Capitalism/Socialism

by Richard Geno

President Richard Geno Addresses The Conservative Forum

Capitalism and free enterprise are not

ideologies; they are functioning systems that have provided more wealth to more people by many thousand-fold than all systems known to mankind combined.

To the contrary, Socialism is a theory that is based on an ideology that has provided only poverty to people, and has brought down economies. 

In America, in our typically politically-correct world, we hide the disaster of socialism behind formerly-positive and descriptive words like liberal and progressive.

Socialism, liberalism, progressivism  - call it what you like, hide behind whatever label you choose, depend upon the following:

• First of all, there is the politics of envy and schadenfreude.  While envy is the sadness one feels when someone else succeeds, Schadenfreude is the joy one feels when someone else fails.  Without the full promotion of those two American traits, today’s Democratic Party would be a marginal third-party.
• Secondly, politically liberalism depends upon what George Bernard Shaw said:  “If we can set up a government where we rob from Peter to pay Paul, then we can always count on the support of Paul.”
• Thirdly, from a positive point of view, a liberal is a person who wants to solve all of the problems of the world… with someone else’s money.

A couple of quotes from ”The Fall of The Athenian Republic”: “A democracy cannot exist as a permanent form of government.  It can only exist until the voters discover that they can vote themselves largesse from the public treasury.  From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy. 

“The average age of the world’s greatest democracies has been 200 years.  These nations have progressed through this sequence:  From bondage to spiritual faith: from spiritual faith to great courage: from courage to liberty: from liberty to abundance: from abundance to complacency: from complacency to apathy to dependence: from dependency back to bondage.”

The standard of living in a country is in direct relationship to how little the government interferes financially and legally in its business.

Leading Capitalistic Countries
Country  & Per Capita GDP

USA    $37,800 
Japan    28,000   
Taiwan    23,400
Singapore   23,700       
South Korea   17,700

Leading Socialistic Countries

Country  Per Capita GDP

Russia    $8,900
Egypt, Syria    3,600
China     5,000
Cuba            2,800
North Korea    1,000             

As for tax rates, I’d like to quote a President of the United States:  “Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government. …The present tax codes … inhibit the mobility and formation of capital, add complexities and inequities which undermine the morale of the taxpayer , and make tax avoidance rather than market factors a prime consideration in too many economic decisions.”

Is this a quote of  George W. Bush?  Ronald Reagan?  No, John F. Kennedy.

John Kennedy, Ronald Reagan, and George W. Bush understand and understood “the multiplier effect” of a dynamic free enterprise economy.  Why else would there be, in all three cases of tax reduction, a substantial increase in government revenues after the reduction of taxes?

Have you ever heard a liberal politician or a journalist exclaim “It is just a tax cut for the rich.”  I believe I heard this proclaimed more than 200 times during 2004.

What does this really mean? 

Let’s put tax cuts in terms we can all understand:

Every night ten men from distinctly different walks of life get together for dinner. The bill comes to $100.  They decide to pay the bill the way we pay income taxes.

The first four men (the poorest) would pay nothing
The fifth would pay $1
The sixth would pay $3
The seventh would pay $7
The eighth would pay $12
The ninth would pay $18
The tenth one (the richest) would pay $59

So, that’s what they decided.

The ten men ate dinner in the restaurant every evening for several weeks, and they seemed quite happy with the arrangement, until one day, the owner threw them a curve.

“Since you are such good customers,” he said.  “I’m going to reduce the cost of your daily meal by $20.  Dinner for 10 now costs just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected.  They would still eat for free.  But what about the other six men – the paying customers?  How could they divide the $20 windfall so that everyone would get his ‘fair share?’

They realized that $20 divided by six is $3.33.  But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to eat their meal.

So, the restaurant owner suggested that it would be fair to reduce each man’s bill by roughly the same percentage, and he proceeded to work out the amounts each should pay.

and so:

The fifth man, like the first four, now paid nothing (100% savings).

The sixth now paid $2 instead of $3 (33% savings).

The seventh now paid $5 instead of $7 (28% savings).

The eighth now paid $9 instead of $12 (25% savings).

The ninth now paid $15 instead of $18 (17% savings).

The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before.  And now the first five would eat for free.  But once outside the restaurant, the men began to compare their savings.

“I only got a dollar out of the $20,” declared the sixth man.  He pointed to the tenth man, “but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man.  “I only saved a dollar, too.  It’s unfair that he got ten times more than me!”

“That’s true!!” shouted the seventh man.  “Why should he get $10 back when I got only two?  The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison.  “We didn’t get anything at all.  The system once again exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for dinner, so the nine sat down and ate without him.  But when it came time to pay the bill, they discovered something important.  They didn’t have enough money between all of them for even half of the bill!

And that, ladies and gentlemen, journalists and college professors, is how our tax system works.  The people who pay the highest taxes get the most benefit from a tax reduction.  Tax them too much, attack them for being wealthy, and they just may not show up anymore.  In fact, they might start eating overseas where the atmosphere is somewhat friendlier.

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