Posted on 08/28/2018 5:51:12 AM PDT by vannrox
If I wanted to keep poor people poor, there are several government policies I would favor. Let's count them down.
For starters, I would advocate for a robust and ever-expanding welfare state—programs like Medicaid, food stamps, unemployment insurance, etc.
I would recognize that an effective recipe for keeping poor people poor is to create incentives that push them into decisions that prevent them from climbing out of poverty.
Rather than help individuals, the perverse economic incentives created by the “social safety net” trap aid recipients on welfare.
Case in point: A 2012 study by Pennsylvania’s Secretary of Public Welfare analyzed the decisions confronting individuals and families enrolled in various government welfare programs. Specifically, the study concluded that in the case of a single mother with two children ages 1 and 4 earning $29,000 a year through work would be eligible for government benefits (such as Medicaid, housing vouchers, and subsidized daycare) equivalent to roughly an additional $28,000.
Such a scenario puts this woman in a bind. If she finds a better job paying more, or picks up more hours, she risks losing substantial amounts of benefits. She would make her family financially worse off even though her paycheck would be bigger. Just to come out even, once taxes are factored in, she would need to find work paying about $69,000 a year to compensate for the lost welfare benefits. Not many low-skilled workers can make such a leap.
It is a vicious, self-reinforcing cycle that keeps people poor and dependent on the state.
This scenario is commonly referred to as the welfare cliff. Confronted with this situation, many individuals understandably opt to continue receiving the government benefits. Rather than help individuals, the perverse economic incentives created by the “social safety net” trap aid recipients on welfare. And the longer they remain out of the workforce, or at lower levels of employment, the less employable they become. It is a vicious, self-reinforcing cycle that keeps people poor and dependent on the state.
Moreover, there is the impact the welfare state has on the family unit. Welfare programs break up families by replacing a father’s paycheck with a government check and benefits. Nationally, since LBJ’s Great Society ratcheted up government welfare programs in the mid-1960s, the rate of unmarried births has tripled.
In my home state of North Carolina, families are roughly five times as likely to be in poverty when there is no father in the home.
High marginal taxes on profitable companies and small businesses alike discourage capital investment.
If I wanted to keep poor people poor, I also would finance the welfare state poverty trap through punitive taxes on the job and wealth creators of society.
The key ingredient to economic growth, and thus a higher standard of living for society’s poor, is through productivity gains made possible by capital investment. High marginal taxes on profitable companies and small businesses alike discourage capital investment. As businesses decide to either not expand or take their businesses to more investment-friendly countries, job opportunities dry up.
If I wanted to keep poor people poor, I would advocate for higher government-enforced minimum wages. The law of supply and demand tells us that the higher the price of a good or service, the less of it will be demanded (other things held equal, of course). The demand for low-skilled labor is no exception. Minimum wage laws are an effective tool to cut off the bottom rung of the career ladder. Higher minimum wages will price more and more low-skilled people out of the labor market.
Meanwhile, the higher wages will attract more job seekers willing to supply their labor at the higher price. Employers will be able to be more selective in their hiring, and as such the lower-skilled job seekers will be crowded out of these opportunities by higher-skilled, less-needy candidates. Minimum wage laws are an effective tool to cut off the bottom rung of the career ladder for those most in need of establishing work experience.
If I wanted to keep poor people poor, I would support government “green energy” initiatives that make energy more expensive. State and federal initiatives that mandate more expensive “renewable” energy mean that—in the words of President Obama—utility bills “necessarily skyrocket.” Poor people trying to scrape by just to stay even can scarcely afford higher electricity bills.
If I wanted to keep poor people poor, I would see to it that government imposes many costly regulations on businesses. Such tight restrictions discourage businesses from starting or expanding, Such tight restrictions discourage businesses from starting or expanding. meaning fewer job openings for those most in need of opportunity. And mountains of red tape force business to expend scarce resources on compliance costs rather than investing in their businesses and creating jobs. Higher-skilled compliance officer jobs will consume payroll that could have potentially gone toward opportunities for lower-skilled job seekers.
If I wanted to keep poor people poor, I would support “quantitative easing” policies. Under such programs, the Federal Reserve creates money out of thin air. The inflated money supply then erodes the value of the dollars sitting in your wallet or bank account. The poor are hit hardest by this inflation because their limited skill set makes it far more difficult for their incomes to keep up with the rising cost of living.
The price increases passed along to consumers disproportionately harm low-income households.
If I wanted to keep poor people poor, I would impose heavy tariffs on foreign goods in order to limit imports. Sure, the domestic industries protected from competition by these tariffs would prosper, but at what cost? For example, tariffs on foreign steel may help the 170,000 American workers employed by the steel industry, but higher steel prices will harm those industries using steel as inputs—and the 6.5 million workers they employ. Ultimately, more jobs are likely to be destroyed than saved.
Furthermore, the price increases passed along to consumers disproportionately harm low-income households. The combination of fewer job opportunities and a higher cost of living certainly makes it harder for the poor to climb out of poverty.
Finally, if I wanted to keep poor people poor, I would most definitely not support a competitive, free market economy. As Milton Friedman once famously schooled Phil Donahue:
So that the record of history is absolutely crystal clear that there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.
Tariffs are long, long overdue.
Wrong about Tariffs. The rest is accurate.
A government regulation that forbids you from making more than a certain amount of money and still receive free money from the government.
Actually, getting rid of the shameful anti-American, anti-God, politically correct indoctrination in public schools and universities should be job #1.
That alone will solve 90% of the problem.
Permanent tariffs are not going to happen on a meaningful scale.
We will of course maintain the tariff on goats and other such existing categories until the unilateral negotiations eliminates them.
The Trump goal is to start at the top and negotiate better terms with major trading parties to increase American exports and thus increase industrial revvenues and create jobs. Mexico, Korea, Japan, then Canada and the EU and lastly China.
When all that comes t pass, dealing with the lower order trading pardners will be easier.
China wants to replace America.
They are already about to pull even with us. They run a MASSIVE trade surplus with America.
America needs to be (much) more aggressive with China’s trade policies.
Much, much more aggressive.
When would you expect higher tariffs to result in new manufacturing capacity here in the USA?
The hon. Gentleman is saying that he would rather that the poor were poorer, provided that the rich were less rich. That way one will never create the wealth for better social services. as we have. What a policy. Yes, he would rather have the poor poorer, provided that the rich were less rich. That is the Liberal policy.
- increase irrational thinking and acting in society, culture, and politics such as leftardism
- destroy natural rights such as private property and freedom
- destroy capital accumulation with such things as confiscatory taxation, increased regulations, increased government spending, inflation due to excessive increase in money supply
- war on industrial civilization, economic progress, and technological advances and progress such as environmentalism
Number 7 should read "Set up unfair international trade which favors every country except the USA and pocket the bribe money or hide it in a 'Foundation'".
#8 keep them in Pubic Schools run by the teachers union.
force the kids to use electronic devices as early as pre-K in public schools ... the parents have no say in the matter ...
Anything run by the teachers union will screw up the kids.
Except that as the article points out, tariffs protect jobs at the cost of higher prices for goods and services and the loss of jobs in industries that use the protected product. Over the long haul, tariffs cost jobs.
The case for tariffs rests on what Henry Hazlitt called the broken window fallacy. A hoodlum breaks the window of a shop. Everyone cheers for the new work for the glazier. But they don’t see the lost income for the suit maker or whichever other merchant would have gotten that money instead of the glazier, had the window not been broken.
This is the same logic that underlies tariffs. We protect certain jobs, such as steel workers, but it raises the cost of buying steel, which drives up the price of products that use steel, causing fewer sales and thus fewer jobs in those industries.
A similar logic applies to gasoline. At every stage of the process of bringing oil up out of the Earth, refining it, and getting it to the pump, there is a tax imposed. We see the tax at the pump, which is too high, but we don’t see the other taxes because they’re just passed along to the next stage of the process and the next and the next. This raises the cost of each stage of the process.
All of FDR’s New Deal programs worked the same way. His government programs did create some jobs (the CCC, for example), but at the cost of many more jobs that nobody considered because they never showed up.
That’s the argument that applies to tariffs. Tariff activists miss the hidden costs.
Attempting to reist or stop an incoming tide is futile.
The future is east of Suez and China is a major player
“At every stage of the process of bringing oil up out of the Earth, refining it, and getting it to the pump, there is a tax imposed. We see the tax at the pump, which is too high, but we don’t see the other taxes because they’re just passed along to the next stage of the process and the next and the next”
Not that I’m totally surprised, but I didn’t know that.
No wonder we’re having a heck of a time going to Thorium energy - HUGE loss of revenue to the tax man.
7: Impose High Tariffs
Here is why we will absolutely win that battle with China.
We grow and make plenty of food. So much, in fact, we give the stuff away to other countries who couldn’t hope to grow enough food for their people.
Food is way more important than electronics or cheap merchandise from China.
If we suddenly reduce our purchase of Chinese it does not mean we won’t have food. We got it all.
China however would suffer from food that is suddenly unaffordable or unavailable.
They are modernizing and can’t afford 500 million people upset at not being able to eat or eat foods they have now become accustomed to.
I loved watching CSPAN on Sunday nights when they’d run Prime Minister’s Questions from the previous week.
Thatcher was so unflappable and would always have a quick comeback to a query from Labor.
She never backed down.
You don’t have to do anything. Poor people keep themselves poor. Especially here in the U.S.A. where the goal posts of “poor” keep moving up the economic scale.
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