Sunday, April 14, 2013

The Benevolence of Government

Margaret Thatcher died this past week. In reading about her, I came across this quote from her last speech to British House of Commons:

The hon. Gentleman is saying that he would rather that the poor were poorer, provided that the rich were less rich. That way one will never create the wealth for better social services, as we have. What a policy. Yes, he would rather have the poor poorer, provided that the rich were less rich. That is the Liberal policy.

If it pleases the lady, and I ever hope it would, I would like to introduce this fictional and entirely too simplistic scenario to help illustrate her point for where we are today, or at least where Obama would take us, in the United States.

Let's say I make $100,000 and someone else makes $20,000. That is "income disparity".

And income disparity is to be despaired above all things.

But unfortunately that someone else loses his job (because his evil corporate fatcat boss says complying with ObamaCare means he can't afford as many workers, but that's another story for another day). So, the government takes $20,000 of my income to help that guy while he's out of work.

We'll call the $20,000 the government takes from me "enhanced revenue". And we'll call the $20,000 they'll use to give to that other guy an "investment".

See, the government really, really cares for this guy, honest.

Now I've got $80,000 $70,000 (not having that $20,000 prevented me from making investments in my business and reduced my ability to market and produce the goods I make), and that guy has $20,000 $10,000 (after the government takes it's slice to pay administrators to determine what that guy should get. And for their staplers and laptop computers and buildings and offices and health insurance and pensions and their annual conference in Fiji for their workshops on better administrating).

I'm telling you, the government cares about this guy.

So now, we got ourselves a situation where we went from me having 400% more than that guy to a point where I have 600% more. Some might argue the income disparity just increased. But don't worry -- those people don't know what they're talking about. See, I used to have $80,000 more than he did, and now I only have $60,000 more. That's a 25% reduction in the disparity! Forward!

We'll call this, oh, I don't know, "fairness".

Ok, at this point, I'm a bit misty about just how much the government cares about this guy.

Of course, there used to be $120,000 in economic activity being generated between the two of us, and now there is $70,000. That's a 42% reduction in economic activity. But don't worry, taking the money from me and passing it through DC gives it a 4.652x multiplier (I rounded the number to save pixels, but government economists know the exact multiplier to at least 16 more places past the decimal point). This will juice the economy a lot more than if I had been allowed to selfishly keep the money I earned.

See, and this is perhaps the greatest lesson of all, the government helps me become a better, less selfish person.

We'll call all this. . . what's the phrase I'm looking for . . . The Obama Economy.

And just wait until they come for another $20,000 from me -- what a world that will be!

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