cbaesen
Apr 5, 2016
Research Papers / Peer Review- three areas of weakness? Presidential race in the US and economy. [3]
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Thank you for your feedback!
cbaesen
Mar 30, 2016
Research Papers / Peer Review- three areas of weakness? Presidential race in the US and economy. [3]
The presidential race has brought income inequality issue to the mainstream media. Political figures like Bernie sanders have claimed that the system is economic system rigged creating income inequality for minorities and women. He suggests that Wall Street is to blame for the problems and offers $18 trillion dollars in spending to correct the issues. Accepting that income inequality needs to be controlled by government will create couture of dependence thus, limiting potential and opportunities for the American people. The political class use Income inequality as a tool to gain political power and create class warfare. Despite the fact that there is a mounting consensus that income inequality is important, there is little understanding on how it impacts Americans. While it is clear that more research needs to be done on the topic it is also clear that Democrats with political agendas have hijacked the research that has been done in order to further policy goals, divide social classes and gain political power. They have used Income inequality as a tool to gain political power and create class warfare with no real intentions of fixing the problem. Income inequality existed long before we were ever divided between the 99% and the 1%.
There has always been income inequality in the United States. Economic inequality differs between societies, historical periods, economic structures and systems. To understand the socialist and communist movement in America it is critical to understand the works of Karl Marx's 1848 Communist Manifesto. Marx's work included elimination of private property the basis of capitalism and the application of all rents of land to a public purpose. Marx encouraged a heavy progressive or graduated income tax. Marx wanted to eliminate all rights of inheritance and centralize credit by means of a national bank.
According to the socialist party website its mission is to establish a radical democracy that places people's lives under their own control - a non-racist, classless, feminist socialist society... where working people own and control the means of production and distribution through democratically-controlled public agencies, cooperatives, or other collective groups. Where full employment is realized for everyone who wants to work; where workers have the right to form unions freely, and to strike and engage in other forms of job actions; and where the production of society is used for the benefit of all humanity, not for the private profit of a few. (The socialist party, 2016). I don't see much of a difference from a socialist and a communist statement. After reading this mission statement it is clear they are willing to go to any means to establish their agenda. They use words like radical democracy and job actions to establish the force in which they are willing to work. A Socialist tends to follow the works of Saul Alinsky who wrote the "Rules for Radicals" in 1971. (Liberty Fund, 2008) In his book he creates artificial conflict in support of his cause. Alinsky believed that the ends justified the means. Meaning it was ok to lie and cheat if you win in the end. This is the opposite of American principals.
Libertarian's and Capitalist are ok with inequality, as they believe it drives the system. Classical economist Milton Friedman believed that if government action were taken in pursuit of economic equality then political freedom would suffer. In a famous quote, he said "A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both." (Liberty Fund, 2008) In Studies in the Quantity Theory of Money, published in 1956, Friedman stated that in the long run, increased monetary growth increases prices but has little or no effect on output. In the short run, he argued, increases in money supply growth cause employment and output to increase, and decreases in money supply growth have the opposite effect. (Liberty Fund, 2008). This would be quite the opposite of the liberal, democrat and socialist view, whereas they believe taxing and government control creates equal distribution of income. In reality by taxing you reduce the money flow thus restricting spending and growth. More than half (55%) of Republicans said the economic system is fair to most people, but majorities of Democrats (75%) and independents (63%) said it favors the wealthy. And 61% of Democrats and 50% of independents said the gap was a very big problem, versus only 28% of Republicans. Four-in-ten Republicans termed the gap either a small problem (22%) or not a problem at all (18%). (DESILVER, 2013). A recent Pew poll showed the millennial under the age of 30 supported Bernie Sanders socialist agenda by 43%%, however, that same group was asked if the supported government managing the economy and 32% of the respondents agreed, opposed to 64% favored Capitalism. According the research when you explain what socialism really is. This shows that young adults really do not understand the social systems and are encouraged with talks of free stuff. In 2010, the New York Times conducted a survey and found that only 16% of millennial could explain that socialism is government ownership of the economy. As millennial age and start contributing to the economy they become less favorable of the socialist ideas. This is primarily because the realized that the free stuff is no longer free as they are taxed for the social programs.
Politicians have run campaigns on Income inequality yet after elected their policies have done little to improve the income inequality gap. In the last few years Barack Obama has attempted to change the subject of public dialogue from healthcare to income inequality, which he has dubbed "the defining challenge of our time." During Obama's 2013 state of the union speech his argument was that there is a lack of upward mobility and inequality for everyday Americans. He contends that the heart of our system is frayed and that this is a fundamental threat to the American dream. Obama reaffirms that no matter how hard you work the cards are stacked against you. This premise is the opposite of the American dream. American's shouldn't let anyone convince them that they are not capable of accomplishing anything on their own and therefore need someone to do it for them. When American's accept that premise, they are letting their government and society treat them as though they are too stupid or too childish to succeed in life.
Obama's true objective is to promote a divide between Americans by promising what government cannot and should not deliver an equal economic system. What Obama is talking about is socialism or worse communism when he claims that income inequality must be altered by more government intrusion into our lives. This is now the Democratic Party theme touted by Hillary Clinton and even more so by Bernie Sanders. Bernie Sanders is touting free college and health care. Hillary Clinton is moving far more to the left and speaking of socialized medicine, gun control and reduced college tuition. The promise of an easier life, less work and free stuff has drawn out many uneducated poor and young voters. Most lack historical or economic knowledge to understand the evils of communism and socialism. What Bernie sanders wont tell you is how much his programs will cost and who will pay for them. He touts a European system, however those systems are in systematic failure. Ultimately their lies will leave to voter disappointment when the promises are never delivered. The words of politicians often disappear after the votes are cast.
In Obama's Leftist America, the "American Dream" is impossible and therefore one should give up on trying to improve oneself. Once you accept this premise you can accept the conclusion that: First, Because the American Dream is impossible and people cannot earn or work towards improvement of oneself, but are in fact automatically entitled to an ever increasing level of comfort and means. And second, if anyone is more successful at improving him or herself than you, or has more wealth than you, their success is directly correlated to you having less than them, and somehow this prevents you from becoming successful. The truth is Income inequality is not a zero sum gain like liberals would like you to think. They would like you to believe that just because one person finds success it takes from another. In fact when one finds success it often leads to others enjoying the benefits. When Steve jobs took over apple he made millions. His ideas changed the way received information and conducted business. It improved the lives of people around the world. The same could be said about Mark Zuckerberg and countless others. Their success did not hinder others or take wealth away. Countless jobs and secondary products were developed because of their success and innovation.
Of course, Obama is right about one thing, only economic growth can provide the opportunity for Americans to increase their personal incomes, provide a choice of investments, and save for the future. However, his rhetoric is just talk, his assault on economic growth is far more damaging. In his first five years in office, economic growth has been historically slow. But he will have you believe it is the Republicans fault. He will have you believe that the ideology of the Republicans supports only the rich. Ted Cruz said it best. "Let me tell you now about the single biggest lie in politics: it is that Republicans are the party of the rich. What complete nonsense. Do you know that under President Obama, the top 1 percent, those millionaires and billionaires that the president loves to demagogue, the top 1 percent are currently earning the highest percentage of our national income since 1928? Listen, when the government expands its control of the economy, the rich do fine. Five years ago if you had a private jet your still flying the private jet. Who are the losers? Who are the people who are getting hammered by the Obama economy? It's the most vulnerable among us." Sen. Ted Cruz (R-Tex), speech in Iowa, October 26, 2013. Under President Obama's recovery, median American household income has fallen by $2,380 or 4.4 percent, after have already fallen by 1.8 percent during the recession, and there is a 4.5 million jobs gap between the Obama recovery and the average post 1960 average recovery. Under Reagan's recovery, household median income rose 2.1 percent by the end of his first term and grew for every demographic category for the rest of his presidency. Also, over the same comparable period, Reagan recovery would have produced seven million more jobs.
Since the recession officially ended, poor people and the middle class were hurt the most and opportunity stagnated. Under Obama millions of Americans are out of work and depend on government programs such as food stamps and unemployment compensation. According to the US census the 2013 median in real terms, 6.5 percent lower than the 2007 (the year before the most recent recession) median ($57,357) and 7.2 percent lower than the median household income peak ($57,843) that occurred in 1999. (Proctor, 2015). It is important to note that in 2014, 6.9 percent of workers aged 18 to 64 were in poverty. The poverty rate for those who worked full time, year round was only three percent, while the poverty rate for those working less than full time, year round was 15.9 percent. This shows that full time workers are far less likely to be in poverty also, 21% of those in poverty were 18 years or younger. This proves that income levels change with age. Young adults are far more likely to be in poverty than middle age adults from 18 to 64 (13.5%).
The inequality that Obama cites is the direct result of the catastrophe of his economic programs as well as a historic flood in federal regulations that harm economic growth. According to the U.S senate Budget committee October 18 2012 report welfare spending is the largest item in the federal budget. Not including entitlement programs like Medicare and social security the federal government spend over $1.03 trillion dollars. Over the last 30 years with an adjustment for inflation the budget for welfare programs has increased 374 percent. Subsequently, since 2008, the federal spending on these programs has increased by 32 percent. (Sessions, 2012) All while income inequality continues to widen. This shows that increasing the spending and programs does not help the issue. In fact it appears that it contributes significantly to the problem. The increased dependence on the government keeps politicians in power and holds citizens back from reaching their true potential.
To fully comprehend the growth in federal welfare expenditures you must look at the federal policy that has fortified growth in the welfare enrollment. The federal government has weakened welfare standards and rules. For example, spending on food stamps-the second-largest federal welfare program-has quadrupled since 2001, yet the USDA has a variety of programs and advertisements whose explicit and unmistakable goal is to expand enrollment to new record highs. (Sessions, 2012). This even includes an official partnership with the Mexican government to expand food stamp enrollment among foreign nationals. The agency has produced materials to train workers on how to overcome the "no" objection. In response to this a Ranking Member Senator Sessions has stated, "The sound policy, and the compassionate course, is not a drive to place the largest possible number of people on welfare support; instead, we should seek, whenever possible, to help our fellow Americans realize personal and financial independence." (Sessions, 2012). Even with the discourse of senator Sessions the Department of Homeland security has waived the legal requirement of those seeking admittance to the US not be welfare dependent. This shows the Obama's policies are not to reduce the welfare dependence and reduce poverty, but to create a dependence on the government to keep his party in political power.
The harsh truth is that most Americans are tired of the rhetoric. The liberals focus on the inequality not the stagnate wages. Most people don't care that someone else is making money they only care about their wages. The top 1% is just the scapegoat for most left leaning politicians. Working Americans are not getting ahead and this has been going on for years. Contrary to the politician's rhetoric it has nothing to do with the top 1% income earners. The reason is companies do not have to pay unskilled workers decent salaries because there is too much competition at that level. The increase in foreign workers continues to draw down wages. This increase is also a product of the reduced qualification for foreign immigrants. Workers that do not have a skill and are poorly educated never improve their standards of living. Most of those don't have the will or the means to relocate where the jobs are.
The solution to inequality is not big government giveaways that Bernie Sanders is selling his supporters; those are a myth. The Affordable Care Act (Obama care) is discouraging full-time employment. According to Gallup's payroll-to-population ratio, the proportion of the American population working full-time has dropped almost two percentage points in the last year to 43.8%. IF the payroll continues to drop, so does tax revenue. This creates a larger deficit, increased unemployment and increased dependence of welfare programs. Eighty-five percent of the projected growth in spending over the next decade is due to entitlement spending and interest on the debt. Washington spent nearly $3.5 trillion in 2014 while collecting nearly $3 trillion in revenues, resulting in a deficit of slightly less than half a trillion. In other words, 14 cents of every dollar that Washington spent in 2014 was borrowed. (Boccia, 2014). The pendulum has swung too far to the left and these programs will continue to weigh down the American system. This weight will eventually collapse the system causing wide spread financial losses and a major depression. The politicians will then find a way to blame the system on the rich and work to grab more power. This happened after the great depression when Roosevelt offered America the "New Deal." The new deal was a power grab for the government by introducing stimulus packages and regulations on wages. UCLA economists calculate that these policies drug the depression out 7 years longer than it should have lasted. But more damaging it created the belief that capitalism could not be trusted to correct a failing economy and government intervention would be needed. As of today the government has unleashed a series of quantitative easing in attempt to correct the sputtering economy. This easing will only increase inflation and poverty making it more difficult for Americans to survive without government assistance.
United states GDP growth is stuck at 2% with this growth we cannot grow our wages. In order to expand the growth we need to free up capital for the citizens and corporations. It is critical to reduce taxes across the board at every income level. After 1986 reform of the tax code we had 20 years of growth. Our current system Works against industry and innovation and is unfair. The current tax code is over 73,000 pages long; it takes an accountant to understand our system. Along wit the poor tax code we have crony capitalism and political favoritism that corrupts and weakens the system. The idea that higher income taxes on the wealthy will reduce income inequality is wrong. When the wealthy have free capital they invest and create jobs when it is taxed they do the opposite.
Liberals will tell you that higher taxes help reduce the income gap, however if you compare income inequality in pre tax dollars pre-tax the United States does better than European socialist economies like U.K and Sweden. These countries have heavy taxes to support the social programs. As shown by the Economist magazine, after taxes the U.S. and United Kingdom end up with almost exactly equal income distributions, the U.K. has a more progressive income tax system than the U.S. (meaning it collects a higher percentage from higher income people), but the U.K. has higher income inequality when measured on pre-tax income than the U.S. While Britain appears to be working harder to reduce income inequality through taxes than the U.S., pre-tax income inequality still exists. Similarly, Sweden, famous for its high taxes on the rich and supposedly more uniform economy, actually has just as much pre-tax income inequality as the U.S. (S.M, 2013)Wealthy people will find ways to shelter their money and use the tax code to avoid paying. Often the rich will use off shore accounts, deferred compensation or form shell companies to write of expenses. In reality, government can redistribute income through taxes and transfer payments, but the poor are only made better off as long as this continues. Without recurrent redistribution, these people would be just as unequal as before all the redistribution started. This process will never allow personal growth or removal of the government dependence.
Income inequality can only be overcome by improving our education system. Politicians need to stop stumping about making things equal and start talking about the facts. Low skilled workers need to learn a skill and understand how to conduct themselves in the market place. Schools need to be restructured, emphasizing basic educational skills and provide courses that are job targeted. In 2014, 28.9 percent of people aged 25 and older without a high school diploma were in poverty. The poverty rate for those with a high school diploma but with no college was 14.2 percent, while the poverty rate for those with some college but no degree was 10.2 percent. (Proctor, 2015) So what do we need to do? High Schools have to provide technical and trade school education. Remove the notion that success is only achieved by going to college. Improve basic math, reading and spelling in elementary and middle school. Parents need to have choices for poor performing schools. Voucher programs need to be available for all students and parents.
The states need to remove of the teachers unions from the schools. But the sad fact is Democrats will never support this idea, as the unions are the source of political donations. We also need to remove teacher tenure and implement a merit based pay structure. Teaches are paid far to little for the work that they do. With that said we should be able to eliminate teachers that do not perform. Teachers that perform would be paid higher and schools would look to recruit these teachers and pay them for their skills. Through voucher programs parents are given a choice and the means to send their children to high performing schools. Schools that underperform would be forced to improve or risk closure.
The simple truth is that in a free economy some people will always earn more money than others. Politicians would rather stump about a problem to gather support for an election that focus on the true issues. They can only win if there is an oppressor and oppressed. We have gone from celebrating success to vilifying those how have found financial success. Given a persons drive, during different stages of his or her life will earn much more than in other stages. It is therefore not clear that there is such a thing as a need for distribution of income, and currently income distribution hasn't set forth any meaningful improvement. Instead of conveying such criteria, politician's have generally been content to argue that income inequality is "increasing" or "widening" and have assumed that it goes without saying that such a trend, if true, would be bad. Both the belief that income inequality is increasing, and the assumption that any such increase must necessarily be bad, needs to be critically examined. The true question should be is our current system "rigged " to support the rich and powerful.
The presidential race has brought income inequality issue to the mainstream media. Political figures like Bernie sanders have claimed that the system is economic system rigged creating income inequality for minorities and women. He suggests that Wall Street is to blame for the problems and offers $18 trillion dollars in spending to correct the issues. Accepting that income inequality needs to be controlled by government will create couture of dependence thus, limiting potential and opportunities for the American people. The political class use Income inequality as a tool to gain political power and create class warfare. Despite the fact that there is a mounting consensus that income inequality is important, there is little understanding on how it impacts Americans. While it is clear that more research needs to be done on the topic it is also clear that Democrats with political agendas have hijacked the research that has been done in order to further policy goals, divide social classes and gain political power. They have used Income inequality as a tool to gain political power and create class warfare with no real intentions of fixing the problem. Income inequality existed long before we were ever divided between the 99% and the 1%.
There has always been income inequality in the United States. Economic inequality differs between societies, historical periods, economic structures and systems. To understand the socialist and communist movement in America it is critical to understand the works of Karl Marx's 1848 Communist Manifesto. Marx's work included elimination of private property the basis of capitalism and the application of all rents of land to a public purpose. Marx encouraged a heavy progressive or graduated income tax. Marx wanted to eliminate all rights of inheritance and centralize credit by means of a national bank.
According to the socialist party website its mission is to establish a radical democracy that places people's lives under their own control - a non-racist, classless, feminist socialist society... where working people own and control the means of production and distribution through democratically-controlled public agencies, cooperatives, or other collective groups. Where full employment is realized for everyone who wants to work; where workers have the right to form unions freely, and to strike and engage in other forms of job actions; and where the production of society is used for the benefit of all humanity, not for the private profit of a few. (The socialist party, 2016). I don't see much of a difference from a socialist and a communist statement. After reading this mission statement it is clear they are willing to go to any means to establish their agenda. They use words like radical democracy and job actions to establish the force in which they are willing to work. A Socialist tends to follow the works of Saul Alinsky who wrote the "Rules for Radicals" in 1971. (Liberty Fund, 2008) In his book he creates artificial conflict in support of his cause. Alinsky believed that the ends justified the means. Meaning it was ok to lie and cheat if you win in the end. This is the opposite of American principals.
Libertarian's and Capitalist are ok with inequality, as they believe it drives the system. Classical economist Milton Friedman believed that if government action were taken in pursuit of economic equality then political freedom would suffer. In a famous quote, he said "A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both." (Liberty Fund, 2008) In Studies in the Quantity Theory of Money, published in 1956, Friedman stated that in the long run, increased monetary growth increases prices but has little or no effect on output. In the short run, he argued, increases in money supply growth cause employment and output to increase, and decreases in money supply growth have the opposite effect. (Liberty Fund, 2008). This would be quite the opposite of the liberal, democrat and socialist view, whereas they believe taxing and government control creates equal distribution of income. In reality by taxing you reduce the money flow thus restricting spending and growth. More than half (55%) of Republicans said the economic system is fair to most people, but majorities of Democrats (75%) and independents (63%) said it favors the wealthy. And 61% of Democrats and 50% of independents said the gap was a very big problem, versus only 28% of Republicans. Four-in-ten Republicans termed the gap either a small problem (22%) or not a problem at all (18%). (DESILVER, 2013). A recent Pew poll showed the millennial under the age of 30 supported Bernie Sanders socialist agenda by 43%%, however, that same group was asked if the supported government managing the economy and 32% of the respondents agreed, opposed to 64% favored Capitalism. According the research when you explain what socialism really is. This shows that young adults really do not understand the social systems and are encouraged with talks of free stuff. In 2010, the New York Times conducted a survey and found that only 16% of millennial could explain that socialism is government ownership of the economy. As millennial age and start contributing to the economy they become less favorable of the socialist ideas. This is primarily because the realized that the free stuff is no longer free as they are taxed for the social programs.
Politicians have run campaigns on Income inequality yet after elected their policies have done little to improve the income inequality gap. In the last few years Barack Obama has attempted to change the subject of public dialogue from healthcare to income inequality, which he has dubbed "the defining challenge of our time." During Obama's 2013 state of the union speech his argument was that there is a lack of upward mobility and inequality for everyday Americans. He contends that the heart of our system is frayed and that this is a fundamental threat to the American dream. Obama reaffirms that no matter how hard you work the cards are stacked against you. This premise is the opposite of the American dream. American's shouldn't let anyone convince them that they are not capable of accomplishing anything on their own and therefore need someone to do it for them. When American's accept that premise, they are letting their government and society treat them as though they are too stupid or too childish to succeed in life.
Obama's true objective is to promote a divide between Americans by promising what government cannot and should not deliver an equal economic system. What Obama is talking about is socialism or worse communism when he claims that income inequality must be altered by more government intrusion into our lives. This is now the Democratic Party theme touted by Hillary Clinton and even more so by Bernie Sanders. Bernie Sanders is touting free college and health care. Hillary Clinton is moving far more to the left and speaking of socialized medicine, gun control and reduced college tuition. The promise of an easier life, less work and free stuff has drawn out many uneducated poor and young voters. Most lack historical or economic knowledge to understand the evils of communism and socialism. What Bernie sanders wont tell you is how much his programs will cost and who will pay for them. He touts a European system, however those systems are in systematic failure. Ultimately their lies will leave to voter disappointment when the promises are never delivered. The words of politicians often disappear after the votes are cast.
In Obama's Leftist America, the "American Dream" is impossible and therefore one should give up on trying to improve oneself. Once you accept this premise you can accept the conclusion that: First, Because the American Dream is impossible and people cannot earn or work towards improvement of oneself, but are in fact automatically entitled to an ever increasing level of comfort and means. And second, if anyone is more successful at improving him or herself than you, or has more wealth than you, their success is directly correlated to you having less than them, and somehow this prevents you from becoming successful. The truth is Income inequality is not a zero sum gain like liberals would like you to think. They would like you to believe that just because one person finds success it takes from another. In fact when one finds success it often leads to others enjoying the benefits. When Steve jobs took over apple he made millions. His ideas changed the way received information and conducted business. It improved the lives of people around the world. The same could be said about Mark Zuckerberg and countless others. Their success did not hinder others or take wealth away. Countless jobs and secondary products were developed because of their success and innovation.
Of course, Obama is right about one thing, only economic growth can provide the opportunity for Americans to increase their personal incomes, provide a choice of investments, and save for the future. However, his rhetoric is just talk, his assault on economic growth is far more damaging. In his first five years in office, economic growth has been historically slow. But he will have you believe it is the Republicans fault. He will have you believe that the ideology of the Republicans supports only the rich. Ted Cruz said it best. "Let me tell you now about the single biggest lie in politics: it is that Republicans are the party of the rich. What complete nonsense. Do you know that under President Obama, the top 1 percent, those millionaires and billionaires that the president loves to demagogue, the top 1 percent are currently earning the highest percentage of our national income since 1928? Listen, when the government expands its control of the economy, the rich do fine. Five years ago if you had a private jet your still flying the private jet. Who are the losers? Who are the people who are getting hammered by the Obama economy? It's the most vulnerable among us." Sen. Ted Cruz (R-Tex), speech in Iowa, October 26, 2013. Under President Obama's recovery, median American household income has fallen by $2,380 or 4.4 percent, after have already fallen by 1.8 percent during the recession, and there is a 4.5 million jobs gap between the Obama recovery and the average post 1960 average recovery. Under Reagan's recovery, household median income rose 2.1 percent by the end of his first term and grew for every demographic category for the rest of his presidency. Also, over the same comparable period, Reagan recovery would have produced seven million more jobs.
Since the recession officially ended, poor people and the middle class were hurt the most and opportunity stagnated. Under Obama millions of Americans are out of work and depend on government programs such as food stamps and unemployment compensation. According to the US census the 2013 median in real terms, 6.5 percent lower than the 2007 (the year before the most recent recession) median ($57,357) and 7.2 percent lower than the median household income peak ($57,843) that occurred in 1999. (Proctor, 2015). It is important to note that in 2014, 6.9 percent of workers aged 18 to 64 were in poverty. The poverty rate for those who worked full time, year round was only three percent, while the poverty rate for those working less than full time, year round was 15.9 percent. This shows that full time workers are far less likely to be in poverty also, 21% of those in poverty were 18 years or younger. This proves that income levels change with age. Young adults are far more likely to be in poverty than middle age adults from 18 to 64 (13.5%).
The inequality that Obama cites is the direct result of the catastrophe of his economic programs as well as a historic flood in federal regulations that harm economic growth. According to the U.S senate Budget committee October 18 2012 report welfare spending is the largest item in the federal budget. Not including entitlement programs like Medicare and social security the federal government spend over $1.03 trillion dollars. Over the last 30 years with an adjustment for inflation the budget for welfare programs has increased 374 percent. Subsequently, since 2008, the federal spending on these programs has increased by 32 percent. (Sessions, 2012) All while income inequality continues to widen. This shows that increasing the spending and programs does not help the issue. In fact it appears that it contributes significantly to the problem. The increased dependence on the government keeps politicians in power and holds citizens back from reaching their true potential.
To fully comprehend the growth in federal welfare expenditures you must look at the federal policy that has fortified growth in the welfare enrollment. The federal government has weakened welfare standards and rules. For example, spending on food stamps-the second-largest federal welfare program-has quadrupled since 2001, yet the USDA has a variety of programs and advertisements whose explicit and unmistakable goal is to expand enrollment to new record highs. (Sessions, 2012). This even includes an official partnership with the Mexican government to expand food stamp enrollment among foreign nationals. The agency has produced materials to train workers on how to overcome the "no" objection. In response to this a Ranking Member Senator Sessions has stated, "The sound policy, and the compassionate course, is not a drive to place the largest possible number of people on welfare support; instead, we should seek, whenever possible, to help our fellow Americans realize personal and financial independence." (Sessions, 2012). Even with the discourse of senator Sessions the Department of Homeland security has waived the legal requirement of those seeking admittance to the US not be welfare dependent. This shows the Obama's policies are not to reduce the welfare dependence and reduce poverty, but to create a dependence on the government to keep his party in political power.
The harsh truth is that most Americans are tired of the rhetoric. The liberals focus on the inequality not the stagnate wages. Most people don't care that someone else is making money they only care about their wages. The top 1% is just the scapegoat for most left leaning politicians. Working Americans are not getting ahead and this has been going on for years. Contrary to the politician's rhetoric it has nothing to do with the top 1% income earners. The reason is companies do not have to pay unskilled workers decent salaries because there is too much competition at that level. The increase in foreign workers continues to draw down wages. This increase is also a product of the reduced qualification for foreign immigrants. Workers that do not have a skill and are poorly educated never improve their standards of living. Most of those don't have the will or the means to relocate where the jobs are.
The solution to inequality is not big government giveaways that Bernie Sanders is selling his supporters; those are a myth. The Affordable Care Act (Obama care) is discouraging full-time employment. According to Gallup's payroll-to-population ratio, the proportion of the American population working full-time has dropped almost two percentage points in the last year to 43.8%. IF the payroll continues to drop, so does tax revenue. This creates a larger deficit, increased unemployment and increased dependence of welfare programs. Eighty-five percent of the projected growth in spending over the next decade is due to entitlement spending and interest on the debt. Washington spent nearly $3.5 trillion in 2014 while collecting nearly $3 trillion in revenues, resulting in a deficit of slightly less than half a trillion. In other words, 14 cents of every dollar that Washington spent in 2014 was borrowed. (Boccia, 2014). The pendulum has swung too far to the left and these programs will continue to weigh down the American system. This weight will eventually collapse the system causing wide spread financial losses and a major depression. The politicians will then find a way to blame the system on the rich and work to grab more power. This happened after the great depression when Roosevelt offered America the "New Deal." The new deal was a power grab for the government by introducing stimulus packages and regulations on wages. UCLA economists calculate that these policies drug the depression out 7 years longer than it should have lasted. But more damaging it created the belief that capitalism could not be trusted to correct a failing economy and government intervention would be needed. As of today the government has unleashed a series of quantitative easing in attempt to correct the sputtering economy. This easing will only increase inflation and poverty making it more difficult for Americans to survive without government assistance.
United states GDP growth is stuck at 2% with this growth we cannot grow our wages. In order to expand the growth we need to free up capital for the citizens and corporations. It is critical to reduce taxes across the board at every income level. After 1986 reform of the tax code we had 20 years of growth. Our current system Works against industry and innovation and is unfair. The current tax code is over 73,000 pages long; it takes an accountant to understand our system. Along wit the poor tax code we have crony capitalism and political favoritism that corrupts and weakens the system. The idea that higher income taxes on the wealthy will reduce income inequality is wrong. When the wealthy have free capital they invest and create jobs when it is taxed they do the opposite.
Liberals will tell you that higher taxes help reduce the income gap, however if you compare income inequality in pre tax dollars pre-tax the United States does better than European socialist economies like U.K and Sweden. These countries have heavy taxes to support the social programs. As shown by the Economist magazine, after taxes the U.S. and United Kingdom end up with almost exactly equal income distributions, the U.K. has a more progressive income tax system than the U.S. (meaning it collects a higher percentage from higher income people), but the U.K. has higher income inequality when measured on pre-tax income than the U.S. While Britain appears to be working harder to reduce income inequality through taxes than the U.S., pre-tax income inequality still exists. Similarly, Sweden, famous for its high taxes on the rich and supposedly more uniform economy, actually has just as much pre-tax income inequality as the U.S. (S.M, 2013)Wealthy people will find ways to shelter their money and use the tax code to avoid paying. Often the rich will use off shore accounts, deferred compensation or form shell companies to write of expenses. In reality, government can redistribute income through taxes and transfer payments, but the poor are only made better off as long as this continues. Without recurrent redistribution, these people would be just as unequal as before all the redistribution started. This process will never allow personal growth or removal of the government dependence.
Income inequality can only be overcome by improving our education system. Politicians need to stop stumping about making things equal and start talking about the facts. Low skilled workers need to learn a skill and understand how to conduct themselves in the market place. Schools need to be restructured, emphasizing basic educational skills and provide courses that are job targeted. In 2014, 28.9 percent of people aged 25 and older without a high school diploma were in poverty. The poverty rate for those with a high school diploma but with no college was 14.2 percent, while the poverty rate for those with some college but no degree was 10.2 percent. (Proctor, 2015) So what do we need to do? High Schools have to provide technical and trade school education. Remove the notion that success is only achieved by going to college. Improve basic math, reading and spelling in elementary and middle school. Parents need to have choices for poor performing schools. Voucher programs need to be available for all students and parents.
The states need to remove of the teachers unions from the schools. But the sad fact is Democrats will never support this idea, as the unions are the source of political donations. We also need to remove teacher tenure and implement a merit based pay structure. Teaches are paid far to little for the work that they do. With that said we should be able to eliminate teachers that do not perform. Teachers that perform would be paid higher and schools would look to recruit these teachers and pay them for their skills. Through voucher programs parents are given a choice and the means to send their children to high performing schools. Schools that underperform would be forced to improve or risk closure.
The simple truth is that in a free economy some people will always earn more money than others. Politicians would rather stump about a problem to gather support for an election that focus on the true issues. They can only win if there is an oppressor and oppressed. We have gone from celebrating success to vilifying those how have found financial success. Given a persons drive, during different stages of his or her life will earn much more than in other stages. It is therefore not clear that there is such a thing as a need for distribution of income, and currently income distribution hasn't set forth any meaningful improvement. Instead of conveying such criteria, politician's have generally been content to argue that income inequality is "increasing" or "widening" and have assumed that it goes without saying that such a trend, if true, would be bad. Both the belief that income inequality is increasing, and the assumption that any such increase must necessarily be bad, needs to be critically examined. The true question should be is our current system "rigged " to support the rich and powerful.
