Well once again we have another election to live through and the candidates are playing their old song which promises us money if we vote for them. Is it really fiscally sustainable that a promise of 1,000 tax and loan free per low income student per year should be made? What about promises of subsidized national daycare? Or the settlement of various and endless Native claims. When we are given election platforms that make promises like these we need to think about whose money is it that they are they promising to give to use? Are they promising to merely take my money away from me and then give it back? Is it my neighbor's money that is being taken from his/her family? And if it is then I need to ask "what right do I have to my neighbor's money?" Or is the money just the government's money that it can pull from whenever it likes?
When it comes to the question of whether or not it is the government's money that is being promised it would be good for all of us to remember that although the government may have money it has no wealth. The government may be the only agency that can print money but printing money cannot be equated with creating or possessing wealth. When it comes to "wealth creation" the demise of communism proved that governments are not capable of performing such a task. The truth of the matter is actually quite to the contrary. The only relationship that government has with wealth is that of consuming wealth as opposed to creating it. Now this does not make government inherently bad or parasitical. Government is truly needed by those who create wealth because government provides the environment in which the wealth creators can do what they do best, which is to apply their brain power and labour to fashioning the earth's resources into the products that improve the human condition. At election times it is a common error for the segments of our society who are the receivers of government transfers and the politicians who court them. To confuse activities like the printing and redistribution of money as constituting actual wealth creation instead of acknowledging what it truly is which is wealth consumption. This destructive nature exists because the recipients of government transfers, be they a business or a person, share one fundamental flaw, that of being poor financial and resource managers. The truth is that continued government transfers do not address this fundamental deficiency but actually serve to encourage it and therefore to assure the politicians an ideological and voting constituency.
So whose money is it that our politicians are promising to spend? First off we need to establish one fundamental fact about money which is that money really isn't worth the paper that it is printed on. Money is simply what the government says it is. In other words the government's argument is circular; money is what it is because the government says what it is. I think that a better way to pose the question, in light of the above paragraph, is to ask "whose wealth creating labour" is it that the politicians are using to fulfill their campaign promises? I believe that the first economic truism that should be established is that no one goes to work with the goal of giving away a portion of his/her work to someone other than him/herself or an immediate family member. Individuals work in expectation of reaping for themselves the reward that natural justice informs us should follow as a natural outcome of their agreement to exchange their labour with buyer. When the government steps in and by way of taxation breaks this natural association between an individual's work and the monetary rewards that he/she has come to associate with work and the greater is the disincentive to produce. The reciprocal of this outcome is that the drive to work is destroyed in the hearts of the ones who are the recipients of this government largess. Therefore any politician who promises to spend money on the seemingly laudable goal of giving low income post secondary students money to help fund their education is actually undermining the long term economic prospects for those same students by promising to take money from current capital accumulators who fund job creation and instead shift that capital to those who are its present consumers.
Additionally it must be stated that the twin government policies of progressive taxation and the accompanying government transfers of wealth are actually counter productive to the government's official stated goal of growing the economy. The reason for this is because progressive taxation penalizes those individuals and families who are able to accumulate wealth by transferring it to those who are not. Economies that wish to create jobs must encourage business investment. It is a necessary prerequisite to having business investment that there must be an accumulated pool of capital that the creators of wealth can access if they are to create the businesses that will provide future jobs. Governments too must have access to pools of capital if they are to sell the debt that they need in order to finance the building of the country's infrastructure.
So during this election season as we listen to the politicians deliver their respective party platforms we must keep in mind that government forced transfers of wealth is in the end inimical to any politician's stated goal of economic growth, job creation and poverty amelioration.
