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Why the economy of the world sucks!

Updated on October 11, 2014

The confusion of socialist and the utopia of equality

If you are open enough to accept the fact that free market capitalism is the answer to the worlds problems, then you will understand how socialism is a failure in society on many fronts. There are the dumb, the stupid, the ignorant that are still trying to convince society that socialism is the guarantee to an even distribution of wealth, when in reality it is the fastest way for 90% of the population to live in poverty.

What you ask? Well, lets stop in reals-ville and approach the subject from the historical perspective of the last 2,000 years. What do you think people lived like up until the last 300 years? A majority of the worlds population lived under tyrannical governments, Kings and other methods that oppress the people. How does this happen? It happens because the BELIEF that central planning and the misunderstanding that a government is going to create wealth and prosperity.

This has never occured in the history of the world. Oppression is the method of liberalism and socialism, because the liberal ideology is that of "we know what is good for you, you don't", and that is the problem. Once you start giving up the freedoms...which really involves property rights and the economic right to profit from your labors, the history of the world will show a marked decrease in the standard of living and the prosperity of a nation. Yet...this is where we are headed and I will soon show you why it affects the rest of the world. Instead of the United States trying to live a socialist economy of fairness, we should be requiring the rest of the world to enjoy economic prosperity by the mechanism of free market capitalism.

There are two theories on society rule, one is capitalism which has crated more wealth to the world than any other mechanism, the other is a socialist/communist method which has led to a lifestyle of threats, killings, premature deaths, and poverty. It is evident by simply looking at the North Korea/South Korea economies. When you look at the North Korean method of life in the socialist/communist style of government, socialist/communist because it involves an elite pig and control of all wealth and freedoms. You will find that the self interest of the government and society is prevalent, and the workers are the ones totally exploited. Why don't you socialist hacks read about the individual rights of these countries, and start to ask the question why capitalist countries prosper and live in a healthier environment?

What a great guy Hugo Chavez was in Venezuela, he eliminated private industry so that the government would control and manage the industrial output. So what happened? Did the people benefit from this at all? Look at the GDP for the individual and you will find nothing but people being executed, poverty, poor medical facilities and a low standard of living! All the while, Hugo and his friends were profiting and living a lavish lifestyle. This is socialism and the way it works.

The myth that the population at large will benefit by the even distribution of wealth is purely a suckers game. If you want to make a comment to this post otherwise, it proves your ignorance and stupidity quite frankly, because it is indisputable. What a majority of people believe is that the 1% people have all the wealth, and if we can just take that from them, I will be better off. The truth is all the wealth held by the 1% would only run the government 12 days, so then what? We are tied up in the fact a CEO is making millions, while the worker is only getting by. What, do you think the elite socialist snobs are going to do anything for you? The evidence point to factual truths that these people are worse than any CEO of a company, they have the same human problem of greed, power, and self fulfillment and you can't do anything about it. In a capitalist environment...hey, you don't need to buy the product but in a socialist society you are going to live by dictatorial rules, no ifs/ands/butts!

What is socialism and what does it really entail? Look at the socialist experiments and you will conclude this is one method to sure poverty. Sure, there are a few countries that have a high standard of living using this method, but it won't survive and comes nothing to the industrial output and prosperity that capitalism provides. Lets look at some of the great examples in history of what socialism has brought to the world.

Socialism and communism are very similar forms of government, in that they restrict the freedom of the individual to prosper. I don't kneed to explain how socialism differs from communism, because the fact remains that the equal distribution of wealth leads to poverty. Whether it is Venezuela, Cuba, North Korea, or any other social experiment, the outcome is always the same. If you look at the former Soviet Union from 1945 - 1985 you will see widespread poverty, unjust living conditions, executions for dissent, and a lack of food. The same can be said for China, whereby this communist country...you know, the front about being the workers party, and you will find China via Hong Kong knows that capitalism works while the rest of the communist country suffers under the guise of looking out for the little guy.

Did you know the United States has created over 50% of the worlds wealth? I am talking wealth for the rest of the world, not the monetary value of per capita income, I am talking actual wealth the rest of the world enjoys and lives in? By the way, when did poverty become such a fun method to live your life? Your healthcare suffers, your family and you suffer, because there really isn't any method or reason to do any better than anyone else. The incentives have been taken away, and exceptionalism is lost. When you live in a society whereby it doesn't matter if you are good at using your talents, and you do not benefit from your excellence, you give up and do not use your God given talents as they should be used.

How you say did the United States create wealth throughout the world? It is because we have such a strong economy that we are the leading consumer of products and services of the world. In a free market economy, competition requires you to bring the best product at the lowest cost so more people can afford the product. By doing so, the entrepreneur looks for the best method of doing this. This often leads to the export of products from very poor regions of the world, which provides income and employment...something the socialist doesn't really care about, else they would be capitalist.

When you look at the products of the world...where was this stuff invented, where does the technology and innovation take place? IN THE WORLD, Boeing is well known, APPLE...forget about it, how about GOOGLE, IBM, Xerox, the Internet! Where did this come from? I haven't seen any socialist countries bring ONE THING to the table that benefits mankind the way capitalism can. Why should one be confused about all this? Seriously, whether it is telecommunications, satellites, GPS navigation, etc. it is brought to the industry because there are individuals - yes individuals who identify an opportunity and find a method to bring it to the market to benefit individuals...and yes, by the way, the profit incentive is there!

What currently is happening in the world, if you look at the economies of China, India, and many other countries that had prospering economies, are now in a contraction. It is because the United States economy is stagnant and we are not providing the consuming of products that are manufactured throughout the world. When you are trying to distribute wealth, you lose the one motivational factor that leads to economic growth, and that is the output of goods and services which provides income and wealth to the nation.

If you don't believe in trick down theory of economics, let me school you how it works and why the government does not produce wealth. The government can print money, distribute it to individuals, but it never produces any output, therefore it does not create an economy. Although the people receiving these payments will spend money in the economy as a trickle down, the fact remains the money has to come from someone, therefore there is really no economic growth. It just does not happen that way, no matter how you try to convince yourself of this.

An economy that creates wealth does so by output, while the wages are paid and increased by more efficient production. The trickle down effect is caused by the consumer with the money to buy the goods and services desired, which creates more opportunity for others engaged in the economy. A quick example that is easily explained is the fiscal policies of the current administration that is socialist in its approach. They have tried a method of injecting money into the economy via payments to recipients that are non-producers. The theory is that people need to live (which is true), and by making payments to the unemployed and deserving in society, these people will spend the money which will lead to demand. This of course, leads to more employment opportunities because there is a need for a business to be able to provide the service that people are willing to pay for.

But does this mechanism really work? As all of you can tell, the answer is an emphatic NO! If it worked, we would have a vibrant economy at this time. Let me ask you a simple question. How much money has the United States government spent to bail out the economy so that it could expand? Do you know that every year it has spent the equivalent of it's gross tax receipts? The government has printed the money to run the government and has spent the money for the bail out that is the total amount of taxes it collects each year. Lets ask the question - what would happen if they would have cut all taxes to every US citizen to zero for a year...the equivalent on what it spent on trying to revive the economy via a government method.

Lets take the average income in the United States at $54,000 per household. This household would have an additional $14,000 to spend on whatever they wish for that year, based on a marginal tax rate of 25% for this income. That is over $1,000 per month for every household that would have spent their money on....a new TV that month, a vacation, a new car, etc. How does each of these activities impact the economy? Lets consider the vacation. The airline fills the seat that makes the flight profitable. The airline of course, pays the pilots, flight attendants, ground personal etc. But it also impacts the company that supplies the fuel to the airplane, the rental car agency will be impacted or a cab driver, etc. It is a powerful method of creating more demand, which creates more opportunity for gainful employment.

As you can see in the example, the socialist approach for a better life does not benefit anyone. The free market with people able to efficiently spend the money on the products and services they want to enjoy creates a vibrant economy. So...we can have the government spend all the money collected in one year that has done nothing, or imagine the possibilities of people buying the goods and services creating opportunity that would grow the economy in such a way that we would have a problem getting enough products (supply side economics) to satisfy everyone. Supply side works for the employment in that without enough quality workers, wages INCREASE to bring the talent to the table, which is you!

You are the one who would be benefiting from this free market policy, not only would you have more money to spend on you and your family, but also you would have more opportunities. When a company is profitable and has demand for the product, they of course are going to want to take advantage of the opportunity, and this takes people. The more difficult it is to find these people, the higher the wage offer has to be to attract this talent. Ever heard of the Bakken oil field? This is exactly what is happening in that region...opportunity for all, prosperity to many who were barely able to make a living, now enjoy a six figure income while the rest of the United States crawls along.

I think you can see how free market capitalism is the answer to the worlds problem. Look at the poor areas of the world, and you will realize that it all comes down to an oppressive government, and a government solution of "we will take care of you" instead of creating an environment whereby the individual can identify a need and profit from it. Enabling capitalism will ALWAYS lead to prosperity and opportunity, no ifs/ands/butts!

Get it?

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    • CHRIS57 profile image

      CHRIS57 2 years ago from Northern Germany

      It must have been brute force capitalism that has brought the USA to a GINI Index of 46%, well in the neighbourhood of Bolivia and China, or Russia.

      Your little example of the 54000 bucks per year of median income with 14000 spare money will only apply to one certain percentage of the population. As a matter of fact, more than 60% of the population have less than half of the 54000 as available income. Another 30% plus have their difficulty to get even close to your example. That leaves some 5% of the population who apply to the example or are better off. What an achievement.

      So much for the statistics of socio economic development. My personal experience with many places i visited on this planet is that a more even distribution of income and wealth creates real and mutually accepted prosperity (and happiness). Some may call this socialism, it is not. It is free market capitalism with social responsibility. A society must be judged of how the poor are treated and not how the rich and influencial serve themselves.

      By the way, China runs a (fairly) free market economy. The only socialist touch is that all property is returned to the state after a lifespan of 70 years. So no Rockefeller juniors or Carnegie juniors allowed in China. But that approach seems to follow ideas from ancient Chinese dynasty clergy selection. For almost 2000 years, no clergy official could pass on his position to his kin. Served China well and created a highly efficient administration.

    • Miks7 profile image
      Author

      Mike Dempsey 2 years ago from Sioux Falls SD

      Chris,

      That is why we have clueless and stupid people like you to question this economic theory. Seriously, why don't you open your brain just a little bit and figure out that what your data presented is fiction? Are you kidding me, China is not a free market economy...when was the last time you visited China?

      I can assure you, the fat bellied pig running the country is worried about exposing the peasants to the fact capitalism works....have you been to Mongolia?

      You are certain proof that idiots still are being suckered into a utopia that has never existed in the history of the world. You may be offended, but the facts support that capitalism has brought wealth to the rest of the world, while socialism has left us with poverty, disease, death, and mediocrity.

      I ask that you get out of the sandbox with your pale and educate yourself, because this isn't about me, but it is about facts and failure Vs. prosperity. Comment again with a rebuttal shows you are seriously brain dead!

    • Miks7 profile image
      Author

      Mike Dempsey 2 years ago from Sioux Falls SD

      And by the way...explain to me otherwise why the European economy sucks! That's right, I am a scientist with a major in Economics, while you are an amateur socialist trying to justify your position, when the United States is flat out dominating the European Union in productivity and economic status. Sure, the Europeans could smoke the United States, but it is too socialist in nature that you can't even come close to reality.

      Look at the facts...I am talking about REALSVILLE here pal, not some faculty lounge theory!

      If you want me to walk all over you, please respond, I will bring some economic data that will make you wish you could fly over here and sit down in my classroom for a while so that I can school you on Economics and free markets that will demonstrate that for the people, you can't beat Capitalism.

      I would have thought you....of all people, would have understood the Hitler was part of the tyrannical type government that does not set people free, but holds them in fear of the government????? Figure that one out first pal!

    • Miks7 profile image
      Author

      Mike Dempsey 2 years ago from Sioux Falls SD

      Chris,

      Still waiting for the "facts", but I had to question your observation about the Chinese economy. Let me ask you this. what is "Alibaba" IPO for the free market economy and capitalism? You may want to do some research, as well as study the found of the company before you shoot your mouth off on being the "expert" on economy theory.

      My question to you, since you have a limited IQ...I mean, how else can I explain to you that you don't know how to research reality....how much time have you spent at the university level, no matter what, it hasn't helped that much.

      So...why did the United States become a super power in less than 250 years and dominate the world? Was it socialism or capitalism? Think China can survive without the US economy? They will vaporize in little or no time without us...and we like them, they are industrious, efficient, and build a quality product for the money. However, if the US is out of the deal, forget it, they are a 3rd world country!

      Tell me how great Germany is....staunchy money controls, zero birth rates, and tell me why it is great to be born in the lower 1/3rd of the economic status and fulfill my destiny of dying in that 1/3 lower economic status? Wouldn't it be great that if you used your talents provided by GOD, to excel and live a life that you could only dream about? The freedom to pursue your God given right as a free man to live your life with prosperity if you choose? I have been around the world 18 times, and believe you me, it is no utopia as you think it is! I have seen more poverty, unequal distribution of wealth, and a life that is dependent on outside forces and not YOU...the rugged individual who - GETS IT DONE!

      Different philosophies for sure, dependency breeds poverty...you, of all people being from Western Germany and doesn't get it? Why do you think the East German people couldn't wait to get out of the pig-pen? Who built the Berlin Wall? That great socialist country that believes in state controlled production, right?

      The qualifier here is...what has the socialist countries delivered for technological progress, and world progress? Are you kidding me? Name an outstanding revolution and product that socialism has brought, and the benefits to society and the people in the country, and I will listen :) Bring it on my friend, truth never hurts...and I am all ears!

    • CHRIS57 profile image

      CHRIS57 2 years ago from Northern Germany

      Interesting, one little comment and 3 replies - must have hit your nerve.

      Well, i try to work myself through your replies and compliments.

      - my last visit to China is probably outdated :-), about 2 months ago and the 4th visit in this year.

      - your reference to Mongolia i am tempted to treat as an example of how to efficiently exploit natural resources. Any kind of capitalism can do that better than so called socialism. It is more a matter of how all the treasures dug out of the ground are distributed among those who contribute and are part of that blessed economic entity (like Mongolia, Khazakstan, USA, Australia, OPEC, Russia ...) My favourite in that lineup would be Australia.

      - "the United States is flat out dominating the European Union in productivity and economic status": How about this: US collective GDP growth over the past 3 years: 6,5%, population growth: 2,1% over same period. My "limited IQ" tells me to subtract population growth from GDP growth. That leaves 4,4% for the USA. Same trick for Germany (as you picked on G. for some reason): 4,4% GDP growth, -1,5% pop. growth. Gives some 5,9% for G. Do this for Sweden and you get 3,3%. Figures are not important, but let me ask one question: How much of economic output can be associated to exploiting natural resources? My perception is that natural resources is close to a flat zero for Europe but is quite significant for the USA. Considering this impact i would judge that "laissez faire" US is underperforming compared to "Social Market Northern Model" Europe.

      It is not about capitalism or socialism. It is about the blend of capitalism.

    • Miks7 profile image
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      Mike Dempsey 2 years ago from Sioux Falls SD

      No...you can't have socialism blended with capitalism. Capitalism is the most efficient mechanism in the distribution of wealth, and needs to be as pure as it can be. The problem is - Government is more corrupt than any capitalist, and if you don't believe that, ask someone that lived in the Soviet Union between 1950-1985!

      When you give up freedom and property rights, you end the efficient production of human resources. When you don't have unlimited freedom to bring your talents to the market, how can new products and services be introduced? Europe has tried the blend, and if you look at most of those countries, they have had little economic growth...and what have they brought to the market?

      Meanwhile, as pure as a capitalist can be, we have Apple, Google, Microsoft, Boeing, cell phones, etc. that are pretty much dominating the industry worldwide. The more blend you have, the fewer opportunities you have. I don't see many exceptions.

      Your mention of Australia is interesting, but what I see is a large continent that could use general aviation for travel throughout the various regions. General Aviation is so restricted, that many areas of the country are without essential services and social advancement through this form of travel...and think about the number of jobs it could create! Yet, the government in all its wisdom, regulates and restricts this to the point of not being practical.

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