Socialism, for the U.S., is a pleasant-sounding trap

Simply Biased
Thursday, February 28, 2019
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With all the talk about socialism taking place in this country, a few things need to be pointed out.

First, in its truest sense, socialism has failed time and again. All one needs to do is point to countries like Venezuela, North Korea, and the old Soviet Union. In China’s case there were major economic failures in the 1960’s and 70’s until it began reforming its economy to be market based.

The list goes on and on.

True socialism is where every aspect of economic production is under state control. The basic idea of socialism is a society that is wageless and classless, and where production is for use, not profit. In this potential society, there is free access to all goods and services, and all work is voluntary.

This may sound good, but what actually happens is a state turning into a totalitarian regime run by a strongman and a rich ruling class. Everyone else sinks into poverty.

Let’s be realistic, thisform of socialism cannot be compared to current-day European (EU) socialism or the socialism that is being proposed by New York Congresswoman Alexandria Ocasio-Cortez, Vermont Sen. Bernie Sanders, and others in the Democrat party or individuals on the left.

Most of the EU has adopted models of socialism where the state provides for wants they deem essential. Most everything else has remained in private hands.

This makes up what I consider a hybrid economic model.

Under a EU style of socialism, the government administers what is deemed the essentials for a decent life.

It may vary from country to country, but most services include a guaranteed minimum wage, medical care for all, free education and retirement. Some even offer monetary support for children, including special benefits for sick and disabled children.

Other benefits include a welfare system that may have unemployment benefits, activation benefits, employment services, employment programs, job and development guarantees, and starter jobs.

This is all well and good, but who pays for this? The citizens of the country.

Out of the 36 most developed countries in the world, the people of Denmark, France, Belgium, Finland, Italy, Austria, Sweden, Iceland, Norway and Luxembourg have the top tax rates.

Nearly 50 percent of their wages go to pay federal taxes and, with local taxes, some countries reach nearly 70 percent.

The average American’s federal tax rate is about 22 percent. In fact, out of the developed nations, the United States ranks 33rd – or one of the least taxed people of the 36 developed nations. Denmark is No. 1.

Here is the kicker: U.S. corporations, even after the tax cuts still pay more in taxes than their counterparts in Europe.

Nowadays, I often hear Ocasio-Cortez talk about raising corporate rates to 70 percent to pay for her social reforms. The problem with this line of thinking is the fact these corporation would just shift operations overseas.

Another point to ponder is what happens to high-tax states. People from such areas like California, New York and Illinois are moving to states with lower taxes.

It’s the same with raising minimum wage. Seattle went to $15 per hour and, according to a University of Washington study, the impact was negative.

The study, it states, “illustrates a significant negative impact of an increase in minimum wage: during the period of increasing minimum wage, including the second wage increase to $13 an hour, the number of hours worked by low-wage workers fell by 3.5 million per quarter.”

The researchers at the University of Washington found there were thousands of jobs lost and a reduction in hours worked by those who retained their jobs. The total payroll accruing to low-wage workers fell by about $120 million per year, with workers losing $125 per month on average, suggesting that businesses are more sensitive to wage rate hikes than expected.”

Let’s be realistic, whether it’s taxes, or a minimum or guaranteed wage, government control does not work.

While it may not be perfect, private ownership and capitalism are proven, and history has shown it works.

British Prime Minister Margaret Thatcher said it best: “The problem with socialism is that you eventually run out of other people’s money.”