Thursday, January 06, 2005


As much as I rail against the paternalism of (factions of) the Left, there is some truth in it: government belongs to everybody. Social Security is an excellent example. Having the elderly eating cat food, unable to care for themselves and starving to death is a burdon on us all, and (through government) we all pitch in so they don't have to do that. The Right says that people are wonderful and will do better fending for themselves. That's partially true, some (most?) people will certainly perform better when they are able to fully reap the rewards of their effort. And so guys like this try to reduce the "entitlements" and allow people to fend for themselves. Standard refrain: "it's your money, you should choose how it's invested." That's great! I know I'd love to get a ~13% raise and dump that straight into the 401k. Set for life, I'd probably be.

There are two problems with that:

1) What happens when everyone else also dumps their money into the stock market? Sure, the innovation sparked by this influx of cash would probably propel society up a rung or so. But wouldn't it even out fairly quickly? And on a macro scale, this is just a way for the big boys to siphon money off the top (even bigger CEO pay, more companies, more board positions, etc.), and for the outright crooks to steal money. The investment -> innovation -> sales -> profit equation is 'lossy' at best, and tends to get worse the more money that is involved.

2) What about the lazy? It's a fact there are people out there who don't plan ahead, don't make good decisions, penny wise and pound foolish, etc. What do we do with them when they can no longer work and they've spent all their money on DVD box sets? That's right. They are once again a burdon on society, and we're back where we started.


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