Many young people decide to support liberal candidates out of a desire to help the poor that they see around them, or even working class families. They hear about the homeless seeking a place out of the cold, a working mother needing to find childcare for her toddlers, or even students getting out of college and trying to pay back student loans. Suddenly the things Bernie Sanders says start to sound pretty good. Who wouldn’t want to have free, quality college for all and to just feed all of the hungry. Indeed, many young people have come to believe that if you elect Democrats, you’ll be taking care of the poor and less fortunate people.
But really Liberals don’t have a monopoly on helping people. There are many fiscal Conservatives who also want to help people and do so every day. (Note while “Liberal” and “Democrat” are synonymous today, “Conservative” and “Republican” are not, so I am speaking of fiscal conservatives, with the “fiscal” thrown in there to differentiate from religious Conservatives.) It is really a difference in the way you go about helping people.
The Liberal philosophy holds that government should control the production and distribution of money, so the best way to help the poor is to force people to give the money they have earned to the government and then have the government send it out as needed. This philosophy has the advantage of not needing to rely on the goodwill of individuals. One has no choice but to contribute since you’ll be thrown into jail if you do not. Enacting Liberal tax policies also give people the feeling that the poor are being taken care of, so they don’t need to take personal responsibility. I can step over this guy lying in the street and continue on with my latte since there are services available for him, so I don’t need to help.
The issues with the Liberal strategy are that it reduces the production of goods and services, it concentrates wealth and power which leads to corruption and fraud, and it relies upon a central group for management and distribution which often leads to waste, mismanagement, and bureaucracy. When you tax people based upon how much they make, you reduce their incentive to produce, which means there is less “stuff” to go around. If you provide things for people without their needing to produce anything, you also reduce the amount of things produced and thereby reduce the amount of wealth society has. Collecting money from everyone and having a central body give it out puts a lot of power in the hands of a few people, and that kind of situation attracts and creates people seeking power and money, leading to fraud and corruption.
Even if you have perfect, benevolent people doling out the money, it is difficult to customize allocations for each individual when you have a large population and only a few people making the decisions on how to give out the money. This results in a lot of money that is wasted, some individuals getting far more than they need and some getting far less. There is also very little capability to give money in a way that helps individuals – for example, giving training instead of cash, requiring individuals seek to find a job, or provision of funds in exchange for entering a rehab program to address substance abuse issues. It is far easier to just hand out a check even though many individuals have substance abuse issues or just very poor money management skills. Note that despite providing all sorts of food assistance for children in the form of food stamps and other financial assistance, many children still show up to school hungry so schools end up providing free breakfasts and lunches. The money that was provided to their parents was mismanaged. Because there will be fraud with such a system, new regulations and requirements are enacted, which creates layers or bureaucracy that make it difficult for those who need assistance to get any. This all makes the Liberal method of helping the poor very inefficient and very expensive.
The fiscal Conservative method of helping the poor relies more on helping people take care of themselves and also providing assistance privately when needed due to circumstances. Conservatives believe that the best way to help people get food and shelter is to have them find and keep a job. The way to earn enough to take care of a family and provide for retirement is to improve job skills and movie into progressively better jobs. The advantages of this method is that it creates a sustainable system that doesn’t rely on the availability of government funds (read, the work of other people), it causes the production of more goods and services since more people are working rather than relying on a few people to take care of many others, and it provides incentives for people to work and produce more since they receive a direct benefit.
The way this is done is by lowering the barriers to entry into the marketplace through reduced regulation and increase the amount of investment capital available through lower taxes on successful individuals. It is done by eliminating laws and regulations that result in lower employment, such as wage controls and requirements for unionization. It is also done by forcing those who are able to work to do so since many individuals will not work if given a choice, but the kind of life they could have would be infinitely better if they found a job and worked their way into better jobs. The amount that they can produce for themselves would be more than society would be able to provide, especially if a lot of people are not producing anything.
Fiscal Conservatives also believe in giving to take care of individuals who either cannot take care of themselves or to help get them to a place where they can. The difference is that they believe help should be private since there is less waste and more customization possible that way. Rather than have a check sent by a bureaucrat who could really care less how the money is used and just wants to make it to Friday, they would like to give to organizations that provide food and shelter for a time period but require people to start doing the things that will bring them to self-sufficiency. They believe that having thousands of small, local organizations with thousands of dollars each is better than having one huge organization with billions of dollars. At times, this would also take the form of people helping others directly rather than using any outside organization at all.
So, you don’t need to be politically Liberal to help others. Certainly, fiscal Conservatives can and do help many people. The difference is whether you believe it is necessary to force people to support others and if it is necessary to support most poor people for all of their lives, or if you believe in personal giving and requiring those who can support themselves to eventually get to the point where they can as a requirement for receiving assistance.
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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.
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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.
