Founding Fathers may have weighed wealth distribution - letter by Richard Benert

Reproduced here for fair use and discussion purposes. My comments in bold.

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Mr. Benert's has been the subject of Mountain Man Trails before, and as is typical for him, he expounds on things he does not know about, arrogantly dismissing ideas he thinks he has refuted. 

His letter is pretty much a regurgitation of a recent Newsweek article, as well as heavily flawed PBS article lauding a book called "The Citizens Share." I probably should refute those instead of Mr. Benert, but he so perfect parrots Leftist talking points, it's probably more entertaining to pop his little balloon instead.

Read on:

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Nothing is more likely to raise the hackles of our friends on the right than to recommend any policy that smacks of “redistribution of wealth.” No matter how ridiculously rich the small minority of “hard workers” get and how stagnant remain the wages of what used to be the middle class, the free-market chorus sings the praises of unfettered accumulation, with little or no recognition of any need, let alone duty, to try to maintain some balance. (Here's his premise. He thinks that the wealth of the country needs to be balanced because of the "unfettered accumulation" of wealth by the rich while the average Joe's wages are stagnant. The staggering ignorance of this is breathtaking. Some inconvenient facts: The top 50% of wage earners pay 97% of all income taxes, the top 1% pay 39%. This percentage has been increasing over the years as high wage earners bear more and more of the income tax burden. 

Given this, there is most certainly no "unfettered accumulation." But this is a typical tactic of the Left. They describe a situation that does not exist, in this case, "unfettered accumulation," in order to assert that something must be done right now to fix it. That is, nothing has been done in the past because the Left does not remember the past, or at least, they only remember the past in terms of the problems that existed. Therefore, the problem has never been addressed before, today is a new day, and so we must take action to solve this problem of "unfettered accumulation.") 

Perish the thought of forcing (Hmm, a slip of the pen. It is anathema for the Left to admit that people are being forced to do things, particularly via the tax system.) anyone with more to share (If they're forced, how can it be sharing?) with anyone with less. It’s not the American way. Witness Joe Balyeat’s recent attack (It's always an attack to disagree with a Leftist. I reproduced Joe Balyeat's column below. Read it for yourself. You'll look in vain for any sort of "attack" on anything.) on Obamacare (Ooops, another slip of the pen. We can't call it "Obamacare.") for spreading “some peoples’ known high medical costs onto everyone else’s back.” Surely the Founding Fathers weep in their graves at how the once sturdy breed of self-sufficient Americans has fallen prey to the Nanny State.

Well, maybe not. Scholars (If you can call Newsweek writers scholars...) (on the East Coast, of course) have recently uncovered statements by our Founders that suggest that profit sharing may be the American way. (Here where Mr. Benert engages in some wholesale appropriation from the Newsweek article...) Madison, for example, said that government should prevent “an immoderate, and especially unmerited, accumulation of riches” by enacting laws which “reduce extreme wealth towards a state of mediocrity, and raise extreme indigents towards a state of comfort.” (This quote cannot be documented. A google search yields no documented sources, as well as quite a bit of discussion as to the genuineness of the quote. I especially doubt the either Newsweek or Mr. Benert accurately quoted Madison in context.)

Washington himself saw the new country as a place where “persons of industry and frugality, possessed of moderate capital” could live, where “it will not be less advantageous to the happiness of the lowest class of people, because of the equal distribution of property.” (Here we can find the letter in its entirety as written by Washington. As you might suspect, Washington is not advocating "forced sharing" of wealth. Here's the entire quote: 

"America, under an efficient government, will be the most favorable Country of any in the world for persons of industry and frugality, possessed of a moderate capital, to inhabit. It is also believed that it will not be less advantageous to the happiness of the lowest class of people because of the equal distribution of property the great plenty of unocupied lands, and the facility of procuring the means of subsistance. The scheme of purchasing a good tract of freehold estate and bringing out a number of ableboded men, indented for a certain time appears to be indisputably a rationale one."

My, my my. How context changes everything. No further comment needed.)

John Adams even foresaw how the rich would be adored by the not-so-rich. A business aristocracy would likely manipulate voters, he feared, and unless they were constrained, the “rich and proud” would possess power that “will destroy all the equality and liberty, with the consent and acclamations of the people themselves.” (Happily, we are once again able to locate the document in its entirety once again. Here Adams was discussing the problems of government, how they tend to start as one thing and end up changing into another. Adams shows how a variety of governments seem to always become corrupted and tyrannical. He concludes, "This is the rotation of governments, and this the order of nature, by which they are changed, transformed, and return to the same point of the circle."

In this context we see that Adams was warning of the dangers of too powerful government, how it tends towards corruption at the hands of the monarch, the rich, and the manipulators. Which of course is the government we have now. Absent from Adams' letter is any mention of redistributing wealth, heavy taxation of the rich, or giving money to the poor via redistributive taxation. The concept is completely absent from the writings of the Founders. Too bad, Mr. Benert.)
Darn socialist Founding Fathers! (See Blasi, Kruse, and Freeman, “The Citizen’s Share.”)


Richard Benert, Bozeman

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Guest column: Understanding Obamacare … and why it will fail

By Joe Balyeat, Guest Columnist



Since 1990, culminating with Obamacare, progressives progressively destroyed health insurance. How? By switching definitions. Old definition of insurance: current fixed, smaller payments to protect yourself from future potential unforeseen larger catastrophic events; based on actuarial equations – potential future loss x percentage probability of occurrence = cost of insurance. Example: $1 million catastrophe exposure x 1 percent probability = $10,000 insurance cost. The equation was a square deal, not a good or bad deal. New definition: a means to spread some people’s known high medical costs onto everyone else’s back.

This “cost redistribution” is achieved via three new mandates on all health insurance. 1. No pre-existing condition exclusions. Even people waiting until after they’re sick to buy insurance can’t be denied coverage. 2. Community rating. With few limited exceptions, unhealthy people can’t be charged more than healthy people. 3. All policies must cover all issues, i.e., a 60-year-old man’s policy must cover pregnancy, nuns’ policies must cover abortion, and nobody can choose which illnesses they want covered. These three cost socialization mandates are what Obama means when he says, “It’s better insurance”… But they’re also a three-pronged pitchfork prodding insurance costs skyward. How?

This turns insurance’s mathematical sense into nonsense. Pre-existing conditions are 100 percent probability. Follow my math: 100 percent x $1 million is … $1 million. Forcing these three redistribution mandates into everyone’s insurance not only eventually doubles cost, it dooms health insurance to destruction. Why? The “square deal” has become a bad deal. No one who understands financial math will buy insurance costing twice what the actuarial equation dictates, except the chronically sick. Because the healthy won’t voluntarily buy it, that’s precisely why Obamacare mandates everyone must buy insurance. Hence, Obamacare’s noncompliance penalties: in 2014, 1 percent x your income; 2015, 2 percent x your income; 2016, 2.5 percent x your income.

But Democrats who passed Obamacare unilaterally (with zero Republican votes) failed grasping simple math. Even the maximum penalties in 2014-2015 are far cheaper than mandate-stuffed Obamacare insurance, so many healthy people will simply opt out of Obamacare and pay penalties. Some will assume the risk of self-insurance; others will buy limited-coverage, high-deductible policies that fail Obamacare’s mandate-stuffed requirements. They’ll pay penalties while abstaining from Obamacare enrollment.

Others will avoid penalties entirely by using Obamacare’s 21 exemptions: Have you received eviction, utility shutoff, or foreclosure notices; health insurance cancellation, experienced domestic violence, disaster, family death, increased care expenses for ill relatives, bankruptcy, unpaid medical bills, or Medicaid rejection because Montana didn’t expand Medicaid? Are you homeless, low income, Indian, incarcerated, or an illegal immigrant, etc.? (All allowable exemptions with minimal or no documentation.)

Precisely because Obamacare insurance is cost socialization, it only works if many young/healthy people pay to cover the high cost payouts of the old/sick. PolitiFacts proclaimed Obama’s “If you like your current insurance you can keep it” the Lie of the Year. Why? Because it couldn’t be true. If he granted existing policies exemption from his three-pronged socialization mandate, and those policies coexisted alongside Obamacare, healthy people wouldn’t voluntarily switch to far higher-priced Obamacare. Conversely, if he forced old policies to include his expensive socialization mandates, insurance companies couldn’t continue offering these policies at previous lower prices. Only option: force cancellation of cheaper, pre-Obamacare policies, which is why Obama can’t relent despite intense criticism. I hand delivered my daughter-in-law her insurance cancellation notice recently enroute to delivering my “Surviving Obamacare 101” Workshop.

Once the young/healthy do the math, realize their options, and start abstaining, a rate death-spiral begins. Obamacare needs 38 percent of enrollees to be young, yet already young enrollment languishes 14 points below that. With fewer healthy paying in, to maintain Obamacare system solvency, rates on the remaining insured will skyrocket. By 2016, when Obamacare penalties escalate to 2.5 percent times your income, Obamacare insurance rates will have escalated even faster, such that financial comparisons will still leave many financially savvy, healthy people opting out regardless of penalty or exemption.

The taxpayer-financed Obamacare low-income subsidies (averaging $5,290 each) only exacerbate problems. Total cost of $1.1 trillion will weigh increasingly heavy on our children’s economic future, as the rate death-spiral drives Obamacare insurance rates skyward. Seventy-five percent of Obamacare’s 20 new tax increases hit the middle-class heavily, yet still fall far short of paying the tab.

Prognosis? Obamacare is on three-year life support.

Joe Balyeat, of Bozeman, is an accountant and former Montana legislator. He is the current state director of Americans for Prosperity.