The False Promise of Democratic Socialism

25 Jan 1983, Braddock, Pennsylvania, USA --- Braddock, Pennsylvania: Unemployment picture. People line up to get bags of food at a food bank for unemployed steelworkers recently. --- Image by © Bettmann/CORBIS

The promise of democratic socialism is a free and easy life; the reality is a painful one. That promise is based on the false narrative that democratic socialist governments reduce income inequality by raising the living standards of people at the lower end of the scale, at no cost to them; all costs are covered by increased taxes levied on the super wealthy, people who are deemed to have “more money than they need.

But the reality is that are never enough wealthy people to cover the costs of “free” healthcare, “free” college, or any other national give-away program. (It Is Arithmetically Impossible to Fund The Progessive Agenda by Taxing the Rich) Consequently, income inequality is reduced by raising taxes across the board, thereby making everyone poorer.

Yet another reality of democratic socialism is that income inequality typically isn’t reduced, wealth is simply shifted from those who earned financial success to those who gained political power. In these instances, the bureaucrat class becomes the dictator of income distribution while those who were the primary targets of increased taxation strive to relocate to a country with less burdensome taxation, or achieve the political power needed to reduce their tax burden.

Robbing from the Rich

In countries that have successfully reduced income inequality through the use of taxation to redistribute wealth, the robbing from the rich and giving to the poor paradigm has proven unsustainable. According to an Organization for Economic Cooperation and Development (OECD) report, Sweden, often hailed as a paragon of democratic socialism, “still belongs to the group of most equal OECD countries, despite a rapid surge of income inequality since the early 1990s.”

Democratic Socialists also hail Denmark as a shining example of “tax the rich, feed the poor”. Yet, Denmark in fact taxes the poor to feed the poor. According to an article published by the Acton Institute, “The government confiscates more than half of virtually all incomes. Low-income Danes pay an effective marginal tax rate of 56 percent; the middle class pay 57 percent.” That’s in addition to a 25% Value Added Tax that is collected on every item sold, and an 8100 krone ( $1,200) per year) ownership tax on pickup trucks.

Like traditional socialism, democratic socialism, is akin to a monarchy with wealth being redistributed through burdensome taxation. As history demonstrates, ultimately, it doesn’t matter whether monarchs or elected officials are confiscating their money, citizens revolt, either through violence, legislation, relocation or deception.

“Ah, but you’re wrong”, is the rallying cry of democratic socialists who claim that democratic socialism is a completely different animal than traditional socialism. “Socialism is based on an all-powerful government bureaucracy. We believe that the workers and consumers who are affected by economic institutions should own and control them.” Yet the Democratic Socialists of America (DSA) web site states, “While the large concentrations of capital in industries such as energy and steel may necessitate some form of state ownership, many consumer-goods industries might be best run as cooperatives.”

Different Mechanisms, Same Goals

Clearly, although the mechanisms of socialism and democratic socialism may be different, the end goals are the same, increased taxation and a government take-over or control of private businesses. Confiscation is the only way private industries can come under state control or be run by cooperatives. In the non-government world, such confiscation would be called theft. Aside from the resulting inefficiency when government wrests control from the people who founded and invested in private corporations, such actions effectively kill the entrepreneurial spirit.

They also kill any viable retirement options other than living on a government pension. The same “evil corporations” that enable executives and shareholders to become wealthy also provide exceptional incomes to holders of privately managed 401K and individual retirement accounts. With private corporation ownership transferred to the state or cooperatives, retirement income opportunities other than state pensions will be minimized and ultimately eliminated.

At its core, democratic socialism is nothing more than a deceptive scheme to bring a warm and fuzzy feel to government control of industry, and most aspects of life. The promised benefits of “social ownership” will be short-lived, if they materialize at all, and ultimately, as the pain of socialism materializes, democratic socialism in the United States of America will crash and burn with the same intensity as a race car slamming the wall at Daytona.

Northern Europe is Not the United States

The examples of Northern European countries that operate under democratic socialist governments don’t relate to the United States, a nation which began, still exists and thrives as an alternative to life in other countries. For those other nations, most of which were formerly monarchies or dictatorships, democratic socialism is nothing more than the lesser of evils. Yet even under the lesser of evils, these countries at best deliver an economic engine that limps along on a few cylinders, while the U.S. engine blasts along on all eight.

The success and attractiveness of the United States of America is largely the result of the economic opportunities guaranteed by its Constitution and inherent in its capitalist system. For hundreds of years, immigrants have come to this country to escape the chains of monarchies, dictatorships and democratic socialism. Creating those chains where they don’t exist is not only a step in the wrong direction, it’s a recipe for financial pain at all income levels.

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