I end up encountering these myths far too often when debating socialist-minded individuals. I’m putting these myths and my responses to them here so that I don’t have to rewrite these responses so many times later. I expect this won’t be the last of this sort of post I’ll be publishing. To prove that I’m not just beating up on straw men, this is the guy I was responding to this time.
Myth: When the economy grows, only the wealthy benefit.
Truth: If that were even close to true, then you wouldn’t see people below the poverty line talking on their cell phones, going to McDonald’s, driving it home to eat in their shared 2-bedroom apartments, and putting the leftovers in the refrigerator. Compare this to poverty in North Korea, or Venezuela, or India, or even France. There’s a stark contrast between these pictures. Now, which picture do you think compares more effectively with 19th century American poverty? Did the American poor have cell phones or cars or refrigerators or even apartments in the 19th century? Not at all. There are countless ways in which the growth of the American economy has made life easier and more prosperous for the poor over the last 100 years. Lower-class wages first began to grow in the US in the 1870s, right in the middle of the “Gilded Age,” and stopped only recently, due to the replacement of wages with “benefits” (health benefits, retirement benefits, etc.).
Now compare this story with the one Argentina has lived for the last century. Argentina was far wealthier than the US on a per capita basis in 1900. However, their Socialist Party was on the rise at that time, and soon succeeded in irreversibly converting Argentina into a devoutly socialist nation. So how are the Argentinian poor doing now? Would you rather be poor in Argentina or the US? Argentina or Australia? Argentina or Switzerland? Argentina or Singapore? Note that poverty-stricken Central Americans looking for a better life tend to migrate north, not south.
Myth: Australia/Germany/Canada/etc is more socialist than most countries because they have socialist health care.
Truth: You can’t just base your entire idea of how socialist a country is on one policy, and expect to be correct. At one time, the US was the least socialist country in the world, but that’s simply not true anymore. If you think the US represents the epitome of capitalism, your preconceptions are entirely subjective and out-of-date. If you want to determine which countries are actually “more socialist” and which are less, you need a more objective measure, like the economic freedom indices I’ve posted countless times.
You’ll find in those indices that both Australia and Canada are consistently less socialist than the US. Germany is more socialist, but not by much, and they’re certainly not faring as well as their less socialist neighbors.
So how can you even pretend that it’s these countries’ socialist elements that brought them prosperity, when in fact these are some of the most economically libertarian countries in the world? In reality, prosperity correlates strongly with economic freedom, with private property rights being the strongest driving force.
Myth: We had a recession 5 years ago, so it makes sense our economy would still be growing slowly.
Truth: Not even close to true. Anyone who has studied recessions throughout US history knows that a big recession usually means a big recovery. The only two exceptions to this rule come from the results of FDR’s New Deal politics, and the results of Obama’s New Deal-inspired concentrations of power. Jimmy Carter brought this country into a rather long series of recession, but it took the pro-liberty policies of Ronald Reagan to bring real recovery. The fact is, so long as we have Obama continuing to suppress the economy with further regulation and taxes, we will always be on the brink of a new recession. If we had elected Mitt Romney instead, and if he had followed through on his promises to reduce tax rates, repeal ObamaCare, and reduce the burden of socialist welfare programs (a huge “IF”), I can guarantee you there would have been a near-instantaneous economic boom.
Myth: The economic crisis was caused by capitalist greed.
Truth: I’ve debunked this one too many times before. The economic crisis was caused by government programs that encouraged risky lending for the sake of racial benefits.
Myth: Clinton’s higher tax rates balanced the budget.
Truth: At the time the budget was balanced, Clinton’s tax rates were bringing in 20.8% of the GDP in revenue. The truth is, Clinton’s tax rates could never balance Obama’s spending, because he’s been spending about 25% of the GDP every year he’s been in office. This is why libertarians say, “Sure, we can go back to Clinton-era tax rates- if we go back to Clinton-era spending and regulation.” To go back to those spending levels, we would need to cut projected spending over the next 10 years by more than $8 trillion, not the mere pittance of $400 billion that Obama has proposed, or the slightly higher pittance of $800 billion that the Republicans have been toying around with. Obama is not even close to serious about balancing the budget- even the Republicans need to step up their spending cuts game if they want to get anywhere close to taking America off the path to Greece. Either we deal with this through spending cuts now, or we deal with this through even larger spending cuts later. That much is inevitable.