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Rethinking Redistribution of Wealth

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Our president has said “spreading the wealth around is a good thing”. And it is … IF it’s done via the charitable heart of the individual. But when the middleman is in Washington, DC the inherent flaws of socialism rear their ugly heads. In the words of founding father James Madison, “Charity is no part of the legislative duty of the government”.

I was watching television the other night and I came to the conclusion that maybe this “redistribution of wealth” policy of the current administration could be tweaked a little to make conservatives like me more amenable to it. Currently the goal is to take from those who earned their money and give it to those that have no interest in earning it. That is inherently a bad policy. It sounds all well and good but there are countless reasons why this ideology is dangerous (to say the least).

The underlying reasoning is helping those that need help and I think the majority of Americans embrace that idea. The problem is in the “method” of redistribution. Our government would have us believe that THEY can spend OUR money more wisely that WE, the people, can. If you aren’t laughing then the odds are that you’re a politician! If there was ever an oxymoron it’s “Wise Government” …

Look at the current status of our government. They spend ONE TRILLION more dollars than they bring in every year. Do you know how much ONE TRILLION dollars is? Start counting right now. It will take you 536 years to count to one trillion! Well, if you don’t stop for a breath anyway.

If the goal is to help people escape poverty then giving money earned by hardworking citizens to those who have done nothing to earn that money will not teach the lessons that need to be learned in this nation. Milton Friedman said “The great achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history, are where they have had capitalism and largely free trade”.

It’s about self reliance, hard work, ingenuity, honesty, integrity, and perseverance. We must stop using the tactics currently employed by our leaders. Envy, hate, and resentment hurt our society and the ultimate result of the “redistribution of wealth” achieved by those means is best described by Winston Churchill as “the equal sharing of misery”. Margaret Thatcher summed it up precisely: “Socialism is a great until you run out of other people’s money”. Now that I’m clear in my abhorrence of the redistribution of wealth, let me explain the “tweaks” to the ideology that would make it more palatable.

It all boils down to WHO we extract the money from to accomplish this grand scheme. My first criteria would be to garnish the wages of those that add no redeeming value to our society. Has anyone been watching American Idol this season? If so, I think we can agree that Nikki Minaj should start off the list of people that add nothing to our society. Well, nothing positive. She does add arrogance, rudeness, conceit, and self aggrandizement to our society. I never thought Idol would find someone more full of themselves than Simon Cowell but I guess if you dig far enough down in the barrel you can find about anything. Another addition to the list is Kim Kardashian. Do I really need to explain that one?

In the next category I think we need to add actors and actresses that access their uninformed, unintelligent minds to bless us with their liberal wisdom (another oxymoron). Does anyone really care what Matt Damon, Ashley Judd, or Sean Penn think? They are most certainly in favor of redistributing wealth (mostly other people’s wealth) so why don’t they put their money where their mouth is and pony up about 95310302f their wealth to the government so they can pass it out to those people they claim they so desperately want to help? Or do they think they can spend the money more wisely on their own?

Lastly, I would like to propose that the career politicians that so excitedly support the redistribution of wealth are added to the list along with an assurance to the American people that the legislation they write will not exempt them from their own legislation as most of their legislation typically does. In addition, those that have made a killing on Wall Street via their use of insider information should be required to be wealth redistributed FIRST. If Nancy Pelosi loves redistribution and she’s made millions due to her political ties and her access to information most traders would kill for, then let’s raid her bank account first. I’m sure she’d willingly provide access to her ill-gotten gains because she’s a real patriot, right?

Stop laughing and wipe the tears from your eyes so you can see the remainder of my list of other politicians and celebrities that should surrender their money so they look less like the hypocrites we, and they, know they are: Warren Buffett, Harry Reid, Barack Obama, Valerie Jarrett, George Soros, Bill and Hillary Clinton, Chris Rock, Alec Baldwin, Al Gore, Michael Moore, Ariana Huffington, Oprah, Mark Cuban, Jay-Z, Bill Maher, Michael Bloomberg, Chris Mathews, Rachel Maddow, George Clooney, Paul Krugman, Andy Stern, and Al Franken. For good measure lets go ahead and throw in all of the news media that tout the evils of capitalism; ABC, NBC, CBS, and PBS.

IF those people on the list would practice what they preach they could probably eliminate the debt, eliminate the deficit, provide free health care for those that genuinely NEED it, feed every hungry mouth in the USA, and even give us all a free Netflix membership. But don’t hold your breath. They’d rather sit up on their high horse and pretend they care about others than to actually do something about the issues that plague our country.

So if the liberal progressive legislators want conservatives on board for redistribution of wealth … there’s the plan. By the way, one final word from Thomas Jefferson …

“The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.”

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El-Erian: Investors Must Prepare For A ‘Reckoning’ In The Markets

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El-Erian: Investors Must Prepare For A ‘Reckoning’ In The Markets

Investors are too optimistic and need to prepare for tough times ahead, warns Mohamed El-Erian, Allianz’s chief economic adviser and former CEO of Pimco.

El-Erian says the financial stress created by the coronavirus pandemic is “far from over,” in a recent op-ed piece for the Financial Times. He expects a “reckoning” as liquidity concerns spread from the most vulnerable businesses to sovereign borrowers.

What Investors Can Do

Investors can get ahead of the coming troubles by not buying assets at “valuations stunningly decoupled from underlying corporate and economic fundamentals,” he said. Instead, they can focus on the recovery value of their assets to get ahead.

Because the country avoided the worst-case projections for the pandemic, a sense of complacency has overtaken investors. El-Erian says all the liquidity created by government money printing coupled with a surge in new retail investors has helped push stocks higher.

“Liquidity-driven rallies are deceptively attractive and tend to result in excessive risk-taking. This time, retail investors are front and center.”

El-Erian also says you can see cracks starting to form if you know where to look. This is despite the stock market surging higher.

“There are already plenty of worrying signs: a record-breaking pace for corporate bankruptcies; job losses moving from small and medium-sized firms to larger ones; lengthening delays in commercial real estate payments; more households falling behind on rents and continuing to defer credit card payments; and a handful of developing countries delaying debt payments.” says El-Erian

He adds that investors are all too happy to ignore these worries. Some even believe that the government will step in and provide help.

“Yet, judging from a range of market indicators, investors are showing insufficient concern. Some continue to expect a sharp, V-shaped recovery in which a vaccine, or a build-up of immunity in the population, allows for a quick resumption of normal economic activity. Others are relying on more backstops from governments, central banks and international organisations.”

How Things Can Fall Apart

Should we not see a v-shaped recovery or a vaccine soon, things could quickly fall apart. Also, El-Erian warns the destruction will spread beyond the financial markets.

“The potential damage is not limited to finance. Disruptions in capital markets could also undermine the already sluggish economic recovery by making consumers more thrifty, as they worry about their job prospects, and by encouraging companies to postpone investment plans pending a clearer economic outlook.”

This means investors need to be prepared and shift their investing approach.

“The investing challenge may well shift in the months ahead from riding an exceptional wave of liquidity, which lifted virtually all asset prices, to steering through a general correction in prices and complex individual non-payments, says El-Erian.

He adds, “No wonder, then, that an increasing number of asset managers are raising funds in the hope of deploying a dual investment strategy.”

“The first involves waiting for a correction to buy rock-solid companies trading at bargain prices. The second involves engaging in well-structured rescue financing, debt restructurings and collateralised lending as countries, and some bankrupt companies, seek to reorganise and recover.”

Investors should also consider increasing their cash position to have dry powder ready to go. They should do so in case we get the correction that El-Erian expects.

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Millionaires Sign Petition To Voluntarily Increase Their Own Taxes

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Millionaires Sign Petition To Voluntarily Increase Their Own Taxes

A group of millionaires has signed a petition asking for the government to force them to pay higher taxes. They did so in an effort to help the global recovery from the coronavirus pandemic.

The group, which includes the likes of Ben & Jerry’s co-founder Jerry Greenfield, Walt Disney Co. heiress Abigail Disney and former BlackRock managing director Morris Pearl, call themselves “Millionaires For Humanity.” Their sole objective is to encourage governments to increase taxes on the world’s wealthiest individuals to help pay for the billions of dollars needed to support health care, schools and security.

The letter states: “As Covid-19 strikes the world, millionaires like us have a critical role to play in healing our world. No, we are not the ones caring for the sick in intensive care wards. We are not driving the ambulances that will bring the ill to hospitals. We are not restocking grocery store shelves or delivering food door to door. But we do have money, lots of it. Money that is desperately needed now and will continue to be needed in the years ahead, as our world recovers from this crisis.”

Millionaires Call for Higher Taxes

The letter continues by asking governments to raise taxes on “people like us. Immediately. Substantially. Permanently.”

The group warned that the impact of the crisis will last for decades. They also mentioned that it could push 500 million people into poverty. Hundreds of millions of people are at risk of losing their jobs, many permanently, the group said. Nearly 1 billion children are out of school due to the pandemic. They also mentioned that many of these kids lack any resources to continue their education.

The petition adds, “Unlike tens of millions of people around the world, we do not have to worry about losing our jobs, our homes, or our ability to support our families. We are not fighting on the frontlines of this emergency and we are much less likely to be its victims.”

“So please. Tax us. Tax us. Tax us. It is the right choice. It is the only choice.”

This petition serves as Pearl’s second attempt to make millionaires – himself included – pay higher taxes.

A Similar Call

He wrote a letter last year supporting the “millionaire’s surtax” introduced in Congress. In it, he said any new tax plan has to be “relatively easy to enact and relatively hard to avoid.”

“Rich people like me are good at dodging taxes. We can lobby to stop new taxes from ever becoming law, or if they do get enacted, find loopholes to get around them.”

“Any plan to tax me and my fellow wealthy Americans needs to be relatively easy to enact and relatively hard to avoid,” Pearl also said.

The millionaire’s surtax, as Pearl points out, would only affect married couples making more than $2 million per year. Alternatively, it also affects a single tax filer making more than $1 million.

“This tax would simply add 10 percentage points to the existing tax rates paid by couples making over $2 million a year and singles making over a million. Though it would only apply to the wealthiest 0.2 percent of taxpayers like me (or about 330,000 taxpayers) the millionaires surtax would raise an estimated $635 billion over 10 years, according to the Tax Policy Center.”

Pearl’s Motivation

Pearl, undoubtedly knowing that many will doubt his motives, says he’d rather pay higher taxes than see his country falter economically.

“You may well ask: Why would anyone push to pay higher taxes, like I’m doing by supporting the millionaires surtax? It’s because I know it’s not actually in my long-term economic interests for the United States to become more and more like a developing nation, with a tiny elite at the top of the mountain and everybody else struggling for a foothold.”

Thus far, 80 individuals have signed the Millionaires For Humanity petition.

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Dems Can Only Blame Pelosi For Failure To Secure More Stimulus Money

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Dems Can Only Blame Pelosi For Failure To Secure More Stimulus Money

The next round of stimulus money will unlikely include any major concessions for Democrats. With this, the party has nobody to blame but Nancy Pelosi.

Astonishingly, that opinion comes from David Dayen, the executive editor of The American Prospect. The said magazine stays “dedicated to liberalism and progressivism.”

In a recent article titled “A Leader Without Leading,” Dayen says during the passage of the last stimulus bill in late April, Pelosi – along with Sen. Chuck Shumer – chose to forego adding their wishlist to the bill, believing they would have another shot. That shot, thus far, has never materialized.

“Republicans wanted more money for forgivable loans for small businesses. Democrats had a host of liberal priorities left out of prior legislation that could have been paired with the extension. But Pelosi and her Senate colleague Chuck Schumer chose to go along with the Republican framework, leaving everything else for later.”

“Immediately afterward, Senate Majority Leader Mitch McConnell hit the pause button on future legislation. It felt like the Democrats were played.” said Dayen.

Credits for the Republicans

He also credits the Republicans for knowing exactly what they wanted out of each stimulus bill. The Republicans did so all while Pelosi fumbled away every opportunity.

“When the coronavirus spread and lockdowns buckled the economy, Republicans knew exactly what they wanted—protect large corporations and investors—and pursued it unerringly. Pelosi had no coherent agenda to fall back on. She’d spent the past year advancing complex, multifaceted bills and watching them wither in Mitch McConnell’s legislative graveyard.”

Dayen adds, “H.R. 1, the House’s signature legislation during this Congress, which attempted to nationalize voter registration, establish nonpartisan redistricting commissions, add ethics standards to the Supreme Court, add a voluntary public-financing option for campaigns, require presidents to release tax returns, disclose donors for super PACs, make Election Day a holiday, and about 20 other things in a single bill, is a perfect example of this syndrome. There’s no single narrative to grab onto, just a mélange of advocacy group–approved planks. This left House leadership unprepared as the pandemic began its march.”

Pelosi worked on the earlier stimulus bills. While doing so, she allowed the Republicans, led by Mitch McConnell, to craft the CARES Act. Dayen says this meant that Democrats “just got to tweak McConnell’s work, without altering its tilt toward the powerful.”

Pelosi and the HEROES Act

Dayen’s takedown on Pelosi ends with her “pie-in-the-sky” HEROES Act. Somehow, she even managed to make a mess of her own bill.

“Incredibly in the midst of a crisis, was a Pelosi tendency that had grown over the years: obsessive concern with deficits. Pelosi rolled back student debt relief in the HEROES Act after learning that it would cost $100 billion more than expected. This was a $3.2 trillion messaging bill not designed to become law, yet an additional 3 percent cost was considered unacceptable. Pelosi also declined to add “automatic stabilizers” that would maintain expanded benefits until economic stress dissipated, blaming a Congressional Budget Office scoring quirk that made the cost appear artificially larger.”

“So with over 30 million out of work, the important thing to Pelosi was that her pie-in-the-sky, going-nowhere bill was ‘reasonable,’ based on some ineffable standard of reason…”

“Devotion to deficit hawkery in normal times is unwise policy. It’s downright fatal during an economic crisis, where relief could be yanked away from needy families prematurely simply because of an unwillingness to challenge CBO’s scoring model.”

Many expect lawmakers to vote on the next stimulus bill sometime after July 20. If you hear Democrats complaining about how “unfair” the bill is, just remember who is negotiating for their side.

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