“Spreading the Wealth” is a Net Loss

A commenter named Phillip over at Warren Throckmorton’s blog claims that Barack Obama’s plan to “spread the wealth around” is not socialism, but “capitalism with restraints” and that “spreading wealth is a pre-requisite for the overall wealth of a country“.

An Insane Asylum is just a Hospital with Restraints

Let’s explore this concept of capitalism being restrained as a good thing. Since capitalism is just liberty in the economic realm, what would a restraint on that look like? Imagine a hospital – that’s a nice place. Now add restraints. That’s an insane asylum! Not so nice anymore, is it?

Capitalism is Liberty in the Economic Realm

The concept they want to sell you is that capitalism is “wild” and if left unmanaged will leave you penniless. But economic liberty does not impoverish you. It sets you free to rise as high as you can and keep everything you justly earn. It is government, not liberty, that has impoverished this nation through excessive taxes, lending, debasing of the currency and over-regulation.

“Spreading the Wealth” is a Net Loss

What about this idea that in order for a country to be wealthy, we must first “spread the wealth”? Isn’t that a contradiction? In order for the wealth to be “spread”, it has to first be in the country. And if that’s true, spreading it is a net loss because it costs money to force that wealth from those that have it and then write all those checks to those who want it. Is this really going to increase the net wealth of the nation? No! It will decrease it.

We need to Produce more Wealth, not “Spread” it

What happened to producing wealth, instead of “spreading” it? That’s what we need to focus on. What enables people to produce as much wealth as possible? Liberty – which, in the economic realm, is called capitalism. Liberty for the poor, for the middle class and for the rich, with no special treatment or exceptions for anyone. Liberty means you can keep the 50% of your income that the government takes in taxes and instead invest it in a business or education or even a vacation. All of those build more real wealth. Taxes do not.

Only Politicians Benefit from Forced Redistribution of Wealth

Don’t be fooled. Politicians who promise refundable tax cuts and wealth-spreading are just selling you other people’s money in return for your vote. No one benefits from forced redistribution of wealth, except for the politicians. The rest of us come out losing once they take their commission off the top.

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