Politicians like to designate three economic classes based on income levels of Americans as “poor,” “middle class,” and “wealthy.” These amorphous categories are made to order for those who want to select a class with whom to empathize in their campaigns to get themselves elected to public office. Such a strategy disturbs public harmony and cohesion and is, at its worst, divisive.
A more precise system of economic classification recognizes only two types of people. The first type is the individual who produces, or vitally facilitates production of a surplus of well-being for many people in addition to himself. The second type, however, absorbs more material wealth than he produces by drawing down on the surpluses of wealth producers. These two types are hereafter referred to as “wealth producers” and “wealth absorbers,” and within both categories are the poor, the middle class, and the wealthy.
Who are the wealth producers, and who are the wealth absorbers? The following exampled distinctions are strictly observational and do not imply aggrandizement for the producers or a rebuke for the absorbers. For example, the principal branches of our constitutional government are subsidized and organized to pass laws, administer justice and defend our country. Certain wealth absorbing services such as police, firefighters, and the military are socially esteemed and are deemed vital to satisfy the people’s need to feel secure. Teachers disseminate knowledge to help students prepare to achieve their goals.
Examples of wealth producers and their vital facilitators are those persons who are: Scientists, Engineers, Architects and designers, Contractors, Ranchers, Farmers, Manufacturers, Foresters, Food processors, Fishermen, Transporters, Inventors, Commercial distributors, Miners & drillers, Energy providers, Real estate developers, Maintainers of property and equipment, and those who provide investment capital to the above. Vital facilitators to wealth producers are: Communicators, Weather forecasters, Accountants, Corporate Lawyers, and Public health maintainers.
Examples of wealth absorbers are those persons who are: Under the age of 21, Medicare and Medicaid recipients, Unemployed, Government employees, Military personnel, Traders in wealth, Politicians, Clergy, Entitlement recipients, Trial Lawyers, Prisoners, Pensioners, Teachers and students, Elected officials, Welfare recipients, Entertainers, Money fund managers, Insurers, Stock brokers, Gamblers, Charity workers, Food stamp recipients, and Foreign recipients of American subsidies.
Although fuzzy edges exist within each stipulation, the examples on the lists are generally accurate. Simply stated, producers provide more wealth than they absorb, thereby enriching the economy. Absorbers consume more than they produce, thereby subtracting from the economy.
The loudly proclaimed goal of politicians is to get people back to work, to “create” jobs. This broad brush job creation mantra disregards the distinction between wealth producing and wealth absorbing jobs. Politicians, themselves absorbers, continue pouring tax money to the needlessly growing ranks of federal civilian government employees who produce little of material value and yet receive over two times the total average individual pay and benefits of wealth producing Americans. The federal executive branch had 1.875 million civilian full time equivalent employees when the financial crisis began in 2008, but that number has now risen to 2.7 million, a 44% increase. Federal, state and local government employee wealth absorbing jobs, for example, now number over twenty million, and the countless additional millions of wealth absorbers on the list are disastrously impoverishing American financial balances.
Statistics from the recent U.S. Census indicate the following. Of America’s total work force of approximately 140 million, 91 million (65%) produce or facilitate wealth production, but 49 million wage earners (35%) produce nothing. InAmerica’s population of 318 million the wealth of our 91 million producers is incapable of providing life support to the 227 million who absorb the wealth. The summation of these disturbing facts is that only 30% of American’s provide the money or national credit worthiness to support everyone.
When wealth producers fail to outrun the wealth drain by absorbers, our government steps in to borrow or print additional money to make up for the shortfall and provide the means to subsidize the overwhelming number of absorbers. Rather than cut back on this irresponsible squander lawmakers put drag anchors on wealth producers with regulations and taxes while extending massive subsidies to wealth absorbers in maneuvers officials call, “fair,” and “redistribution of wealth.”
While acting out on the socialist prejudices on which they are based, the wealth redistributors have established a colossal disregard for financial budget management and practical free market commerce. They evidence by a disposition, characteristic of their order, an adversity to wealth producers.
A successful and durable economic playbook calls for stimulus to producers among the poor, the wealthy, and the middle classes which will add to prosperity. Stimulus dispensed to absorbers subtracts from wealth by increasing their rate of absorption.
William S. Davis
Chairman of the Board