I intend to turn “The Hypocrisy of Liberal Logic” into a frequent talking point. So this will be my first ‘episode’, if you will, of many. For the first installment, I wanted to dive into the left’s hypocrisy of certain economic systems, and their solutions:
Socialism and ‘Trickle Down’ Economics
Surprise! There is a major flaw in liberals’ logic. They scream over and over that ‘trickle down’ economics doesn’t work and people are far too greedy and inconsiderate for full-blown capitalism. Their solution – we need socialism to balance out capitalism’s flaws. Wrong.
First, let’s define what they mean by ‘trickle down’ economics. When the left says that term – which we don’t really use – they define it as tax cuts for the rich to help ‘trickle down’ through the economy to the less wealthy. They fail to mention that anything government creates must first be taken from someone else. Let’s dig into this idea that government cannot directly create.
A government ‘by the people’ is only that because it is funded by the people. Let’s imagine, in a perfect world, the IRS wouldn’t come knocking if you didn’t pay your taxes, the Federal Reserve wouldn’t print endless money to continue to fund the government and you were able to convince Americans to not pay their taxes too. The government would end. The government is ours. We are not the government’s property. So when government needs funding, even if they redistribute that wealth elsewhere, or keep it for themselves, the government has a net loss on the economy.
But if the government takes it from a wealthy person and redistributes it to a less wealthy third-party, there are negative repercussions. The most obvious is the rich are better at spending their money. When they invest in expansion of their business or invest in other businesses, they directly create jobs. The government cannot directly create jobs – they must first steal from one group and give it to another. That group receiving the subsidy is much less likely to create jobs, or even work if they will get paid regardless.
Additionally, as businesses invest into research and development, they create cheaper products through technology. This means more people can afford those products. In other words, the poor who were once unable to afford such luxuries are now able to purchase them.
The left coined the term ‘trickle down’ economics as a way to make the general public feel that it is a major advantage for the rich at the expense of the poor. But when the rich create better, cheaper products the implication on the poorest among us is that they will gain the biggest improvements in their lives.
But anyways, the hypocrisy becomes evident as we start to examine what socialism really is. In layman’s terms, socialism is the government having the ultimate ‘trickle down’ approach. Socialism allows the government to control most of the money, and they let that ‘trickle down’ through the economy. Only difference is, this time, ‘trickle down’ actually means trickle down.
When government is in charge, it is a top-down approach to the economy. They are saying that they know how to spend your money better than you do, but I bet you’re not $18 trillion in debt! They take all the money from the rich – also known as profits, or incentives – and trickle it down to whichever group that they choose.
Government cannot directly create jobs, so the jobs they create have some ulterior motive for them in the form of money, favors, votes, etc. Otherwise, they would just take their ‘profits’ off the top, before they trickle it down to the people.
Newsflash! politicians are as greedy – if not more greedy – than business owners. Another key difference between their means of profits – or as the left would call it greed – are politicians are trying to get elected, whereas business owners are trying to create greater value to their consumers. Which is better? Who would gain more by lying?
What the left coined as ‘trickle down’ economics, which would more accurately be described as free market capitalism, is a bottom-up approach. It offers equal opportunities to all, and rewards the hardest working, most talented people, and leads to cheaper products over time. Instead of being chosen by a government, and redistributed to those of their choosing – which leads to higher prices and directly hurts the ones they intended to help – prices and wages are set by nobody, but the natural laws of supply and demand. This is the best economic system because it is the most efficient way to allocate scarce resources with alternative uses, or economics, as the great Thomas Sowell defined it.
Get Sowell’s groundbreaking economic book – which every Econ student needs to read – “Basic Economics” by clicking the book below!
Or, another way to enhance your knowledge is to check out New York Times best-selling author Tom Woods and his Liberty Classroom. I promise you won’t be disappointed.