Posted by
RepublicanEvangelist on Sunday, January 18, 2009 9:49:19 PM
A friend and I were discussing today what we feel that is one of the main problems with the housing collapse: namely no money down purchase of housing. If someone doesn't have a dime of their own on the line in a property, it makes it much easier when circumstances like interest rates change. Today only 1/2, the top 1/2, of Americans pay ANY federal income tax. The numbers are even more radically skewed in the top 10, 5 and 1 percent. The bottom half get a bulk of the government largess. They get the benefits of the welfare state but pay nothing in return. Even they, in the form of poor quality public schools, are getting a bad deal but since they pay nothing, it doesn't matter. They will always vote for the candidate giving more goodies. By taking from their wealthier neighbor, they give their neighbor a disincentive for working hard because he/she will only be rewarded by a higher marginal rate. The result is bad for all of society including the bottom half. Rich people benefit society by using their money in two ways: they invest their money creating opportunity for others or they spend it creating jobs and making others richer. They also give to charity and build hospitals sometimes with their names on them. Put it more simply, would it be better for the government take every dime Bill Gates makes and confiscate all assets of Microsoft and give every American $100 or $500? Is Barack Obama's transfer payment from the wealthy to people at the bottom who don't pay any taxes going to make any real difference in society or even in the lives of those people. Sure they'll have an extra $500 or so per year but you can't live on that. And what if the long term effects of such a policy means there are less rich people taking risks, starting business and employing people? Is it worth it to lose your job to get $500 from the government? I don't think so. Both the Democrats and President Obama's plans include massive expanse of government spending and reach. The result will be higher taxes or a devalued currency. Either way the nation will be ultimately poorer as a result. I don't give a damn about the gap between the rich and poor as long as the poor can feed themselves and can house themselves. If the poor all drove Toyota Camrys does it matter the rich have Ferraris? I fear that we are well down the Road to Serfdom and there may be no going back. I heard Al Rantal say years ago, "when there are more people in the back of the truck than are pulling the truck, you have a problem." Yes we do or put it another way, when more people sign the backs of checks vs the front, society has a problem.