Posted on 11/24/2005 11:05:58 AM PST by nickcarraway
WHEN market forces cause income inequality to grow, public policy in most countries tends to push in the opposite direction. In the United States, however, we enact tax cuts for the wealthy and cut public services for the needy. Cynics explain this curious inversion by saying that the wealthy have captured the political process in Washington and are exploiting it to their own advantage.
This explanation makes sense, however, only if those in power have an extremely naïve understanding of their own interests. A careful reading of the evidence suggests that even the wealthy have been made worse off, on balance, by recent tax cuts. The private benefits of these cuts have been much smaller, and their indirect costs much larger, than many recipients appear to have anticipated.
On the benefit side, tax cuts have led the wealthy to buy larger houses, in the seemingly plausible expectation that doing so would make them happier. As economists increasingly recognize, however, well-being depends less on how much people consume in absolute terms than on the social context in which consumption occurs. Compelling evidence suggests that for the wealthy in particular, when everyone's house grows larger, the primary effect is merely to redefine what qualifies as an acceptable dwelling.
(Excerpt) Read more at nytimes.com ...
Have at it...
He is an economics teacher approved by NYT. What more do we need?
I agree. His argument is purely economic not political. Platitutes are not going to make the reality go away. We are fat becoming Brazil. (before you flame, I vote Republican down the line). Nevertheless, economic reality is economic reality.
I didn't know that the NY Times published comic strips.
I'm in poverty if my house is smaller than yours. Plus that gives me the right to apply for welfare and steal from you. Plus if you have a new mercedes and I only have a new honda, I'm poor and entitled to food stamps and medicaid.
What cuts. President Bush has overseen the largest expansion in Medicare since the Johnson Administration.
I should point out that conservatives don't favour "cuts" per se - we just don't want the government to be providing services to the poor, as they're so crap at it. No conservative wants cuts in charitable work, unless we're talking corruption in the Red Cross.
Regards, Ivan
There's an important difference between "careful" and "selective".
No it is the old economic theory of utility. What is better, a mansion ins a cess pool, or a mansion surrounded by other mansions? He is saying society at large, is turning into a cesspool.
Wrong. The author stereotypically defines the wealthy. First of all, most of the wealthy live modestly and in normal homes. Second of all, it's their money. None of the author's business what people live in or what they buy.
I'll agree with you on the two-tiered thing -- but note, this has happened before and the system corrected itself.
Dosn't the poorest ten percent of the U.S. have a better quality of life then anywhere else in the world. Often better than a higher percentile in other nations?
No. Let me change the situation. Is it good to own a ford escort when there are no roads to drive it on or own a ford escort when there is a road system to ride it on. His argument is not dependent on a particular definition of wealth.
He is not arguing that it is not. He is arguing the opposite of "in a rising tide all boats rise". He is arguing that the tide is falling.
Based on what evidence? Standard of living has been rising in this country.
There are serious structural flaws with the current economy.
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