Wealth creation key to economy’s growth

“It’s not what people know that causes trouble, it’s what they know that ain’t so.” – Josh Billings

Facts seldom matter these days, but for old times’ sake consider the following: The income gap between Blacks and Whites narrowed under President Reagan’s administration whilst it widened under Obama’s administration.

The narrowing under Regan’s administration had nothing to do with specific policies that favoured Blacks but everything to do with his favourable free market policies which created an environment where everyone could improve their lot.

It has become fashionable to talk about “greedy” capitalists but it is also becoming more difficult to ignore the fact that wealth-creation, including foreign investment, is the only way to grow a sustainable economy that can support even the most basic government programmes and services.

Entire countries are practically broke in Europe and are going through an extremely painful process because of these unsustainable programs. Yet America seems to be preparing to lay in the same bed that the Europeans are now finding so uncomfortable. I guess backwards is the new forward.

Zero-sum thinking — what is gained by one must be lost by another — and redistribution often go hand in hand. Redistribution can be emotionally satisfying but Dr. Thomas Sowell gives a good example of its key flaw: “In theory, confiscating the wealth of the more successful people [tax the rich] ought to make the rest of the society more prosperous.

“But when the Soviet Union confiscated the wealth of successful farmers, food became scarce… It is not complicated. You can only confiscate the wealth that exists at a given moment. You cannot confiscate future wealth – and that future wealth is less likely to be produced when people see that it is going to be confiscated.”

The very people that redistributionists set out to help (especially those looking for a job), are the ones who invariably suffer the most. In the case of the Soviet Union, some people suffered to the point of death by starvation. Food for thought. — Adrian Sobers

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