I do not support any government policy that forces re-distribution of wealth. I am also unable to ascertain why so many people support that concept. I have not seen one sound economic argument that supports taking from those who have and giving it to those who have not. I agree with the biblical direction to feed the hungry and care for the poor, infirmed, and widowed. It’s just that I read those biblical verses as directions to individual people, not to governments or collective societies. Why does government presume to be the great distributor of charity?

The real question is why are these social welfare programs desired? Is it to make the poor among us better off or is it to make the wealthier less wealthy? If the real reason is the later, one might go even further into examining the motives and conclude that at some point, taking from the wealthy to give to the poor will make us all worse off as the previous investments made by the wealthy that lead to economic growth will at some point no longer be available. When our economy stops growing, our standard of living gets worse not better.

I simply do not understand why anyone would support these types of programs. Here is what I do know: government confiscates money from some, then uses it to pay the salaries of those in government who oversee the confiscation and redistribution efforts, and then the pennies of each dollar that remain are “given” to the poor, needy, underprivileged, victims or whatever term is the PC word-of-the-day. That entire process is totally detrimental to our economy.

A major contributing factor for economic growth is the accumulation of capital equipment. That capital equipment is used to produce consumer goods; either directly by producing output for immediate consumption (consumer goods), or indirectly by producing other capital equipment that will be used to produce future consumer goods. Since the ultimate goal is always to produce consumer goods, the distinction between the two types of capital equipment is almost irrelevant. The combined total of all capital equipment is referred to as our store of capital equipment. It is cumulative in that newly created capital equipment is added to the previously created capital equipment that is still functioning to produce consumer goods.

The rapid addition of capital equipment as a result of the industrial revolution created a demand for workers to operate and maintain those machines. Labor was induced to leave the agricultural sector, where nearly 90% of the US workforce was employed in the late 19th century to earn a higher wage by working in a factory. Farmers could easily accept the loss of family members on the farm because they also could invest in capital equipment that resulted in the more efficient mechanical planting and harvesting capital equipment resulting in lower cost of production and a higher total yield. This led to our current state of agriculture in which yields are the highest in history and the relatively high money-value of the harvest.

The increase in capital equipment imposed a sharp increase on the demand for labor which meant that higher wages had to be offered to attract the increasing number of workers. The industrial revolution lifted society out of a subsistence economy (one in which people toil long and hard to just get by and survive) into a thriving and growing “capitalistic” economy. The average worker saw his pay rise enough to allow him a higher standard of living. We can accurately credit capitalism for the creation of the middle class. As the accumulated capital continued to increase because new capital equipment was being produced at a greater rate than the older equipment was wearing out, the middle class continued to grow. This middle class growth reached its peak in the post-World War II years during the 1950s and 1960s. The population also surged in developed countries as the “baby boomers” were born and more and more families realized they could afford to raise three or four children on a single wage earner’s income because inflation had not yet become a major factor in reducing the spending power of those earnings.

During the 1960s politicians more actively intruded into the economy and “social programs” picked up where they had left off in the pre-WWII Roosevelt administration. Roosevelt gave us Social Security as a form of government sponsored retirement “insurance” protection. In 1938 Social Security seemed too good to be true as all workers paid in very little and all (both workers and non-workers) would be able to reap the benefits if they lived to the ripe old age of 65 or became unable to work due to prolonged disability. President Johnson declared a War on Poverty and signed Medicare into law. Now the poor did not have to earn more money to increase their lifestyle; all they needed was to apply for government benefits and they could live like the middle class! The elderly did not have to set aside massive amounts to pay for their geriatric medical treatments; the government would take care of that through the Medicare “insurance” program.

None of these social programs are really insurance programs in the strict and legal definition of that term. Insurance is a contract that is freely entered into by both the insured and the insurer which transfers a specific risk from the insured to the insurer in return for a specific premium paid by the insured. In reality, there is no such thing as government “insurance” since governments tend to be self-insured in the sense that they do not transfer risk of loss to another party in return for a premium paid. What the government does is pass the cost of losses, whenever they occur, to the general public by borrowing the money to pay the claims and passing the repayment and interest payments on that debt onto the current and future taxpayers.

That is how these social programs, which were created with good intentions, became the burden they are today as wealth transfer programs. The question still remains as to why those who work hard to earn an income to support their families should be paying additional taxes to fund handouts to those able-bodied citizens who choose not to work but graciously accept their monthly benefit checks from a benevolent government. I might point out that those of us who fund those programs do not see our government as benevolent; we tend to see the opposite – a government that forcibly separates us from our property under fear of prosecution so the government can appease others by redistributing our former property.