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Work, Not Government, Creates Wealth

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Here is a thought (truism) that will stick in the craw of many/most liberals (or progressives, or whatever they want/like to be called now): Work creates wealth! By transforming less desirable things into more desirable things, work creates wealth. The key word here is creates. All the well meaning( ?) government programs (stimulus, e.g.) in the world do not create anything. At best they only rearrange things. But, liberals will argue, the stimulus wants to provide jobs by focusing on infrastructure. To that I argue there is a big difference between jobs and wealth. Further, “Federal infrastructure spending has a long and painful history of pork barrel politics and bureaucratic bungling by both parties, with money often going to wasteful and environmentally damaging projects.”

Some will argue that wealth is unequally distributed. To that argument I have two responses: First, it is not government’s purpose or function to redistribute wealth, to make us all equal. In fact, the preamble to the US Constitution states: “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.” Note that the key word is promote, not provide.  Not a single word about redistribution of wealth in the entire US Constitution. Second, some people are willing to work harder than others, and those people tend to acquire more wealth.

For those of you who want to provide the general welfare, let me say that there is nothing stopping you. If you want to provide for others, go right ahead. If I want to do it as well, that’s fine. Just let it be my decision!

The purpose or function of government is to facilitate the creation of wealth by encouraging people to work with maximal productivity, which is inexorably related to how long and energetically people work. But productivity is also, to an increasing extent, related to how efficiently people work, thanks to the efforts of others who have preceded us. Which brings us to two other factors: borrowing and infrastructure.

There is nothing inherently wrong with borrowing. Borrowing to improve productivity can be a good thing, but borrowing to pay for present consumption, such as with Obamacare, is usually not. A person or a country should borrow with care, because debt incurred by borrowing will have to be repaid, in one way or another, sooner or later, by the borrower; or, in the case of a country, by the borrowers’ children and/or grandchildren. Borrowing can result in a decrease in future wealth. But politicians of both parties continue to borrow, in order to buy votes, thus mortgaging our children’s future, because they know they will long be out of office when the debt can no longer be kicked down the road.

Creating jobs through the creation/renewal/expansion of infrastructure is, in and of itself, good. But, all too often, new infrastructure is totally unnecessary, and, in some instances, can actually be harmful to people and the (precious) environment. This spending more often than not does not increase productivity, and it extracts resources from other parts if the economy, from other people. As an example, the green energ” infrastructure spending requires massive tax subsidies, tax money that could be spent elsewhere. There is no doubt that green energy projects work, but they require subsidies and are not economically feasible. And they do not increase/improve productivity. Another example: infrastructure projects were not as shovel ready as Obama thought. His response: make a joke of it. Another example: Obama just killed the largest shovel ready project this country has seen in recent times (the Keystone XL Pipeline project), then blamed Republicans because his time for vetting the project was too short. I guess three years for vetting was not long enough. Plus his EPA (we all know how objective his lapdog, er, the EPA is) has studied 14 different routes! So much for not having time to vet it.

After three years we expect Obama and his administration to learn this. But, to quote the late John Belushi, “Noooooooooooooooooooooooooooo!” So we are left with only two alternatives. Either (1) President Barack Hussein Obama and the people he chose to surround him are really, really dumb, or (2) Obama is smart and is creating policies to wreck this country/culture/economy on purpose. The results are/will be the same either way. November can’t get here soon enough!

But that’s just my opinion.

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  • Cannonshop

    #21 Glenn, you weren’t paying attention-I never said you only cut-that would be stupid, and more to the point, it wouldn’t work.

    But you DO need to cut-and cut a LOT. Raising the taxes WITHOUT cutting is just as stupid as only cutting, and for the same reason-it doesn’t address the problem beyond making certain factions feel better about themselves whilst they continue to do the same damaging things they’ve used government to do for decades.

    Oh, and getting another credit card to pay off the previous ones? Is STILL stupid, Glenn. We have too much debt, our dollars are devalued, and devaluing, and more debt is going to make that WORSE, not better.

    Malinvestment-the typical outcome of Government “Stimulus”, generates short-term booms and long-term busts, and hair of the dog doesn’t fix it, it just works like a painkiller hiding the damage of the cancer, instead of treating it.

    Looking to the King (er, Government) to give you a standard of living? Yeah, that doesn’t work, it never has, Glenn. In the short term it can look and feel like it, but the end is always the same-the crown-er, Treasury” runs out of money, the lifestyle on debt is non-sustainable and getting used to it is toxic.

  • Glenn Contrarian

    Cannonshop –

    I recommend you lay off the cuts-only Kool-Aid. That’s only half the problem – and real cuts in defense would go a long way towards taking care of that particular half of the problem.

    The other half – yes, it’s taxes. America got along quite well, thank you very much, when taxes – particularly those of the wealthy – were higher. Under Obama we have the lowest tax burden we’ve had in six decades, lower than under Eisenhower, Nixon, Ford, Reagan, Bush, and Bush…yet all we hear from the GOP is “cut more taxes!!!”

    Call it wealth redistribution if you want – but with greater tax revenue comes more people hired by the government to DO things – which is how we got the interstate system during a time of 90% top marginal tax rates, and the Apollo missions during a time of 70% top marginal tax rates. And when those people are hired to DO things, they get PAID, which means they go out and BUY things…

    …which is why you NEVER heard of the rich going to the soup lines even when their taxes were much higher.

    A rich person will not open up a factory unless there is demand. There must be demand FIRST – and that’s why George H. W. Bush called supply-side economics “voodoo economics”. People have to have money FIRST before there can be demand…and that only comes if people are hired, and when the private sector isn’t hiring, it’s just a vicious circle all the way down.

    That, Cannonshop, is why most economists agree that the stimulus, if anything, was too SMALL. That’s also why the government stimulus package called “World War II” worked wonders. The government put people to work. People got paid, and they bought things, and the rich profited, too.

    It’s all there in the history books, Cannonshop. We need tax revenue in order for the nation to function. Slashing tax revenue even further will only make things worse. Increase the tax revenue, use it to put people to work, and you’ll see things look just like they did in the Clinton years after Bush 41 raised taxes.

  • Cannonshop

    #9 Glenn, you mistake the context of “Optional” with “Undesirable”. NIH is desirable, as is an OSHA that works, and a CDC that works-but these are OPTIONAL expenditures.

    Debt-service is NON optional, and with every expansion of debt, it grows in terms of the GDP (and tax base) necessary to pay for it. Adding debt is fundamenally an optional move-paying debts is not. One does not get out of debt by incurring MORE debt-even for very desirable things.

    CDC, NIH and OSHA represent a miniscule fraction of the optional-or discretionary- portion of the budget. Spending HAS to reduce-we’re increasing our debt load merely to maintain the current level of outlays. IT WILL HAVE TO BE CUT-eventually. I favour cutting NOW, as opposed to when the debt-service is equal to or greater than the GDP for the entire country.

    Incidentally, that won’t happen with “Deals” that amount to less than .003% of present outlays, spread out across ten years. That’s like trying to pay your mortgage off by not having that extra (Fifty cent) candy-bar each month.

    Increasing the debt load to pay present bills means your bills later are going to be that much larger. Eventually your house of cards falls apart on that approach, with brutal, long-term, and catastrophic results, whereas NOT increasing the debt-load, and reducing OPTIONAL spending NOW (possibly to include highly desirable things) will cause short-term pain NOW, but avert Catastrophe WHEN, not “IF” the note comes due.

    The present method, and attitude from your end, is akin to treating malignant cancer with aspirin and vodka.

  • Glenn Contrarian

    Oh, Warren –

    You might consider reading the act before you start thinking it had anything to do with the military. It had absolutely squat to do with the military.

    So why did we do it? Ezra Klein explains it best:

    During the early years of our union, the nation’s leaders realized that foreign trade would be essential to the young country’s ability to create a viable economy. To make it work, they relied on the nation’s private merchant ships – and the sailors that made them go – to be the instruments of this trade.

    The problem was that a merchant mariner’s job was a difficult and dangerous undertaking in those days. Sailors were constantly hurting themselves, picking up weird tropical diseases, etc.

    The troublesome reductions in manpower caused by back strains, twisted ankles and strange diseases often left a ship’s captain without enough sailors to get underway – a problem both bad for business and a strain on the nation’s economy.

    Did you see aught there about the military? No, you didn’t. It was about keeping sailors on privately-owned ships physically able to DO their jobs…because our economy depended upon it. It doesn’t have to be a retired Navy guy like me to tell you that a ship can’t get underway if key personnel aren’t able to do their jobs. He continues:

    First, it created the Marine Hospital Service, a series of hospitals built and operated by the federal government to treat injured and ailing privately employed sailors. This government provided healthcare service was to be paid for by a mandatory tax on the maritime sailors (a little more than 1% of a sailor’s wages), the same to be withheld from a sailor’s pay and turned over to the government by the ship’s owner. The payment of this tax for health care was not optional. If a sailor wanted to work, he had to pay up.

    This is pretty much how it works today in the European nations that conduct socialized medical programs for its citizens – although 1% of wages doesn’t quite cut it any longer.

    The law was not only the first time the United States created a socialized medical program (The Marine Hospital Service) but was also the first to mandate that privately employed citizens be legally required to make payments to pay for health care services. Upon passage of the law, ships were no longer permitted to sail in and out of our ports if the health care tax had not been collected by the ship owners and paid over to the government – thus the creation of the first payroll tax in our nation’s history.

    As the nation grew and expanded, the system was also expanded to cover sailors working the private vessels sailing the Mississippi and Ohio rivers.

    The program eventually became the Public Health Service, a government operated health service that exists to this day under the supervision of the Surgeon General.

    It was never about the military, Warren – it was about our economy. If the people are not in good health, then they can’t work.

  • Re: comment #14, Glenn, you state, “…America’s merchant marine fleet sailors in 1798.” Is that the same Merchant Marine that, in time of war, becomes part of the US Navy? I reiterate, read and understand the US Constitution!

    Re: comment #17, Clavos, very good point. I am anxious to see how Glenn rationalizes/ignores it.

  • Clavos

    ‘Free enterprise’ doesn’t address weather forecasts…

    There are many excellent private forecast services providing focused forecasts for, among others, farmers and transportation companies.

    Some use raw data from the NWS. Many develop their own. But all provide a service not offered by the gummint.

  • Glenn Contrarian

    And Clavos –

    From a Congressional Briefing way back in 2007:

    The virus has spread beyond Asia, reaching Europe in 2005 and the Middle East and Africa in 2006. Over 250 million poultry have died or been destroyed internationally. Human mortality among the more than 275 people infected exceeds 55%.

    Most of the poultry, btw, were in industrial poultry farms in Vietnam and China – and perhaps if you see that those two nations were willing to kill hundreds of millions of chickens and ducks to stop this, maybe, just maybe you’ll think it’s something you should look into.

  • Glenn Contrarian

    Clavos –

    What you’re not realizing is that H5N1 is not H1N1. According to the WHO, H5N1 has a documented mortality rate of 60% today, and that’s with all that modern medicine has to offer. It may be lower due to the fact that some may not report lower-level symptoms to be diagnosed by medical professionals…but that caveat is a “definitely maybe”.

    I strongly encourage you to investigate it, and find out why it keeps virologists from keeping a good night’s sleep.

  • Glenn Contrarian

    Warren –

    ‘Free enterprise’ doesn’t address weather forecasts, or conduct research on diseases in Vietnam (where H5N1 is often found), or lead to standardized protection against chemicals, or self-police to prevent chemical spills (much less clean up after them).

    When it comes to the Constitution, do you know it better than the Founding Fathers did? Because in YOUR view, it would have been quite unconstitutional for them to pass a law requiring an individual mandate for America’s merchant marine fleet sailors in 1798.

    How did America survive before these things/agencies existed? Because many of these threats and challenges we face did not exist then, either. For instance, how many environmental disasters like the BP oil spill happened before, say, the Civil War? Zero. Every single government agency you rail against was implemented as a REACTION to a threat or a challenge we as a nation faced that we had not faced before. Every. Single. One.

    Is more government the answer to all problems? Of course not. Business is in the business of making money – let business make money! BUT there are threats and challenges America faces that business simply will not do anything about. I’ve enumerated several of them above. You will simply ignore it, of course, but there it is.

  • Clavos

    It makes no sense to assume that, because a certain percentage of the population died in the 1918 outbreak, a like number would die today.

    Such an assumption disregards advances made in medical science and logistics over the past 100 years.

  • Clavos

    If H5N1 ever makes the leap to human-to-human transmission, say bye-bye to between 30-50% of the world’s population…


    Bears investigating…

  • Re: comment #9, Glenn, two more questions:

    (1) How did this country ever survive before all those things/agencies existed?

    (2) Do you think more government is the universal answer to ALL problems?

  • Re: comment #9, Glenn, two questions:

    (1) Have you ever heard of free enterprise?

    (2) Have you ever bothered to read (and comprehend) the US Constitution?

  • Glenn Contrarian

    Cannonshop –

    You’re poisoning the well with your example, because you’re ignoring how very many more challenges the American people have to face now than when the Constitution was entered.

    For instance, according to your comment, the taxpayers should not be funding the CDC or the NIH (and all the funding they provide for Big Pharma and universities would go away too). But – barring extinction events like asteroids or all-out nuclear war or Siberian Traps-level supervolcano – what’s the greatest threat against human civilization? H5N1 influenza. Yes, the flu. The 1918 H1N1 outbreak killed up to 50 million people worldwide – half the total number of people killed in WWII – mostly in a period of four months. 50 million dead…when the world’s population was about 1 billion people, which is about a 5% mortality rate. Imagine, Cannonshop, an influenza that has a mortality rate of fifty to sixty percent – and you’ve got H5N1. If H5N1 ever makes the leap to human-to-human transmission, say bye-bye to between 30-50% of the world’s population, of every family, including yours.

    The CDC and the NIH have H5N1 as their very highest priority and are the world’s greatest center of research against H5N1…yet, if we listen to you, the CDC and the NIH would go *poof* and disappear. And so would NASA (use a cell phone lately?). And NOAA (watch the weather forecast lately?). And the EPA (did you breathe lately? Or do you remember Love Canal and 1970’s Los Angeles smog?). And OSHA (did you use lead-free paint recently?).

    That last – OSHA – is one you should personally be grateful for since you build aircraft, and you’re probably well familiar with respirators and benzene and toulene. Do you really think Corporate America would have instituted a standardized and effective respirator program if the government hadn’t forced them to do it? Of course not – and you and your co-workers would be paying the price.

    The above example about H5N1 is quite lengthy, but it proves – proves – the point that Americans today face threats that they have never faced before…and it doesn’t stop there. America’s very first individual mandate for health care, FYI, was for our merchant marine fleet back in 1798. Why? Because the Founding Fathers knew how important it was to protect the most important industry – shipping – they had to protect the most important infrastructure of that industry – people.

    There’s many more threats and problems we face today, Cannonshop – you KNOW this. And corporations and industries cannot solve many of those problems. Why? Because what is the raison d’etre of every company? To make money, of course. NOT to do what’s right to protect the general welfare, but to make money. Moneymoneymoney.

    No, it takes government to face threats and tackle problems that corporations and industries are not in any way equipped to handle, physically or psychologically. Is government perfect? Of course not! Will they spend taxpayer dollars exactly how we want them to? Of course not! That’s why we’re supposed to have (and before Reagan, we DID) have a broadcast media that was by law free from corporate influence. But now?

    No, it’s quite naive to think that a modern government should take care of only the short list you gave, because the world has changed and we’d be fools not to demand our government to change with it, to address the challenges the Founding Fathers never imagined.

  • Clavos

    Let’s say it’s not innocuous (I don’t think I’ve heard Warren claim it was), so what? It’s the bum’s name (and no, I didn’t call him a bum innocuously).

    It was his grandfather’s given name and in the Luo (Obama’s tribe) language, Dhluo, means “good,” or “handsome one,” so in a very real sense, Warren is complimenting the bum by using his middle name.

    I, on the other hand, am insulting him. Very deliberately.

    I do, however respect the office, even though, in my opinion, he has demeaned it and the country.

  • Re: comment #4, EB, you are the one that keeps bringing up and making a big deal of Obama’s middle name. Are you ashamed of it or offended by it?

    No he isn’t.

    And I’ll believe your persistent use of Obama’s middle name is entirely innocuous when you start routinely referring to George Walker Bush, William Jefferson Clinton, George Herbert Walker Bush, Ronald Wilson Reagan, James Earl Carter, Gerald Rudolph Ford, Richard Millhouse Nixon…

  • Re: comment #5, thank you, Cannonshop, for addressing comments by troll (#1) and Glenn (#2). You did a much better job than I ever could, especially the points about the Kingdome and Murtha.

    Re: comment #3, Igor, you seem to forget how those coupons were acquired. Have you ever heard of risk? Besides, have you ever heard of the Kennedy family?

    Re: comment #4, EB, you are the one that keeps bringing up and making a big deal of Obama’s middle name. Are you ashamed of it or offended by it?

    Re; comment #2, Glenn, feel free to “insure domestic Tranquility” by keeping the people from rioting in outrage because of (what you define as) financial injustice. No one and nothing is stopping you. While you’re at it, fix financial injustice. Just use your OWN money to do it!

  • Cannonshop

    #1 only under a very narrow (or broad) definition (Depending on which side you’re a fan of.)

    Taxation, strictly speaking, is the chief method of generating revenue for legitimate governmental funcitons-what are those functions? Well, according to the Constitution, those functions include:

    (no particular order of precedence here)
    National Defense
    Roads, Ports, and Bridges
    Maintenance of Navigable Waterways
    Law Enforcement and Prisons
    The Mint (printing money)
    The Post Office (yes, folks, it’s SUPPOSED to be a Government Function!!)
    Regulation of Interstate Commerce

    Everything else, is optional/tacked on/added. We have the national income to pay for the listed non-optional items, what is killing us, is all the Optionals that have been added in two hundered years of Pork and Spoils system politics, and the loans taken out to finance said pork and spoils.

    #2 Glenn, do I really need to break out the list of billions in tax-breaks, subsidies, and bailouts concocted and/or voted into place by Democrats? REALLY?? From State level up to the Fed, it’s a long list, Glenn. IIRC, you lived in Washington when the Governor (Gary Locke at the time, D-Seattle) overrode, with a Democratic Legislature, a public vote of “No” on Three hundered fifty million dollars worth of playground for billionaire owners and millionaire athletes (The Mariners Stadium), along with the demolition of the Kingdome, a building that IS still not paid off, over a decade after being demolished.
    Mind that I don’t oppose professional sports, I simply find that the cost/benefit ratio collapses when the Public is bearing the cost for such a narrow private benefit.

    There are a raft of similar boondoggles on the Federal level, some of which had (past tense) the potential of broad public benefit,only to be legislatively conditioned into irrelevant side-shows, while others never had the potential to be anything more than some congresscritter’s vanity-booster. (John Murtha’s airport in E. Pennsylvania comes to mind-big enough to land a shuttle, with six flights a day-total-going in and out, or the plethora of bridges in Robt. Byrd’s old district…)

    This country as a whole has a real problem with how it handles and spends its money, Glenn. FDR’s administration could spend all the money they spent, because he walked into a condition of the U.S. being a net CREDITOR wiht a positive income balance, and money to SPEND, not a Debtor nation going from princes to potentates hat-in-hand begging for loans to make payments on the last set of loans.

  • whew! was worried you were going to miss an opportunity to mention Obama’s middle name.

  • Igor

    Well, Warren, I’m glad that you finally realize “Work creates wealth!”

    Yes, work, Not Speculation, not cream skimming, not coupon clipping! Work! The activity of Workers.

    Anything else is fake, it’s BS.

  • Glenn Contrarian

    Warren –

    You included the Preamble (to which I immediately started humming the melody from Schoolhouse Rock), but did you really pay attention to the meaning thereof?

    For instance, look at “establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare,”

    Part of ‘domestic tranquility’, FYI, is keeping the people from rioting in outrage because of financial injustice. You may not realize this, but the greater the economic INequality, the greater the anger among the people…and history backs this up again and again and again. The greater the inequality of wealth, the greater the chance of internal strife. The French Revolution, the Bolshevik Revolution, and the fall of the Weimar Republic were ALL directly due to income inequality. What’s really pitiful is that you and the rest of the conservative rank-and-file cannot see how you are being USED by the rich to make themselves richer…even though by doing so you’re hurting yourselves by cutting funding for your kids’ schooling, among other things.

    Are you even aware of what led to the Boston Tea Party, that famous reaction to the Tea Act? It is important to understand that the Tea Act actually placed no new tax on tea. Instead it simply gave a tax break to the East India Tea company. Today’s give-lots-of-tax-breaks-to-business GOP would have been on the side of the Tories and Loyalists, whereas those who engaged in the original Tea Party were all about business paying its fair share of taxes…sorta like today’s oh-so-socialist liberals are demanding.

    But since all of this is documented history which says stuff you don’t like, you’ll ignore it and go back to your echo chamber.

  • troll

    …isn’t all taxation wealth redistribution?