The Rise Of Socialism
My rich dad often said, “The government tries to solve the problem of poor people by giving them money. Giving poor people money only creates more poor people.”
He also often said, “If we don’t improve our children’s financial education, they will not be able to solve the financial problems we have passed forward. If we do not solve these problems, the American Empire will come to an end. It’s up to your generation to solve the problem before this happens.”
Back then, when I was learning from my rich dad, he said we have a number of years to solve the problem…but I believe our time has run out.
Prophets of doom have always taken risks in terms of ridicule and humiliation. If you stand on a street corner holding up a sign that reads “The End Is Near,” passersby will laugh and heckle. People will say you’re like Chicken Little, running around telling people the sky is falling.
Yet after an economic crisis like one we’re experiencing now, people ask, “Why didn’t someone warn us?” or “What’s the government doing to save us?”
Well, if we’ve learned anything from 2020 it’s that when the economy is in trouble, the government will just step in by signing a trillion-dollar stimulus package. Small wonder the country has money problems.
The Dollar Is Toast
It’s no secret, the U.S. is in a lot of debt.
For many years, it was a reasonable percentage of our Gross Domestic Product, bumping around 50 to 60% of our GDP. But since 2007 it’s gone up dramatically, and as of April 2020, our debt is 122% of our GDP.
That’s right, we owe more than we make. It doesn’t take a genius to know that if you continually take on more debt than you have the income to pay for, you’re going to implode at some point. If the US defaults on its debt, the dollar will be toast.
Looking at history, that is how fascist dictators such as Hitler rose in power and, with him, the rise of the Nazi Party, the National Socialist German Workers’ Party. Hitler came to power following the collapse of the German Reichsmark, which led to hyperinflation. Hyperinflation led to “Wheelbarrow Money.” As the story goes, a person went to a store to buy some food, leaving his wheelbarrow—filled with money—outside. When he returned, someone had stolen his wheelbarrow, but left the money.
History has proven that printing fake money never ends in prosperity, and there’s evidence that printing fake money always ends in poverty for those who work for fake money.
Printing money has never produced sustainable prosperity. Historically, printing money has always ended in either depression, revolution, war, or all of the above.
- The Chinese were the ﬁrst to print paper money in AD 618. Marco Polo noticed Chinese paper money on his travels and the practice of printing paper money slowly spread to Europe.
- The Roman Empire, faced with rising debts, ﬁghting long-distance wars, diluted their gold and silver coins with base metals, such as nickel and tin.
- American colonists printed fake money to ﬁght the Revolutionary War, as did the South, printing the Confederate dollar to ﬁght the Civil War.
- Germany printed trillions in fake money in the 1920s. Printing fake money led to World War II, the rise of Adolf Hitler, and the slaughter of millions of Jews and other innocents.
- Zimbabwe, once the breadbasket of Africa, became the basket case of Africa after the leaders began printing money in the 2000s.
- Venezuela is one of the richest oil countries in the world. Yet, Venezuela is on the verge of bankruptcy and revolution, yet continues to print fake money.
Advocates of centrally planned economies believe central authorities and economic planning is consistent with socialist and communist systems. Capitalism is a market-driven economy in which market forces shape society and life. Socialism is characterized by state ownership of businesses and services. Central planning is used to attempt to make society more equitable.
In The Creature from Jekyll Island, G. Edward Griffin boldly states that the purpose of the “Creature” is Marxist communism. He writes, “the spirit of the American people is too strong. Before Marxist communism can take over Americans, the American spirit must be broke. The way to break the American spirit is to make Americans poor.”
These words ring true for me, which is why today’s gap between the rich and everyone else is troubling and dangerous. Once Americans are poor, their capitalist spirit can be broken, opening the door for socialism and communism.
Socialism is rising in popularity on American college campuses. Many of the hippies from the Vietnam War era grew up and became teachers. Columbia University housed the College of Marxist Studies. The 2020 Presidential Campaign was laced with socialist-communist ideals, free education, free health care, free childcare, free food, and UBI (Universal Basic Income).
Universal Basic Income
Today there is a lot of talk about UBI, and R. Buckminster Fuller predicted that this would happen—that people would be paid not to work. As I said above, 2020 Presidential campaigns touted socialist agendas, such as free education, free medical, free housing, and on and on. The question that few seek to address is, in my view, the most important question is: Who is going to pay for it?
Rather than the Federal Reserve Bank printing money and giving the money to the banks, many socialists and the millennial generation want the Fed and the government to print money and give it directly to the people.
Of course, when asked how the U.S. will pay for this world of free, the answer is “Tax the rich”—aka The Robin Hood Theory of business.
As my good friend Bert Dohmen says, “When stimulus programs fail, the last resort with be UBI.”
What Does It All Mean?
Citizens have faced many challenges over the past year, and though I don’t have a crystal ball, I can assure you that many other challenges will come.
Through each challenge, we have an option to either give up more freedoms and pass more blame or to embrace the risk that comes with freedom and take on the mantle of personal responsibility.
This is true in life and in finances. At Rich Dad, we’ve always preached that the fundamental difference between those who thrive and those who struggle is the spirit of personal responsibility.
Financial freedom is achieved by taking the small risk of financial education, challenging the status quo rules of money, and taking the risk to put that financial education into practice. And while it is a risk to think differently and to put your knowledge into practice—it is a much smaller risk than giving up your freedom to think for yourself and trusting others to take care of you.
Editor, Rich Dad Poor Dad Daily