Spurring discussion on inequality and government poverty policies

Recently, in the Albuquerque Journal and then in the Las Cruces Sun-News, a column I wrote on inequality and poverty was published. In it, I made the case that inequality is an amorphous and hard-to-attack problem, but poverty is clearly defined and worth our attention. Furthermore, poverty is best addressed through free markets and limited government.

Needless to say, the column received a strong response. In today’s Journal, my old debate opponent Nick Estes argued that jobs and economic growth are needed to cure inequality. First off, I agree with Nick that economic growth is imperative for raising living standards across all income levels. The main difference we have is that he sees government economic stimulus as the best means of achieving that end. As the chart below illustrates, federal government spending is at historically-high levels as a percentage of GDP:

Estes is simply trapped in the Keynesian mindset that government spending is needed to “prime the pump” when it comes to our economy when in reality, government diverts resources away from the private sector and into less beneficial, government programs. And, if federal spending helped reduce inequality as Estes posits, we’d see greater equality, not greater inequality.

Another response came in the form of a letter to the editor in the Sun-News. The writer basically argues that because we have a progressive federal tax system and rich people who believe that income inequality is important. The author seemingly claims that raising the minimum wage will have a dramatic, positive impact in terms of reduced inequality.

Lastly, there has been an ongoing discussion in the Albuquerque Journal’s Business Outlook section in which I was accused of not backing up my writing with data. I find that suggestion to be laughable. All this opposition is wonderful. It is a sign that my work is hitting its mark and forcing people to think about the issues. In other words, I’m doing my job.

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8 Replies to “Spurring discussion on inequality and government poverty policies”

  1. Please give us some hard data and sources such as the GAO, Bureau of Labor Statistics, and the Federal Reserve.

    1. I’m not sure what you are saying, Lee. In my original article I cited The Economist magazine and a former official at the Federal Reserve. In my posting above, I use a table from Forbes Magazine that simply compiled data from the OMB. I’m not sure where this meme is coming from that I just cite opinions with no data. Seems like an organized left-wing campaign to me.

  2. Hi Paul good to be talking with you again. Start with wikipedia.org. Try the Congressional Budget Office (CBO), U.S.Department of Commerce, Bureau of Labor Statistics, Economic Policy Institute, Political Research Quarterly, USgovernmentspending.com, and the Federal Reserve Minutes. Those are the ones that come to mind offhand but there are many more.

    1. There is definitely plenty of data out there and I used some small sliver of it. One can only use so much data in his writing, especially in a 700 word article. Rather than badgering me about the supposed inadequacy of my sources, I’d love to see you and some other folks put together a solid rebuttal. It’s been awhile, but I’d be happy to post your article alongside my own (I’d revise mine) at: NMPolicyDebate.com Send me an article at: info@riograndefoundation.org

  3. There were about $4 trillion (that’s with a T) of off the books spending that President Bush did for the wars in Iraq & Afghanistan and Part D Medicare. So the spending as part of GNP was never reflected. Then you see a spike in spending for Obama whose budgets (with exception of the $800 billion Federal Stimulus) are generally lower than Bush’s were.

  4. Paul, please research government subsidies to private business entities. I believe the income tax credit and welfare among other subsidies to individuals are in reality business subsidies in that taxpayers pay what business should be paying employees — a living wage. If not for those subsidies, our citizens would be in violent revolt against our government as we are witnessing throughout the world.

    1. Are you referring to the Earned Income Tax Credit? Perhaps that policy is less than ideal. I’m not sure what the situation would be in the absence of traditional welfare programs and transfers to the lower classes, but just to be clear, so much of what our government does is welfare for the wealthy: Social Security, Medicare, much of the military spending (especially fancy new weapons and equipment), agriculture subsidies, the homeowners’ tax deduction, higher education subsidies….on and on. It only makes sense because the wealthy have plenty of money to hire lobbyists whereas the poor don’t.

  5. Good points. Rex Nutting, Global Community editor with http://www.marketwatch.com wrote two articles you may find of interest: ” Why the super-rich get richer and you don’t” 2/21/14 and “3 things the fed can’t explain” 2/14/14.

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