Great contribution from Mike Walker, Col USMC (retired)
Redistribution Sucks!
In 1998, Barak Obama said: "I think the trick is figuring out how do we structure government systems that pool resources and hence facilitate some redistribution -- because I actually believe in redistribution, at least at a certain level to make sure that everybody's got a shot."
Mr. President, I am sorry. Whoever introduced you to stale and flawed redistribution theory sold you a pack of lies.
Redistribution Is Fundamentally Unfair
Let us take Prudent Prudence and Fast Eddy. Both worked for forty years and earned an average of $30,000 per year. Prudence saved an average of $3,000 per year (at 5% annual interest) while Eddy spent his money as quickly as he earned it. Both then retired. Prudent Prudence now has hundreds of thousands of dollars in savings, but Fast Eddie has none. Gee, its time for governmental intervention!
Some argue that Eddy has a right to the same financial “shot” at retirement as Prudence. So, the government will redistribute Prudence’s money. Everything up to $250,000 Prudence can keep. The rest goes to Eddy. We leave our twosome with Prudence sitting at the kitchen table and sighing while crossing out items on her “Things I always wanted to do when retired” list while Fast Eddy is spending his newfound wealth on a celebration party at the beach. Surf’s up, Dude!
Redistribution Is Bad Policy
Even within the government systems lauded by President Obama, there are better solutions than redistribution. California faced the problem of unequal school funding and opted NOT to redistribute monies from rich to poor schools. Instead, it took the path of equalization, ensuring the poorest school was funded at around 93% of the richest. Why not redistribute the funding to make it 100%? Two reasons, first, redistribution leads to stagnation; it would have cut off an important venue for local level growth and improvement. Second, equalization ensured that all the schools would be on an upward path of fiscal support.
The people paying school taxes in the top 7%, like La Jolla, Newport Beach and Marin County, were going to help their kids, either by staying inside the government system (through State equalization) or (in the case of redistribution) from the outside by opting for private tutoring, out-of-school enrichment programs and the like. By keeping them inside the government system, those communities increased the average spending for California students. When that average went up, poor school districts, like mine, received increases in State equalization funding. Everybody benefited. That was the goal. That, however, is NOT the goal of redistribution, which gets us to the third and final point.
Redistribution Is All About Punishment
That is the logic behind the President’s remarks about not caring if giving tax breaks to high income earners and successful small businesses gets the economy going again. For President Obama, it’s about fairness defined by redistribution. That is regrettable. Redistribution has never been about doing the greatest good for the greatest number of Americans. It has always been about punishing class enemies. Redistribution advocates do not care if that extremist philosophy results in a stagnant economy, crippling debt growing at over one trillion dollars per year and millions of people out of work.
At its core, redistribution is about punishing Americans. Nothing else really matters. Mr. President, the best thing is to fuggitaboutit!
