THE WELFARE ECONOMY BY T.S.KHANNA, May 29, 2012

                              

The Welfare Economy

By T.S. Khanna, May 29, 2012.

When our knowledge is not in order, the more of it we have the greater is our ignorance.  Our leaders are very knowledgeable but their knowledge is not in order.  They replace the principles of natural economy with controls of political economy.

Political economy has a limited use for a limited time in treating the ailing part of the national economy.  Its frequent or permanent use by politicians to secure or promote their own power works against the national economy.  Welfare economy is the outcome of political economy.

Not too long ago, some European countries took pride as  model welfare states.  Now they have an insolvent banking system with budget deficit beyond repair.

The USA, with high labor wages and high currency value, is an island in the ocean of much lower wages and currency value.  It is unable to produce and export quality goods at competitive prices.  Further, it is not showing collective political will to reverse its course from welfare entitlement programs, in spite of the astronomical budget deficit and 47 % of the population paying no taxes.  More and more, this island of economic rock is turning into economic sand.

Around the world, the struggle is growing between the wealth producing classes and the dependent classes. The population of dependent classes is growing in far greater proportions.

Welfare funds, according to present policies, serve as incentives to increase the population of the dependent classes.  Better use of the funds would be to limit their population; maintain them well with a condition reducing the welfare benefits with each child they produce.