The Cost of Socialism

National prosperity depends on national productivity and this is measured by GDP.  When economic incentives to increase production are discouraged by socialism, production always decreases, productivity declines, prices increase and our standard of living suffers.

When governments take over industries, lower productivity infects these industries and they generate cost increases because they have no incentive to improve. When these industries were in the private sector they innovated to continually reduce costs and increase productivity. As costs were lowered, the number of consumers increased and so did revenue. Consumers benefitted and industries prospered. Henry Ford’s innovation with the assembly line allowed him to double throughput and cut prices in half. He also doubled wages at Ford, so that Ford’s employees could afford to buy one of the cars they made. Ford did this at a time when he was allowed to do this. That kind of freedom is required to succeed in a private economy.

The freedom to succeed requires the freedom to economize and seek the highest value. This happens when you spend your own money. When you spend someone else’s money, you seek the highest value, but you ignore the costs and prices become unsustainable. This is why government, education and healthcare costs are unsustainable.

Countries with socialist programs and over-regulation have higher taxes, a lower standard of living and no path to lower taxes and improve the standard of living until the programs go bankrupt as they always have. It is far better to reduce these programs gradually to avoid becoming Venezuela.

The detailed case for increasing the private sector and decreasing the public sector of our economy is made at:

https://www.whitehouse.gov/wp-content/uploads/2018/10/The-Opportunity-Costs-of-Socialism.pdf

Norb Leahy, Dunwoody GA Tea Party Leader