9 Random Thoughts on Socialization

This is broad and conceptual enough that it is probably going to hit on a few topics but certainly covers welfare, assorted forced charity and health care even if it doesn't mention concrete ideas, problems and or potential solutions.

About a year ago I had a conversation with my Grandfather. He was a very smart man and also fairly liberal. We were talking about health care and I being me was against the idea of increasing government involvement. My entire defense was a single question "When has the government every got involved in anything and made it better?". Grandpa mentioned busting up a few monopolies in the Robber Baron days but we both noted that the need to move that far back to a series of acts which were more regulatory than anything else says a lot. Little family story aside lets move forward.

1. I honestly do not believe government can do anything (excluding defense, some large regulation stuff, manage trade, etc) better than the private sector can do it. History has broadly speaking confirmed my belief.

2. Government is better at accomplishing less with more resources than anybody else. Simply put they have no incentive to prevent them from doing so.

3. As Thomas Sowell so eloquently said (more or less) "it is a fallacy to think we can afford anything collectively that we can not individually."

4. Take twenty people who were all going to get lunch at the local taco truck for example. If a burrito costs $5 it still costs the same if one person collects the cash and orders 20 burritos for a hundred bucks it is the same. (yeah maybe they could bargain and get a better deal but refer to #1 and#2) So the guy who is short on cash that day is still going to need to scrape together $5 to get a wonderful carne asada burrito. Unless.

6. What if they charged based on income instead of what you are going to receive via the commercial exchange. So the boss pays $25 instead of $5. I remember a joke about a bunch of friends who go out to get drinks which shows this wonderfully but in any case.

7. The first misconception about people who make or have real money is that they are somehow stupid and willing to ignore a % point here and there. While those with real money are certainly good at something which is well compensated they also pay attention to and care about their finances. They notice and they care a lot. These people will make choices to keep as much of their money as possible. They will invest in more business friendly places, use the tax code to their utmost advantage. They can potentially be less willing to have their money 'doing something' if the tax rate is high enough that it eliminates the potential gains which has all sorts of implications. Last but not least these people are the most mobile segment of our society. Often they run a business and could work from a different location should they desire to. This is significant when a high tax area is near a low tax area (CA/NV). Certainly they have the resources to move if so inclined and often already own multiple residences.

8. People often say that soaking the rich is a good idea. Setting aside the dilemma of people wanting to get something for nothing for a second rich people do not exactly garner a lot of sympathy. You need to care what happens to them and their money. I would not go as far as to say I believe in pure trickle down economics, honestly I do not know enough about the matter to say anything with authority. I can say that people with money are probably a big part of our overall economy in ways we might not think about. Excluding businesses which tends to target lower income folks (a $1 hot dog stand near a factory or a used tire lot) those with money are common and desirable customers. They can do things like getting a new expensive car every couple years or just get a new super fancy home entertainment system on a whim. They can do thinks like expensive home remodels which spread all sorts of money around the area. Don't know a single contractor whose bread and butter is $1,500 kitchen remodels but can think of a few who do the high end stuff. Also people with money will pay for services they probably do not NEED but all the same want. This is an area where many low income people are employed. People like house cleaners, gardeners, repair men and painters are a few areas where those with money are likely and regular customers.

9. Simply put the rich are not a big enough group that taxing them like crazy will let our nation socialize major areas without the cost being passed on to a significantly larger number of Americans. Americans whose incomes are not at all incredible. Lots of fairly rational people could argue that the rich paying a bit more to subsidise some services for those with the lowest incomes is not necessarily a horrible thing. The issue is at what point these subsidies become a serious problem. I do not know and it is impossible to speak in numbers about a conceptual situation though I think erring on the side of caution is probably wise.