Raymond Jewell: [00:00] Capitalism versus socialism. You tell the difference. Stay tuned.
Announcer: [00:09] From Philadelphia, the home of the Liberty Bell, Financial Freedom Radio starts now. Here’s your host, Raymond Jewell!
Raymond Jewell: [00:19] Thank you for tuning in to Financial Freedom Radio. My name is Raymond Jewell and I’m gonna be your host for however long it takes to get this message out. What are you laughing at?
Steve Bailey: [00:36] That was a very powerful intro.
Raymond Jewell: [00:39] I want to introduce our chief engineer, only engineer, producer, Steve. How are you doing?
Steve Bailey: [00:50] Hey there Dr. Ray how are you today?
Raymond Jewell: [00:52] I’m dynamite.
Steve Bailey: [00:55] I am excited for today’s show.
Raymond Jewell: [00:58] Really?
Steve Bailey: [00:58] Yes.
Raymond Jewell: [00:59] How excited are you?
Steve Bailey: [01:00] I’m very excited.This one’s going to be very polarizing. That’s for sure.
Raymond Jewell: [01:07] Yeah, we’re going to talk about socialism versus capitalism and let me tell you I hope people get a good idea as to the difference after this show. The question is there enough wealth in the world to pay for all the socialistic programs in the current election, all these programs these people are offering. Before we start, I want to ask you please like, share,
Steve Bailey: [01:37] And subscribe. Don’t forget subscribe.
Raymond Jewell: [01:38] And subscribe! That’s it subscribe to our podcast or video podcast. FinancialFreedomRadio.com. You can get the link or go to youtube.com/financialfreedomradio, yes. So let’s dig in. Oh also, I forgot if you want a printout financialfreedomradio.com you could get a printout of what we talked about. because we transcribe it every week for everyone. So we’ve already done the hi Steve so I’m done with that on my notes. So let’s define socialism and capitalism. Let’s take a look at a slide here. The main difference between capitalism and socialism is the extent of government intervention in the economy. A capitalistic economic system is characterized by private ownership of assets and business. A capitalistic society also relies on free markets to determine price, incomes, wealth, and distribution of goods. That’s a little techno speak there. Can you put that back up because I’m reading it? Thank you.
Steve Bailey: [02:58] My bad.
Raymond Jewell: [02:59] A socialistic economic system is characterized by greater government intervention into reallocating resources in a more egalitarian way. Now that’s capitalism versus socialism. You have to start with the macro first. You have to look at the macro of all of this and how it fits into our current world, the macro of all the free stuff. Let’s take a look at the second slide. Steve, you can bring that up please. So, let’s look at capitalism versus socialism. As we break it down, we talk about the macro in a definition, but let’s break it down into little micro pieces. In ownership assets owned by private firms, capitalism. Socialism assets owned by government / cooperatives. Equality, income determined by market forces. Redistribution of income. Prices determined by supply and demand where socialism is price controls. It means they tell you what you can charge. Efficiency, market incentives to encourage firms to cut cost, to be more efficient to make more money. Government-owned firms have fewer incentives to be efficient, like the government. How efficient is that? Total and competent in most of these government agencies. Taxes, limited taxes, limited government spending. Socialism, high progressive taxes and a progressive tax means they ratchet up as your income goes up. So they’re going to get their pound of flesh. The majority of your money, let’s put it that way. Higher spending on public services. Health care left a free market. Socialistic society healthcare provided by government free at point of use views. Crazy. Problems, inequality, market failure, and monopolies.Those are problems we deal with today. Socialism, inefficiency of state industry, less incentives. Advantages, dynamic economy and centers for innovation and economic growth. Promotion of equality. Attempt to overcome market failure. The government has their mitts in everything.
[05:43] Now let’s go back to health care. Health care was left to the free market. Years ago, you could buy health insurance across state lines. It was high competition until Blue Cross and Blue Shield came into play. How do I know that? Because I’m old.
Steve Bailey: [06:02] You’re not old. You always yell at me for call you old. You can’t call yourself old.
Raymond Jewell: [06:06] So what occurred was you could buy health insurance from a company. If you’re living in Virginia, you could buy health insurance from a company in Denver or in Colorado and they would all compete with each other and the prices were ridiculously low. Then, Blue Cross and Blue Shield came in as a nonprofit and all the states started to regulate the fact that you couldn’t go outside the state unless you’re with Blue Cross and that was regional. So when you have anything that’s operating in the free market, you’re always going to have a chance of keeping the price low. So the problem with liberals is that they assume first and then make all their decisions. Now, what do I mean by that? They will assume that there’s plenty of money and then they will offer all these free things, but the assumption may not be valid. So in this case, the assumption is not valid. The assumption is we don’t have a lot of money and we’re going to take a look at that. Assume there’s enough money to provide the promises and then start promising. No way, not enough money.
Steve Bailey: [07:35] We don’t have enough money today.
Raymond Jewell: [07:39] No. So let’s break it down here. You heard it here, folks. We’re gonna break it down. So let’s go to slide number one. What is the net worth of the top 1% of Americans? It’s 10 million dollars.
Steve Bailey: [07:57] Those are the 1%ers?
Raymond Jewell: [07:59] They’re the 1%er’s. The 10%ers, 1.1 million. So obviously you can tax the rich, but you’re not going to get enough money because they’re looking for fifty trillion dollars over ten years and that’s the last number I earn. We have a 32 trillion number that came out of a study. Next slide. What is the net worth of the top 5%? 2.5 million. If you’re there, you’re considered wealthy. That’s including your house, cars, everything. So if you’re going to tax people, is there enough money to pay for it? Let’s go to the next slide. How many Trillionaires are there in the world? There are currently no trillionaires alive today. The current known limit of personal wealth is about 80 billion. Next slide.
Steve Bailey: [09:08] Do we know who that eighty billion dollar person is?
Raymond Jewell: [09:11] No I don’t. Do you?
Steve Bailey: [09:13] No I don’t. I’m just curious.
Raymond Jewell: [09:15] Bill Gates is up there. I think Buffett’s up there.
Steve Bailey: [09:17] It’s gotta be some sheikh in Saudi Arabia country.
Raymond Jewell: [09:21] Yeah. You know Mexico’s got some pretty wealthy folks down there. To be in the top 10% you need a net worth of at least $65,000. So being a top 10% is $65,510. The last I heard, there was two trillion dollars of money in circulation in the U.S. If you’ve got a fifty trillion price tag on what you’re promising, then you’re not going to be able to tax enough on an annual basis to make it because you’re going to need 5 trillion dollars. Velocity of money and multiplier effect has to be very high in order to get enough money because we already have a certain amount of obligations. We’re currently spending over a trillion dollars a year, close to 2 trillion. In order to get money into the government, you’ve gotta tax the dollar multiple times because there’s not enough money in circulation to pay for the benefits, or if you did, nobody would have any money. So the money in circulation is about 2 trillion. I’ve heard anywhere from 1.2 trillion to 2 trillion. When you tax the dollar for example, let’s let’s break it down, very simple. I take a dollar and I go to my cleaners. I’ve already paid taxes on that dollar. The cleaners take in the dollar, they pay taxes on it, and they go out to eat at a restaurant. So the guy at the restaurant takes that money and they pay taxes, they go buy a car and so on through the economy and that drives revenue.
[11:25] So, if you’ve got two trillion dollars in circulation, I’ve heard 1.2 to 2. If you’ve got that much money in circulation, if your tax rate is 20%, you’re only going to get 20% every time you tax the dollar, keeping it very simple. So how many times do you have to tax that same dollar to get enough revenue to pay for all the free stuff? So the Liberals think that they can tax the dollar by raising taxes and get enough revenue. The higher you raise taxes, the less gets spent, and the less velocity you get on a dollar, the lower the taxes. The more people spend, the more revenue goes into the Treasury. It’s very simple. It’s economics 101. Oh maybe that’s 401, I don’t know.
Steve Bailey: [12:26] It makes sense. If you tax more people more, they have less to spend. So they don’t want to spend as much.
Raymond Jewell: [12:32] That’s right, they hoard it.
Steve Bailey: [12:35] Yeah exactly.
Raymond Jewell: [12:36] That’s what happened in the Obama years. So when we look at all these free things that Bernie Sanders is giving away, he’s moronic. Elizabeth Warren, even Biden’s giving away free stuff. There’s not enough money. Look at it this way, what are they doing? They’re out buying votes with our money. They’re taking our money and promising free stuff to get votes so that they can get elected and give away our money. So they’re out buying boats not with their money, but with our money. They’re promising all this free stuff and it’s never going to happen, or if it does we’re gonna go the way of some communist country. Bernie Sanders is a raging communist and he hasn’t got good economic sense. He can’t even tell you how he pays for this stuff. He can’t even tell you how much it costs. He doesn’t know. What did Nancy Pelosi say about Obama care, Steve? You’ll know what it is when it gets passed. Some crazy thing like that. Well you vote for him. Matter of fact, give them a shot and guess what happens, in four years we’ll be going the course of Venezuela. Same with Biden. He’s giving away free stuff. His Medicare for all, it’s impossible. It hadn’t worked in any other country on the planet. Why do they think it’s gonna work here? Steve, what’s the definition of insanity?
Steve Bailey: [14:19] Doing the same thing over and over again and expecting different results.
Raymond Jewell: [14:25] It’s insane, but yet they keep doing it. So when you look at the free Medicare for all, it just doesn’t work. It can’t work and there’s a study and I think we have it somewhere in your stack of stuff there, Steve. I think it’s slide number five. It’s a study done at a George Mason University. No that’s not it, but anyway.
Steve Bailey: [15:01] That’s all I got.
Raymond Jewell: [15:03] Go read that one. Sanders supports repeal of some of the tax deductions that he says benefit hedge funds and corporations. This is all micro. Somebody makes a lot of money and hits the news and we’re gonna go tax him. Years ago, in the medical field, it was called polypharmacy. You would take a drug and it would create a side effect. So then you’d go to another doctor and say I’ve got this problem and the doctor treats that with a drug and then that drug creates another side effect and then you go to another doctor because people go to different doctors and he keeps treating side effects. It’s taking the side effect from one drug and giving other drugs to treat it, polypharmacy. It’s done all the time, but the same thing with what’s going on here. When you have a situation in the economy and you address it, you don’t know what’s gonna happen in other areas. It’s called a ripple effect. You drop a boulder in a pond, you’re gonna have waves and they’re gonna keep coming and you don’t know what’s in them. When you do that in the government, they did it with Obamacare. They micro engineered Obamacare without understanding the macro impact on the whole economy and the whole government. So you can’t micro-engineer a problem unless you understand the macro first.
Steve Bailey: [16:36] Yep, amen.
Raymond Jewell: [16:37] Basic, basic economics that could be 203.
Steve Bailey: [16:42] Yeah but that’s macroeconomics and that takes a special breed of brain to understand that.
Raymond Jewell: [16:47] Thank you.
Steve Bailey: [16:50] I wasn’t stroking your ego, but okay we’ll let that go.
Raymond Jewell: [16:55] I am a macro economist. So let’s look at how crazy Bernie, doesn’t he look like a crazy man standing up there. Waving his finger and shouting and everything.
Steve Bailey: [17:07] He reminds me of Nixon.
Raymond Jewell: [17:11] Really?
Steve Bailey: [17:13] I just remember Nixon. “I am not a crook.”
Raymond Jewell: [17:19] Drop Bernie in some communist country somewhere and let him do what he’s doing. They’ll love him.
Steve Bailey: [17:26] He’ll just keep pointing at everyone.
Raymond Jewell: [17:30] That’s right. So we have a slide of Bernie Sanders’ website. I don’t want to pull it up. Yeah there it is. If you hover over these things, and I just took a screenshot of them, but you go there, BernieSanders.com/issues. When you hover over these things, these things are voluminous in all the things, like the green new deal. That thing alone actually that’s insane. When you read that, that defies logic. It doesn’t make any sense. College for all doesn’t make any sense. Medicare for all. When you hover over them and you read all the stuff they’re going to do, and I think there’s another slide that has even more. Expand social security, housing for all, honoring our commitment to veterans, free child care, justice and safety for all, eliminating medical debt, reinvestment. They’re buying your votes with our money and why people can’t see that, it’s slick. Other people have done it, but the major person that did it years ago was FDR. He had all these programs, CCC, WPA. All these things to get us out of the depression. Well what did you have to do to get the job? You had to become a member of the Democratic Party. So he was buying votes with our money. It’s great if you can do it, then you got people, like me, screaming about it.
[19:14] So let’s look at how this gun impact, business, taxes, and socialism. Owning a business is going to be difficult because it’s going to be stripped of its revenue. So all the home-based businesses and all the people that are trying to achieve their entrepreneurial nature and trying to elevate themselves, they’re going to get stripped away. Businesses are gonna leave the country. They were leaving when Obama was in. They left because of the high taxation. They started to leave under Bush and then Trump brought them back. I don’t care what you think about Donald Trump. He’s created the best economy that we’ve had for 50 years. Small home-based businesses would dry up, I talked about that. People need to pay attention when they say oh it can’t happen here.
[20:10] Let me read you a few places. Venezuela. Sound familiar? You’ve heard about that. That was one of the wealthiest countries on the planet and in 20 years it’s now one of the most impoverished countries on the planet. Russia, after World War 1 happened. North Korea, China, Iran, Cuba, after the Revolution. I’d been to Cuba and I’ve seen that firsthand. Crazy Bernie starts to say well, Castro’s not a bad guy. He educated people. He educated them how to read about communism. How about all the work camps, Bernie? How about all the firing squads, Bernie?
Steve Bailey: [21:04] I really need my Ray’s on fire sound effects today.
Raymond Jewell: [21:09] It’s crazy when you see that. This stuff, it makes no sense. It makes very little sense when you look at it through a macroeconomic grid.
Steve Bailey: [21:29] I think the problem, at least from what I see, is they’re good ideas.
Raymond Jewell: [21:33] Show yourself. Let people see you.
Steve Bailey: [21:36] Oh okay. I think, at least from my point of view, I think they’re good ideas, but at the end of the day, nothing is free. If you’re getting the services of a doctor for free that doctor is still having to pay their bills. So that money is, by definition, if you’re getting something for free, someone is working for you for nothing. It just, mathematically it just doesn’t add up.
Raymond Jewell: [22:03] Right, yeah. Because what occurs is people become bureaucrats and they want to work as little as they can because they know they’re going to get paid no matter what they do.
Steve Bailey: [22:23] Although small business owners stop making money because all the money they make goes to the government.
Raymond Jewell: [22:28] That’s right. No incentive. It’s been done and don’t be fooled by the word democratic socialism because let me tell you that’s a word out of Karl Marx and Marx was an economist, a socialistic economist communist. They used democratic socialism to woo people into this philosophy. So people say, “Well I’m democratic, so what? We take a few things.” We border on it all the time with all the free things we give people. We border on democratic socialism, but never has it been brought to the forefront as Bernie Sanders, crazy Bernie. He’s the one that is actually getting traction, but he’s getting it with mainly the kids because they’re taught this garbage in college, maybe a few adults that don’t know any better. But if people understand socialism and how hurtful it is to others, it just violates our premise that our country’s built on under God. Socialism, not under God. It’s under the dictator. Look at Venezuela. You can go pray all you want. I’m not besmirching religion, but our forefathers built this country so that it would be different from the others because they left countries that were controlling people to come here for freedom. We call this financial freedom radio. We’re talking about freedoms, and yes we’re political here, but a lot of our economic functions in our economy are political. So we need to understand how it’s going to hurt us or help us. Socialism will not help us. Capitalism will always help us and that’s what has caused us to excel over the years.
[20:49] So I want to thank you all for coming and listening and putting up with me. If you made it all the way through, that’s right, I’d like to have you please like, share, and subscribe to our youtube channel Financial Freedom Radio. Go to FinancialFreedomRadio.com and you will be able to see the links to the blog and all the other information that we have here. So I hope you folks have a great week and we’ll see you back here next week. FinancialFreedomRadio.com. Take care. God bless.
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