State intervention has been proven throughout history to be nothing but failure, it is a complete failure. There are several ways in which state intervention can take place, mainly three ways in which government can affect the economy. The first is through taxation and increasing public spending on public works. The second way is through regulations and controls in different sectors of the economy, and the third way is through monetary policies, quantitative easing and banking. These policies have proven themselves to be the largest hemophilia in the economy.
Taxes drain the economy and its capital that could be used to increase individual consumer satisfaction and create economic development through production, which is derived from the increase in living standards of all citizens, given that the higher the level of production, the lower the cost of products.
By taxing, intervening and regulating this flow of capital, the standard of living is prevented from rising to the levels that it would normally be able to reach in the absence of market regulations, although it is true that capital tends to accumulate disproportionately, the creation of more capital generates quality of life since the higher the profits of any one employer, the greater the profits for all its employees. Because productive people are the only ones who make money, they are the only ones from whom the government can get money. By intervening, this natural cycle of capital stops and ends up aggravating the system.
Some people feel that taxes are not really that bad, because the money taken from the "private sector" is spent by the "public sector", so that everything is compensated for, the idea remains that private sector owners generate a lot of profits that would be better invested in those they do not have. But while the government spends the tax money, it will never spend that legally plundered wealth, it always ends up in corruption or misinvestment of the funds, just as it would have been spent by its rightful owners: the victims who pay taxes. That money that could have been spent on greater consumer satisfaction or invested in production, creating more jobs and more products for consumers, can instead be used to subsidize the beneficiaries of social schemes, controlling their lives and, therefore, discouraging them from freeing themselves in the only way possible: through productive work. Or it can be used to build a dam whose value is so minimal for consumers and investors that it would never have been built without the government's intervention force. Government spending replaces the spending that people would incur if they were free with respect to their needs to maximize their happiness. In this way government spending distorts the market and damages the economy as much or more than taxes.
If taxes bleed the economy and government spending distorts it, government regulation amounts to a slow strangulation. If a regulation requires businessmen to do what the consumer's wishes would have led them to do anyway, it is unnecessary. If it forces businessmen to act against the wishes of the consumer (which it almost always does), it harms businessmen, frustrates the consumer, and weakens the economy; and the consumer, confused. The consumer is usually the target of propaganda to urge him to blame the businessman for his underdevelopment, i.e. the cause of my poverty is that the rich get richer while I get poorer. By forcing businessmen to act against the wishes of consumers, government regulation increases the cost of regulated products and therefore reduces the living standards of all and increases poverty. A very common case of controls is Venezuela, which has about 96% of its regulated and controlled economy, and it is not new that it is suffering the greatest crisis in its history with poverty and nutrition rates close to African countries.
Government regulation not only indirectly harms the poor by raising prices, but also directly by denying them the opportunity to move up and out of poverty. Suppose an immigrant who cannot get a decent job decides to support his family by making sandwiches and selling them to men who work on local construction sites. First, it would have to apply, in appropriate legal language and procedure, for licenses and permits from all government powers and departments that require them. You would probably need city and state licenses that would allow you to make sales. Then you would have to pass the inspections and certifications required by food and drug laws on a regular basis. If he could manage to do all this without going bankrupt or despairing, he would still have to face the problem of keeping extensive records that would allow city, state, and federal tax collectors to take some of his profits and make sure he paid his "fair share. This would require extensive knowledge of accounting, which he probably does not have. Suppose you decide to hire a friend, who knows a little about accounting, to keep your records, then you would have to comply with all the laws that harass other employers, including income tax and deductions from your employee's social security salary, sales tax, minimum wage laws and working conditions rules.
And as we have seen with so many barriers and impediments, it is not new that people who have the initiative to invest in a small business are so unlikely to improve their economic condition, in many cases this situation becomes worse to the point of leaving them in bankruptcy. Governments do not seek to improve the living conditions of citizens by preventing it and blaming those who generate wealth for the nation for their failures in administration and bad fiscal policy. A vicious cycle over and over again of which we seem not to understand, regulations, taxes and controls generate more poverty, do not improve the living conditions of the poor.
Posted from my blog with SteemPress : Here