"The problem with socialism is that eventually you run out of other people's money [to spend]."
Margaret Thatcher, 1976.
While this quote is not precise, it is the most popular version of what she said back in 1976 when she was condemning socialism.
America claims it was built on the pillars of capitalism. During the cold war era, the opposition to communism grew and even runs pretty strong even now. Socialism is but just a weak version of communism and has many of its core philosophies based in communism. Hence the common form of ridicule that Canada faces (by Americans) is about their socialist form of healthcare.
America has now recognized that our healthcare system is broken and that government-run healthcare is not that easy either. Leave alone running government-based healthcare, they cannot even run the website.
I am talking about the export of socialism that has manifested itself due to the actions taken by the Federal Reserve. Last week, I wrote to you about the dangers that the world is facing due to the quantitative easing (QE) policies of the Feds
Let's start with India as an example. Traditionally the power has been oscillating between the Congress and Indian People's Party. One is rampant with corrupt officials and the other is a Hindu fundamentalist party. Not great choices there. But at least they have seasoned veteran politicians who know how to govern a country.
Due to the QE policies in the United States and the reluctance of bankers to loan money in the United States, the liquidity flowed to India and inflation has galloped to 10 to 12 percent each year. As a result, the people have suffered. Now some upstarts are winning elections on promises to the overstretched middle class, promising them heavily subsidized electricity, water and other services. In response, the mainstream parties have started rolling back their fiscally responsible reduction of subsidies. This can only end badly for India, no matter who comes into power.
Similar stories are playing out in Argentina, Brazil, Russia and several other important economies. While each one individually is not huge, combined there is a large block of the global economy that is tilting heavily toward socialism thanks to QE in America.
Staying within America, we also need to halt our long ongoing war. No, I am not referring to the war on terror, but the war on poverty. While the concept and the intent is noble, it is an utter failure and has squandered trillions of dollars.
Back on Jan. 8, 1964, President Johnson declared war on poverty. Fifty years and $20 trillion later, about 15 percent of Americans live in poverty. That is about the same as back in 1964 and yet the government has spent about $1 trillion each year trying to make everyone wealthy.
According to Robert Rector, a senior research fellow at the Heritage Foundation, the typical American who lives below the poverty level: "lives in a house or apartment that is in good repair, equipped with air conditioning and cable TV. His home is larger than the home of the average non-poor French, German or English man. He has a car, multiple color TVs and a DVD player. More than half the poor have computers and a third have wide, flat-screen TVs. The overwhelming majorities of poor Americans are not undernourished and did not suffer from hunger for even one day of the previous year," he writes in The Wall Street Journal.
I am not sure that the definition of poverty is universal globally.
Our government seems to take it upon themselves to redistribute the wealth of the citizens by taxing and squandering monies on the so-called poor.
This has got to stop before we run out of spending China's money!
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