Posted by
Jamal Jackson on Tuesday, October 28, 2008 11:39:20 PM
An economic system where the government doles out money to those it thinks is "needy" is a system that is unsustainable. The money that the government spreads out is money that is taken from a section of the population that the government thinks has too much. And of course it's government bureaucrats who determines who is needy and who has more than he or she needs.
To keep that kind of a system from crumbling, that threshold of "rich" will have to be lowered, because in such a system there is less incentive for productive people to work more - and more incentive for the less productive people to work less (since it is expected that the government will make up the difference with wealth redistribution). In fact just today, a news agency reported that Joe Biden said the following during an interview in Scranton, Pa.
Obama's running mate, Joe Biden, told a Scranton, Pa., TV station on Monday that Obama's tax break "should go to middle class people -- people making under $150,000 a year."
I don’t know if this is yet another misspeak from Biden, but this is exactly the trajectory socialism will follow - the original threshold of $200,000/$250,000 has dropped to $150,000. That number will keep dropping since, in practice, socialism cannot be sustained. Another important fact to understand is that the Obama's plan of tax-cuts for 95% of working Americans is very misleading - in fact, a lie because 35% - 40% of American income earners DO NOT pay income taxes. So how will that 35% - 40% of people get a tax-cut without paying a tax? Well, it's a simple trick - just rename a tax-credit (government giving free money) as a tax-cut. So Obama is giving free money to millions of people and then calling it a tax-cut!
The only way to help the "poor" is to have an economy that grows. An economy that grows creates jobs (of course it helps the poor only if they are willing to work). An economy grows when the "rich" invests their money in activities that start new businesses or grows an existing businesses. The poor does not give you a job, it's always the rich.
$500,000 in the hands of an entrepreneur is much more productive as far as growing the economy is concerned than $500 in the hands of a 1000 "poor" people. Economic policies are all about creating the right incentives for an economy to thrive - and, wealth redistribution creates all the wrong incentives, and is a bone-headed way to go about enriching those in the bottom.
CBS Evening News (this is a correction - it was not ABC as originally posted) did a report recently about how the different tax plans would affect various segments of the population. Under Obama's plan a "poor" family of four in Ohio who do not pay a single cent in taxes, would get a free check from the government for $550 a person, for a total of $2200. It was interesting to note that the "poor" family, had a 4 bedroom two-storey house, 2 cars, and a nice wide-screen LCD TV in their living room.