I’m no fan of Mitt Romney. I don’t like him, actually. Not because he’s Mormon or what have you, I just prefer someone who doesn’t flop on his standpoints, doesn’t follow the party line and actually wants to free Americans, not merely help one group, such as the Republicans who worship the rich or the Democrats who worship the poor.
However, I have to give him credit, and not necessarily for the reasons he gives for his own statement that he’s not focused on the poor.
Before I begin, let me post two quotes he made.
The first quote: (para) he said he’s “not concerned about the very poor” because they have an “ample safety net.”
His rebuttal to people’s protests: “I’m not concerned about the very poor. We have a safety net there. If it needs repair, I’ll fix it. I’m not concerned about the very rich. They’re doing just fine. I’m concerned about the very heart of America, the 90-95 percent of Americans who right now are struggling.”
First, if your focus is on the poor, giving money from the government at a time the economy has little money is helping the poor when there’s no economy for them to be helped into. The idea is that we help the poor until they can get on their feet and take care of themselves, right? However, the economy is broken. If we find better ways to improve their safety net and actually give them the tools to get out of poverty, it’s like increasing pressure to get water out of a hose while there’s a cap on the end. You’re creating activity, but you’re not actually helping them out of it.
The economy doesn’t care if you’re rich or poor, it’s just plain sick. Rampant inflation, high regulation, business-defeating measures in congress keep anyone, rich or poor, from healthy success in business. If we don’t address those issues first, such as ending the Federal Reserve’s dangerous experimentation in the economy and hold on our government, simplifying the tax system and ending tax loops, ending bureaucratic waste in federal and state governments, removing unneeded federal agencies. When you release the power within the economy from unhealthy interference, there are sellers, buyers and money for everyone.
Second, for all I disagree with Romney singling anyone out, he’s not far off track. The true lifeblood of American business IS the middle class — always has been. Our nation is 80% entrepreneurs, our economy built upon them. Without them, business stops. If you want to focus on a group, the middle class is better to focus upon than the others, because when the middle class succeeds, so does everyone else.
If your focus is not merely on helping the poor (because you can give money to the poor whether the economy is good or bad), but if you give them money and they have nowhere to aim for or improve to, you’ve served only to feed them for the day. And let me qualify that — any day you help someone through another day is GREAT, but this is about making your efforts of TEACHING them to fish worth a damn.
Thirdly, the government is a dangerous entity to ask to take care of people. Ask the Native Americans in the early 1800′s. Chinese in the late 1800′s. Japanese in the early 1900′s. Blacks in the mid 1900′s. Stop asking the entity which created our welfare state to fix our welfare state. The government didn’t create the poor, but it expanded the number of people who are poor and locks them into their poverty using the progressive tax system, which punishes low-earners from making more.
If we don’t simplify the entire system and reduce the government’s footprint, remove roadblocks to small businesses expanding, reduce the strain of taxation, and prevent the singling out of any group of people as classes, it won’t matter if we help the poor first. We’re not solving the long-term problem of a broken economy. We’ll end up giving the poor all the money the middle class needs to stay in business, effectively giving capital to people who can’t manage it from people who can, leaving only the rich as capable businessmen, and then where are we?
Help the poor? Absolutely. I personally believe people who have their own money will do the right thing and offer more to charity. I don’t believe a government is somehow more noble, especially when that same government starts wars and then leaves people to suffer for their interference (Vietnam), tests chemicals on their own people (CIA), assassinates people without trial, and no efforts to make it legal to circumvent our own bill of rights (NDAA). Let them help the poor? These careless bureaucrats?
Help the poor yourself. Find someone who needs your help and teach them to manage their money, offer them funds to improve their lifestyles and help them get out of their rut. But make no mistake, poverty is a culture, not a mere state of your budget. My own family has been on nothing, but it was temporary and we moved on and up, without a college degree.
The best way to help the poor is involve yourself in their lives, not asking a cold bureaucracy to do it for you.
Ultimately, you can’t save the economy by saving the poor. You can’t neglect them, but helping them doesn’t necessarily help everyone else. Focus on the economy so everyone benefits, THEN worry about freeing the poor to move up by their own merit.
Exactly how does a progressive tax system keep people in poverty?
In short, impovershed people attempting to get out of their lack of funds might work at four low-income jobs, maybe making at or less than minimum wage (waitresses, for example). If they make over a certain amount total from all jobs that exceeds a particular step in the progressive ranking, despite each job paying the minimum, they will be taxed at the higher bracket. It’s like working only enough really to earn $15-20,000 a year and being taxed for $30,000 a year. Also, should they get a job just over the bracket hump, they will be taxed so much more than the top of the previous bracket that it becomes discouraging to even try to move up.
Small businesses face a similar danger all the time. For example, a small business has 199 employees, and the law states that if it gains one more employee, it will have to install certain facilities for handicapped, which might cost hundreds of thousands of dollars, or possibly millions. Small businesses will not grow beyond that point because of regulations, and that’s just a small example of how progressively treating groups differently based on an arbitrary figure that changes each generation can harm the greater economy.
The second danger to having an income tax at all (flat or progressive) is that it opens a window for politicians to both know who is getting paid and how, allowing them to cater to special interest groups with “tax breaks” that garner votes and helps to keep them in office. This is a very common tactic for politicians to buy votes, and it actually means that the government is working to create classes by treating people differently based on nationality and other characteristics, rather than letting Americans be citizen/non-citizen to the blind justice of the law, but we’ve left that behind, unfortunately.
Your reasoning doesn’t line up with the facts. Tax rates for the bottom 20% of earners are half of what they were in 1979, for example.
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456
What about those who are trying to get to the 21% percentile? Tax rates might be lower right now, but if you factor in the complete loss of power of our dollar (Approximately 75% of it’s buying power since the 70′s, 98% since the inception of the Federal Reserve), then we can lower taxes all we like, but the money they do keep will be worthless. Factor in a 75% loss of buying power with 50% tax cut you mentioned, and we’ve actually made it worse than it was in the 70′s.
It’s when those at the bottom attempt to shift progressive income tax steppes that it becomes discouraging, especially to those who don’t understand money. Remember that poverty is a culture, not merely a state of economics. Many impoverished are never educated properly on the management of money or how to adequately face steppe changes. Many believe it’s not possible to move out of poverty, and even the slightest discouragement to all but a few hard-nosed SOBs who fight their way out, will turn them back. While poverty programs are needed to help re-educate them on how to better manage what they do earn and encourage self discipline, it will still be worthless if they don’t have a healthy economy to manage their way into.
The bottom 20% is making more in inflation adjusted dollars than they were in 1979. This means their buying power is higher, not lower. (Of course the top 1% has done much much much better!)
See figure 1:
http://cbo.gov/ftpdocs/124xx/doc12485/10-25-Householdincome.pdf
If you compare their power relative to everyone else, yes. (You must also factor that the degradation of the dollar affects everyone equally, so while the poor may have grown relative to the middle and upper class, everyone has less power overall). America’s poor usually have one or more TVs, a vehicle, and other amenities they couldn’t have purchased years ago, not to mention certain price drops of those amenities. Food prices have dropped considerably, and is much easier to acquire in bulk. It’s very cheap to eat out now compared to the late 70′s. But it doesn’t mean they’re not locked where they are due to the progressive income steppes, not to mention outrageous untenable mortgage rates and interest rates.
If we are looking at a poor with a higher buying power, then by what measure are we calling them poor? Is it because they’re merely at the bottom, or because they’re actually impoverished? Even if my figures are off, which I admit is always a possibility, the poor are still consistently locked where they are. The economy still must be fixed first.
Nice piece, pretty much nailed it. We’re following you know, if you want check out usnotes.net for what we got on the Fed and more.