Monday, October 13, 2008

Spread the Wealth

Obama is going to spread the wealth. Oh joy indeed. Happy days are here.

It sounds good in practice, but generally, when people try to spread the wealth, they spread poverty instead.

Someone should tell Obama that American wealth is currently in the process of being destroyed, and more is at risk of being destroyed. Furthermore, the mere suggestion that the government may take wealth increases the risk to holding assets which might be confiscated. The increased risk devalues those assets. In essence, wealth is destroyed simply by increasing the expectation that the risk to holding those assets has increased.

In this case, the asset in question is expected future income. Obama is making it clear that he intends to make it less profitable for the wealthy to engage in the work necessary to produce that future income. This decreases their incentive to engage in this work. It also decreases the incentive for the wealthy to consume today based upon the reduced income they expect to generate in the future.

Obama is already making America poorer. I am betting it will only get worse.