Straight Up with Sherri

Wednesday, February 16, 2005

Income Redistribution..............

We have the distinguished honor of showcasing a piece by Laura on WEALTH REDISTIBUTION! Straight Up with Sherri is pleased to have Laura allow us the opportunity to let us share her hard work and brilliant and erudite writings with us. This should certainly hit the point home on this issue. (Once you finish reading Laura’s piece, be sure to protect YOUR rights and YOUR wallet from the corrupt UN and elected officials that would have American’s return to the tyranny our great forefathers fought so bravely to free us from. Don’t just follow the link at the bottom of this post- be sure to ACT!)


Topic: The U.S. government presently utilizes the practice of income redistribution. From whom should this income be taken, and how much is appropriate?


In order to appropriately analyze the action and results of the practice of governmental income redistribution, it is important to understand all influences being brought to bear upon said action. Both policymakers and economists raise questions regarding the effectiveness of current redistribution programs. One principal responsibility of government is to redistribute income from the wealthy and redistribute it to the impoverished, disadvantaged and unemployed. How much truth is contained in this statement? The reality seems to be that 75 percent of public assistance and social insurance is distributed regardless of need. To consider this thought, it must be understood that regardless of whether or not redistribution occurs, that distribution has less to do with the relative income of the recipients and more to do with political clout and lobbyist influence. Consider also that when assisting the poor, cash helps more, when accompanied by education programs, because the funds to directly to the needy. Only 30 percent of redistributed funds [perceived value] are received as ‘cash’. To complicate matters further, looking at redistribution actions only to the poor leads to incomplete and often incorrect answers to the question of the impact of this practice.

Although government affects the distribution of funds in numerous ways, the result is a by-product of a multitude of other programs, some related, some not. Should the goal of government be explicitly to redistribute income from the rich to the poor? Not necessarily: this should be a well-supported action. It should be the government’s responsibility to determine and establish guidelines, based in principle, to lead people to the best decision for all involved. Capitalism is here to stay; however the power and wealth generated by that capitalism should be, at least in part, used to reduce poverty, unemployment, and disability. It is a noble foundation of ideal that if you are given the gift of wealth or talent, with it comes an inherent responsibility to use and apply a percentage of that gift to the cause of improving the world around you. Receive, but also give back in return…maintain the balance.

In 1993, nearly seventeen percent, or one dollar out of every six received as personal income, reinvented itself in the form of old-age, survivors, disability, and health insurance benefits, unemployment insurance benefits, veteran’s benefits, government employees’ retirement benefits, aid to families with dependent children, and a miscellany of other government transfer payments to a total tune of $912 billion. It rose from $29 billion in 1960 – a growth rate of approximately 1% per year, seemingly compounded.
This overt rise in government transfer also reflects the growth of the government itself. (D. Lee, UGA, 1997)

Present day senior citizens enjoy an extraordinarily high standard of living by their Social Security returns. In contrast, young workers and taxpayers will most likely never recoup their own contributions. Overall, nearly every government action changes the personal distribution of income. To reiterate, the most important factor appears to be political power, not need, when considering the redistribution and transfer of government funds.

Sadly, there are numerous neglected consequences to continuing the process that are unchecked and unmonitored. (If checked and monitored, who is doing the checking and the monitoring? Are they unbiased? How do we know?) Consider that redistributed transfer payments received by individuals discourage continued income earning. As a result, many individuals often choose idleness; if income can be acquired without the action of earning, there is less effort to earn. There is less production of goods and services, less [wealth] is accumulated, and thus society suffers and is poorer, in a multitude of ways. It becomes the proverbial vicious circle; as a consequence society’s reaction is to become more contentious.
“Taxpayers who consider themselves disproportionately burdened grow to resent their exploitation by the tax-and-transfer system of redistribution.” [1]

In closing, if our society allows its’ government to redistribute income on a grand scale, much of liberty is sacrificed. The thread returns to the idea of altruism, controlling the invisible hand, weighing all the options and doing what is best for as many as possible; this determines in the end how much and from whom with regards to the practice of income redistribution.


[1] R. Higgs, The Freeman, 1994, December 5th

17 Comments:

  • OH MY!

    Straight Up has its very own Dr Laura!

    nice job Dr Laura!

    Thanks for driving home the socialist agenda!

    SHerri

    thanks for posting this!

    By Anonymous Anonymous, at 3:34 PM  

  • Ever read Atlas Shrugged?

    By Blogger MTG, at 4:00 PM  

  • a small nit -- 29 to 912 over 33 years compounds at 11% a year. After you strip out inflation, that is probably twice the growth-rate of the economy over that time.

    Here's the other issue to grapple with. As communications speed and improve, the payoff to the best in any field radically increases as compared to the 2nd and 10th and 1000th best. Think not just professional sports, but law, or computer programming, or almost any endeavor. Without income redistribution -- do you fall back to a situation where the less capable members of society live like rickshaw drivers?

    By Blogger levi from queens, at 4:58 PM  

  • levi from queens raises an interesting question regarding the disproportionate reward system juxtaposed with the effects of income redistribution.
    The wacky payouts to super athletes, lawyers, programmers, or any other class is usually not derived from our free enterprise system, but from an aberation of power. Just as CEOs and politicians find ways to give other people's money to themselves, they use it to buy the services of the elite performers as they would any piece of art or esoteric toy. It is not a matter of economics, it is a matter of arrogance. Even during the world's great economic depressions, this does not change.
    The governments policy of wealth redistribution is more of the same, but with bad results. Actually, today's rickshaw drivers can do pretty well, provided they have the right personality, stamina, and venue. This is true because of the free enterprise system that works best at the bottom. Free enterprise and free government fail miserably as they "evolve" and grow. The government wants an "entitlement class" because it loves slavery. And people who become dependent solely on the government for their existence are, indeed, slaves to the demigods that control that government.
    The best way to enhance the income at the bottom of our economy is to reintroduce Capitalism. We must find new ways to produce our own capital goods (consumables) in the United States. We concentrate too much on the shell games of money manipulation while we become ever more dependent on foreign nations to produce the capital goods we need to exist. By securing our borders, the laws of supply and demand will raise the incomes of those at the bottom (without any government intervention or theft). As the demand for skills increases, the education and training programs make sense - today, I fear, they do not.
    To believe that government redistribution helps any people at the bottom of our economic chain is foolish. It only helps the government officials who instigate it. It feeds their power, their arrogance, and their evil aspirations.
    Hi, I'm from the government and I'm here to help you. Let me start by taking away your guns, your money, your dignity, your power, and your life. Next we'll work on your job, your kids, you house, your free speech, your right to assembly, and your right to redress.
    If you pardon my cynicism, you will please note that these attacks are not made against those at the top, but those at the bottom.

    By Blogger Right Wing Nut Job, at 7:02 PM  

  • YAY!!! Did you hear that Laura! or I mean Dr Laura????

    BRILLIANT PIECE!!!

    BRILLIANT!!!!

    By Blogger Straight Up with Sherri, at 9:11 PM  

  • Does that it's like Guinness? lol!

    By Blogger la6868, at 9:26 PM  

  • oops! insert..."mean"...

    LOL!

    By Blogger la6868, at 9:29 PM  

  • Dr Laura

    Guinness

    Genius

    whatevah!

    LOL!!

    America is AWESOME! We all have the freedom to succeed or fail---- FREEDOM- SWEET FREEDOM!

    By Blogger Straight Up with Sherri, at 9:40 PM  

  • Redistribution of the income should be given to the people who has low income, single parent homes, college students, some of the medicaid programs, and to help homeless across the world. The government is spending our money in various ways that is really not important at all. Why? Can these problems be solved? There are so many people out here who really need help! It is already enough that some of the programs are being cut in the 2006 budget plan. I wish we were stable, had a better economy, out of debt, and everyone living comfortable. Why can't we stop wasting money and start utilizing it the correct way.

    Professor Mckittrick HUMN410 D# 1699 LJefferson

    By Blogger Tree842001, at 7:51 AM  

  • Great piece, Laura. I too am currently enrolled in HUMN410 and although I am at a different location have been given the same assignments. I thought you might enjoy reading what another student had to say on the topic of income redistribution so I pasted my two cents below...

    At face value, income redistribution seems like the fair thing to do, land grants for veterans, local government providing food and shelter to the destitute. What sort of heartless person could possibly have a problem with this? Well, if this is where it ended most people would not have a problem with it but alas it doesn’t end there. This type of redistribution is not what most Americans resist. Veterans have earned every dollar the government has paid them and then some. Providing them with a land grant is another form of payment that I for one think they are due. Local government is free to use its resources in any manner the people of that community see fit. So what exactly is the issue with income redistribution anyway?
    Over the years, instances of income redistribution have increase, dramatically. Over 85% of the income that is redistributed in the U.S. does not go to low-income recipients. Surprised? I was stunned to learn that the majority of our redistributed income taxes are going to programs that fund pensions and Medicare for the elderly who, by the way, generally have more disposable income than the average taxpayer. It is troublesome to think of the masses of young families that struggle to make ends meet paying their hard earned dollars into a pension for a retired person that is far better off than they are in the first place.
    Another disheartening statistic is that of the federal farm subsidies. As far back as 1989, billions of dollars were being redirected to farmers that were certainly not in dire straights. More than 60% of the farm subsidies that year were paid to the wealthiest 17% of farmers. Again, while I am struggling to pay my grocery bill, a portion of my earnings are supporting the farmers that are providing the groceries I buy. This sort of “double-dipping” is not only legal but, supported and administered by our federal government. Things that make you say, “Hmmmm”.
    Beyond the financial burden placed on taxpayers, there are countless other moral repercussions. In an effort to help those in need we have lost sight of the fact that this sort of aid is nothing more than a bandage. By subsidizing these programs, we are not offering these people a long-term solution to the problem we are merely throwing money at it hand over fist.
    I am strongly against income redistribution and thus support the FairTax as a viable alternative to yielding control of my earnings to the government. As it is not likely that cutting this type of rampant redirection of income completely will be seen any time in the near future, I would at least like to see these funds used to empower the recipients to increase or generate income for themselves.

    Thanks to Prof. McK. for his thought-provoking teaching methods! He is, in my opinion, a true genius and I am grateful for the opportunity to learn from him.

    Thanks again, Sherri, for casting light on the many important issues that you address with your blog.

    Susan
    D00767385

    By Anonymous Anonymous, at 10:28 AM  

  • Susan

    GREAT PIECE OF WORK!!

    I LOVE IT!!!

    Please email me!-- Straightup@acworthcablenet.net

    PLEASE!!!

    By Blogger Straight Up with Sherri, at 3:40 PM  

  • Thank you Susan - Truly thoughtful writing; I agree with many of your views.
    Interesting your point about farmers and the legal "double-dip" that goes on.(Things that make ya go hmmm, CMC Musik Factory?) lol Wondering how far your dollar will stretch for groceries is oh so fun, but can be more than a bit demoralizing when the governmental indecretions are revealed. Who is to blame? We have a voice. We have, collectively, the power to make appropriate changes. The question is, where to start - where to focus our intent.
    I agree also with you about HUMN410/Professor McKittrick - :) excellent class - controversial and passionate topics and discussions -excellent fodder for grey matter growth and stimulation. I highly recommend the experience.*
    Do email Sherri - she will do wonders to boost your confidence with her enthusiasm.
    (Thanks again to you Sherri, for your dedication here - don't know how you do it...) L

    By Blogger la6868, at 11:55 AM  

  • What a great sensitive idea? There is a lot of income disparity in the World, not just the US. The solution to this is not to re-distribute income, but to create more jobs , plus to encourage and promote job stability. There are a lot of government programs that are designed to help the less fortunate, but the abuse and mismanagement of these programs makes them ineffective. Plus these progams are funded by the richest taxpayers whose income is taxed the most. If that is not considered income redistribution, I don't know what is. By the way, each individual earns their money in a different manner. Some people work harder than others, and some have a higher education which does not come cheap, therefore they make more money. Who is the government going to target to take money from for redistribution? Whoever it is, it will be very unfair. Anyone who is capable of working should earn their own money and not depend on other sources.

    HUMN 410 SB7413

    By Anonymous Anonymous, at 1:02 PM  

  • When it comes to this topic it is hard to say who the money should come from. But when it comes to when is it enough they have already past that point. The government does not know when to stop with anything just like with social security they used so much of that for other things until it is almost draind out. At one time I thought they should tax the rich for more but now I don't. There just like everyone else but htey just took another route of making money, that paid off.

    By Blogger MAB8887, at 8:44 PM  

  • I feel that some form of redistribution is needed to help the less fortunate. However I will agree that the government is spending the money in other ways not needed. I don't think that the rich should be taxed more just to cover the governments spending.

    By Blogger CS3689, at 9:16 PM  

  • I am totally for income redistribution because lower income families can’t do some of the things as a higher income family. This will give a lower income family a chance of equal opportunity to a higher income family. I know some museums require you to pay least 15 dollars per person but will allow you to come in if you pay 15 cents. Look at taxes for an example: the federal tax you’re paying is according to the amount of money you’ve made and the allowances you’re claiming. This is a great policy; say for instance, if a mother is single and has 6 kids and she only made $ 300.00 for her gross income, she’ll be exempt from the federal tax or pay a small amount. On the other side, if you made $ 4000.00 and 6 kids you wouldn’t be exempt, the government will take out a lot more. I believe its receiving taxes from everyone,at a fair rate.

    By Blogger AB7463, at 10:34 PM  

  • AB7463

    GREAT!

    Why not ask your teacher to practice it with your grades. Who cares if you work harder, are smarter, or if you're lazy and don't bother doing assignments-- you should all get the same grade right? Those with the A's should just skim some of their points off and hand them over to those with F's that don't bother showing up for work..

    BRILLIANT! Then NO ONE WILL WORK because the ones who do actually pay your bills! BRILLIANT! then what? I'll tell ya what- then they start building walls around the country- and whammo- welcome to communism!

    USE your HEAD! Learn to think things through.... all the nicey nice, give to the poor sounds good- but it is cruel to not only the ones working harder and earning more- it is also cruel to the ones you enable to be lazy.

    What grade are you in anyway???

    4th?

    By Anonymous Anonymous, at 4:20 PM  

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