Inflationomics

Income Inequality

I sure am glad I don’t live in a world of income equality!  Just imagine what the world would be like if everyone were paid the same regardless of results.  It would kill our incentive to produce more.  Think about how much poorer all of us would be if Henry Ford hadn’t mass-produced the automobile, David Rockefeller hadn’t mass-produced oil and gasoline, and Steven Jobs hadn’t mass-produced the iPod, iPad, and iPhone!  And those are just a few of the people who weren’t equal to their peers and produced more.  But then, everyone’s different and very few people are really equal.  (From what little I can recall from high school, we were all trying to be different!)

The bottom line is that some people simply want more out of life than others and they’re motivated to do more to get what they want.  There’s also a difference in talent (genes) and what we like to do (upbringing).  And because some things are in greater demand, some people are rewarded more for their efforts (paid more).  And let’s not forget bad habits and dislikes—they too will influence our outcomes.

I know someone who hates to pay taxes so much that he has avoided having an income all his adult life—setting up corporations and trusts to shunt any income to his wife and kids.  Imagine how much more productive he could have been had he been born 100 years earlier (prior to income taxes, social security, and Medicare, for example).  On the other side of the coin, there are people who collect unemployment compensation, rather than working for less money.  Talk about a motivation killer!  And there are the people who collect food stamps rather than working for food.  And let’s not forget the politicians and bureaucrats who just sit back and collect money for doing little or nothing that is productive.  And I can’t help but wonder how many people see what is happening to the value of their money and why it’s becoming harder to make ends meet year after year.  And of those people who see what inflation has done to their money, how many of them are ready for the collapse of the U.S. dollar?

One hundred years ago, people flocked to the United States for the opportunity to work and be rewarded for their labor; i.e., to have their talents recognized and get ahead (unequal results).  Today, people flock to the United States to collect unemployment compensation, or some other government handout (also unequal results).  And what a difference it makes!  One hundred years ago, the United States was growing into the richest nation in history.  Today, it is declining into a third-world country—but then, that’s what happens when we try to make everyone’s incomes equal…by taking from the productive and giving to the unproductive, we become equally poor.

Robert Jackson Smith

P.S. By the way, more and more productive people are leaving the United States every year!

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