“It appears, Curmudge, that conservatives and progressives
agree on something. They both want
Americans to live well, and in addition, to have a safety net for those who are
unable to support themselves.”
“Sounds good so far, Julie, but then they diverge. Conservatives want ‘living well’ to be
based on economic growth such that everyone who is able to work can find a
job. And ‘living well’ means
having the freedom to live as he/she wishes and as prosperously as he/she can
afford.”
“Based on our readings, progressives see it
differently. They feel that an
all-powerful central government can make better decisions than
individuals. This reduces inequalities,
but as Churchill said, provides for ‘equal sharing of miseries.’ Nevertheless, in the U.S. in recent
years the administrative state has forged ahead with ‘over-regulation, cronyism, institutional sclerosis, and mounting public
debt’ (Levin in preceding posting).
Despite this sorry record, the progressives portray themselves as
helping the middle class.”
“As I see it, chère etudiante, the more people they
can get feeding at the public trough, the more people will be depending on and
supporting the progressives. Here
are some data: ‘In 1960, According to the Office of Management and Budget,
social welfare programs accounted for less than a third of all federal
spending. Today (2013) entitlement
programs account for nearly two-thirds of federal spending.’ ‘Welfare spending is nearly twice as
much as defense, justice and everything else Washington does—combined.’ ‘The Department of Health and Human
Services reports that more than 12.4 million working-age Americans obtained
income disability support from government programs in 2011. That’s more than the total number of employees
in the manufacturing sector of the economy.’ (1) Yet after spending several years in a corporate Environment,
Safety & Health Department, I know personally that the American workplace
is becoming increasingly safety-conscious.”
“Another way that
the progressives hope to gain support is to raise the minimum wage from $7.25
to $10.10. But the Congressional
Budget Office estimates that the change would eliminate 500,000 jobs. Gosh, Curmudge, it seems that
progressives care more about catchy themes that attract votes than they care
about people. More facts from
research: 25% of hourly employees in poverty already earn $12 per hour or
more. Only 18% of the benefits
from the proposed increase would go to minimum-wage earners living in poor
families. (2) And for young people
hoping to climb the ladder of success, a higher minimum wage makes the first
rung harder to reach.”
“To neutralize the
voter appeal of a higher minimum wage, Wilcox in Room to Grow and Saltsman in The Wall Street Journal (2) have
proposed modifying the earned income tax credit (EITC). The EITC is a refundable tax credit for
low-income households. The
modified plan would increase the credit received by childless adults. Other approaches to fighting poverty
are the block grants described by Winship in RtG, termed federal opportunity
grants by Paul Ryan. (3)”
“I think I know
where you are heading, Old Guy.
Although middle class Americans are aware of the miseries of socialism,
they—like many Europeans—have been seduced by big government’s handouts. They will be reluctant to break the
‘big government’ habit ‘cold turkey.’
That’s why several of the YG Network’s proposals in Room to Grow are less rigorous than desired by other
conservatives. YG Network people
want to gently wean middle class people away from big government. To be even-handed, let’s consider what
dyed-in-the-wool conservatives favor.”
“As you wish,
Julie. The title of Daniel J.
Mitchell’s paper is the same as his conclusion, Tax Credits Won’t Lift Economic Growth. (4) He said there is no evidence of a
positive economic outcome. ‘And
since tax credits have little or no effect on incentives to work, save and
invest, conservatives won’t be able to make an argument about the less
fortunate benefitting from faster growth.’ ‘The more effective policy is to boost economic growth so
that families have more income in the first place.’ Mitchell’s conclusion is to ‘focus on reforms that boost
savings and investment, such as lowering the corporate tax rate, reducing the
double taxation of dividends and capital gains, and allowing immediate
expensing of business investment.’ “
“Somehow,
Professor, I doubt that Mitchell’s last sentence will strike a chord with a
mother on welfare.”
“Let’s end this
posting with a few suggestions from George P. Shultz on How to Get America Moving Again (5): Cleanse the personal income
tax of deductions. Lower the
corporate tax rate to be competitive with the rest of the world. Overhaul the complexity of the regulatory
octopus. Have a robust military
capability. Get control of
spending, especially entitlement spending. Index the normal retirement age to longevity. Shultz had several suggestions on
health care; we’ll revisit them when we next write about that subject. But here they are briefly: Have
high-deductible catastrophic insurance available across state lines. Encourage health-savings accounts to be
used in paying for routine medical services. Have price transparency for medical services.”
“I read, Curmudge,
where someone said in a subsequent letter to the editor, ‘Shultz’s ideas are
great, but we need the right leader to make them happen.’ “
“Agreed! A dynamic communicator. As Margaret Thatcher said, ‘First
you win the argument; then you win the vote.’ ”
Kaizen Curmudgeon
(1) Eberstadt, Nicholas Yes,
Mr. President, We Are a Nation of
Takers The Wall Street Journal, 1/25/13.
(2) Saltsman, Michael A Better Poverty Fighter Than Raising the
Minimum Wage The Wall Street Journal, 8/12/14, p. A13.
(3) Ryan, Paul A Better Way Up From
Poverty The Wall Street Journal, 8/16/14, p. A11.
(4) Mitchell, Daniel J. Tax Credits Won’t Lift Economic Growth The Wall Street
Journal, 8/21/14, p. A13.
(5) Shultz,
George P. How to Get America Moving Again The Wall Street Journal, 8/09/14, p. A11.
No comments:
Post a Comment