I have a somewhat different comment/question: when an area declines economically, the costs of living and running a business should decline. This means that places like Detroit (which no longer have $30/hour manufacturing jobs) could support $8/hour jobs. This doesn’t seem to be happening-Detroit seems to keep sinking. Is this because the workforce in Detroit declines low wage jobs?
I suspect it has more to do with e inefficient and corrupt city government, which cannot run a quality school system, keep roads in repair etc.
Can we expect to see a city like Detroit shrink to perhaps a 100,000 person population? that seems to be about what the downtown office district can support.
And I’m from Mexico and am telling you that it’s not a ‘capitalist’ country…it’s a country that was socialist and had most of it’s corporations as state owned until fairly recently, and today basically has just a bolted on veneer of capitalism (with very little ‘free market’ involved) on top of literally centuries of socialism and endemic corruption. These aren’t excuses, they are reality, and I’m sorry that you find reality hard to accept. Your example simply doesn’t work, especially if you read Wesley Clark’s cite which shows that, even with years of fucked up socialism it hasn’t taken that long for Mexico to actually start to show some improvement and be one of the up and coming industrial nations even with the remaining issues of corruption, lingering socialist horseshit and problems with the rule of law. Ironically, most of your communist countries that aren’t total write-offs are in a similar boat…they have a veneer of capitalism on top of decades of socialist horseshit, and it’s that thin veneer of capitalism that makes them a potential up and coming economically competitive nation in the future. Takes a while to make a fundamental economic shift though, so it’s kind of ridiculous to say that because they don’t instantly get rid of their large poor population that it’s capitalism that’s at fault.
Er, ok. What is the problem, exactly?
The problem is determining who shot the sheriff…and whether that same person did or did not shoot the deputy as well. And why they used an arrow, poison and a Buddha. I think.
From an article written just today: http://www.bloomberg.com/news/2013-12-30/americans-on-wrong-side-of-income-gap-run-out-of-means-to-cope.html
To those in the thread who have dutifully dismissed each and every proposed government-based solution to increasing levels of relative poverty and income inequality, what sort of specific market-based solutions (or eliminating which governmental burdens) do you think would be effective in reversing these trends?
Or are there really people who read the sort of things in the quoted article and think, “Yep, this is a system that is working as intended. No problems here, no sir.” ?
Well, some people have dismissed this as “everything’s great!” Other people have dismissed some of the proposed solutions, like drastically increasing the minimum wage, or communism.
How about my solution? Public health insurance, tax capital gains as normal income, get rid of the cap on the social security tax. Eliminate a bunch of sweetheart tax breaks, like the beloved home mortgage deduction. Cut military spending back to 1990s levels. That should about do it if we talking about poverty as it exists in the United States.
Or are we talking about real poverty like they have in Africa? If that’s what we’re talking about then building schools to teach girls to read and write is probably the best investment you could possibly make. Modern water and sewage systems. And eradicating malaria would be nice.
The key to ameliorating third world style poverty is to systematically remove one stumbling block after another. People getting sick from curable diseases is one. Illiteracy. The rule of law. Stopping wars. We’re past the point where we have to worry about feeding starving people, we have everything in place to stop that, the only people who starve nowadays are people in war zones where food aid workers can’t go for fear of being shot at. We’re past the point of needing to worry about overpopulation, global fertility has declined drastically in recent decades.
Removing stumbling blocks is not a panacea that will immediately usher in a utopia. But problems feed on each other, war breeds poverty, poverty breeds war, illiteracy breeds poverty and poverty breeds illiteracy, disease breeds poverty and poverty breeds disease. This isn’t going to be fixed today or tomorrow or next decade. But people all over the world are much better off than they were two decades ago. The improvements in China alone over the past two decades have alleviated more human misery than has ever been accomplished in history. China used to be a basket case of a country, but the nice thing about hitting yourself in the face with a hammer is that it feels so good when you stop.
I’m inclined to agree with most of your suggestions, actually. Although in regards to US poverty issues, I would toss in the minimum wage hike and probably swap eliminating the home mortgage tax deduction for a raise in the estate tax, in order to keep more money in the pockets of those who are more likely to really need it. Aside from these details, though, I agree 100%.
However, I think most people would describe these sorts of actions as being left-wing or centrist, at best. I’m particularly interested in hearing someone put forth a conservative alternative. Mostly because the narratives I hear always involve the conservative argument knocking down liberal or socialist proposals, but never really offering any concrete plans beyond “Step 1: Less government involvement. Step 2: _______ Step 3: No more poverty.” I would like to hear something that explains this process more explicitly, ideally with very specific proposals and policies that could be enacted.
My preferred approach: the negative income tax, as advocated by Milton Friedman.
A baseline minimum income is set, which can be scaled to household size and/or local cost of living. Say, for the sake of the example, that it’s $20,000 per year. Then, a subsidy rate is set. Say it’s 50%. For every dollar of income below $20,000, a person receives a subsidy of 50 cents. In this way, the incentive to work remains, as each dollar of wages earned only costs the recipient 50 cents of NIT.
For incomes above $20,000, a progressive income tax is paid.
As advocated by Friedman, he also recommends the elimination of all other social safety net programs as part of the deal:
I would have major concerns about the complete elimination of aid to people who wind up unemployed at a financially inopportune time. Anyone that falls through the cracks in such a system could easily find themselves completely screwed and on the streets. Not to mention that desperate people are more likely to turn to crime in order to survive.
If instead you advocate for a NIT without altering any social programs, you’d be placed solidly in the camp of left-wingers. If you choose to merely reduce entitlements in those other programs while instituting the NIT, you’re not really changing the system in any fundamental way – just shifting the entitlements around.
How exactly would you see this working with respect to the other welfare and assistance programs?
The conservative/libertarian narrative is tied to basic supply and demand theory. Lower taxes and less regulation on businesses means lower startup costs and people with more money to spend. The idea is that when government gets out of the economy’s way, it’s can grow more quickly.
I don’t know if “no more poverty” is the goal, but a major tenet of libertarian ideology is that just because you are poor does not give you the right to take from the rich.
I endorse that aspect as well. Sorry for failing to mention it.
The NIT needn’t be computed annually. Sudden unemployment, if one had already earned enough throughout the year to exceed the NIT level, could be accounted for, perhaps by “borrowing” against future payments, or by facing a higher tax burden in the future, or by just computing the program month-to-month, so that instead of the tax level being $20,000/year, it’d be $1,666 per month.
I’d want them, or at least the large majority, ended. As it stands, the dog’s breakfast of welfare programs both place a hurdle in front of those that need them most, as they must navigate multiple government agencies and jump through many hoops, and interact with one another in less-than-ideal ways: they all have different eligibility criteria, and participation in one can make someone ineligible for others.
Net effect, ideally: less bureaucracy, more personal choice, fewer perverse incentives. Those all accord with conservative values, but without leaving anyone starving in the streets.
Just a quick note on this: one can look at aid to the poor not as a moral duty, or something the poor are owed by rights, but as buying a public good, namely peace and order. The desperate and hungry can be motivated to do awful things to alleviate their suffering. I, for one, would rather pay taxes that provide a minimum level of human comfort, then take my chances in the streets with the poor and desperate, who would exist even in a more productive, less regulated* economy.
- Needless to say, some regulations aid help an economy, all regulations are not created equal.
Or we could create a free, just, libertarian, and prosperous society–which is to say, a COMMUNIST society–and preclude the issue altogether.
Such a thing has never been done.
Previous attempts have resulted in millions upon millions of deaths.
If the Wright Brothers want to climb into their airplane and risk only their own brittle bones on a crash, that’s their business. They have no right to force the rest of us into their naive deathtrap.
I’d suppose the entire matter of the NIT’s implementation would come down to the question of exactly how powerful the subsidy rates ought to be established at. Under the exact numbers you provided as an example, I doubt the net payout to the working poor would be at the same level as the current combined amount provided by welfare/food stamps/medicaid/etc., although again, I don’t know in which exceptions or special cases you might choose to keep these programs running.
I don’t really want to get bogged down in exact numbers and excruciating detail, but I will say that I would be okay with the NIT if could match or exceed the current net amount of aid to the poor. Also, there would need to be something in place to prevent individuals from falling through the cracks if they were unable to work for whatever reason, i.e. permanent disability. I think you are correct in that the incentive structure of a NIT system would be superior to the current model of entitlement system and that the there is potential for the elimination of bureaucratic burden.
Although, I expect a hypothetical attempt at real-life implementation of such a system (in the USA) would boil down to liberal and conservative elements playing a tug-of-war with the policy specifics, similar to how the current entitlement war is going already. Are there any conservative lawmakers that have proposed or are supportive of this idea?
If lower taxes and less regulation helps business and therefore ultimately leads to people having more money to spend, why is this not currently the case? Economic indicators seem to show businesses are quite healthy and continue to grow while the outlook for the lower and middle classes is increasingly bleak, as described in the posted article and elsewhere. What would be the libertarian explanation for this disconnect that we are experiencing? Or is this literally the expected result of a libertarian doctrine?
Libertarianism is the complete opposite from communism. Just sayin’ It’s the absence of any laws or regulations as much as possible. Like Somalia. Somalia is a lot of things, but communist isn’t any of them.
Communism is when the State owns everything and creates a lot of laws, regulations and social codes to suppress anything that can overthrow it.
However, under both political systems, the elite end up with everything. A revolution won is an opportunity for power to corrupt. Hence the only non-corrupt political state is one of constant revolution where at least for some time period, the rich face the same dangers briefly that the poor do every day.
Interesting that your article is saying what several posters in this thread were saying as well. As for your question, personally I’m ok with setting some sort of BLS (basic living standard) and paying for it out of direct taxation instead of, as Human Action calls it, the ‘dogs breakfast’ of programs we currently have. I’m not sure of the best way to do it, but in theory I’m ok with something along the lines of what he laid out. One of the problems with what we have now is how complex and convoluted it is, and how it’s shot gun approach doesn’t really focus help on those who really need it the most.
The thing is I don’t believe that increased automation, expert systems or even outsourcing/offshoring are problems that need to be solved, nor do I believe in a fiat ‘living wage’ paid to people simply because someone thinks they should make a certain wage even if what their labor isn’t worth the wage set. I think that everyone would be better off without this indirect taxation and market distortion, and instead a single program/stipend would be used to aid the poor and set a minimum standard of living for them through direct taxes.
No, you said
You mention no increase of employment for anyone there, only a decrease in unemployment. Since the supposed increase in unemployment from increasing the minimum wage is at the low end (with never a mention of increased employment at the higher end) I think my conclusion that your were talking about a net decrease in employment was reasonable.
Nope. Libertarianism is, and always has been, fundamentally anarcho-communist in orientation.
Is not having the slightest clue what you’re talking about, a badge of pride for you?
And?
No, they haven’t. Making stuff up will get you nowhere.
Which is exactly why we need to end capitalism, because that’s exactly what we’ve got now.