"Just this morning, Senator McCain said that he and President Bush 'share a common philosophy,'" Obama said. "I guess that was John McCain finally giving us a little straight talk." Obama said "the Bush-McCain philosophy" benefited the rich and promised the wealth would trickle down to everyone else " (John Whitesides,PC,Sun).
The most beautiful truth about wealth creation is that it will begin to spread one way or another in any system and in that process it triggers more economic activity that can support development or spawn new technologies and new industry. There is not yet a system in our world that can contain and confine wealth to the person who “made the bucks”. The more money is made, the greater the potential to consume more. And that potential always tends to generate more demand and tends to widen the demand for a greater range of goods and services simply because buyer-behavior and customer preferences in the market are fragmented. In time, the spreading of wealth creates more choices and fuels more competition through innovation, continuous improvements in packing, delivery systems, advertising, selling strategies, quality, product attributes, benefits and branding or through paradigm shifts that will satisfy the customer in a different way.
Money spreads because it not only has the power to purchase but that it can be put to work, creating more valuie or more benefits. Creation of wealth cannot be isolated nor divorced from spreading whether it is spread by the creator of the wealth or through a system that imposes a tax on it. So, even if an administration is bent towards wealth creation policies that benefits only the rich, it will as the Bush-McCain philosophy state that it will spread by trickling down to everyone else.
That sounds like a democratic ideology in its very pure form. Nothing bad about it. However, it is only a ideal principle that in practice never exists in that pure crystalline form. All democratic governments impose a tax which is a system that pools money, more from those that create more wealth, in order to spread it around for the benefit of society through development programs, funding of universities, giving research grants, giving scholarships, paying for police work and defence needs of the nation etc. A good system is fully entrepreneurial and liberal that allows the individual and corporations to express themselves and respond to the market and needs so that it succeeds in promoting a sound velocity of circulation of money and keeps the wealth creation machine in perpetual motion. In this system, anyone who wants to plug in to benefit and “make the bucks” ends up contributing to the system.
But it is never so perfect either. The system churns the wheels of economy that is suposed to create wealth but that system does not manage itself entirely. Extrinsic to it is its tax regime that always takes a portion according to some predetermined basis to spend for administration and development and safety and security. A tax system can be modified to spread wealth in the form of incentives to pioneer industries or give tax breaks or factor tax deductibles or tax rebates for economic reasons or for socio-democratic purposes as for giving relief to families for the first three to five children. In the US and in many other countries there is a social welfare system that gives out support to fellow members of society in various forms, including unemployment benefits.
In some countries the paid maternity leave extends from two months to 18 months while other democratic governments plan their budgets to afford free healthcare and medical attention or at a low price at government hospitals. In all of these systems wealth is spread. The giving of aid to disaster victims, wherever they might be, spreads some of it, sometimes in millions and billions. The insurance pools also collect money, use some of it for expense and spread the rest to pay for its specified contingencies and liabilities. Cooperatives and fund managers pool and spread wealth in order to create more. Money will not stagnate. It is a question of how it will spread. The government can support the rich and benefit them, in the hope that wealth will trickle down to everyone else or it can administer policy interventions such as tax cuts for the middle-class and low income earners and provide scholarships to excellent students and study loans and even set up a fund to give loans at low cost to businesses in the knowledge sectors such as in biologics, biomedical or biotechnology etc to help spped up their growth and help to expand their job creation potential fast and that could contribute to narrowing the trade deficits if they are able to export. In all such cases, the spreading of wealth is calculated and aimed at benefitting the economy. It is not a Robin Hood policy of spreading wealth nor a socialist one. It does not aim to steal from the rich to give to the poor but rather is applied for some economic aim and purpose far removed from the established welfare systems or unemployment benefit schemes or free milk for school children or free text books for school children. Sometimes, the trickling process is slow or otherwise inadequate to address an economic situation and requires an interventionist policy or law to apply funds that may be redistributed to many or a few.
When Bush bailed out certain investment funds, he spread some of the public wealth to prevent them from going bellie-up. Similarly, an application of funds upto USD700 billion to shore up some companies on Wall Street is the spread of wealth that came from the man on the street to prevent a credit squeeze created by financial institutions in the mortgage business that outsourced its mortgage underwriting. However, this application of money is termed as an “economic solution” but in its fundamental essence is a spread of wealth to protect these institutions and minimize or contain the recessionary fall out. Equally, there is a spread of wealth by reduction of taxes from the working class and the middle class to increase their disposal income that can help to cushion the effects of this fallout. It is part of a total economic solution, not a socialist contraption that exists solely for purposes of controlling surplus wealth that must go to the state for its redistribution.
The New Democratic Party in Canada encouraged numerous writers and movements to begin to discuss alternative economic strategies. There has been a proliferation of new models of socialism and alternate economic strategies that attempt to extend democratic participation in a decentralist fashion by extending workers' control and user participation in the management of enterprises and organizations and to formulate new representative bodies, administrative means, and strategies at the centre to control the economic surplus and redistribute it toward sustainable production for needs and to expand and broaden the economy. Any strategy that incorporates the notion of spreading of wealth is devised for capitalistic goals and not for the socialistic agenda of the state. It always requires policies and bodies with people participation for it to work and to monitor both its performance as well as the intended capitalistic benefits and results. It gets acceptance as an alternate economic strategy only when its underlying function is to support wealth creation and when that is the basic role it gets implanted into the host system as a symbiotic organelle to serve it and the rich benefit in turn.
Pure socialism is dying out because it is not possible to work out a socialistic agenda that confines or spreads wealth only to benefit the working class and to keep it under the control of the working class. As the money accumulates, it will flow out of its pool and coffers to spread again to fuel development and create more jobs and fuel more consumption that will create more products and competition and eventually churn out a capitalistic economy or an economy with capitalistic charateristics. Good governance and prudent measures will ensure that moneys works to create wealth that will spread one way or another.
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