielding 10% return. In Year 2, he now has $10.9M do spend. He continues to believe in a 10% allocation to charity, so his Year 2 charitable contributions go from $1M to $1.1M, while his next year's investment in projects goes to $9.8M in an ever increasing spiral of prosperity.
Over the long run, Person A's growth in income is very low, so his charitable contribution don't grow that fast. Person B, continued to grow the pie much faster and over the long run was able to grow his charitable contributions to exceed the generosity of Person A.
None of this is speculation...it's just mathematics. Capitalism with low safety nets (Person B) are certainly more volatile, but they create enormous incentives to individuals to create high growth economies that ultimately lift all boats and unleash prosperity for a large majority of the people. Socialism with high safety nets (Person A) destroys incentives, because it results in enforced charity to a large majority and away from productive capacities and individuals in the economy, which by definition reduces long term growth, results in stagnant economies, and ultimately impoverishes the very majority that everyone is trying to help. To enforce that reallocation of wealth, governments must become increasingly more militaristic and meddlesome to control a population that doesn't want their money confiscated and given to other people. That destroys our freedom and ultimately our Democracy. An economic movement from Capitalism to Socialism to Communism results in a parallel movement from a free society to a Dictatorial or Oligarchic Society.
I know you don't agree and you don't see the common sense logic of this. And that is why we all have these endless debates. At the end of the day, the earth is round. We can debate it, but it doesn't change the facts. It's just unfortunate that we have to waste so much time and energy and increase the suffering of the 99% because so many people want to keep experimenting with the idea that the earth is flat. I know you are all well meaning, but you are cutting your nose off to spite your face. |
