Wealth Redistribution is Just a Band-aid

By | December 5, 2013

ID-10067204After listening to some people I know debate about politics and social welfare, it made me realize how much people are stuck in the mentality of lack and limited wealth.  They do not realize that wealth is created.  Wealth is not a limited and rare element that gets smaller as it is divided.  The pie of prosperity can actually grow.

On one side you have people demanding more regulation and higher taxes for the wealthy and corporations, and expanded social welfare programs.  They frequently point out how unfair it is that rich people are rich while the poor are poor, and demand a redistribution of wealth through taxes, minimum wages, required employee benefits and other such programs.

And on the other side, you have the wealthy, who feel they have put a lot of effort and taken great risks to create their fortunes, and do not think it is fair that someone who has not educated themselves and has not worked hard should get some of their money.  They feel that if the poor wanted to be rich, they should work hard like they did.

Meanwhile small business and startups get squeezed from both sides, with better funded big business using their muscle in the marketplace to squeeze small business, and workers demanding increased taxes and benefits, which make it harder for small businesses to survive.

Getting Back to What Made America Great

This country does have a real problem with distribution of wealth.  The wealthy are getting wealthier, the poor are getting poorer, and the middle class is barely hanging on.  Expenses keep rising, but wages do not, pushing people further and further down the economic ladder.  So it is true that something needs to be done, and done soon.

But, perhaps what we really need to do is help educate people on how to create wealth, and support them in their endeavors.

Taking money from one group and giving it to another is just a political band-aid and does not solve the real problems in this country.  We need to make it easier for people to be upwardly mobile, and make it easier for small businesses to survive and thrive.  We need to teach better money management skills to our citizens, and share some of the secrets the wealthy have used for years to get rich.  We should teach our citizens about business and investing and how our government works, so they can make better decisions.  We should make financial education available to everyone.  And have pro-small business policies that encourage them to hire new employees and grow.

Many third world countries operate as if the pie of wealth cannot grow, and the wealthy take all they can, while the poor beg for the scraps.  One thing that has made the United States so great is the fact that anyone can become wealthy if they educated themselves in creating wealth, and worked hard.  Somewhere we forgot that opportunity is unlimited, and reverted to survival mode where we take all we can to survive.  And that is a recipe for disaster.

We need to get back to what made this country great: the opportunity to create wealth.  This means making it easier for the average Joe to better themselves and support and protection for small business and small investors.

Instead of moving towards a purely capitalist state of extremely rich and bitter poor, or moving towards a more socialist state of mostly medium wealth and poor people, we could instead work for a country that actually supports the creation of wealth by all.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net


 

Scott M. Stolz

Entrepreneur, Educator, Author.
Helping people embrace life's opportunities.™