Home > Europe, Politics, The USA > What makes a good customer

What makes a good customer


There have been a lot of news stories from the USA and Europe that viciously slam the wealthy of the world, blame them for all of our current issues and demand that we soak them to pay for a slew of governmental programs. Only these governmental programs will make sure that everyone is fairly compensated – or so they say.

Redistribution

Redistribution is fatally flawed primarily because, by definition, the government becomes the main source of capital. It removes incentive for citizens to take a chance on starting a business or trying a new idea, and it removes incentive for businesses to do business when it is more attractive to just accept a government handout. This stifles innovation and thus growth stalls (like the stagnation we’re in now). Government can’t collect enough taxes to pay for its expenditures, so it must borrow or print more bills. The government has nothing to fear from the populace because no matter how much the populace complains they ultimately are faced with either paying their taxes or going to jail. Because of this, it has every incentive to cheat and lose lots of money in the endless miles of red tape it can generate.

Free Market

A free market has no safety net and everyone enters the market with their primary resource being “human capital”. Having wealth already is nice, but it can be lost. If they take a chance on an idea, they might make it big and get wealthy (or wealthier), or they might fail and have nothing left but their human capital – which is all they need to take another chance. A government that sits back and only collects a small percentage on transactions in a free market that is processing tons and tons of transactions stands to do well. The government also has an incentive to ensure the safety of the environment of this market – to make sure no one is cheating or coercing anyone else.

Here’s a picture (Taxes on the redistribution side are income taxes):

Businesses and Citizens kind of share a tiny sliver (that has strings attached) at the end on the redistributive side. Government is fraught with corruption (always), and that is the reason for the big red chunk that disappears into special interest’s pockets.

On the Free Trade side, there certainly would be corruption as well, but it isn’t worth mentioning because whenever someone tries to cheat, they will be left in the dust as the market changes. If the cheater gets big enough to stop that change (through regulations from the government), then consumers and businesses (which are effectively the same thing since it is impossible to have one without the other) can simply stop doing business and choke the government until the government repeals those regulations.

This is why it is so important to get rid of the income tax – by doing so the government can not even begin to plan a redistributive scheme. These schemes have been proven, time and again, to always fail. The only thing they are good for is funding special interests and bureaucrats.

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Categories: Europe, Politics, The USA
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