Tuesday, September 28, 2010

Wealth and Wealth Redistribution

What is wealth? That's always a tough question, so let me begin by dividing it into two types, tangible and intangible. Tangible being such things as food, clothing and shelter and intangible being money. Government can control the production of the latter, but seldom the first, although at times they attempt to do so. Currently the Obama administration seems to be attempting some form of wealth redistribution, by placing additional tax burdens on the so-called wealthy. This simply moves intangible wealth from one group to another and does NOT increase the about of tangible wealth those things we need in our daily lives (food, clothing and shelter). Additionally the movement of that tangible wealth from one group to another will have the immediate effect of driving up prices on the basic goods we need for everyday life, while not producing an increase in the quantity of such goods. The true reality of this movement of wealth from the rich to the poor will result in less production of vital goods and higher prices.

Many people in our society think that millionaires have too much money and the government has a responsibility to take some and give it to those in the lower economic groups. This is the flawed belief of the socialist. They fail to realize that goods not money determines the wealth of a nation and wealth redistribution only moves money and not real wealth. The value of money is based only on what it can purchase. Just a few thoughts on economics 101 which many seen to have forgotten or never knew.

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