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Daniel Webster Quote

The contest, for ages, has been to rescue Liberty from the grasp of executive powerÖThrough all this history of the contest for liberty, executive power has been regarded as a lion which must be caged. So far from being considered the natural protector of popular right, it has been dreaded, uniformly, always dreaded, as the great source of its danger.

ideas > Confusing capitalism and socialism

Confusing capitalism and socialism
As I was walking home today, I noticed a sign on the street for a 2 day celebration. This celebration was for a former President of Chile who was a socialist. It caused a rush of ideas to flood my mind.

Whether or not you are a liberal or conservative, socialist or not, we all generally believe that we should take care of each other. The liberal left or socialists do not have full claim on this belief. Conservatives, alike, believe that we are our brotherís keepers. After all, the conservative movement is made up of many evangelicals who believe in Christís charge to be their brotherís keeper. Where the left and right differ is how to take care of the less fortunate? The left believes in using the government to do this. The right believes in not using the government to do this.

I do not believe the government is the appropriate avenue for helping the less fortunate for several reasons. First, using the government involves using force to extract money from those who have and give it to those who donít. In other words, you are creating an injustice to solve an injustice. I donít believe that this is right. Second, government jobs and bureaucracy are created to administer the funds to the less fortunate. These government bureaucracies usually are well-paid with great benefits. They have no incentive to lower the number of people who receive cash or benefits. In fact, they have every incentive to grow their programs because that is job security for them. The bureaucrats have self-interest in growing their programs. Third, if you really wanted to help the less fortunate, why not just give them the money in the form of a check? Why create a bureaucracy around them? Make sure that the money gets directly to them without going through the hands of bureaucrats who skim off of the top, ensuring that they receive good pay, benefits, etc. Fourth, socialists or those who wish for the government to control and regulate all aspects of other peopleís lives often use the poor and defenseless to gain power. They hide their true intentions, which are to lord power over the masses, behind causes they espouse. They should not be trusted. Fifth, more government means less freedom, less dynamic economy, and less products and services that the masses want. In other words, more government, which is what we have, has brought us the current economic misery that we are facing.

The socialist solution to the less-fortunate is the raise taxes on the wealthy. They complain that the current system of capitalism has benefited the wealthy too much, but they fail to truly understand what has transpired in America over the last several decades. While it is true that the wealthy seem to be getting richer and the poorer seem to be getting poorer, it is not the fault of capitalism or free markets. It is the fault of the government. Until people see this truth, they will continue to fall for the next pretty face or smooth talking big government politician. During much of the past century, the rich had a higher tax rate than the middle class or the poor, at times reaching a 90% tax rate on the highest part of their earnings. Yet, the rich also enjoyed and still enjoy a myriad of loopholes. They can afford lobbyists to ensure that there are plenty of loopholes in the tax code. They can afford the accountants and tax lawyers to make sure they pay little tax. Through these mechanism, the rich actually pay a lower percentage of taxes that the middle class or the poor. The middle class is really the group of people who get hammered the most, yet often the rich, of which most representatives in Congress are, complain about how capitalism is harming the middle and poor classes, yet in reality it is the government who is harming them by making them pay a higher percentage of their income to taxes, while the wealthy get out of paying taxes due to loopholes, lawyers, lobbyists, and accountants. In other words, the rich get richer and the poor get poorer. To top it off, the economy suffers as well because now a good percentage of the economy is spent on finding ways to get around paying taxes by exploiting loopholes. The government has found many ways to plan the economy including tax incentives, regulation, taxes, etc. All this government intervention leads to two things. First, it hurts or slows the economy, making it more difficult for middle and lower income people to survive. Second, it ensures that the rich stay rich. In other words, the rich are using the system to protect their wealth. They can afford to find the loopholes in the tax system. They can then use lobbyists and special interest groups to curry favor with politicians and bureaucrats, thus receiving work, grants, money, and such to do government work. In other words, money is transferred from the middle and lower classes to the upper classes through government grants, tax breaks, etc. The problem isnít free markets. It isnít capitalism. It is socialism. That is currently what we have in America. The government controls and regulates through outright regulations or tax code what our economy does. It should come as no surprise then that we have over $10 trillion in debt, that we are hemorrhaging jobs to other countries that have less government intervention, or that the rich are getting richer. The current progressive income tax structure with its loopholes ensures this outcome. Those who can afford it curry influence from Congress and they receive the benefits. So please, donít blame capitalism for the failures of socialism. Until Americans realize that socialism is to blame for what ails this country, not capitalism, we will continue to march down the path of economic pain. The socialist system ensures that the rich get richer regardless of what they do for the masses or less fortunate. They can hang onto their wealth by currying favor from the government.

Capitalism, or free markets, ensures that the rich donít get richer at the expense of the poor. Everyone benefits from capitalism, except for those who provide nothing (e.g. the politicians) to the system. In socialism, those who get rich are usually those who gain the favor the government or the connected. The consumers or the massís desires and wishes matter very little. In capitalism, the consumer or the masses is treated as king, for if you donít serve them well by providing them what they want, then your business will die and your wealth will shrink. The person or group who that provides the most good for the people becomes rich in capitalism. The masses get the products and services they want, while those who provide the most to the masses become rich. Now if the rich want to hold onto their wealth, they have to continue providing goods and services that people want. They canít use the government to protect their wealth, because under capitalism, the government does not provide loopholes in tax structures, does not regulate the behaviors of businesses, etc. People often complain that we need to regulate businesses or they will do evil things, but I would like to remind you what countries are the worldís worst polluters? They are the communist or socialist countries of China and the Soviet Union. Capitalist countries are not the worldís worst polluters because the consumers would not stand for it. If, under a capitalist system, a business polluted a lot, then the consumers would not do business with them. If, under a socialist system, a business pollutes, they just pay off the government to turn a blind eye. Capitalism is the key to economic freedom and political freedom. You canít be free politically without being free economically. They go hand in hand. America is currently not a free nation because right now, all governments combined spend over half the GDP in the economy. They control the other half with regulations, laws, rules, tax breaks, etc. The only reason it has gotten this bad is because the masses believe what they are told, that capitalism is at fault here and that what we need is more government, more regulation, etc. The reality is that socialism is at fault here and that government regulation and more government will only make it worse. As Confucious said, ďWhen words lose their meaning, people lose their liberty.Ē We are seeing this right now in America, socialism is being called capitalism and people are falling for it, thus losing their liberties in the process.

It is never appropriate for a government to take from one group of people to redistribute to another through force. Socialism always seeks to use force to right some perceived wrong, when in reality those who are behind the socialism are really trying to protect their wealth and ensure that they benefit financially from the process. If socialists are serious about helping the poor and less fortunate, then they would be the first to line up to offer to donate their money and time to benefit others. Instead, they are often the ones who give the least, while talking the most. Unfortunately, the masses fall too easily for their words, and fail to properly weigh their actions.
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