NYC Letter: "Spread The Wealth Around"

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It’s not that I want to punish your success, I just want to make sure that everybody that is behind you, that they have a chance for success too. I think that when you spread the wealth around, it’s good for everybody.

Mr. Obama,
explaining his tax policies
October 12, 2008 (Pop Modal/Fox News)

Rule of thumb: "Spread the wealth around" is popular in proportion to the spread received, it is unpopular in proportion to wealth appropriated for spreading.

There is no dearth of "spread the wealth around" models. There was the Soviet Union, which eventually ran out of spread. There is Cuba, which long ago ran out and now just spreads misery around.

More along the lines of Mr. Obama's model there is France, whose spreading around has made her uncompetitive and reduced the French to gloomy* pill-popping complainers, hand-wringers, and losers and cranks in the midst of plenteous unfunded** state candy. We have argued elsewhere against French "spread the wealth around" socialism:

French socialism is premised on net winners leveling up the losers in society. Winners are those who can pay for their own housing, food, clothing, and healthcare. The goal of socialism is to have everyone at the level of winners. In French socialism, the attainments of winners eventually become legal rights extended to losers (e.g., Droit au logement, DAL, or this).

Bravo, France! [Wait as applause subsides.] Now here's the rub.

Socialism raises losers at the expense of winners.

To pay for all the socialist candy, winners are extravagantly taxed. At tax rates over 50%, a winner is foremost working for the state, though the winner is still responsible for his own paycheck.

Socialist tax booty is redistributed to the losers without any productivity offset by them. As greater state obligations squeeze winners from the system (and this), more citizens come to live off the state than to work for the state. To compensate, socialism raises the tax burden on winners. The level rises as losers begin to gain on winners. Eventually the burden of supporting losers comes to overwhelm the productivity of winners [Cheerless pause.] and the system fails.

And that is a terrible surprise to the losers. [Pause.] What the state giveth with ease, the state taketh away with ease.

But a Mr. President Obama will not be raising taxes. Hhmmm. [Pause.] America could just print a lot of money. That is how Mr. Mugabe supports the socialist paradise of Zimbabwe.

ZIMBABWE INFLATION HITS 231 MILLION PER CENT
Zimbabwe's Inflation Has Rocketed To An Astronomical
231 Million Per Cent, Harare Has Admitted – An Advance
Of More Than 200 Million Per Cent On The Previous Figure.

October 10, 2008 (Telegraph) - The root cause of the country's hyperinflation is the government's policy of printing ever more money to meet its own needs, which has the effect of destroying the Zimbabwe dollar's value in terms of hard currency, sending the cost of anything imported soaring.

And with the economy in a downward spiral Officially, one US dollar is worth Z$180. But on the black market, it fetches Z$8,000 – and that is for cash, which is in desperately short supply. For bank transfers, the rate is Z$1.5million to one.

These figures are even after the currency was revalued in August, when 10 zeros were knocked off.

"The consequences of such a rate of inflation is absolute desperation, despair and poverty," said Eldred Masunungure, professor of political science lecturer at the University of Zimbabwe.

ZIMBABWE INFLATION OF 231 MILLION PERCENT
UNDERSTATES RISK - ECONOMIST

WASHINGTON October 9, 2008 (VOA) - U.S economist Steven Hanke, an expert on hyperinflation who has consulted to countries on stabilizing prices, recently estimated that inflation hit 531 billion percent in September, while Zimbabwean economist John Robertson reckoned it ran at some 26 billion percent.

Mr. Obama's America could become another socialist bankrupt, but we'd likely all be billionaires. Impoverished. Dirt poor. But billionaires. Billionaires on Mr. Obama's dole.

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* And here and here (second item).

** And here.