Tag Archives: income inequality

On socialism

On socialism, overheard elsewhere:

An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class.

Why? That class had insisted that Obama’s socialism worked and that no one would be poor and no one would be rich, a great equalizer. The professor then said, “OK, we will have an experiment in this class on Obama’s plan.” He decided to average all grades… everyone will receive the same grade so no one will fail and no one will receive an A…. (substituting grades for dollars – something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little studied even less and the ones who studied hard decided they wanted a free ride too so they studied little. The second test average was a D! No one was happy.

When the third test rolled around, the average was an F. As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed.

It could not be any simpler than that.

These are possibly the five best sentences you’ll ever read and all are applicable to this experiment:

  1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
  2. What one person receives without working for, another person must work for without receiving.
  3.  The government cannot give to anybody anything that the government does not first take from somebody else.
  4. You cannot multiply wealth by dividing it.
  5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

Marriage: A luxury good

From Monty posting at Ace:

This certainly feels DOOM-y to me: marriage has become a luxury good. Charles Murray‘s book Coming Apart tries to underscore that trend with data and extensive cultural observation. This trend portends a lot of things, few of them good. Single mothers are far more likely than married mothers to be poor and thus dependent on the welfare state, for one. For another, the whole concept of “fatherhood” is disappearing from a huge swathe of American life. Men are becoming marginalized and devalued, yet at the same time are faulted for being reluctant to enter into an institution — marriage — that is so grotesquely weighted against them in terms of risk versus reward. There is cold comfort to be had here, though: no civilization in the history of the world has survived without the nuclear family as the basic building-block. We will revert back to the mean, sooner or later….

Read it all.

Charen: “Unwed and imperturbed”

Worth a read. From Mona Charen at National Review Online:

…The collapse of marriage among the lower and lower middle classes is rapidly tapping our national strength. Women from wealthier families get it. They generally wait until they’re married to have babies. They know that two parents create stability, financial security, and the social structure to optimize the chances of rearing happy, healthy, and productive new citizens. The illegitimacy rate among women with college educations, while it has tripled since 1960, is still only about 8 percent. As Kay Hymowitz noted in Marriage and Caste in America, “Virtually all — 92 percent — of children whose families make over $75,000 per year are living with both parents. On the other end of the income scale, the situation is reversed: only about 20 percent of kids in families earning under $15,000 live with both parents.”

The failure to marry on the part of the lower middle and lower classes — not the tax code, or Wall Street, or competition from China, — is what is aggravating inequality in America.

The toll is incalculable. In every way that social science can measure — school performance, drug abuse, unemployment, suicide, poverty, depression, dependence on government handouts, mental illness, violence, and far more — children raised by single parents (especially when their parents never married) are at a severe disadvantage. The failure to form families is devastating our schools, exacerbating inequality, and diminishing happiness on a grand scale….

Read it all.

Income inequality now lower than it was under Pres. Clinton

Top 1% income share now at 1996-1997 levels (The Tax Foundation)
Who knew that politicians often use demagoguery instead of facts? From the Tax Foundation, the facts on income inequality:

…Based on the most recent IRS data, from 2009, income inequality has fluctuated considerably since 2000 but is now at about the level it was in 1997.  Thus, the Bush-era tax cuts (which had provisions benefitting both high- and low-income taxpayers) did not lead to increased income inequality.  By contrast, inequality rose 12 percent between 1993 and 2000, following two tax rate increases on high-income earners.  Thus, changes in inequality over the last two decades appear to be driven more by the business cycle than by tax policy….

Read it all, and check out the TaxProf Blog–good stuff.