Current Problems in Economy

There is a lot of talking going on about health care reform, but I can’t help wondering at what point the government decided (in the best interests of the poor down-trodden people of course) to stop the problems that currently exist in our health care system by totally reworking it and inserting a highly efficient bureaucracy. (I know highly efficient is an oxymoron when it comes to bureaucracy; I don’t know if the government knows that, but the governed certainly do.) I wonder to myself, “How is our corruption-free, selfless government going to pay for this?” Answer—Tax the daylights out of the rich!

Hmmm. I am no great member of the intellectual elite. But taking America’s wealthiest citizens and taxing them more and more and more doesn’t seem to be fair. Why should the wealthy have to pay more taxes than the poor? Isn’t there equity in the law? How can paying upwards of thirty percent in taxes while others pay nothing or close to it be fair?

I realize that I am defending a group of people that are totally without sympathy in this current society. People without stuff have always looked to those who have stuff with envy. The battle cry of the populace has always been that the rich deserve to have their riches taken away. That is why Robin Hood’s mantra is considered heroic, and why Marx, a man that never worked in his life, could create such a seductive economic philosophy. “Take from the rich and give to the poor!” is not good economic theory, although it does unify the masses against anyone who is better off than themselves. But here is a thought that might deserve some consideration, “Didn’t the rich earn their money?”

Take Bill Gates for instance; sure he’s richer than most everyone, but didn’t he sell most everyone a computer program? “But Gates didn’t work for that money!” Okay, I’ll concede that he didn’t go door-to-door like Kirby vacuum salesmen, but just because he didn’t do all the work does that mean he didn’t earn the money. From what I understand of economic theory, there are three things that are required for production to take place; work, resources, and facilities. Any of the above will not produce goods without the others, you need a farmer, seeds and a field; you need a worker, materials, and a factory.  All of those cost money! Workers don’t work for free; basic materials aren’t free; factories aren’t made or maintained for free. All the economy requires money, the economic power to accomplish something.    

If all parts of the economy require money, where does that money come from? How do companies start? Well, there are primarily two sources of revenue for a business—profits and investments. A company starting out has no profits; it must start off with investments. That means someone has to buy the resources and facilities, and pay the workers. That someone is the investors.

Now I know that the investors are not some great benefactor to society; they want to make money and use their money to do so. However, that doesn’t mean that we can ignore the investors in our view of the economy. To provide a job requires money, an investment; that, quite honestly, people cannot afford to pay. It takes many thousands of dollars to open a fast-food joint and provide a dozen teenagers with part-time minimum wage jobs; starting a company that can support a dozen salaried employees with benefits costs exponentially more. The average American cannot provide the money it takes to create their job. In order to create jobs, we need many investors to put their money into creating jobs and businesses. And guess what? The best people to put their money into investing are the wealthy!

In economic hard times, a young guy saving in a mutual fund or a middle-aged couple opening a retirement account is not going to greatly affect our economy. Even the same groups spending their money is not going to help the economy to a great extent. What the economy needs it the wealthy to put their money into it. This will create jobs and businesses.

The good thing is that although the rich are going to get richer; the rest of society does too. The rich get a return on the investment but the whole economy gets the new jobs and businesses; in fact, some of the people involved in the new company might become wealthy themselves. That is the American dream-a land of opportunity- where people can get jobs, work hard, save money, and become wealthy themselves.

It is bad for the economy for there to be an inequity in the percents of taxation from the wealthy to the poor. First of all, it is not equal under the law. Second, it stops the wealthy from being able to use that money-primarily in investments that will help our economy. A third reason, which I didn’t develop in this article, is that it keeps the poor in that economic bracket. I completely oppose progressive taxation or increased taxation on any people group in our society. I wonder as the government fills its time with new reforms and initiatives and programs, if it really thinks the redistribution of wealth is the best way to pay for it. I don’t think it is, and history proves it.