The United States has long been known as the Land of Opportunity. Unlike other parts of the world where you might be doomed to a life of poverty unless you were born into the right family, anyone could go from poverty to middle class or even wealth in one generation in the US. This is because there were schools (traditional and trade schools) where individuals could learn skill regardless of their backgrounds, there were jobs where people were paid in relationship to the value they produced, there were opportunities for individuals to grow in their jobs and increase their skills and salaries, or even create their own job if desired, and there was the ability to invest and save so that wealth could grow over time. Sadly, the US has reached the tipping point where this may no longer be possible.
The large amount of wealth that exists in the US exists because most people in the past were productive. While there were a small number of people (percentage wise) who were physically or mentally unable to be productive, the large majority of people did something during the day that was useful to other people. (Note in a capitalist society, people receive income when they do something that someone else wants or needs, and therefore is willing to pay for. If people were receiving a paycheck, they must therefore have been doing something beneficial to others.) This has started to change, with more and more people not working and instead receiving welfare from the government.
It certainly is tempting to choose welfare over work. In many states the total amount of benefits available approaches the income one would receive from an entry-level or even mid-level job. Many would question the wisdom of getting up early, getting dressed, driving through rush-hour traffic, working at a job all day, and then fighting the commute home when you could make the same amount by simply walking to your mail box and pulling out a check.
The issue, however, is that as more and more people are getting a check (or an EBT card, home heating aid, disability aid, etc…) it means that fewer are actually producing things. Think about a situation where two families have farms in isolation. If both families are growing crops and raising animals, harvesting, going through the work of canning vegetables and smoking or salting meat, and doing what is needed to keep their farm implements and buildings in repair, it is very likely that both families will have more than enough food, clothing, and other necessities. If there are several families farming, it is also likely that they will be able to help a family who cannot support themselves – for example, one in which the husband died when he had four young children.
If one of the two families decides not to farm (or half of the families in a set of farms decide not to farm), however, and instead use the force of the government to take food and supplies from the families who are farming, there will be half as much food, clothing, and other items available for everyone. Items that might once have been in high supply, like corn, bacon, and flour, might suddenly be very scarce. The society has lost the output of the labor from those who were once working, and therefore there is less to go around.
The situation in the case of the two farming families would be very obvious. One could go and see that there was half as much grain as there was before the one family decided to stop farming. In a big society like the US, however, it will be less obvious. Things will just start to be in short supply. Prices will increase and many will likely blame the merchants or producers of price gouging and other practices, The fact is, however, that one cannot raise prices when there is an abundance. If someone tries to gouge there will be others who undercut him and prices will fall back down so long as there is a lot of production.
This situation can be reversed, but it will take individuals going against their instincts. People must work for what they need even though they can get it with no effort. People may need to take what they see as a pay cut when they return to work (or start working for the first time in their lives), getting less initially from working than they were getting on welfare, but knowing things will be better in the long run. Those who are working must no longer be blind to those who can work but who choose to sponge off of the system. While it should not be shameful to take help when you truly need it, those taking welfare who can produce for themselves should be embarrassed for doing so.
If you are on welfare and not taking a job because you’ll get less than you are receiving now, consider what your children think. It would be better for them to see their parents out doing something during the day instead of being paid for doing nothing when they are physically and mentally able to do better. After the welfare reform of the late 1990’s, many lifelong welfare recipients spoke about how they had pride for the first time int heir lives once they were forced to find a job and provide for society. We can become the land of opportunity again, but to do so we must bring back pride in work.
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Disclaimer: This blog is not meant to give financial planning advice, it gives information on a specific investment strategy and picking stocks. 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. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.