The Corporate Board Meeting: Welfare

The Pitch: Good morning, gentlemen. Today I'm submitting a proposal that is guaranteed to increase our sales, increase profits, and expand our business to vast new markets. Just by a simple investment, we will have more business than we can even dream of handling, and our stores will be flush with cash to either expand or branch out. What is this simple idea about which I can be so sure of success? Simple, we pay money to people who are not yet our customers. And I do not mean some trifling sum that would just be the equivalent of a sale or a discount, I mean enough for them to buy the product multiple times over. Here is how it will work. We hand out checks to those who cannot afford our products. They, then, will use that money, and even if they do not spend it all on our products, at least some of it will be spent on our products. Our store owners, then, will be getting more money, and they will be able to expand their stores because of the increased business. The money that was not spent in our stores will be spent in other places. It may be spent on movies, it may be spent on dinners, it may be spent on booze, etc., it really does not matter. The people who own those businesses will be getting more money which will mean that they will hire new employees and expand their businesses. This means that more people will be making more money, and those people will be able to spend more money in our stores. This will basically start a chain reaction whereby we will give up a lot now, but make up multiples of that in time because economic activity will boom! There is no way that we can lose in this scenario. Why invest in factory equipment and new machines that will take years to become profitable and come with great risk? With this proposal we face no risk, and guaranteed success. This is a sure-fire winner. Do you have any questions?

-The simplicity of the proposal may be its most endearing quality. Now, when you mention expansion, do you mean to say that businesses will expand just by making more money? It would likely take a long time for those businesses to make enough money to expand just by the profits that they make. Eventually they will have to take out a loan. Historically that was the purview of our business. Shop owners run and maintain the stores and we provide the capital for expansion. With the amount of money required for this, businesses will have to go outside to find sources of capital. Does this not decrease our profits?

-In the short run yes, it will decrease our profits. However, as they money starts coming in, we will eventually be able to provide that capital, and at that point we will already have become much richer.

-Why would we just give out this money? Historically, when faced with increasing profit margins, we have been forced to invest in capital so as to decrease our prices so that we could keep up with the competition. With this proposal, we will not have the money for such an investment. While we are handing out money to new customers, competitors will be investing in new production methods and will undercut our prices. In this scenario, why would customers ever buy anything from us? They would go to the cheaper companies, buy their products, and we would be completely shut out of the market. There is no way for us to win with such an expenditure.

-Indeed, I have already thought of this scenario, and found a solution. Instead of us alone providing this money, we should do it in concert with other companies. But trusts have historically failed, I know, because of outside competition or one of the companies dropping out of the trust. The best approach, then, would be to have government dole out the cash. This way, no other companies could undercut us as the entire industry would have to go through this. Even better with this approach is that instead of us furnishing the bill, we could have the customers themselves pay for it. We, in essence, would get the benefit of the customers themselves spending more money and we reap all the profits without doing anything to deserve it! It is the best solution.

-The only problem I see is that this would mean that the pool of savings among consumers would go down as they would be forced to pay more taxes. Would this, then, be a hindrance to capital accumulation and production?

-Of course, and usually this would be a problem for us. However, as all of the companies in the industry would have the same problem, we would have nothing to fear. We would be making more money without having to invest anything into production. Sure, the consumers would suffer as prices would otherwise fall making goods cheaper for them, but what does that matter to us? We will make more money and solidify our position in the industry since start-ups would have a tougher time finding the capital they need to compete with us. Gentlemen, our future lays with supporting the welfare machine.

The Slow Return Back, Part 1

Yes, after quite a long hiatus, I feel as though I have too much to say to keep this mouthpiece of mine muted. Much has been going on in the world: a presidential election, reform in Europe, tensions in the Middle East, and the continuing monetary fiasco, among other things.

I have been keeping up with the news, and frankly the things that I have begun to notice are horrifying me. I have many things with which I am taking issue, and I will deal will them in due time. However, I thought that I would touch upon what seems to be at least somewhat related to all of the issues: the triumph of rhetoric over reason.

What I mean by this is quite simple, but in a way, quite sinister. For probably decades if not longer, people have discussed the bias of the media. They have shown evidence of some issues, but they are mostly partisan ones. While this is important and should not be ignored, I feel that there is a much larger problem that is much more sinister. Essentially, the media (and our politicians!) dictates to us the bounds of discussion. Let me list a few examples.

The income tax is probably the most blatant example of the issue. The debate with which we are presented is whether we should raise or lower taxes. This works for both income and capital gains taxes. Funny, why do we never hear the argument raised by those who feel that this country should have no income tax? Frank Chodorov made the point earlier in the century that essentially it was the income tax which allowed the federal government to become the behemoth that it is. Without that, we would have the same government that we had during the Gilded Age. Isn't it interesting that this is just seen as laughably absurd? After all, how would the government function without an income tax, they would say. It it just too extreme for rational discussion. Funny, the federal government functioned quite nicely before the income tax, and that system allowed the United States to rise to prominence. Now it is laughably impossible?

The second issue is war with Iran. This has been a particularly hot issue lately, and it is understandable. Discussion of war and nuclear bombs will easily pique the interest of those worried of the Islamist menace. But how much of a menace is it? Is it too extreme to discuss the possibility of our military actions raising up anti-American sentiment? Is it too extreme to say that our debt is far too large to be going into more wars? Is it too extreme to discuss the practicality of a war for peace that kills 100,000 people and displaces millions (I'm looking at you Iraq)? Why are we not allowed to even discuss these things? Are these not valid points?

One issue particularly close to me concerns the election of Ron Paul. From the start we have all heard that Ron Paul is never going to be elected. After all, he is too old, too extreme, and too crazy. Funny, whenever somebody mentions that he is unelectable, they never discuss why exactly that is. Is it his crazy idea that we should be concerned about our debt? Is it his crazy idea that we should not be so trusting of the rising police state (if he's crazy about this, then so were our forefathers)? Is it crazy that we should understand our enemy before we attack them? Is it crazy to vote against unbalanced budgets? Ultimately, the opposition to Ron Paul relies on flash and not substance. What he says makes sense, but just because he is not great at oration he gets dismissed easily. This is nonsense. Ron Paul deserves a look, especially among conservatives who claim to be concerned about our national debt and unfunded liabilities since he is the only candidate that has a plan that would actually lower that debt.

The most entrenched issue revolves around welfare. We all hear about how welfare spending is out of control or how social security is broke. We hear all kinds of proposals to fix it or given the programs back to the states (even this is deemed as too extreme!). When was the last time that any of us heard about just getting rid of these programs? Oh no! Why, if we did that, we would be branded haters of the old and sick, Social Darwinists, or any other kind of dismissive label that is placed on real fiscal conservatives. Hmm, that's funny, how did the poor, old, and sick survive before welfare spending? Did all of the old people die of starvation before social security? Were people dying because of access to care before medicare? Of course not! But can we ever discuss it rationally? Of course not. We're not allowed to.

If this sounded like a rant, it was intended to be. The state of politics in this nation is despicable. We no longer judge proposals on their ultimate conclusions, but rather on superficialities. This is nonsense. If we are ever going to have significant change in this country, we must demand a real discussion, not the pandering that is doused upon us daily. If you want to escape this cespool or pseudo-intellectual discussion, I would suggest visiting sites that actually offer opposing viewpoints. Recently, I've been visiting antiwar.com, rt.com, al-Jazeera, lewrockwell.com, and others. Do I agree with everything on these sites? Of course not. However, they actually present another viewpoint. Read them with a grain of salt, but read them, and don't just rely in big media. They've lied to us before and will again. Be bold, search for the truth, let propaganda not your source of information be.

What Would Happen Without Welfare?

Begin a thought process with me. Let's just look at medicare and medicaid. In 2010, the US government spent $793 billion on these programs. There is a lot more than medicare and medicaid to welfare, but let's just look at this. Now, imagine that instead of the government taking that money from business and people and giving it away that the money instead was left in the hands of those to whom it belongs. What then?

First and foremost, to be sure, many people would be left without health insurance. Even as the extremist libertarian that I am, I can admit that this is a bad thing. All other things being equal, people having health insurance is much better than them not having health insurance. Fortunately for libertarians, though, all other things are not equal in this case. We have to remember that money. What does this other money do? What is its purpose?

The extra money will either be spent or invested. The spent money increases profit margins and the increased investment provides the capital with which to furnish new jobs. So the people who have lost health insurance can now find new jobs because of that capital now being freed up.

But is this alternate scenario worthwhile? Is it better that the money is providing jobs instead of just directly going to pay for health insurance? From the point of view of the person who was taxed, the situation is much better, because now he is getting more for his money. From the point of view of the person who was getting the health insurance, he is now getting the money for insurance plus some spending money for himself. His situation is improved because of the change.

Yes, it is a simplistic analysis, but what do you think of it? Is this a worthwhile idea?