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ICFE eNEWS #16-17 - June 23rd 2016

If I Don't Have It, Neither Should You!

By Jim Garnett, a/k/a Ask Mr.G, a member of the ICFE's Board of Educational Advisors

Here's some advice for the "income inequality" and "wealth redistribution" crowd.

This column from the Des Moines Register's "Two-Cent's Worth" caught my eye (and my ire) the other day. Thought I'd share it with you:

"I make $40,000 a year. A flat tax of 5% makes me pay $2000, but I need every penny of that. Someone making a $1,000,000 a year gets to keep $950,000. They don't need all that!" (Paycheck-to-Paycheck, Des Moines Register, June 9, 2016).

Keep that thought in mind as you consider Kindergartener Sarah Jones. She raises her little hand and says, "Teacher, it's not fair that Julie has a box of 152 crayons while I have a box of only 36! She doesn't need all those!"

Do you see any similarities between the two situations? You should, because they convey basically the same idea: "If I don't have it, neither should you!" Both attitudes begin with a lack of appreciation that turns into jealousy because someone else has more. Neither attitude is desirous for a child or an adult. It is not a childlike attitude; it is a childish attitude.

Little Sarah is a child and will hopefully learn to appreciate what she has and quit complaining about others who have what she doesn't have. As she matures, she hopefully will learn that if what she has is not enough to satisfy her, she should find an honorable way to get more.

Mr. Paycheck, on the other hand, is a much sadder situation, in that, as an adult, he is embracing an attitude that he would never desire for one of his children. The implication in his remark is that the Government ought to "level the playing field" and "tax away" the millionaire's excess income.

But consider some serious flaws in this thinking:
  • If the Government "taxes away" the other guy's excess, it won't give Mr. Paycheck a dime more than he already has. Making the other guy poorer will not make him richer!

  • It would not be enough to just tax the millionaire more, we would also need to "equalize" his assets. After all, he probably has more money in checking and savings, owns more stock, has a bigger house, has a nicer car, wears more expensive clothes, and eats at more expensive restaurants.

  • What do we do about all the people who make less than Mr. Paycheck? Those that make $20,000 will look at him just like he looks at the millionaire and desire his "excess" be taken away too.
Hey, I have a neat idea! What if people quit worrying about what someone else has that they don't, and just focus on themselves? Why don't they try to "equalize the wealth" by bringing their own wealth up instead of tearing someone else's wealth down? History substantiates the fact that the best vehicle for increasing one's status in life is through free-market Capitalism, not through some Socialistic "equalization" plan. How about if people quit squawking and just work harder and/or smarter until they have whatever it takes to satisfies them.

Milton Friedman, Nobel Memorial Prize recipient, hit the proverbial nail on the head when he penned: "A society that puts equality - in the sense of equality of outcome - ahead of freedom will end up with neither equality nor freedom. The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests."

Maybe the next time you hear someone spouting off about "income inequality" and "wealth redistribution," you could gently tell him about little Sarah Jones.
Ask Mr. G
Jim Garnett, The Debt Doctor
AskMrG Consulting, LLC
2216 SW 35th Street
Ankeny, IA 50023
515-577-1799
askmrg@yahoo.com
AskMrG.com

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Sent by:

Paul S. Richard
President - Executive Director
Institute of Consumer Financial Education (ICFE)

About the ICFE:

The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation).  The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely. 
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.

The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org).  CASDRAP disbanded in 2010, shortly after the web site project was completed.  In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.

The ICFE is also an on-line help for consumers who spend too much.  ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.

Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org.  Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G,  a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.

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