By Charles Payne
Saturday, June 01, 2013
Why socialism doesn't work, and the consequences once
you've run out of other people's money.
Item: Police in Venezuela seized 2,500 rolls of toilet
paper in an overnight raid of a clandestine warehouse. In addition, officers
seized 400 diapers and 7,000 liters of fruit juice.
Item: The Elysee Palace sold off a tenth of its wine
collection in a Presidential garage sale. The French government says it's no
big deal, and they're trying to set the example.
Selling presidential wine in a nation that loves its wine
might chip away at awful approval ratings, but it speaks more to the stupidity
of goals that include squeezing the inequality gap by bringing the top lower,
taxing rich people and businesses, and demonizing success. Venezuela has become
a shell of itself after confiscation of foreign assets and saber-rattling spooked
away expertise and investment. In the meantime, promises made to an entire
continent aren't being kept as it's become hard enough to keep toilet paper and
diapers for Venezuelans in stock.
Margret Thatcher talked about running out of other
people's money, but in the game of ruining a country and squandering potential,
running out of money is just the start of the fun and games. Usually by the
time it begins, draconian options like higher taxes, fees and wealth
confiscation has already been in place. Then it comes down to simply cutting
spending or as is it's generally called- implementing austerity. But, in
nations that have afflicted themselves with the most socialist policies, it's
always back to higher taxes and confiscation of wealth anyway.
Of course when it's all really said and done, the end
game looks like Greece where there's been talk of selling more than a thousand
bottles of wine but major attractions including tourist sites and islands.
But for all these nations the spending doesn't stop, and
yet they call it austerity. In America, we got a taste of austerity in the form
of reinstatement of social security tax and sequestration. I didn't like the
cut in social security tax, instead it should have been a permanent break on
income taxes, but this was the easiest way to get wealth redistribution going
along with supped up initiatives like the earned income tax credit and child
tax credit. These scams used the cloak of rewarding workers when it was really
focused on not helping people that earn too much.
(The starting point of most administration policies is
how to make sure certain people do not benefit rather than how can we lift the
entire nation. It's not a stretch to see how exclusive economic policies could
lead to targeting by government toward other unfavorable people and
organizations).
President Obama talked about the devastating impact of
sequestration and even went on a national tour touting the harsh outcomes of
government slowing the rate of spending by just 2%. Never mind American
households took a $1.3 trillion haircut over the past few years ... we were
promised Armageddon beginning on March 1st.
This is what we got instead:
> Dow Jones Industrial Average +1,234 points or 9%
> Existing home prices (median) +19,600 from Feb or
11%
> Job creation of 303,000 with April's tally as high
as or higher than seven months in 2012
> Washington DC has seen 40,000 jobs, 5.3%
unemployment, and huge spikes in tax receipts for neighboring states and more
cranes anywhere in the world than maybe Dubai.
While this was going on, Europe raised taxes as its form
of austerity eschewing pro-business policies to support their welfare states
and impossibly lavish social spending.
Headlines out of Europe this morning were heartbreaking.
Euro Zone unemployment is now at record high 12.2%, but
that is just the tip of the iceberg. A country by country look speaks to a kind
of desperation that can't be cured overnight or by printing money. Unemployment
in the most troubled areas of Europe continues to deteriorate and is now in
crisis mode, particularly for those nations' youth.
Last month I read that there are 6,000 pizza jobs
unfilled in Italy because nobody wants to do that kind of work anymore. Yet the
unemployment rate among Italy's youth is at an all-time record high (records
kept since 1966). This speaks to the negative impact of the welfare state and
welfare mentality. If you can get paid and live well, even live an inevitable
life without working, then why make pizzas, why get off the sofa unless it's to
go to the beach - where American tourists become jealous and think "these
guys got it right."
They got it wrong!
Arvind Mahankiel got it right!
Arvind was winner of Scripts National Spelling Bee after
correctly spelling "Knaidel" to become champion of the competition
last night. The beauty is Arvind actually got knocked out of the competition
the two prior years when he was tripped up by German words. Last night he
turned his weakness into his strength and got the German word and the title.
This is what America has always been about, grit and determination made us
great and is the only way to stay that way. More and more of our youth along
with society at large are being lured into a European existence where the state
takes care of our needs relieving the need to get better, overcome adversity,
and to be great.
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