The Stupidity of Income Redistribution

by

I have a proposal: You work your butt off every day, and send the money to me. I’ll use the money for a good cause, feeding myself, my wife, and my children, buying clothing and shelter, transportation and fuel. I’ll use the free time I now have for a good purpose—watching TV or browing the internet with the computer your money bought me as well.

Sounds stinky and unfair?

That’s what Barack Obama and the democratic party are proposing, right now.

A tax refund is supposed to be a refund of taxes paid, money sent back to taxpayers because the government collected too much. I know it’s a hard concept, but bear with me. If I paid $4,000 in taxes last year, and I get a check for $1,000, that’s a tax refund.

A handout is money that you are given for doing nothing. That is, if I paid $0 in taxes, and got a check for $1,000 for doing absolutely nothing but having a pulse, then that’s a handout.

And here’s a fundamental principle in human behavior: Handouts are really, really bad.

First, handouts are unfair. They take bread from one mouth and put it in another. Usually, the mouth they end up feeding is less productive than the one the bread is taken from. In other words, we are robbing Peter, who is hard-working and industrious and productive, to feed Paul, who doesn’t know how to create anything useful for himself or anyone else. We are punishing those who produce and reward those who do not.

Which brings up the second point: Handouts create exactly the wrong incentives. They reward bad behavior and punish good behavior. In both cases, it encourages people to do things that not only hurt themselves, but hurt everyone else as well. When producers think, “I can produce even more than I am now, but I won’t because I won’t see any of it,” then we have a serious problem. When consumers think, “I have limited resources and should carefully budget what I have, but I won’t because when I run out I’ll just get more handouts,” then we likewise see a problem, a problem where we don’t carefully allocate the resources we have based on necessity. When both of these effects combine, we are creating a slothful society, one where industry is not just unrewarded, but punished, where frugality is not just ignored but opposed.

What about our Christian duty? Aren’t we supposed to fork over our food, clothes, shelter, and money to those who need it? The answer is a resounding, “NO!” Christ’s own mission on earth wasn’t a gigantic give-away for free gifts and miracles. He wasn’t teaching people to live every moment of their life with their hand out expecting freebies. He was teaching them to be responsible for themselves, to put their faith in God and their feet forward. He taught his disciples to be self-sufficient and sturdy rocks upon whom the church could be built. He taught that salvation was in doing and giving, not receiving, the word of God, freely giving what we have to those who need in the way that helps them most.

As a member of the LDS church, we believe in doctrines revealed by the Lord, including the doctrine that the slothful shall not eat. That is, in more childish terms, “No work-ie, not eat-ie”. We view sloth as a sin, even among those who are wealthy.

We built, in the early history of our church, communal societies where the rich freely gave of their excess to the bishop, who then administered the allocation to the poor. We never took from the rich. We never gave to the lazy. We made sure that every dime was allocated in the best way possible. Our system inspired people to do their best to see the most profit for themselves and thus the spiritual kingdom of God on earth, the church. Accordingly, we saw a generation of very poor people learn how to become economically productive in a short matter of time. Indeed, the effects of our system of economic redistribution can be seen in Utah today, where a desert devoid of life blossomed like a rose.

Today, we don’t have communal societies in the LDS faith although I would like to see their return when we are spiritually–and economically!–mature enough to handle it properly. We do, however, oversee a massive welfare program designed to get the poor back on their feet as productive members of society. We collect offerings from those who have, as much as they are willing to give. We spend every dime in programs and companies and efforts designed to help the poor but without inspiring sloth.

For instance, one brother in my ward was in a very rocky financial predicament. (We refer to each other as “brother” and “sister” in our church.) He was not even employable. So the bishop distributed food to his family, on condition that he spend several hours a day working in the distribution center. On the job, he learned responsibility and diligence. He learned how to work with others productively and cooperatively. He regained his physical capacity for labor. I don’t know where he is now, but I do know that many in that position eventually reach a level of self-sufficiency.

Had he refused to work to get himself out of his predicament, the bishop may well have cut off his food and support.

I don’t think there are many churches that don’t spend a great deal of effort trying to help the poor, making our church hardly unique. But I think those churches which are more successful are those which distribute goods and services and money with strings attached, strings that demand that the receiver become a producer and eventually a giver.

The message of Marx, the part that tantalizes the poor and needy into subservience to the state, is the bit where they get free food from the rich. However, the real effect of Marxism is that all are equally poor, especially the poor. We have seen its horrors spread throughout the world, horrors including political imprisonment, torture, and death, the loss of basic liberties such as the right to speak freely, petition government, and practice religion according to the dictates of one’s conscience. But we have also seen the horrors of economic poverty that Marxism brings. We have seen entire countries starve to death as they are incapable of even producing enough food to feed themselves.

Today, the rest of the world is waking up from over a hundred years of communism and socialism. More and more societies are realizing that taking from the rich and giving to the poor is a recipe for poverty, while encouraging all to produce as much as they can as fast as they like is a recipe to real lasting wealth and happiness. The government should not be a massive redistribution system, but a body designed to protect the economic freedoms and rights granted to us by God, the economic freedom to produce and own the fruits of our labor, the economic right to be enslaved to no one.

Let’s not go back to the old, broken ways that Marx taught. Let’s expose the democrats for trying to bring back communist Russia here at home, and reveal what they have long tried to hide—the long list of unprecedented successes that an ownership society has, successes that communism never even imagined as possible.

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