Creating Wealth

While our president crusades with an unrealistic plan to tax the rich to pay for his profligate spending and bring the country back to what now seems like a Capitalist pipe dream, the elusive pre-Obama economy. Obama Elites, who are almost always rich, but don’t seem to pay taxes or worry about them, agree with the old Marxist parable, “tax the rich to spread the wealth around,” at least, as long as no one dips into their private accounts. If Obama stays in power, their money is safe, that’s the way his system works. While the public frets over wether Obama is a Statist or a Marxist, he keeps trying to make the old failed Marxist principles work. Apparently, the Marxists of history didn’t understand how to run a Statist economy or so Obama must reason, to keep from being collectively diagnosed as a psychotic, by doing the same experiment repeatedly and expecting a different result.

Taxing the rich and the productive people of society, in order to give the money to non-productive members of society, is like beating your head against a wall to rid yourself of a headache. It may seem like a good idea to the naive and stupid, but eventually, your situation becomes worse or desperate. The wall maintains its integrity, but your head and your ability to reason is in an indirect proportion to the time spent beating your brains to a pulp.

Marx argued that the Socialists of the 19th Century continued to fail because they neglected to address the economic issues, and he was regarded as a brilliant thinker, his formula for the evolution of Socialism into Communism incorporated the concept of Wealth Redistribution. Obama incorporated Wealth Redistribution as a major portion of his election platform in 2008 and it has been an underlying principle of his economic policies. In the beginning, Marx was content to describe his theories in newspapers, but in 1848 he published, “The Communist Manifesto”; in 1867, he wrote the more notable book, “Das Kapital”. The brilliance of Marx has been the silent epitaph for over a hundred million, but Obama is not one to let the failures and the disasters of every experiment in Marxism and Statism deter his idealism.

The major problem with Marxism, a problem described by Orwell in his book, “1984” and later illustrated so poignantly by Obama during what may charitably become known as America’s Malignant Presidency, is the problem of reallocation of wealth or the Redistribution of Wealth, since the creation of wealth in Marxism or Statism is extremely laborious and difficult.

Marx believed that the problem with the socialism of his day was that it failed to deal in a realistic manner with economic issues. He proposed that his new (Communist) economic system, which called for redistribution of wealth, was more equitable. But in time and with application, it became clear that this system fails as well; in part, because it requires people to be altruistic and to live like ants or for the community rather than to advance the concept of self. Unfortunately, working for the benefit of others over self is not in harmony with human nature. Marx advanced a secular solution to a spiritual problem. But by its very nature, a spiritual problem can be solved only on a spiritual level.

Wait, wait, Progressive Marxist sympathizers may be tempted to work themselves into a coronary, but let’s consider some basic facts. Increasing taxes will always dry up a percentage of an economy, because a finite amount of money evacuates the economy and the economy becomes less dynamic. If at a certain moment in time, 45% of the money of an economy is taxed, the economy is weakened by 45%. Nancy Pelosi has argued that the money isn’t lost because it is fed back through the economy in the form of welfare and food stamp programs. But this requires a caveat. Before the money was taxed out of the economy, wealth was being created, goods and services were provided, and the economy was healthy and dynamic. But when money is taken from the economy and given to non-productive people to spend, no wealth is being created. The economy becomes anemic with false values and a loss of 45% of the economy’s capacity for the creation of wealth.

In an imaginary economy of Dystopia, the United Socialist States has $20 dollars, but a wealthy man has the $20 dollars and has decided to sit on the entire amount, except for his personal living expenses, say $2 a year. The rest of the people of Dystopia will be falling over one another to get a few cents of that two dollars to be able to feed their families and repair the roof over their heads and be glad to get a portion of that small pittance of the national economy of Dystopia. The money is spent in desperation by each citizen of Dystopia, who feels lucky to earn some of the limited money supply. They feed their families and provide whatever comforts they can afford with their share of the limited money supply as it is spent solely on the basics required for subsistence.

These few pennies of wealth are spent over and over throughout the economy. This economy is said to possess a limited money supply. However, if the wealthy person see the opportunity to “Create wealth” by investing a portion of his capital in a business or the manufacture of a product, the capacity of the money supply of Dystopia will begin to increase exponentially.

The investment that our imaginary capitalist has seen is in the form of ceramic tiles for the roofs of the homes of Dystopia’s citizens. It will take $14 of wealth to manufacture the roofing tiles, but since there is demand for this inexpensive product that can be produced and sold to turn a profit, the enterprise seems promising. Our theoretical capitalist thinks there is an opportunity to increase his fortune and create wealth within the community. The wealth created is not limited to the bank account of the capitalist; the actual wealth is recorded in the higher standard of living provided by the jobs and the spinoff industries that spring up to service the roofing industries.

It is the $14 dollars that invigorated the economy; once people had income beyond substance levels, they had the option of being a Hedonist and spending money on indulgences, sitting on money like the capitalist did before he saw opportunity, or trying to create wealth by investing in a business or creating another product. A group of human beings will provide examples of all three, but more importantly, the economy is invigorated as the $14 turns over almost every business day. People are seeing their standard of living improve weekly and the economy is not only healthy, it is strong. People have faith in the future and they are not afraid to take economic risks.

Obama has created the antithesis of a healthy economy. The money supply is dwindling. People who can invest have little confidence in the future and the money supply is turning over in a manner much closer to early Dystopia when the rich man sat on his assets rather than risk his money in a “Down” economy.

But Obama has the answer, he will tax the rich and spread the wealth around; unfortunately, the wealthy producers see the economic climate and close up their wealth and innovative creativity like a turtle hiding in his shell.