Wealth distribution

[Neomalthusian]

All advanced economies have old age pensions and comprehensive medical plans, usually better ones than the US, and they function just fine.

DB pensions don't function just fine. The SS Trustees have repeatedly told us about our problems.

 

[Absentglare]

LOL. Tell that to France. You are ready and willing to mow down, run over and sacrifice every last one of the pawns you claim to be helping with your crazy ideas. This is why giving political power to a liberal is like getting in a car with a drunk driver.

I overstated myself, if you'll notice, i quickly edited my post.

I don't mind so much the idea of adding means-testing to social security and medicare. If we do add it, i think the means should be fairly generous.

But i'm not convinced that it's the best solution.

 

[Absentglare]

I am poor folks, by most standards, but manage to work to support myself. The idea that one sets their expenses and then requests public help to meet them has to be stopped. Popping out a dependent somehow now automagically converts a poor person into a needy household - that is pure nonsense. Someone with no work history or stable residence would not likely be allowed to adopt a pound puppy yet we reward them with public assistance for the magical achievement of producing a dependent child.

Well that's going to be a tough sell. We don't want child services to be put in a position to confiscate children from poor households where no other abuse occurs. Politically, it will be very difficult to convince the public to be unsympathetic to hungry children.

I'm not so sure that poor people use more children as a way to make money in this country. Maybe some do, and certainly children used to be needed as cheap labor working the family farm or some such.

I think the case made by many here like Ganesh and John is that there are fewer and fewer jobs, and the wages for the jobs that are still here have been stagnant for decades. Those are serious problems that cutting handouts to needy families will not solve.

 

[Neomalthusian]

I overstated myself, if you'll notice, i quickly edited my post.

I don't mind so much the idea of adding means-testing to social security and medicare. If we do add it, i think the means should be fairly generous.

But i'm not convinced that it's the best solution.

Every other "solution" is either to make the future beneficiaries get a worse deal so that current and soon-to-be beneficiaries remain unscathed. There's no legitimate reason to implement a fix that puts all the burden on one type of person while giving another type of person special privilege.

Fact remains though, seniors are better off than they've ever been relative to their younger counterparts, holding a lion's share of the national wealth, yet a 3rd of the federal budget goes straight to them in addition via old age programs that are poorly funded over the long run, as though it's still 1940 and a third of seniors are impoverished. They're not anymore. And that's not to mention the litany of other freebies like other tax exemptions and breaks and discounts for them just on the basis of age. Wanna combat wealth inequality, do ya? Start there. Stop tossing all the social program freebies to the age demographic that needs it least.

 

[ttwtt78640]

Well that's going to be a tough sell. We don't want child services to be put in a position to confiscate children from poor households where no other abuse occurs. Politically, it will be very difficult to convince the public to be unsympathetic to hungry children.

I'm not so sure that poor people use more children as a way to make money in this country. Maybe some do, and certainly children used to be needed as cheap labor working the family farm or some such.

I think the case made by many here like Ganesh and John is that there are fewer and fewer jobs, and the wages for the jobs that are still here have been stagnant for decades. Those are serious problems that cutting handouts to needy families will not solve.

In many cases there is no household until the state ponies up the funds for one. Where was mom living and working before she decided to have a kid? That is not a cruel or unusual question. Asking what plans that person had to support the child is essential to getting them any meaningful help - absent any meaningful help it is simply rewarding failure.

 

[JohnfrmClevelan]

In many cases their is no household until the state ponies up the funds for one. Where was mom living and working before she decided to have a kid? That is not a cruel or unusual question. Asking what plans that person had to support the child is essential to getting them any meaningful help - absent any meaningful help it is simply rewarding failure.

What would help most is more jobs. Those kids don't have much to look forward to as adults.

 

[ttwtt78640]

What would help most is more jobs. Those kids don't have much to look forward to as adults.

No doubt, but having a kid when you never had a job, or any way to get/keep a job after having the kid, makes zero sense. This how the cycle of poverty perpetuates itself - enabled by compassion rather than insisting on common sense.

 

[Ganesh]

I am poor folks, by most standards, but manage to work to support myself. The idea that one sets their expenses and then requests public help to meet them has to be stopped. Popping out a dependent somehow now automagically converts a poor person into a needy household - that is pure nonsense. Someone with no work history or stable residence would not likely be allowed to adopt a pound puppy yet we reward them with public assistance for the magical achievement of producing a dependent child.

I hear what you are saying here, and I do understand that this happens, and is not trivial. However, I think to come to some sort of constructive solutions here, one must tone down the emotions, and look a little further afield than the worst of the worst- that is, the few that are on direct welfare, the fewer yet that are lazy slobs, and the fewer yet that are totally surrendered to cynicism and self interest. There are some, and probably they will always be here.

But changing the distribution of wealth in society today means far, far more than agonizing over a few welfare bums and inner city burnouts. There are a vast array of options available to make society more equitable and fair. Universal medical care is on obvious first thought, one that has been delivered in most countries, but cut off at the knees by business interests in the US. Transport and energy use are two other big questions for the future. In the US, sprawl and waste have trumped the far more efficient (and cheaper for low income workers) transit solutions in other countries. A progressive tax system (and no Tex, not just for the welfare bums, but for myriad reasons) has been shown to work, and work well. It is only in dispute today because of the relentless spin put out in the self interest of the most affluent and powerful in society today. The inflation of real estate bubbles- and hence rents for the poor and working poor- is also an issue for which there are public policy solutions.

It's more than welfare, it is sound economics, and has been historically verified.

 

[Ganesh]

DB pensions don't function just fine. The SS Trustees have repeatedly told us about our problems.

But they do. In Canada, the parallel to social security works, is in good shape, and is projected to work into the future. So too in other countries. And when we think about it, it's not surprising. Wealth and productivity have risen over many years. Old age pensions were first started by the Kaiser in 19th century Germany. Do you think the economy is more productive and efficient today than it was then, or not so much? The vast wealth created by the digital revolution, and other developments, have impoverished us, or made caring for the old and marginalized a bit easier?

 

[Moderate Right]

The term you are looking for is wealth redistribution.

Americans are against it because they have been told that the poor, lazy, greedy leeches that are on the receiving end of wealth redistribution programs aren't deserving of help, and that the programs are strife with fraud.

While I don't doubt that there are abuses and fraud within the US's various welfare programs, I also don't doubt that there are many people on these programs that are using them as intended, that would have a substantially reduced quality of life without them.

I don't really think that is a good definition of wealth redistribution. Having social programs to help the poor that don't even barely maintain a low quality of life for them is not the wealth redistribution that people mainly talk about. They are just social programs. Wealth redistribution is more like taking from the rich and giving the poor more than they have now, outside of social programs. Huge minimum wage increases would be one example. Making the perceived rich pay employees $15.00 per hour, in effect, takes money away from those perceived to be rich and gives it to the poor. A huge minimum wage increase is not a social welfare program but it is a much better definition of wealth redistribution than talking about your normal social programs. The trouble is, when you take away from the rich they are not able to invest and expand their businesses as well and this causes job loss. Many small business owners live paycheck to paycheck and could not afford large minimum wage increases and they would be forced out of business, not only hurting them but eliminating the jobs that they provide as well. Republicans are not against social programs for those that truly need them. They are against the rampant fraud and the mega dollar bureaucracy that goes along with it, adding billions of dollars to the national debt every year. They are against giving the true freeloaders handouts for being bums instead of having to work to earn it. Again, I'm not talking about those who are truly in need and neither are the Republicans. Republicans want to give people the tools to get out of their hole instead of giving them free handouts to keep them in the clutches of government programs for the rest of their lives.

 

[ttwtt78640]

I hear what you are saying here, and I do understand that this happens, and is not trivial. However, I think to come to some sort of constructive solutions here, one must tone down the emotions, and look a little further afield than the worst of the worst- that is, the few that are on direct welfare, the fewer yet that are lazy slobs, and the fewer yet that are totally surrendered to cynicism and self interest. There are some, and probably they will always be here.

But changing the distribution of wealth in society today means far, far more than agonizing over a few welfare bums and inner city burnouts. There are a vast array of options available to make society more equitable and fair. Universal medical care is on obvious first thought, one that has been delivered in most countries, but cut off at the knees by business interests in the US. Transport and energy use are two other big questions for the future. In the US, sprawl and waste have trumped the far more efficient (and cheaper for low income workers) transit solutions in other countries. A progressive tax system (and no Tex, not just for the welfare bums, but for myriad reasons) has been shown to work, and work well. It is only in dispute today because of the relentless spin put out in the self interest of the most affluent and powerful in society today. The inflation of real estate bubbles- and hence rents for the poor and working poor- is also an issue for which there are public policy solutions.

It's more than welfare, it is sound economics, and has been historically verified.

It would seem wise to transfer these (72?) federal "safety net" programs (and their funding) to the state level - that alone would give us up to 50 attempts to find a better, long term, solution to breaking the cycle of poverty. I realize that I used a minority (worst case) example but if we will not even hold the most irresponsible accountable then why waste time/money with any social workers and just hand out benefits to all comers with no strings (expectations?) attached?

 

[Ganesh]

It would seem wise to transfer these (72?) federal "safety net" programs (and their funding) to the state level - that alone would give us up to 50 attempts to find a better, long term, solution to breaking the cycle of poverty. I realize that I used a minority (worst case) example but if we will not even hold the most irresponsible accountable then why waste time/money with any social workers and just hand out benefits to all comers with no strings (expectations?) attached?

And how will fragmentation help? The problems we are addressing are global problems, not local ones. The solutions come from academic scrutiny, and not from homespun local notions. And when we want to marshal the best resources, then drawing the widest net tends to, all things being equal, give us the best tools we need.

You are following the libertarian line that devolution to local authorities is the best bet, but this is nothing more than ideology. Why should it be? Even the right wing accept that to have the best management, a wide net needs to be cast, and they do so- internationally, this is quite common. The argument for local government has a rather obvious political imperative. The smaller the constituency, as apposed to the economic entity, the more the imbalance of power is. Can you think of instances when the most affluent and powerful have hoped to cut short popular input? If you say no, I'll be very disappointed in you, Mr Tex.

 

[Ganesh]

By the way everyone- happy new year! Thanks to everyone, from our economic adviser (in Cleveland), to our Libertarian entertainers (who are still God's creatures, and worthy of support). Good on yer, and keep thinking about the world in 2016, because not thinking is a recipe for disaster.

 

[Absentglare]

In many cases there is no household until the state ponies up the funds for one. Where was mom living and working before she decided to have a kid? That is not a cruel or unusual question. Asking what plans that person had to support the child is essential to getting them any meaningful help - absent any meaningful help it is simply rewarding failure.

Well, that may be, but i think there will be a lot of poor folks with unplanned children. Terminating those pregnancies won't likely fly for the average American.

 

[Absentglare]

It would seem wise to transfer these (72?) federal "safety net" programs (and their funding) to the state level - that alone would give us up to 50 attempts to find a better, long term, solution to breaking the cycle of poverty. I realize that I used a minority (worst case) example but if we will not even hold the most irresponsible accountable then why waste time/money with any social workers and just hand out benefits to all comers with no strings (expectations?) attached?

I don't really think that's true.

Ten individuals accomplish far less working independently than ten people working together. Ask yourself: how many of the most powerful companies in the world are run by only one person ? How many are run by big teams of collaborative effort ?

Further; there's another aspect to this. There is only one way to guarantee that every American is kept out of poverty- a federal system.

Attaching strings to social spending ends up costing money and therefore making those very social spending problems less efficient per dollar. It seems that those very measures we use to make them more effective, like welfare piss tests, can actually make them less efficient, as welfare recipients use drugs less than the general population.

 

[Frank Apisa]

By the way everyone- happy new year! Thanks to everyone, from our economic adviser (in Cleveland), to our Libertarian entertainers (who are still God's creatures, and worthy of support). Good on yer, and keep thinking about the world in 2016, because not thinking is a recipe for disaster.

Happy New Year back atcha, Ganesh.

And to everyone in the forum...may 2016 be your best year yet!

 

[ttwtt78640]

Well, that may be, but i think there will be a lot of poor folks with unplanned children. Terminating those pregnancies won't likely fly for the average American.

Is that your idea of an alternative? Surely you could see using no-kill shelters like we do for undocumented immigrants, those create jobs and would likely be far more cost effective than paying to support one care giver per child.

 

[ttwtt78640]

I don't really think that's true.

Ten individuals accomplish far less working independently than ten people working together. Ask yourself: how many of the most powerful companies in the world are run by only one person ? How many are run by big teams of collaborative effort ?

Further; there's another aspect to this. There is only one way to guarantee that every American is kept out of poverty- a federal system.

Attaching strings to social spending ends up costing money and therefore making those very social spending problems less efficient per dollar. It seems that those very measures we use to make them more effective, like welfare piss tests, can actually make them less efficient, as welfare recipients use drugs less than the general population.

Paying one (unqualified?) person to care for each child is very inefficient. Would it not be much more efficient to have one (qualified?) person care for 4 children, thus allowing 3 other single parents to work? If each of the three now working parents paid a portion, say 25%, of their income to the childcare provider then the subsidy cost would drop by at least 50%, perhaps more. As it stands now we pay to support far more than the childcare costs yet pretend that we are doing just that - saying that the assistance is "for the child" when clearly each child does not need their own entire house/apartment and a single dedicated childcare worker.

 

[eohrnberger]

The math I'm referring to is the reduction in the demand for human labor. Automation reduces the need for human labor. There is no reason to assume, as you did, that presently there is a big dip in the curve, where demand for human labor is only temporarily low, and will somehow increase in the future due to technology and automation. That has never been the trend. Technology and automation have never created more jobs than they have eliminated. More products, yes. Different jobs, yes. More jobs, no. So when you say that the entirety of the workforce will be more productive, that is true - but it also means that the workforce will need less and less human labor. One machine that can do the job of ten humans = high productivity. But all of the income now goes to the owner of that machine.

No, I'm not saying that there will be a resurgence of demand for blue collar manual labor. That's clearly been replaced by automation, which has turned out to be far more cost efficient.

I'm saying that there are going to be many more non-blue collar labor demand created (heck we can already see this in the job market), and as people become trained / educated for these jobs, they'll be filling these jobs.

 

[eohrnberger]

I do consider taxes to be a benefit. Look at the US- did we flourish under low tax rates, or high tax rates ?

The 1960s endured strong growth and high taxes :

Bill Gates: High taxes and high growth can co-exist | PunditFact

Correlation does not imply causation

Education and healthcare are largely service based. Can you elaborate on why you're bringing that up ?

Service industries do not create value, they transfer value from service consumer to service provider. In order to create value, you have to grow something, mine something, or manufacture something. This is not to say that providing service is not of value, clearly it is, as there are people willing to pay for it. It does not however increase the total value in the system the way the other 3 do.

I do like the idea of ensuring transparency in health care costs to help customers make decisions. I am skeptical that such an idea, alone, could account for our health care costs being more than double what they should be. There are many cases where Americans pay more for worse care.

While i can appreciate that you may consider a government "takeover" of health care to be misguided, i think it's a stretch for you to claim that it's unwarranted. Truly, we must do something, right ?

When you say 'we must do something, right' I'm assuming that you are talking about government.

So the question is what does government do best?

Roads, National defense, Foreign relations, Space program, Large infrastructure projects such as a the Hoover dam, come to mind.

 

[eohrnberger]

That doesn't prove that there's any spending problem.

The government needs to consider more than just costs !! That seems to be a myopic perspective, we need to consider the full implications of our changes to these massive, complicated systems.

Social programs are expensive. We spend a lot of money, giving it to people who are already rich via SS and medicare. Of course, many of these rich people spend to their income and are relying on those SS payments, people with million dollar mansions who are expecting that $1,000/mo income in their retirement. They won't lightly accept having to give up some of the personal assets they've accumulated. I can't really say i blame them, but i think selling a million dollar house to live in a half million dollar house is less important than fixing how hard it is to get a good education for poor folks.

It seems rich people falsely believe that poor people have it easy :

How Expensive It Is to Be Poor - NYTimes.com

In a way, getting welfare is easier than working in a coal mine. Sure!! But it's not like it's easy for a kid growing up in poverty to make it out. I think it's important for the strong to protect the weak, i am more than happy to do so.

Yes, social programs are needlessly more expensive than they need to be.

UNCLE SAM is being bilked, big-time. Losses from health-care scams alone are between $70 billion and $240 billion a year, reckons the FBI. An ever higher percentage of frauds (false claims for welfare payments, tax refunds and so on) are being perpetrated with stolen identities. Some 12.6m people—one every three seconds—fell victim to identity theft in the United States in 2012, according to Javelin Strategy and Research. The problem only grows as benefit programmes strive for efficiency and convenience, shifting applications online and making payments to prepaid debit cards, which can be bought in shops, require no bank account and allow money to be laundered quickly and easily. The self-proclaimed first lady of tax-refund fraud is Rashia Wilson (posing with the loot on her Facebook page, above) who, along with her eager associates, claimed bogus rebates of more than $11m.

SIRF?s up | The Economist

Yet, so many are trying to pass it off that the cost of finding, investigating, and eliminating the fraud isn't worth it. It may not be, but on principal, finding, investigating, and eliminating the fraud needs to be done regardless.

Government continuously spending more than it takes in is by definition a spending problem.

If you overspend and have excessive debt, do you march into your boss' office and demand more pay? That's exactly the meme that seems to always come from the left end of the political spectrum.

 

[AlbqOwl]

All Americans receive "some form of government subsidy", unless they have been hiding out in a tent somewhere in the wilderness all their life. And wealth is redistributed every day in some fashion or other, whether in the private sector or public. This is not in doubt. The questions remaining are what actually represents value to society, and how should people be compensated, even those for whom there is no real need in the workforce.

Up until the Reagan administration, "redistribution of wealth" more or less worked. Growth was constant, wealth increased, infrastructure improved, and society looked a heck of a lot better than it did during the extreme inequality of the Gilded Age, or the labour battles of the early 20th century, or the poverty and economic collapse of the '30s. Things are again going downhill because, as others have outlined here, current economic and technological trends have favoured capital over labour. Whereas a half million used to stream into Detroit factories to make cars, now only a fraction are needed. Apple, on of today's biggest money generators, has some like 70,000 employees. Facebook, another big money maker, has less than 1,000.

This is not a bad thing per se, but the point here is that there is no automatic market mechanism that will effectively deal with the problem of such excess labour. Indeed, there is no one "correct" answer, this is a sociological issue that must find solution by political means. This is just one more example of the market failing again....and again....and again.

There were only a little more than 40 years of government's first efforts at redistributing the wealth between FDR and Reagan and only 12 or so years between LBJ and Reagan when government enforced redistribution of wealth was a serious and proactive thing. And I can show facts and figures that show how government redistribution of wealth has produced far more negatives than positives since LBJ decided to 'own the people' by buying them. I won't bother because I see that no source I produce is satisfactory to those who seem desperate for government to dictate, control, and be involved in our lives as much as possible and who refuse to consider that government confiscating wealth from those who earn it and giving it to those who don't can have a negative side.

Government enforced redistribution of wealth turns the Constitution on its head and allows opportunistic politicians and those who worship them to pretty well destroy the liberties the Constitution was intended to secure.

 

[Frank Apisa]

No, I'm not saying that there will be a resurgence of demand for blue collar manual labor. That's clearly been replaced by automation, which has turned out to be far more cost efficient.

I'm saying that there are going to be many more non-blue collar labor demand created (heck we can already see this in the job market), and as people become trained / educated for these jobs, they'll be filling these jobs.

You are dreaming here, Eo.

There will never be enough of the non-blue collar jobs "created"...because the machines are becoming sophisticated enough to make even the non-blue collar jobs subject to the "more cost efficient" factor. That is why there are no steno pools anymore.

Remember them. They paid decent wages for non-blue collar workers that simply are not needed anymore.

Accounting programs are taking out low level accountants like crazy...inventory jobs are being done by machines.

And there is a huge segment of the "people" who will NEVER be able to handle much more than grunt work. They want to live, have families, and share in the unprecedented prosperity of our nation.

 

[eohrnberger]

You are dreaming here, Eo.

There will never be enough of the non-blue collar jobs "created"...because the machines are becoming sophisticated enough to make even the non-blue collar jobs subject to the "more cost efficient" factor. That is why there are no steno pools anymore.

Remember them. They paid decent wages for non-blue collar workers that simply are not needed anymore.

Accounting programs are taking out low level accountants like crazy...inventory jobs are being done by machines.

And there is a huge segment of the "people" who will NEVER be able to handle much more than grunt work. They want to live, have families, and share in the unprecedented prosperity of our nation.

Why are you showing your contempt for people with your soft bigotry of low expectations?

Human beings are the most adaptable creatures on the planet, and will adapt to these new conditions. They really don't have a choice if they want to survive and thrive. They will continue to do the things that the machines can't do, or the things that we don't want the machines to do.

 

[Ganesh]

There were only a little more than 40 years of government's first efforts at redistributing the wealth between FDR and Reagan and only 12 or so years between LBJ and Reagan when government enforced redistribution of wealth was a serious and proactive thing. And I can show facts and figures that show how government redistribution of wealth has produced far more negatives than positives since LBJ decided to 'own the people' by buying them. I won't bother because I see that no source I produce is satisfactory to those who seem desperate for government to dictate, control, and be involved in our lives as much as possible and who refuse to consider that government confiscating wealth from those who earn it and giving it to those who don't can have a negative side.

Government enforced redistribution of wealth turns the Constitution on its head and allows opportunistic politicians and those who worship them to pretty well destroy the liberties the Constitution was intended to secure.

Actually, redistribution has been going on for centuries, from the almshouses of old, to the 160 acre land grants of the 19th century, when former aboriginal land was given away to settlers, to the progressive reforms of 100 years ago, the beginnings of income tax, and the legalization of trade unions shortly after. The Reagan administration redistributed wealth from the working class to the affluent, and from the taxpayer to arms manufacturers. How much of this is good or bad depends on your political viewpoint, and that is just what you are producing here: an extreme political view, not a rational economic argument.

And you are probably wise not to present more links, because I suspect then it would be pointed out to you again that there is a difference between material that attempts political persuasion, and material that attempts academic argument. The Heritage foundation, for example, makes no bones about the fact they are there to persuade others to a hard right wing viewpoint.

Being horrified that somewhere, at some time, there is going to be some black dude sprawled on a couch, drinking beer and watching TV instead of working, on your dime, is not only a bit obsessive, but completely beside the point at this stage of the game. In the 1960's, the biggest employers were ones like GM, Chrysler, US Steel, ones that paid high union wages, and provided a middle class society. Today the biggest employers are Wal Mart, Target, UPS, and similar, paying low or minimum wages, and enforcing an ever greater rift between have and have not. The working have become the working poor, and we have only just begun. It is those very jobs- retail, warehouse, truck driver, bookeeper, that are on the cusp of automation. Software will be able to do their jobs vastly cheaper, with no complaints, 24/7. The working poor will then be the non-working poor. At that point, some tough political choices are going to have to be made. Your view that the invisible hand will somehow fix things, just don't give those welfare bums anything, will lead to some sort of corporate feudalism, and set the state for civil unrest and conflict.