Saturday, July 18, 2015

Punishments and Rewards

If someone comes to America illegally, they are increasingly provided with various government benefits.  These benefits, in many cases, are substantially better than those provided to ordinary American citizens.  Meanwhile, someone who wishes to come to America legally pays a substantial penalty to do so.  In fact, most who would like to come to America legally are denied that opportunity while money and benefits are showered on those who come illegally.

This strategy is in keeping with that used by US fiscal policy which rewards those who make little or no productive effort in society and heavily penalizes those who work hard, save and try to provide for their families.

Incentives matter.

If you want increased illegal immigration, then follow the current policies.  Many of those coming to the US illegally are coming for the sole purpose of blowing up Americans and blowing up American institutions.  Current policies guarantee that there will be many, many more of these folks and fewer and fewer of those with education, values of hard work and thrift and a desire to do things legally as opposed to illegally.

Similarly, as fiscal policy rewards those who don't make mortgage payments and penalizes those who do, there will be increased numbers of Americans who see no reason to make mortgage payments, pay off student loan debt or otherwise live up to obligations incurred when taking other people's money.

Similarly, those who do pay off mortgages and student debt will be penalized by higher tax rates and much more severe regulation -- as well as personal villification for arriving at "one-percenter" status.  It's perfectly okay to arrive at one-percenter status by selling political influence funded unknowingly by American taxpayers, as the Clintons and Gores have done, but it borders on criminal to produce a product or a service that benefits millions of Americans for which Americans are voluntarily willing to pay. Wallmart comes to mind.

Incentives matter and gradually the age-old incentive structure that produced economic prosperity is being dismantled plank by plank.  This process has been going on in Europe since early in the twentieth century.  In America, this process came later.  The Nixon, Clinton, Obama presidencies have dramatically accelerated the process of eliminating incentives that produce prosperity and replacing them with incentives to stop producing and start complaining.

Some wonder why economic growth has vanished in the western economies and why the middle class is losing ground.  There are a lot of reasons, but likely the most important are policies that encourage everyone to participate in a decline in economic prosperity by directing the incentives in ways that discourage innovation, work effort and thrift and encourage victim mentalities and litigation.  

No comments: