Friday, May 3, 2013

Wealth in America

This video below is a beautiful example of misdirection by socialists.  It seems to interchange income and wealth as if they are synonymous.

Wealth is the recoverable net value of fixed assets.  It is what you would be paid if you disposed of that asset.  Let's take a stock certificate for instance.  You would be able to sell it on the appropriate exchange and receive the cash value minus any trading costs.  Of course you would have to provide for all taxes payable as well.  The problem here is that if everyone were to attempt to sell their shares in a given company or industry at the same time, the value would rapidly approach ZERO.  So, what are the shares really worth?

What do the assets of these rich people look like?  Almost invariably they are houses, cars, boats, clothes, stocks/companies, bonds, cash etc.  Note that in every case except the cash, that actual investment value has been transferred to someone else.  In fact, the 'rich' are the biggest source of money to all the rest of us.  If they don't build a business, there will be no supplier, no clients, no employees, and no taxes paid.  How does that help?
Even if the rich bury their cash in the cellar how will that impact others?  As it turns out, the FED will just top up the missing cash in the economy.

The private sector free enterprise economy guarantees the creation and distribution of wealth.  It is only when monopolies and cartels (governments and unions) are allowed to steal the cash and prevent its fee flow that the system fails.  That is where we are today!  Every willing transaction between or among citizens results in a confiscation of value.  When the rate of confiscation exceed the rate of growth of value the system begins to collapse.
We need to go back to fundamentals.    

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