Bernie, can you spare a dime?

Fiscal Conservatism 604

Democratic Socialist (is that now a redundant phrase?) Bernie Sanders has come out with his proposal to spend $18 trillion over the next 10 years, which should surprise no one, except perhaps that it probably underestimates what he really wants to do. $18 trillion may be his attempt at being conservative, who knows. (For link, see http://www.wsj.com/articles/price-tag-of-bernie-sanders-proposals-18-tri...)

But anyone who supports Bernie and what he stands for must confront what socialism is. It is not a benign, feel-good political structure that wants to make everybody happy and solve the world’s problems.

The supporters of socialism may have those ideals as their goals, and they may honestly feel that socialism could achieve them, but socialism will never make those dreams a reality. I think our socialist "leaders" know this, yet continue to mislead people so they can get elected, which makes them dishonest. I don't blame the socialist voters so much, other than to think they must be easy to deceive. When (some of them) finally figures it out, the damage will have been done (case in point: President Obama.)

Fiscal conservatives also want to make people happy and solve the world’s problems, but we don’t want to do it at gunpoint, taking from Peter to pay Paul. We believe that free-market capitalism increases wealth for everybody, and it creates opportunity for the poor to escape the treadmill that many of them are on. Does it guarantee that they will? No. But neither does “democratic socialism.” We have been living in a country which has effectively been practicing a mild form of socialism for about 50 years. We have a large welfare state, with a big safety net, and have spent trillions of dollars (yes, even Bernie would be proud) trying to “fix” poverty and to pay people and support people who need help. Yet today’s poverty statistics show no improvement despite this long and expensive track record.

But I want to just focus on two things in this article. First, I want people to really think about what it means to redistribute wealth. And second, I want people to understand how such a mechanism is inherently flawed. And I will try to make my point by analogy.

So just about every day, I go on a long walk around town, wearing my bright yellow Acton Forum t-shirt. (Feel free to wave or beep if you see me around, or if you hate me, obscene gestures are also welcomed.) And I often pass a particular lawn sign for Bernie Sanders on my walk. Seeing this sign got me thinking.

This lawn sign has been placed by an Acton homeowner, who is surely in the top 5% of the nation’s income and/or wealth. Maybe he or she is in the top 1%, who knows. So my question is this: What would happen if I were to knock on the door, and when the homeowner answered it, I grabbed him by the wrist, turned him around, and took his wallet out of his back pocket. As I rifle through it, I find $200 in cash, which I remove and put into my pocket.

“What the heck are you doing?” I am asked by an angry yet bewildered socialist homeowner. (I imagine socialists to be unfailingly polite, by and large, because most of them probably have big hearts.)

“I am redistributing your wealth. You obviously aren’t paying your fair share, based on the location of your home and the fact that you have plenty of cash on you, and I am going to give this money away to someone who is more needy and deserving than you.”

Now, honestly, this Sanders supporter should be thanking me at this point. “Thank you,” he should say. “I was just about to take a trip down to the Goodwill store to hand my money out on the street, but you’ve saved me a trip. You’ve also helped save the planet because I won’t have to burn fossil fuels to get there, so two Thank Yous are in order.”

Of course, that’s not what would happen. He would rightly call the police and try to have me arrested. But I have a defense. I can claim that he isn’t paying his fair share, he has extra money, and our leaders from the President on down have decried the rich as acting unfairly, un-American, greedy, and they must be made to pay. So I am just doing my part to help.

The Sanders supporter would object, but he favors having the government perform the exact same function to millions of people who do not want their money taken from them by force and spent by the state. What is the difference?

If you don’t pay your taxes, the police will come and arrest you, take your car, take your home and seize your bank accounts. If you refuse to file your taxes you go to jail. If you falsify your taxes, you go to jail. And if you correctly report what you owe and don’t pay, the money will be seized by force if necessary (with interest and penalties.)

Now the Sanders supporter might argue that the difference is that I can’t be trusted to handle the money properly. Who am I going to give it to? What type of accounting will there be? How can I be trusted not to keep it myself or squander it?

But that stuff is exactly what happens when we trust the government (any government) to distribute "free" money. How about Obama's friends at Solyndra? How about people who are essentially bribed to support a politician during an election? How about unions who provide money and workers to keep some in power?

The point is that the government is really no better at deciding how this money is spent, based on millions of anecdotes about welfare queens, paying for illegal immigrants’ benefits, crony capitalism as practiced by Washington insiders, and the incurring of (future) crippling debts and unfunded liabilities which one day will have to be paid back, or if not, which will result in skyrocketing inflation which will achieve the same goal--taking what private citizens have earned and turning it over to others who haven't worked for it and don't deserve it.

One of the great benefits of capitalism is that it is not directed by a central authority. The central authority just needs to setup the rules to prevent abuse (like monopolies or abuse of workers.) When you have a central authority that is overseeing wealth redistribution, you must get a high level of corruption and waste. And that is what we've seen happen time and again, both in this country and in socialist-communist countries.

The socialist might object because my taking $200 is arbitrary. Why not take just $50? But the act of deciding what to take and from whom is a moving target that is subject to political manipulation and corruption. I'll bet most "socialists" don't think they will have to pay anymore than they currently pay, and that it is the "rich" who will be funding all the spending. That sounds great until you actually start to work the numbers and guess what? The middle class always gets hurt, either directly or indirectly. Think about Obama's promise that Obamacare would save the average family $2,500 a year. Instead, it is probably costing the average family $2,500 extra, for both the plan and the high deductibles. So that is a $5,000 per-family lie that he told. And many of his supporters probably thought they would be better off under the socialist-medicine umbrella.

But the underlying issue is still the same. Taking money from people may seem great in theory to solve “income inequality,” but the reality is that it will not solve the problem whatsoever. What it will do is empower those politicians who get elected by promoting socialism which is an inefficient economic model that doesn’t produce wealth for a society in the long run. Yet naïve people continue to vote for these politicians because they simply don't understand the dangers of this economic system or what it really means to do to the concept of fairness.

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Introduction: http://www.actonforum.com/blogs/allenn/political-philosophy-fiscal-conse...

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