In my opinion, I think something extraordinary happens when certain people gain a leadership position. A few of their brain cells start to misfire and, suddenly, they know more than everyone else. No one can tell them anything and they make sure they surround themselves with corresponding "yes men", people who kowtow to everything their leader does, whether they agree with their actions or not. The caesars were famous for this. Any disagreements were met by punishment: imprisonment, torture, death, or all three. The authority of these leaders is absolute. What does this have to do with economics? you may ask.
We all pretty much know about the system of government known as communism, sometimes compared to socialism. Karl Marx, the author of the Communist Manifesto, is known today as the Father of Communism, along with Friedrich Engels. These men believed in a society free of classes. In other words, these men wanted to eliminate the classes because they feared contention would erupt and society as a result would be destroyed. They feared the poor would strive with the rich because the rich had more money. I think Robin Hood was Marx and Engels' hero. Anyway, to eliminate the classes, a system of wealth redistribution was proposed. Of course, the rich didn't like it because it meant their hard-earned wealth would be taken away from them. The poor liked it because they wouldn't have to work so hard to make a living. Moreover, the fuel to all this was the notion that the rich had gotten rich due to dishonesty and ill-gotten gains. This would eventually lead to a revolution which would result in the deaths of thousands. Eventually, communism would take over several nations and impose its totalitarian brand of leadership over those nations.The communist regimes would rule these nations with an iron hand and those who favored communism believed they were supporting a just and noble cause. However, this "just and noble" cause suppressed the rights of its subjects. The desire to work hard would disappear because people realized they were working basically so the government could take their money and redistribute it to someone they didn't even know in order to eliminate the poor, middle, and wealthy classes. The government made decisions for the people because those who ran the government believed they had the people's best interests at heart. However, all they did was to oppress the people. Christianity was outlawed because it believed everyone should be rewarded for their hard work. Proverbs 14:23 states "In all labor there is profit..." Also II Thessalonians 3:10 says "...that if any would not work, neither should he eat."
Wealth redistribution sounds good because it is disguised as helping the poor. Herein lies the problem, though; communism forces you to help the poor, or rather the person who doesn't make as much. So a person who could make a huge profit by performing his services loses all desire to work hard because the government is going to take his money anyway. The poor are made lazy because they realize even though they didn't work hard enough, they're still going to be rewarded. Redistribution destroys one's willingness to work.
The problem here is the average American doesn't understand simple economics.
Here is economics in a nutshell: A person works to provide for himself and his family. The time he puts into his work is rewarded with a paycheck. Since he earned the money, he's free to use it as he pleases. He pays his bills, buys groceries and other necessities, and may even use what he has to buy something he or his family wants (big-screen TV, new car, video game system for the kids, or whatever). If he has enough left over, he may even donate some to the charity of his choice. These are his decisions to do whatever he wants with his money. After all, he is the one who worked to get it. Whenever he buys goods or services, his currency helps businesses to grow and continue to provide products to everyone. This strengthens the economy. It's a flow that produces quality products to customers and jobs to potential employees.
Some people hate competition. They see competition as something that rewards unfairly. However, competition is a necessary component for a healthy economy. Let's say I offer a product that everyone wants. I offer high quality, a competitive price, and a way that everyone can get their hands on this product. I sell lots of products and make a huge profit. In all this, I can hire employees to handle the day-to-day operations and give them a nice salary along the way. Another company, who I'm in competition with, notices my success and studies what made me so successful. He sees my product and notices he can make it even better. He does so and, even though, I may lose some of my customers, the customers are the ones who benefit the most because the competition resulted in a higher quality product. This is called free enterprise, a major component of capitalism or, as the liberals may call it, the c-word.
Socialism/communism eliminates competition and, as a result, goods, services, and, eventually, customers suffer in the long run. Very rarely does a socialist-run country produce a high-quality product. They usually steal technology and make improvements, but very rarely produce the products themselves.
One thing I don't understand, is people who get mad at the rich because, well, they're rich. However, they look at their paychecks and bawl over the taxes that have been snatched from their finances. They should be happy that they were forced to perform their patriotic duty to help out those less fortunate than they are! I'm starting to sound like Joe Biden, aren't I? These people also play the lottery hoping one day to "strike it rich". The lottery, though, is just another way the government can get more revenue. Someone once described the lottery as "a tax on stupidity".
If I want to help someone who isn't as blessed as I am, I should be able to choose who to help. The government raising taxes and helping the homeless isn't charity. Charity comes from the heart, not my paycheck.
There are also those who believe we need taxes to pay for public services. I have no problem with this except I believe the taxes should be no more than a 10% consumer tax and not taken from my paycheck before I get a chance to touch it. In this country, we are being taxed into poverty. Moreover, the less taxes the citizens pay the higher the government revenue. Barack Obama said he understood this but said he wanted to raise taxes in order to be fair-whatever that means.
Money to the government is like sugar-the more it gets the more it wants.
I believe we should get every penny we earn on our paychecks, pay for our own healthcare, and save for our own retirement. How much a person earns is none of the government's, or anyone else's, business. If someone starts a business and it fails, it isn't the end of the world. They are free to start over from scratch and try again. Success isn't measured on failure, but on how one overcomes failure. Capitalism makes this possible.