I have noticed that it has become very popular lately to refer to
A transfer of wealth makes one party better off and one party worse off. An example of a transfer of wealth would be redistributing money from Smith to Jones, such as what happens with many forms of taxation and corresponding government spending. In other words, one party gets something for nothing, and the other party gets nothing for something.
On the other hand, when Smith enters into a voluntary agreement with Jones to purchase corn in exchange for soybeans, for example, that is not a transfer of wealth; that is a trade. A trade makes both parties better off. One party sells excess corn for needed soybeans, the other party sells excess soybeans for needed corn.
When those “evil” Middle Easterners get our cash in exchange for the oil that we buy, what do they do with it? Do they spend it in their own country? No, because American dollars are not accepted by the hookers in
Well then, what do the Middle Easterners do with the money? They send those dollars back to us in exchange for ipods, Dell computers, Microsoft software and all the other goods and services that we make here is the
If T. Boone Pickens and Mitt Romney want to rail against transfers of wealth, they should take a look at government spending.