The state never helps… | El estado jamás ayuda…

Editorial, El Dia:

The state enjoys good press because it helps, provides assistance, distributes wealth, and seeks social justice, but these are just good intentions. The reality is very different because it ends up generating more poverty than before, discourages production, and above all, harms the neediest.

The harm of state aid is especially evident in times of crisis, recessions, or when economic imbalances occur. At that moment, the state launches with its good intentions to “save” the hardest hit, and the result is a deeper and more prolonged depression.

The money the state spends on providing assistance comes from taxation or borrowing, factors that reduce savings and investment by genuine producers to benefit parasitic spending by non-producers, negatively affecting society’s productivity.

While providing assistance (inefficient and costly), the state does not reduce other government expenditures (almost always increases them) and ends up reducing the “private purchasing power” that is crucial for economic recovery.

Spending on “welfare” obtained from taxpayers through higher taxes discourages businesses from investing their capital and generating more jobs. It is also detrimental to the labor market because it dissuades people from seeking reemployment, acquiring new skills, and improving the quality of the workforce, hindering economic recovery.

The welfare of a society is not provided by the state but by private investment, business creation, job generation, people’s savings, and that is impossible when governments extract money from society to give it to supposedly vulnerable sectors, which do not need handouts but tools to recover. Only businesses can offer these tools, capable of providing sustainable and productive jobs. Meanwhile, state aid always generates dependency, fosters bureaucracy and corruption, and discourages the competitiveness of human resources.

When the state does not help, it fosters an alliance between entrepreneurs and workers, assumes greater responsibility in times of crisis, whether by promoting savings, being more sensitive to market needs, or investing in personal skills for the future. In fact, the most prosperous societies often invest more in education during difficult times, and the most conscientious save money, limit their expenses, attitudes that are not in the state’s playbook, much less when it comes to a socialist regime or a welfare state, which are practically the same.

Demagogues often justify their actions by arguing that in times of crisis, the rich must help the poor. That’s why they take their money, raise their taxes, and supposedly distribute wealth among the needy. The consequences are disastrous, as evidenced by Cuba or Venezuela, where they wiped out the rich, everything ended up in the hands of the state, and the poor continue to multiply like mushrooms.

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