Entitlement – Page 3 – an Uncensored Mind

Universal income

Democratic presidential candidate Andrew Yang is proposing that the government give each and every American $1000 per month as a “universal income”, no strings attached. Candidate Yang wants to pay for this with a VAT (value added tax) that he claims is “…a fair tax and it makes it much harder for large corporations, who are experts at hiding profits and income, to avoid paying their fair share…” Unfortunately, in my view candidate Yang does not have a fundamental understanding of economics or even the definition of a “value added tax”.

Money is a complicated concept; I apologize if I don’t do it justice as I try to condense its essence. However, a basic tenet is that it is not sufficient to simply print money. The paper which comprises money does not give it value; instead, money is given value through the productivity by which it is backed. In short, money (at least if it is expected to have value) must be earned by the productive work of one person before it can be given away to another. This is what Mr. Yang fails (or refuses) to recognize: the only real source of money for his proposed “universal income” is to take it from others who have earned it.

Yang says that he will fund his plan with a value added tax (VAT), which he implies will be paid by the evil corporations that inhabit our country. However, that is not how a VAT works. A VAT is essentially a consumption tax; think of it as a Federal-level sales tax. With that understanding, who do you think will bear the brunt of this tax? That’s right – you, the consumer. However, those who consume more will pay more. The result will be yet another government-controlled wealth redistribution system, with the federal government in the middle reducing its value through overhead. It is important to note that work done by the government in redistributing money is a waste of resources – it yields nothing that can be consumed, and squanders valuable productivity that could be better applied elsewhere.

Mr. Yang is pandering and – quite literally – buying the votes of some with the money of others (people who won’t vote for him?). But he likely knows the secret to buying votes with government money: so long as those who receive a value greater than their contribution outnumber those who receive less, the scheme works. It essentially allows the majority to pick the pockets of the minority.

Andrew Yang is a pandering idiot. Please drop him a line and let him know.

If you build it, they will come (part II)

It’s one thing to help the homeless obtain the assistance they need to get off the streets; it’s quite another to enable them to remain homeless. Laws such as these will only attract those who choose this lifestyle to the detriment of those who do not.

Austin plan to allow homeless camps faces backlash

Can you imagine being a taxpayer whose taxes built a park, only to have a homeless encampment take it over? Worse, the homeless who have taken over the park are not even former local residents, but have instead come from other areas to benefit from the local government’s willingness to enable their homeless behavior (which includes, in many cases, drug use). Want proof? Look here and here to start.

Note that some claim the increase in homelessness is due to escalating home prices, but I disagree. California’s rent costs as a percentage of income have dropped while vacancy rates have increased, even as homeless rates in some large California cities have grown at a rate of greater than 40% per year. A more likely cause (although more research is needed) is that California’s willingness to enable the homeless lifestyle attracts homeless from across the country.

Efforts to assist the homeless should focus on helping them overcome the difficulties that led to their homeless condition, not enable their continued homelessness. Those who wish to remain homeless by their own hand should not be encouraged through well-minded but misguided efforts that enable their behavior at public expense.

What about us?

Bernie Sanders wants to wipe out all student college debt – amounting to somewhere in the vicinity of $1.6T. Mind you this is money owed to the American taxpayer, who only loaned the money to these students to assist them in their education – not to pay for it outright. Talk about “buying votes”; given the number of students with student debt (roughly 45 million), it seems that Bernie’s going to win in 202o…

But, wait! I have a few questions, Bernie:

1) What about the rest of us? What about those of us who responsibly attended college by choosing a useful (pronounced STEM) degree program, one where scholarships and fellowships were available, and who worked through school so as to not have any or minimal debt upon graduation? Is it our reward for being responsible citizens that we are saddled with paying the debt of those who weren’t?

2) Why not go further, as long as you are printing money, and pay off everyone’s mortgage, too? That will penalize us further, those of us who have lived within our means and scrimped/sacrificed/saved so that we could own our homes outright. Why not saddle us with the debt of those who partied, vacationed, and spent beyond their means rather than pay off their homes?

Somewhere I once read an unverified quote that seems to accurately describe what is happening in the United States. This unverified quote essentially made the claim that a democracy only remains viable until the people realize that they can write themselves a check out of the treasury. This appears to be what Bernie (and others) are attempting to do; the trick is to make sure that more people benefit from the giveaway of public funds than those who will suffer for it, thus insuring voter support.

It is the 16th amendment that is largely responsible for this dilemma, as until its ratification direct taxes were required to be apportioned based on population. With the advent of the progressive tax system the 16th amendment enabled, it became possible to provide the majority of people with a benefit where their contribution in taxes was far less than the benefit received.

The Constitution was designed to protect against the “…tyranny of the majority…” by including specific rights for the people and limitations on government. Unfortunately, Article I, Section 9, Clause 4 of our constitution just wasn’t clear enough, as evidenced by ratification of the 16th amendment. Hopefully, we’ll get it right next time.

Affordable Housing

2020 Democrats Offer Up Affordable Housing Plans Amid Surging Prices

Not a one of these plans offers a real solution. But don’t expect our nation’s undereducated voters to understand; the classroom-based political indoctrination process has weeded out fundamental skills like basic math and general economics. As a result, many voters will accept these proposals as viable solutions – no matter how bad.

Some of the proposals offer money to those who cannot afford their rent. But if you want affordable housing, giving money to people will not solve the problem; this will only increase the cost of rent. Think about it: if the housing stock remains the same, but more money is available for rent (creating more competition for the existing rental units), what would you expect to happen? That’s right; rent will increase, and the same people who have the rental units now will keep them – albeit at a higher rent.

OK, so the politicians then say that they will invoke rent control to prevent rent increases. But that won’t solve the problem, either. In this scenario there are still too few rental units, and investors are unlikely to build any more when rents are set at the whim of local government officials. This result of rent control is easily proven; it has been shown time and again to reduce the number of rental units, and without more rental units to meet demand prices will continue to rise.

So next the politicians promise to force developers to build “affordable” housing along with their other, more expensive units, supposedly solving the supply issue. But once again this will lead to failure. In this case the cost of the rent subsidies are simply passed on to the non-“affordable” units, increasing rents for others. In addition, only the chosen few benefit from such “affordable” units (there is no way to construct enough affordable units to meet demand), and those lucky enough to obtain a subsidized unit are free to camp out in it for life.

None of the proposals floated by the democratic candidates will do anything except increase the cost of rent for the vast majority of people. Ignoring the laws of supply and demand won’t fix anything. If you want lower rents then we need more rental units, and if you want more rental units then you need to make it easy and profitable to build rentals. Establish rental-friendly zoning rules, ease rental permit requirements, and eliminate rent control and you will be rewarded with more rental units at lower cost.

A bit of reduced risk for landlords wouldn’t hurt, either; reducing landlord risk will translate directly to reduced rents. This does not mean that renters should have to tolerate truly bad landlords; only that landlords should not have to tolerate truly bad renters, either. For instance, laws that allow rent to be withheld from landlords who have failed to make timely repairs are ripe for abuse. A renter could cause damage to a property deliberately or from improper use, then use the condition to avoid rent. Instead, the renter should have to deposit the rent with a tribunal while the investigation is ongoing or be subject to eviction for non-payment. Also, eviction for non-payment should be made easier; forcing landlords to subsidize delinquent renters for months or years while the renter abuses rental laws is not something that encourages investment in rental properties.

If you want to make rents more affordable then you need to make it easier and more profitable to build rental housing, and protect landlord investments though more equitable eviction law. It’s a simple as that. Wealth redistribution by the government will only behold you to the errant politicians and secure your vote for them and their mindless rent control schemes.

The fallacy of rent control

No news article that attempts to justify rent control – like this one from NPR – should contain the statement:

“[She] has been evicted from nine apartments in the past four years. All she did, she says, was complain about things like a gas leak, mold or a missing security gate.” [emphasis mine]

Shame on you, NPR; any legitimate news organization would have investigated the circumstances of the subject’s evictions so as to eliminate the “…she says…” from the story. But the story isn’t about the truth behind her evictions; no, instead it is a political piece meant to justify the imposition of rent control.

Unfortunately, rent control simply doesn’t work; it only makes it possible for a select few to have their rent subsidized at the expense of landlords. The article actual admits this flaw:

“Even though much of the research shows rent control doesn’t help most tenants in the long run, advocates say at least current tenants are protected.”

But helping tenants isn’t the goal, is it? There is little room to deny this position, given that they know it “…doesn’t help most tenants…” and yet establish rent control anyway. The goal instead is political control over people through dependence; it is effectively vote purchasing using the landlord’s money.

I think this excerpt from the article says it all:

“…housing advocates have said they have goosebumps at the idea of launching campaigns all across the state to get local towns to adopt the new rules…”

Goosebumps. You can’t make this stuff up…

The problem with rent control laws

Of course, there are stories such as this that rile sensibilities:

A 102-year-old woman faces eviction so the landlords’ daughter can move in. It’s completely legal

But the truth is that rent control laws force landlords to subsidize the rent for those less fortunate. Why should that be the case? Why should being a landlord subject you to an additional and arbitrary tax to support the family members of others rather than your own?

Excerpts like this from the article bear out the truth:

“They use this law to target long-term, low-paying tenants,” said Larry Gross, executive director of the Coalition for Economic Survival.

The key term here is “low-paying tenant”, likely due to rental laws that prevent the landlord from charging market rates. This effectively forces the landlord to subsidize the rent of long-term tenants. What if I instead determined that it was you who should subsidize this woman’s rent? What if I took money out of your potential earnings, money that you could use to support your own family or improve your own life? How would you feel then about the low rent this woman was paying?

If the people want to subsidize the rent for this woman using tax proceeds, so that everyone pays a little towards her rent, so be it. But to force this tax onto a single individual just because they have invested their earnings wisely in real estate is simply wrong.

Before you chastise this landlord’s desire to support his own family over the family of another, open your own wallet. It’s just as much your responsibility as it is his.

Yeah, that makes sense…

An interesting read regarding the political/social climate in Seattle, WA:

Seattle accused of turning blind eye to rise of homelessness, drug dealing

Here are a few excerpts:

Mayor Jenny Durkan pushed for an elimination of fines for late returns, which has already been done at over 50 libraries nationwide. But The Seattle Public Library depends on the revenue from fines, more than $1 million per year, as part of its operating budget. So Durkan pushed through a seven-year, $213 million property tax levy proposal that would do away with late fees. Voters will decide this fall and library officials are hopeful.

I’d be hopeful, too. Let’s see: they are eliminating fines that generate $1M per year and replacing them with a property tax that will generate $30.4M per year. Yeah, that makes a lot of sense…

“Fines don’t teach responsibility,” said Andrew Harbison, Seattle public library assistant director…”

Yes, they do, Andrew. That’s why we fine people for improper activity. Do you think people slow down in a school zone because they are worried about your kids, or because of the fine they might face if caught?

Reading between the lines

An interesting news article about one candidate’s basic income proposal:

Andrew Yang, 2020 candidate: My ‘$1,000 per month’ plan offers ‘economic resources’ to every American

Here’s what they say (and my response):

A proposal to pay every American adult $1,000 per month is an opportunity to “put economic resources directly into” the taxpayers’ hands, Andrew Yang said.

By taking these same economic resources out of the hands of other, more productive taxpayers?

“It would create an economic path forward for many people who, right now, are struggling and don’t have access to, let’s say, treatment for substance abuse problems, or mental health issues,” Yang said.

Can someone please explain to me how giving money to drug addicts will provide them access to resources other than more drugs? Isn’t this called enabling? It will probably encourage them to vote, though, to keep the spigot of free money flowing…

“The experience I’m having when I talk to voters around the country is that 70 percent of them are living paycheck to paycheck. Fifty-seven percent can’t afford an unexpected $500 bill,” he claimed.

Isn’t this indicative of a failed education system, one that does not teach people basic life skills like budget management and economics? Wouldn’t this money be better spent educating workers and developing skills that might be more valuable in the workplace, thereby increasing wages? Teach a man to fish, or feed him – which will provide better, lasting results?

“We need to wake up to the fact that we’re in the midst of the greatest economic transformation in our country’s history, and start moving in the direction of just putting economic resources directly into our hands.”

Actually, we need to put economic resources into the hands of those most likely to produce. That’s how capitalism works, and that’s what has built the most powerful country in the world. Putting the economic resources of our country into the hands of ne’er-do-wells who can’t balance a checkbook, well… that just seems foolish.

Will someone please explain…

…why anyone should have to pay to raise someone else’s child?

Warren set to release $70B-per-year plan for universal child care, will tap wealth tax

Whatever happened to being responsible responsible for ones own actions? When debts incurred were our own, not our neighbors?

<rant mode on>
Government programs such as this only add expensive government overhead to our tax burden and increase the dependence of people on the government for their basic needs.

The end goal seems clear: by increasing dependence on the government, those who propound such dependencies control the vote of those made dependent. They are no different than drug dealers providing a “free” fix to secure a lifetime of addiction. What is truly sad is that the real victims – those dependent – are simply too ignorant to realize the trap into which they have fallen.

My argument against such socialist policies is that they remove the motivation and ability to contract on your own for better (and merit-based) wages, thus removing incentives to excel. We all just become another cog in the machine, striving to do the least work for the identical alms we are each provided by the state.

In addition, any time we create a government bureaucracy we add overhead that produces nothing of value. You cannot eat the product of wealth redistribution, nor can you drive it to work. You may have more money in your pocket from these policies, but the products available to purchase with it have not changed. There is nothing more to buy than there was before, and possibly less due to reductions in productivity that result from these socialist policies. The result of receiving unearned money will always be increased prices.

Our education system leans democrat 2:1, and this has a dramatic effect on what students learn. If we taught students critical thinking skills and basic economics instead of liberal politics they might actually understand why socialist math doesn’t work. But getting free stuff from the government? We teach them it’s a right… and that it’s OK to make someone else pay for it.
<rant mode off>

Walls to keep people in

The Berlin Wall was built by the East German government to prevent the flight of people and their wealth. This desire to flee was the result of the socialist policies of the German Democratic Republic (why do these despotic governments always claim in their names to be democracies?).

Senator Warren also wants to build a wall to prevent the flight of people and their wealth – this time in the United States. She expects that “rich” people will want to leave due to her proposal to tax their wealth to fund her vote-buying socialist programs. This wall, however, is not physical; instead, it is financial. If wealthy people want to leave the U.S. to avoid the high wealth tax she proposes, then she will take 40% of their wealth on the way out the door. That is a substantial bar to freedom, no less so than a concrete wall.

There is little difference between the actions of the former East Germany and those of Senator Warren, and both have been perpetrated on the public in the name of socialism. If we allow Warren’s proposal to go forward, it won’t be long before walls are built on the border to keep Americans in – rather than illegal aliens out.