Who Would Make the Best Use of $Billions – Bill Gates or US Govt?

by Darwin on August 17, 2010

As the saying goes, “No good deed goes unpunished”, with the recent announcement that several billionaires will end up donating much of their wealth to philanthropy before they die rather than passing it on to heirs (along with a substantial portion to US coffers by way of the estate tax), many prominent Europeans are coming out against this move and calling it “Undemocratic”.  So, people who are willing to give away BILLIONS of dollars in generational wealth rather than spend it or pass it all on to their heirs are being criticized.  Per a recent article in the Wall Street Journal, here’s some of the criticism:

“If the rich really wish to create a better world, they can sign another pledge: to pay their taxes on time and in full; to stop lobbying against taxation and regulation; to avoid creating monopolies; to give their employees better wages, pensions, job protection and working conditions; to make goods and use production methods that don’t kill or maim or damage the environment or make people ill.

“The rich make a choice: Would I rather donate or pay taxes? The donors are taking the place of the state. That’s unacceptable.”

“It would have been a greater deed on the part of Mr. Gates or Mr. Buffet if they had given the money to small communities in the US so that they can fulfill public duties.”

These are typical socialist responses frankly, which rely more on big government and high taxes to redistribute the wealth, as opposed to relying on smaller government to fund necessities and provide a protective web for a minority of citizens that have no other means to do so themselves.  The basic question becomes, who is the most efficient distributor of funds – Bill Gates or the US Government? Based on what I’ve seen from the Gates Foundation and other NGOs (note they like to make sure they’re clearly designated as NON-government organizations), they are much more efficient at identifying true problems, solutions and attacking a problem as opposed to burdening organizations with layers of bureaucracy.  With NGOs and private philanthropists, generally:

  • There’s no politics and special interest groups.
  • No health care reform with a special side deal for union members and special payoffs to entice a holdout senator to vote for a bill.
  • No layers of bureaucrats.
  • It’s basic decision-making.

While some would argue that money made by someone like Gates should stay in the US, etc., the counterargument could be that Us citizens were born with a huge gap in opportunities over people in the developing world.  And while some argue that he and his brethren should fork over their billions in wealth to the US government to disburse as they please, it’s as easy as pointing to how the government spends other peoples’ money with wanton abandon and no accountability.

Personally, I’d trust a philanthropist over Washington to distribute charitable fuding in an efficient and effective manner.

Who Would You Trust More?

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Weekend Reading – Hindenburg Omen Edition
August 22, 2010 at 11:18 am

{ 10 comments… read them below or add one }

1 Crystal in Ft Worth August 18, 2010 at 11:30 am

Bill Gates hands down-we’ve all seem how well the gov’t handles $ and how many millions of bride moneys have to be paid for a couple thousand to finally trickle to the general public.

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2 Jason August 18, 2010 at 1:48 pm

I definitely agree with you.

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3 Budgeting in the Fun Stuff August 18, 2010 at 3:34 pm

Bill Gates. There, that was easy. :-)

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4 Money Obedience August 19, 2010 at 12:33 pm

I agree. Bill Gates does a better job. But apparently some European billionaires disagree. They are not joining the Giving Pledge since they think the government should distribute the money.

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5 Money Obedience August 19, 2010 at 9:40 pm

I just saw this article about Druckenmiller which may interest you: http://www.investmentnews.com/article/20100818/FREE/100819903 Druckenmiller is also big into charity and seems to be rather efficient.

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6 Rich August 26, 2010 at 3:05 pm

It is not so much who I trust more; rather it is who I trust less – that would be our egocentric government. Plus Gates philanthropic actions are all legal within our existing avoiding tax code.

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7 Dividend Monk August 28, 2010 at 5:35 pm

Nice article. My bet’s on Gates over the government.

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8 Bret @ Hope to prosper August 29, 2010 at 2:33 pm

I just read an article on the Government’s handling of Huricane Katrina that answers this questions. Five years later, one quarter of the money still hasn’t made it to the victims. Huge contractors pocketed all of the relief funds and stiffed the subcontractors that did the work. Paperwork was held up for years and most of the houses were never rebuilt. The Government was a disaster almost as big as the hurricane.

How do you think The Gates Foundation or other NGOs would have handled it?

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9 1-million-dollar-blog.com September 7, 2010 at 8:20 am

Of course it is Bill Gates. Just wondering why these people complaining when the rich donating their money? They work hard for it. It is up to them what they want to do with their money.

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10 Chrisfs September 13, 2010 at 3:02 am

If you don’t think there are politics, bureaucracy and inefficiency in an NGO, then you are fooling yourself. It’s lazy thinking to just parrot back the myth of ineffective government. As Buffet and Gates would point out to you, the fact that they have billions to spend at all is because other participants (private participants) were extraordinarily bad at judging value, and /or taking something that could be created rather cheaply and though the application of a combination of marketing and copyright law (enforced by a government that “can’t do anything right”) resell in for a huge price.

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