- Dec 18, 2011
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We keep hearing the left sound the alarms about income inequality. When you look closely at the problem, you realize that, like many things, the left has systematically created or worsened this problem just so they could advance their agenda by introducing "solutions" that take us even farther left. You don't help people by discouraging them to do more for themselves, you merely make them more dependent on you. And that is exactly what the left has been doing. It's also becoming less advantageous for some to work. Many middle class families had two adults working full time. Not so now. Between many small businesses being destroyed and taxes punishing that middle class income, it's better for many to settle for one income. Removing the rungs on the ladder to success only serves to further the divide between high and low income. When you cut out the middle income earners, that divide appears even greater. I think this is all a carefully conceived plan to create more dependent Dem voters. And it's working. There is so much ignorance out there and few stop to ask what caused some problems.
"Money matters, but so do other policies, such as the long, historic sweep of the expanding welfare state. In 1968, government transfer payments totaled $53 billion or roughly 7% of personal income. By 2014, these had climbed to $2.5 trillion—about 17% of personal income. Despite the redistribution of a sixth of all income, inequality measured by all three of the Census Bureau’s indexes is far higher today than in 1968.
Transfer payments under Mr. Obama increased by $560 billion. By contrast private-sector wages and salaries grew by $1.1 trillion. So for every $2 in extra wages, about $1 was paid out in extra transfer payments—lowering the relative reward to work. Forty-five million people received food stamps in mid-2015, an increase of 46% since the end of 2008. Similarly, 71.6 million individuals were enrolled in Medicaid and the Children’s Health Insurance Program, an increase of 13.3 million since October 2013.
In 2008, during the deepest recession in 75 years, 13.2% of Americans lived below the government’s official poverty line. The Great Recession officially ended in June 2009, but in 2014, after five years of economic expansion, 14.8% of Americans were still in poverty. The economy was better, and there were a lot more handouts, but still poverty rose.
The structure of American households shows how this happened. From 2008 through 2014, the most recent year for which we have data, the number of two-earner households declined. These two-earner households have become the backbone of the American middle class.
Research by the Hamilton Project and http://www.ntanet.org/NTJ/65/4/ntj-v65n04p759-82-how-marginal-tax-rates.pdftheUrban Institute show that when families with children making between $20,000 and $50,000 attempt to have a second earner go back to work, the effective tax rate on the extra earnings—including lost government benefits such as food stamps, the earned-income tax credit, and medical support payments—is between 50% and 80%. This phaseout of the ever increasing array of benefits has created a "working-class trap" instead of a "poverty trap" that is increasing inequality and keeping the income of these households lower than they might otherwise be.
While the number of two-earner households declined during the first six years of the Obama presidency, the number of single-earner households rose by 2.6 million and the number of households with no earners rose by almost five million. In other words, two thirds of the increase in the number of families under Mr. Obama was accounted for by households with no one working. This is the reason the middle class has shrunk, and the reason inequality has increased. And unless we increase the number of people wanting to work and the number of jobs through economic growth, inequality will only increase.
It may not be Democrats' fault that the family is breaking down - that more people are having children out of wedock and doing other things that put them at an economic disadvantage - but it is their fault they keep subsidizing these behaviors with counterproductive public policy.
When you subsidize something, you get more of it, and all the transfer payments Democrats insist on making from producers to non-producers have two very destructive effects: 1. The lessen the urgency to either get a job or get a better one; 2. They reinforce the cultural message that you're not entirely responsible for taking care of your own needs.
I don't care how much liberals insist that doesn't disincentivize work. It does. They're no way it can possibly not. Human nature allows for no other possibility. And what Lindsey demonstrates in his piece proves that it has that effect.
Think about it like this: Let's say you've spent many years in the workforce and you've always been gainfully employed. One day, a liberal comes along and takes all your money away from you and gives it to someone who has never worked - and gets you fired from your job. But nothing else changes. You still know how to work. You still have the same experience. You still have the same skills and good habits. And the person who was given your money still lacks all that.
Fast forward five years: What do you think are the chances you're back on your feet and he's back where he was before the wealth transfer? Pretty strong, right? Because even though you were dealt a blow and he got a momentary windfall, you still know the right things to do and he still doesn't.
That's what wealth transfers on a massive scale do. The same people end up doing well in the end, and the same people end up doing poorly, but the ones who do poorly are given a false sense of security that they don't have so much to worry about because someone else is going to take care of them. In the end, they put less effort than they otherwise would have into improving their situations - and it's the fault of the people who claim they want to help them."
http://www.caintv.com/lawrence-lindsey-explains-how
"Money matters, but so do other policies, such as the long, historic sweep of the expanding welfare state. In 1968, government transfer payments totaled $53 billion or roughly 7% of personal income. By 2014, these had climbed to $2.5 trillion—about 17% of personal income. Despite the redistribution of a sixth of all income, inequality measured by all three of the Census Bureau’s indexes is far higher today than in 1968.
Transfer payments under Mr. Obama increased by $560 billion. By contrast private-sector wages and salaries grew by $1.1 trillion. So for every $2 in extra wages, about $1 was paid out in extra transfer payments—lowering the relative reward to work. Forty-five million people received food stamps in mid-2015, an increase of 46% since the end of 2008. Similarly, 71.6 million individuals were enrolled in Medicaid and the Children’s Health Insurance Program, an increase of 13.3 million since October 2013.
In 2008, during the deepest recession in 75 years, 13.2% of Americans lived below the government’s official poverty line. The Great Recession officially ended in June 2009, but in 2014, after five years of economic expansion, 14.8% of Americans were still in poverty. The economy was better, and there were a lot more handouts, but still poverty rose.
The structure of American households shows how this happened. From 2008 through 2014, the most recent year for which we have data, the number of two-earner households declined. These two-earner households have become the backbone of the American middle class.
Research by the Hamilton Project and http://www.ntanet.org/NTJ/65/4/ntj-v65n04p759-82-how-marginal-tax-rates.pdftheUrban Institute show that when families with children making between $20,000 and $50,000 attempt to have a second earner go back to work, the effective tax rate on the extra earnings—including lost government benefits such as food stamps, the earned-income tax credit, and medical support payments—is between 50% and 80%. This phaseout of the ever increasing array of benefits has created a "working-class trap" instead of a "poverty trap" that is increasing inequality and keeping the income of these households lower than they might otherwise be.
While the number of two-earner households declined during the first six years of the Obama presidency, the number of single-earner households rose by 2.6 million and the number of households with no earners rose by almost five million. In other words, two thirds of the increase in the number of families under Mr. Obama was accounted for by households with no one working. This is the reason the middle class has shrunk, and the reason inequality has increased. And unless we increase the number of people wanting to work and the number of jobs through economic growth, inequality will only increase.
It may not be Democrats' fault that the family is breaking down - that more people are having children out of wedock and doing other things that put them at an economic disadvantage - but it is their fault they keep subsidizing these behaviors with counterproductive public policy.
When you subsidize something, you get more of it, and all the transfer payments Democrats insist on making from producers to non-producers have two very destructive effects: 1. The lessen the urgency to either get a job or get a better one; 2. They reinforce the cultural message that you're not entirely responsible for taking care of your own needs.
I don't care how much liberals insist that doesn't disincentivize work. It does. They're no way it can possibly not. Human nature allows for no other possibility. And what Lindsey demonstrates in his piece proves that it has that effect.
Think about it like this: Let's say you've spent many years in the workforce and you've always been gainfully employed. One day, a liberal comes along and takes all your money away from you and gives it to someone who has never worked - and gets you fired from your job. But nothing else changes. You still know how to work. You still have the same experience. You still have the same skills and good habits. And the person who was given your money still lacks all that.
Fast forward five years: What do you think are the chances you're back on your feet and he's back where he was before the wealth transfer? Pretty strong, right? Because even though you were dealt a blow and he got a momentary windfall, you still know the right things to do and he still doesn't.
That's what wealth transfers on a massive scale do. The same people end up doing well in the end, and the same people end up doing poorly, but the ones who do poorly are given a false sense of security that they don't have so much to worry about because someone else is going to take care of them. In the end, they put less effort than they otherwise would have into improving their situations - and it's the fault of the people who claim they want to help them."
http://www.caintv.com/lawrence-lindsey-explains-how
