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Capitalism vs. Consumerism
By John | June 14, 2010
“Income redistribution” or “spreading the wealth” has enormous consequences beyond the simple transfer of wealth from one segment of society to another. Those who advocate such government policies attack the traditional values of Americans. But they also damage the basic system by which wealth is created.
Until recently, taxes were viewed as the price paid for services provided by government. Now, taxes are used to transfer wealth. From whom? From the productive. From savers. From investors. From capitalists.
And who is the wealth transferred to? To those who did not produce it. To those who do not save. To those who do not invest. And what do they do with that transferred wealth? They spend it. They consume it.
Those who don’t understand capitalism think of wealth only as consumable. They don’t think it matters who possesses that wealth, because they are just going to spend it anyway. It’s just a matter of who benefits.
However, this policy of income redistribution is an attack on wealth creation. Savings and investment are discouraged. Self-indulgence; self-gratification is encouraged. Those who act responsibly by postponing immediate gratification – those who save for the future and make those savings available for investment in technology, plant, equipment, etc. – those who make economic growth and prosperity possible – are now SUCKERS!
Those receiving wealth transfers will not save and invest. They are not capable of it. That is why they don’t have wealth. They are irresponsible. They are consumers.
This policy shifts societal values. Beyond that, it increases our trade deficit, lowers government tax revenues and increases dependency on foreign investors. It reduces our international competitive position, lowers our standard of living, and reduces government capacity to meet entitlement obligations, such as Social Security, Medicare and Medicaid.
This policy reduces the credibility of government promises, including the promise implicit in the U.S. dollar.
We face an uncertain economic future – a crisis that just won’t go away. Excess consumerism got us here. Only capitalism will get us out.
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