Friday, March 18, 2011

Redistributing the Wealth

I follow the RSS feed for Dave Ramsay's Radio Show (blog). I don't listen to every post, only the ones that are interesting to me. Today, I saw one that was about the concept of wealth redistribution and decided to see what Dave had to say on this. He entitled the post, "This Isn't a Fixed Pie." I couldn't agree more. I had simply never heard it said that way before.

Now, before I begin to explain my position, allow me to start by saying, I am NOT one of the 11,000 families at the top. Within the past couple of years alone my husband has lost his job three times, our house has been up for foreclosure auction, and we've had to sell off some personal items just to be able to afford groceries. However, had someone come to me at any time during that and said, "Tell you what, we're going to go take some money from someone else and give it to you so you can pay your bills," I would have told them "No thanks!"

This is not an issue of pride. I have no problem accepting help freely given (and in fact, I did just that a couple of times). But I don't for one moment think it ought to be mandatory, and I think taking someone's money without their consent is still stealing, no matter if you do it yourself or if you elect leaders to do it for you.

So, do I think poor people should be poor and the wealthy should be wealthy and that's that? Not exactly. As Dave said in his talk show, the problem here is we're assuming this is a fixed pie. To put it another way, we've got a recipe in our hands for making pie, and we're fighting over how to divide a single pie once it's made. Why shouldn't we just MAKE MORE PIE?

To be clear, I'm not talking about printing more money. I won't even start to get into the idiocy of that concept.

What I'm talking about is teaching people how to make money. You don't have to take wealth from the rich to do this. People can make their own wealth without stealing it from others. Lots of people have done it.

Many of you may have seen Dani Johnson on ABC's Secret Millionaire a few weeks ago. (If you didn't, I highly recommend you catch an episode or two. Her episode is still available to view here.) Here's a woman who understands what I'm talking about. She was homeless. She started a business out of the trunk of her car. She is now a millionaire.

But the wealth doesn't stop there. Folks tend to forget when they're discussing this kind of thing, that those people who make all that money are doing good for more than just themselves. How many people do you figure someone like Dani Johnson or Dave Ramsey employ? Even more than that, these two millionaires in particular are in the business of teaching other people to do what they've done and get to where they are.

I should add a disclaimer here. I have never read any of Dani's books or watched any of her videos (other than the Secret Millionaire episode mentioned above), so I can't really say whether I would agree with her methods or not. On the other hand, I have read some of Dave's books and my husband and I took his FPU class and are working through his "baby steps" on the way to our own financial peace.

So, getting back to the issue at hand, what then should be done for the poor? I think the first basic thing is we need to teach people how to handle money. Is this a perfect method? Absolutely not. Is it a good one? I think so. The fact is that most people who have made a mess of their finances have done it because they either didn't know what they were doing or they didn't have the drive, discipline, or sense of personal responsibility to make the most of what they had. Handing these people money won't keep this from happening to them again. If anything, it will perpetuate the problem by teaching them that someone else will bail them out if they screw up.

If we can get as many as possible to be self-sufficient and take care of their own finances and build their own wealth, then the charity of those of us who enjoy helping others should be more than enough to help those special cases where more is needed.

That's how I see it anyway.


Jan said...

I knew we had a strong mental connection. I have a relative who continually messed up her life and was finally able to get on some kind of public assistance where she gets food stamps, low cost housing, a regular check and does no work.

She is quite content with her life except that she never has gasoline money, can't buy shoes for the kids, and those pesky four time a year inspections of her duplex are really annoying.

I'm afraid that educating her in how to manage money is not something anyone in power is doing. And I'm as guilty as anyone for helping her.

BunGirl said...

I know what you mean Jan. Often it's easier to "help" by just handing over the money that someone needs rather than taking the time to really help them understand things like budgeting and saving. Been there, done that!

I do highly recommend Ramsey's FPU though--it's a great "Money Basics 101" class that covers all the basics from getting out of debt to saving for retirement. And Dave makes the whole thing entertaining, which is hard to do when you're discussing things like mutual funds and tax incentives! The mister and I really enjoyed it, and even though we already knew most of the basic principles, it gave us a fresh reminder and provided some additional tips we had never thought of!

Andy D said...

I think it's one thing for private individuals or charities to help people in need by handing them money. It's a very different thing when the government does it. Charities and individuals get there money by earning it. Governments get there many by confiscating it.

I also think we need to reexamine our definition of "the poor". In the US, many "poor" people have it much better than anyone else in the world, and than poor people have had it in years past. That does not mean there aren't people in real need here in the US. It just means we need to be very focused on who we are discussing when we talk about "the poor".

Christian Woman said...

We have the tools to make our own pies. I loved this post.

Christian Tees

Anonymous said...

I bounced upon your blog via a link elsewhere. While I must say I enjoyed some of your posts (the PETA one was spot on, and this comes from a vegetarian!) I very strongly disagree with this one. I disagree that there should be classes ; hence I disagree with the very concept of poor people and rich people existing. I strongly believe in unity through equality, not as in being equal in lifestyle, religion, culture, appearance, believes, ... but having equal access to all basic rights which the state should provide for its citizens. This includes healthcare, education, housing, ... The state should provide this as I see them as basic rights for everyone, no matter how badly they screwed up in the past. A good health and education should not be privileges for the rich. I in fact support abolition of private clinics and schools because even if the gap in incomes is reduced until there is no upper class and lower class anymore, status symbols would replace those to keep a certain class struggle intact. So we need to nationalise all those and avoid status symbols replacing monetary differences. Of course this can not be done overnight, a first step would be nationalising whatever possible and then tax the rich (CEO's, board members, ...) at a rate attached to their income until the gap in income is reduced so drastically they're no longer a rich class. There should be minimum AND maximum wages, and those should apply to management level just as well as street cleaners. I am not saying everyone should earn exactly the same ; hard work should be rewarded. There is however room for nuances. A CEO may earn thrice the amount of his secretary, but it becomes exploitation if he earns 10x the amount. Those who work hard can afford the extra holiday and a nice spacious house, as opposed to the state-provided social housing for those who do little or no work. The difference is that the state is not letting everyone who is in the bottom class down, unlike the capitalist system where those in that situation rely on charity. Since charity is never a certainty, I do think it is only justified that the government enforces solidarity. In the end, the hard workers will still be rewarded, with that nuance that the basic rights such as health and education and housing will no longer be privileges but basics for all. The management level will still have a much more pleasant life, but without exploiting and without the others being left outside alone in the cold.

BunGirl said...

While the type of society you describe may seem to be a utopia in concept, in reality I don't believe such a thing is possible or would ever actually work, so I must respectfully disagree. As long as there are greedy people out there, they will step on others and do anything to have more, better, whatever. (For the record, I am not saying all rich people are greedy.) And as long as there are lazy people out there, they will not contribute to the society, forcing others to pay their way. (Again, for the record, I am not saying all poor people are lazy.)

Capitalism is not perfect, but is far more feasible than socialism, IMHO.

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