Let me start with a nice funny story to lighten things up a bit before I get down to some serious stuff. This story was forwarded to me by a good friend of mine. Here it goesâ€¦
Recently, while I was working in the flower beds in the front yard, my neighbors stopped to chat as they returned home from walking their dog. During our friendly conversation, I asked their little girl what she wanted to be when she grows up. She said she wanted to be President some day. Both of her parents, liberal Democrats, were standing there, so I asked her, “If you were President what would be the first thing you would do?” She replied… “I’d give food and houses to all the homeless people.” Her parents beamed with pride! “Wow…what a worthy goal!” I said. “But you don’t have to wait until you’re President to do that!” I told her. “What do you mean?” she replied. So I told her, “You can come over to my house and mow the lawn, pull weeds, and trim my hedge, and I’ll pay you $50. Then you can go over to the grocery store where the homeless guy hangs out and give him the $50 to use toward food and a new house.”
She thought that over for a few seconds, then she looked me straight in the eye and asked, “Why doesn’t the homeless guy come over and do the work, and you can just pay him the $50?” I said, “Welcome to the Republican Party.” Her parents aren’t speaking to me anymore.
Lately I have been focused on the US Presidential elections, listening and reading the arguments of both the Democratic Party and the Republican Party. As some of you may know, the two political parties have a fundamental difference in ideology. This is actually a good thing! At least the difference is in the ideology unlike in the Philippines where politics is personality-based. In the Philippines we get all this myriad of political parties and colors but at the end of the day they are all the same guys! Anywayâ€¦ please forgive the digressionâ€¦ letâ€™s go back to the Democrats and the Republicans.
The Democrats are more inclined towards a collectivist ideal. For them, it is the governmentâ€™s duty to ensure equality by spreading the wealth more evenly. So in essence, they are proponents of taking from the wealthy and spreading the wealth to the poor or the less fortunate. Sounds noble, right? I mean come on! Who doesnâ€™t like Robin Hood? So for the Democrats, raising taxes (and the debt ceiling) is justified so long as it can promote the general welfare. As one of my favorite Democratic Presidents (Bill Clinton) said, â€œI did not have sex with that woman!â€ â€¦ oops… sorry, wrong quoteâ€¦ I meant to say that for Clinton the Democrats live by the â€œWeâ€™re in this togetherâ€ mantra.
The Republicans, on the other hand, are more inclined towards individualism. For them, they prefer to have the free market and capitalism run its course with very little government interference. The Republicans are strong advocates of the principles of the nationâ€™s Founding Fathers â€“ manâ€™s right to his own life, to his own liberty, to the pursuit of his own happiness. Philosopher Ayn Rand interprets this to meanâ€¦
â€œâ€¦manâ€™s right to exist for his own sake, neither sacrificing himself to others nor sacrificing others to himself; and that the political implementation of this right is a society where men deal with one another as traders, by voluntary exchange to mutual benefit.â€
As one of my favorite Republican Presidents (Ronald Reagan) said, â€œRepublicans believe every day is the Fourth of July, but the democrats believe every day is April 15â€. (By the way, for those who may not be familiar with April 15, it is the tax deadline date in America)
So based on the contrasting ideals, it certainly sounds like the Democrats are the nicer fellows and that the Republicans are the selfish evil bunch. Who in their right mind and heart would even consider the Republican ideals noble and even plausible? Even if the Democratic inclinations are towards socialism, if it eases the pain of the poor and the middle class and if it promotes equality, why is that such a bad thing? Canada, where I hail from, is a socialist country and they certainly have been the envy of a lot of other countries including a lot of folks in the United States. Well, I always tell them that they probably feel that way because they have not lived in Canada yet.
Donâ€™t get me wrong, I love Canada and I believe it is one of the most beautiful countries in the world, especially my province of British Columbia. What I do not like about Canada is the socialist style of government. The style of government just isnâ€™t conducive to business and it offers very little opportunity for personal and career success. If you are the type of person who is content to have just the basic needs in life such as food, shelter, and health care, then Canada is a great place to be. But if you are in your productive years and if you have ambitions in life then Canada does not offer the same luster in opportunities as the United States does. If Americans would like to go towards a system of government like Canada, they better think again. Socialism (also Communism and other shades of Collectivism) hurts the pocket a lot and it fosters a culture of mendicancy. It hardly translates to equality especially for hard working and diligent people and it is tantamount to rewarding failure.
Consider this story taken from Ayn Randâ€™s â€œAtlas Shruggedâ€:
So, there was a motor factory called the Twentieth Century Motor Company, which was highly successful, known as being synonymous with quality through the country. Then, the owner died, and the factory went to his three children (two men and a woman), who had big â€œprogressiveâ€ (in that context, an euphemism for â€œsocialistâ€) ideas â€“ the main part of it being that well known communist ideal, â€œfrom each according to his ability, to each according to his need.â€
The six thousand workers approved, of course â€“ since they were made to feel that anyone who didnâ€™t agree with such â€œbrotherly loveâ€ was an evil, selfish monster. And so, that ideal went into practice â€“ everyone worked, supposedly as much as he or she was able to, but wasnâ€™t paid according to time, or results â€“ instead, all of the profits from sales were put together in a common â€œpoolâ€, then divided according to need.
However, they immediately had a problem: what is really â€œneedâ€, and what is but a desire? What defines â€œneedâ€? Thereâ€™s no absolute standard for it, since what to some is just a pleasure, to others may be a vital need, and vice-versa. And so, they voted. Yes, every 6 months or so, they had huge meetings where they all voted on each oneâ€™s need â€“ and how did you convince others? By begging, by pleading, by convincing everyone that they were worse off than others, that they had more health problems, had more children to feed, that they suffered more, and therefore had a greater â€œneedâ€. In a little time, six thousand workers had turned into six thousand beggars â€“ because no one had any â€œrightâ€ to the result of their work, that line of thought was dead, by then.
Naturally, since work wasnâ€™t tied to earnings any more, no one had any incentive to work harder, and production dropped sharply in the first year. In a meeting, then, they decided that it had happened because some workers werenâ€™t giving their all, they werenâ€™t using all of their ability, and therefore would have to work extra hours at night â€“ without pay, of course â€“ to improve the situation. Who? The most able, of course â€“ and again, they voted on who those were. Obviously, since that day, everyone would hide the slightest sign of ability â€“ indeed, they would compete as to who would appear more incompetent. Being incompetent meant being â€œneedierâ€, and was rewarded; being competent was a curse, since it meant you â€œneededâ€ less â€“ and had to work harder, to support the â€œneedyâ€ ones.
For some reason (!), production dropped even more.
It got worse. It was decided that no one could have any kind of luxury until everyoneâ€™s basic needs were met â€“ and any kind of entertainment, cultural activity or amusement were the first to go. Books? That was a luxury. Music? The same. What right had anyone to a book when there were people starving? And the standard of living â€“ for everyone just kept going down. Lots of people turned to alcohol.
Anything that made people â€œneedierâ€, such as becoming ill, or having a baby, was a reason for everyone to hate that person â€“ since he or she would be, supposedly, â€œtakingâ€ more from the pool. People also began to spy on their neighbours, so that they could report on anyone who was faking his or her â€œneedsâ€.
In four years, the company was bankrupt. What a surprise.
In Canada, the less you work or the less money you make, the more benefits you are entitled to from the government. On the other side of the spectrum, you get taxed more as your income increases. The idea is that because you need less, the government takes what they deem as excess from you to give to the needier ones. Never mind that you work 2 or 3 jobs, the fact that the multiple jobs you have translates to more income this puts you on a higher tax bracket where the government will take more from you (regardless of the blood, sweat and tears you put in your multiple jobs) so that the wealth will be redistributed to the needier through the social programs and dole-out programs supporting the general population especially those who are â€œneedyâ€. This is the kind of system the Democrats are trying to sell to the American people. They call this â€œpaying oneâ€™s fair shareâ€. The idea is for the wealthier to pay more as this is taken as paying back to the community responsible for their success. As President Obama contended in one of his speeches, successful businessmen â€œdidnâ€™t build their businessesâ€; their success was only made possible through other people.
But if Obamaâ€™s plan to increase taxes on the wealthy and to redistribute the wealth through social programs and dole-outs will strengthen the middle class and uplift the poor, wouldnâ€™t this be better for the economy? Wouldnâ€™t this make the economy more vibrant as the middle class will have more money to spend? Well, the problem isâ€¦. it isnâ€™t as simple as that especially in the current global financial turmoil.
Let us consider one of the proposed tax hikes on the rich â€“ the estate tax . Let us suppose you are a rich old tycoon and you hear of this upcoming estate tax to be implemented. If you have loads of money, would it make sense for you to put your money into your business for expansion or would you rather keep your assets more liquid so that if and when you die your heirs will have enough liquid cash to pay one third of the estate to the government? Wouldnâ€™t you rather do that than to watch all your assets be taken away and auctioned off by the government at fire sale prices?
If you are a businessman in the medical or health care sector, if the Democrat plan to close some tax breaks on you (because you are wealthy) such as disallowing reimbursements for costs in running your business gets implemented, are you going to buy an expensive equipment or even develop a new and innovative drug knowing that the government may disallow reimbursements? Do you know how much it cost (let alone how much regulatory hurdle companies deal with) to develop and get a new drug (or medical device) approved for market?
If you are a tycoon in the manufacturing sector, with the Democrat â€œCap and Tradeâ€ legislation (all in the name of environmentalism and green energy fixation) how can you expand your factories if you are facing heavy taxation on your increased output? If you are in the coal and oil business, Obamaâ€™s carbon tax proposal (again, because of his over-fixation on taxation to support his inclinations towards environmentalism) will obliterate any incentives for new investment, exploration or drilling.
These are just a few examples of Democratic tax hike plans. With all the tax increase proposals of the Democrats (even for just the wealthy folks the Democrats love to vilify) in order for the government to have enough funds to sustain its multitude of social and dole-out programs, why is it any wonder why businesses do not invest more and create jobs in the country? With Obamaâ€™s taxation increases, there arenâ€™t many incentives for businesses. Why are people still wondering why businesses arenâ€™t creating jobs in the country and why businesses are moving out of the United States to operate in countries where the cost of doing business is much cheaper and the governments there are â€œfriendlierâ€? So if you believe in the Democrat punch line that their plan will create jobs and strengthen the middle class, then you better stop drinking the Obama Kool-Aid! Going to the direction of Socialism entails increased taxation and with increased taxation without much incentive for success, there wonâ€™t be any jobs left and there wonâ€™t be any middle class! The rich are still going to be rich, only they wonâ€™t be in the country but in another place where the business climate is more conducive for profit. The working and middle class however will end up getting the shaft. If the rich arenâ€™t in the country to tax, who do you think will be next in line to get the tax from in order to sustain the social programs and entitlements of the Socialist government?
If businesses transfer their manufacturing and business operations to other countries that offer better incentives, America will become more of a consumer-based economy. Without the manufacturing jobs, people may end up moving to foreign countries where the jobs are. The country, then, will become dependent on the remittances that overseas American workers will send to the States to support their familyâ€™s needs. This will awfully be similar to the situation in the Philippines and last I checked, the Philippines isnâ€™t exactly what other countries aspire to be like.
Anyway, even with Obamaâ€™s populist rhetoric the polls show that the contest is very close. Even with all the smear campaign and the gutter politics the Democrats are waging (using class warfare, war on women, and other divisive social issues such as abortion and gay marriages) they still cannot seem to get much ahead in the polls. Fortunately there are lots of American voters who can see through the distractions; fortunately there are still lots of intelligent and thinking American voters. Now I can only wish that this were the case for Philippine voters too.
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