Redistribution’s Effect On the Dollar
By: XVR
Mrs. ---confidential--
Task 1: Cause Entitlement and Redistribution/Effect: decay of the value of the dollar
There comes a time when financing a nation becomes too much for the business sector to handle, and the nation’s debt begins to weigh down on it like increasing gravity. When something like this happens, the first and most illogical choice of action is raising taxes. Despite the failure of this measure, the government is almost always convinced that throwing money on the problem fixes thins, usually in the forms of stimulus plans and redistribution ploys that always have a negative effect on a growing economy. As a result, there is no oversight in monitoring the flow of money, so even though they don’t say it, it is apparent that the money just disappears. Since this money has no way of being followed, it creates an enormous amount of strain on budgets and accounts, that there is no possible way to finance this. Many programs have people hooked onto the government for dependency and support, and this money comes from the taxpayers straight to these government partakers and never sees a return from it. Without responsibility on all fronts, there is no way to guarantee a revenue stream for a nation, and without one there can be no protection from recession. The saving grace of being responsible is the radically fast turnaround rate the enacted changes make when they are put into play.
Entitlements, a driving force in determining this nation’s debt threshold. These systems pay people money for a variety of reasons, most likely of the unearned kind of reasons. As such, the demand for entitlements has lead to an influx of money going to the people, more so than the money is coming back in. This creates a vacuum in the treasury that results in a burst of growing debt, sustained only by the force of people who are so hopelessly dependent on the income of government money to stay alive. What has been forgotten here is that dependency is something that must not be allowed to increase. The more dependency on something there is the more corruption of the original concept that results from the laws that make it all possible. Dependency will always hurt an economy, and ending entitlements would only cause violent protests. This outlines the psychological dangers that entitlements bring to the table, and the only recourse—although inconvenient as it sounds—is to transition the expenses to private organizations. Privatization in action is best represented by the Social Security funds that are currently flourishing in Galveston Texas. Since the time of enactment of this privately managed funding system, Galveston has not had any financial troubles pertaining to the account health and stability of its constituents and continues to thrive in all economic conditions. Handing out money has never really succeeded in fixing a problem; it acts like a treatment to an otherwise untreatable quandary. To fix a problem one must first find the source, and to do that it requires all involved to stop and assess the situation. This nation has not assessed the issue of entitlement spending since the Reagan years, the time America flourished with economic growth. This was because the government spent less, taxed less, and improved programs to the extent that they could do more with less. This shows up clearly well in the cost of goods flowing through the economy, costed less to produce and sold for less due to lower taxation. What also was restrained was putting out the kind of money
Another dangerous tool that is being used is “for the greater good(Beck)” in that should there be a ‘need’ whether it exists or not, can be acted upon to enact legislation that completely erases the people’s rights. To date most of our debt was created by needs being acted upon—supposedly for a greater good of the nation. With the advent of political powers unseen in decades, laws were being drafted left and right that granted executive order-like powers in that laws could be written into existence for a supposed cause, and could not be easily battled without intervention from the Supreme Court justices. This principle, much like eminent domain, grants immediate power to act without being responsible for the effects it will have.
Our political climate is in dire straits, spending must be controlled if our currency is to ever prosper as it did in the eras past. Where the notion that raising taxes actually does good, the reality of this action is all too clear in that the debt keeps on rising. People will only spend more if they have more, and in times of recession, redistributing wealth only adds to the debt problem. Responsibility and oversight are very crucial in times of crisis, because once we have that much, the problem will be identified and remedied through careful financial regulation. Recovery cannot happen if the money cannot be tracked from source to destination, the money that is tracked will help in the efforts to balance the budget. “Shortfalls” are just another way of saying “We do not know where the money is or where it is going.” In times like this, knowledge is power; the more someone has, the more they can do something about the situation. In taking action, recovery from the damage becomes possible, and the currency will begin to show signs of strengthening. Works Cited
Beck, Glenn. Common Sense, The Case Against an Out-of-Control Government, Inspired by Thomas Paine. N.p.: Threshold Editions, 2009. 77-87. Print.
Budziszewski, J. The Problem with Liberalism. University of Texas, Mar. 1996. www.firstthings.com. Web. 8 Feb. 2011. .
Feulner, Edwin. Entitlement programs soak up money that could boost business. N.p., 18 Jan. 2007. The Heritage Foundation. Web. 8 Feb. 2011. .
Levin, Mark R. Liberty & Tyranny, A Conservative Manifesto. N.p.: Threshold Editions, 2009. Print.
Annotated Bibliography
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Beck, Glenn. Common Sense, The Case Against an Out-of-Control Government, Inspired by Thomas Paine. N.p.: Threshold Editions, 2009. 77-87. Print.
Building on the notion of what power the government has should there be a “need” and this need, does not necessarily need to exist for a power to act upon it. The reasoning behind such ‘needs’ has no bearing on the power’s ability to justify it or not.
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Budziszewski, J. The Problem with Liberalism. University of Texas, Mar. 1996. www.firstthings.com. Web. 8 Feb. 2011. . This site makes known the many problems associated with dependency and taking political liberties, in that those who are tied to the system are therefore part of the system and cannot get out. The cost of this kind of dependency results in capital that cannot be returned to the treasury.
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Feulner, Edwin. Entitlement programs soak up money that could boost business. N.p., 18 Jan. 2007. The Heritage Foundation. Web. 8 Feb. 2011. .
Entitlement programs have a benefit, and the first thing people see is the benefit, not the consequences behind them. Everyone has an allocated fiscal value attached to them. When someone enters into the retiring circle, all that money entitled to them is suddenly given to them, creating a large red number on the government’s checkbooks. Enough of these numbers create red line crossing balances when the books are tallied. This in turn creates strain in every field of a nation, impacting growth, confidence, and the ability to trade freely.
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Levin, Mark R. Liberty & Tyranny, A Conservative Manifesto. N.p.: Threshold Editions, 2009. Print.
Stimulus plans never do what they say they will do, no one really knows where that money goes or what it is used for, what is made known from this citation is the fact that historically stimulus plans have been one of the few things that have caused our nation so much damage financially and continue to do so no matter the time that goes by.
