Thursday, October 1, 2015

'Life Isn't Fair' ... Prosperity, National Priorities and Wealth Creation ... Creating Free Market Opportunities and Not Redistributing Wealth Through Government Programs is the Only Realistic Road to Greater Prosperity for All

The productive private sector has long served as the primary wealth creating vehicle leading to America's world leading position as the most prosperous nation in the history of the world. And the wealth results from what We the People do and then are able to enjoy.

Meanwhile, the unproductive public sector with its 'baked-in' entitlement spending programs for a rapidly aging society has become too large as well as too intrusive. Its redistribution programs and huge indebtedness both severely inhibit the strong economic performance needed for growth.

Budget Priorities Don't Bode Well for Future says this in relevant part:

"The net result of budget policies since 2010 will be to undercut the federal contribution to the country’s human, physical and intellectual capital, undermining long-run economic growth, as an unreformed safety net swallows up ever more of national income and saps growth in the labor force.

The simplest illustration of this dichotomy is that under current law, domestic discretionary programs—programs that must be reauthorized each year by Congress—will shrivel to 2.3% of the country’s gross domestic product, the broadest measure of economic output, by 2025, the Congressional Budget Office projects. That would be the lowest since before 1965, down from 3.4% in 2007. This category includes most federal spending on research, education, training and infrastructure (though not highways)—in other words, the sort of spending that enhances economic growth.

At the same time, mandatory programs, which don’t need annual authorization and include most of the social safety net, will balloon to 14.1% of GDP by 2025 from 10.1% in 2007, according to the CBO.

This is due partly to the Affordable Care Act, but even more to the impact on Social Security, Medicare and Medicaid of an aging population and health care costs, which, after a respite, will outstrip inflation in coming decades."

The free market is the vehicle that creates and maintains the millions of jobs that 'pay for themselves' and therefore generate lasting societal wealth. The monopolistic public sector at all levels (local, state and national) simply takes a large part of that created wealth from the wealth creators and spends it on such things as government 'road to nowhere' projects and enormously underfunded entitlement programs for our aging American society.

And since this has brought us to the 'road to nowhere' we're now traveling, let's see how bad things are looking for future generations, including the very people the politicians claim to be trying so hard to help today.

But the genuine help that would be effective and is really needed is not the false vote seeking help found in today's political environment which advocates ever more expensive and intrusive government redistribution programs and policies. The politics inspired, economy debilitating and populist backed war on the private sector has to end.

The False Income-Equality Narrative is subtitled 'The focus on divvying up existing wealth instead of creating more for everyone hurts the very people the left says it wants to help:'

"An enduring theme of the Democratic presidential race has been income inequality, coupled with an enduring belief that America’s affluent reached their status at the expense of the poor and the middle class.

Bernie Sanders speaks of little else on the stump. And . . . Hillary Clinton will tell you that the “deck is still stacked in favor of those at the top.” If Joe Biden gets in, expect more of the same. The vice president is said to be contemplating a 2016 bid in large part because struggling middle-income families may have trouble relating to Mrs. Clinton on inequality given her high living since leaving the White House.

This theme, in any case, seems to resonate with voters, which is no huge shock in the sixth year of an economic “recovery.” Envy and resentment fuel class warfare, and lackluster economic growth throughout the Obama presidency has made people less optimistic and more inclined to fault others for their circumstances. A Wall Street Journal/NBC News poll this week reports that four-in-five Americans “were either ‘angry because our political system seems to only be working for the insiders with money and power’ or ‘anxious and uncertain because the economy still feels rocky and unpredictable’—or both.”

Liberals want to address income disparities through wealth redistribution—by taking money from more productive people and giving it to the less productive in the name of “fairness” as the left defines it. They want to raise income taxes, expand the welfare state, lift minimum wages and strengthen the bargaining power of unions. . . .

And all the focus on divvying up existing wealth instead of creating more risks making matters far worse for the people they are trying to help and the country in general. “To the extent that the expanding welfare state allows more people to live without working—and therefore without earning income or developing their own human capital—supporters of the welfare state are contributing to the very income disparities they so much decry,” writes economist Thomas Sowell in his new book, “Wealth, Poverty and Politics.”

Mr. Sowell is the author of more than 30 books over the past four decades, many having to do with what drives different social and economic outcomes among different groups in the U.S. and elsewhere. . . . One common assumption is that proportionate or random outcomes are the natural order of things and that gaps or disparities are evidence of something wrong. In fact, huge disparities are the norm, not the exception, because the demographic, cultural and political factors that influence the development of the human capital that makes people productive also tend to be unequal.

In 2013, only 9% of U.S. women with college degrees who gave birth were unmarried, versus 61% of women who were high-school dropouts and unmarried. Harvard’s Robert Putnam reports that children from professional families will hear 19 million more words than their working-class peers before the first day of kindergarten.

These children don’t all have the same prospects. “Equal opportunity, in the sense of being judged and rewarded by the same standards as others, cannot possibly mean equal life chances for children born and raised in these very different settings,” writes Mr. Sowell. The “fact that life is unfair is not the same as saying that a particular institution, or a particular society, is unfair.”

The argument that social mobility is a thing of the past in the U.S. also is disputable. Longitudinal studies by the IRS and others that measure the progress of individuals over time show that the
American dream is alive and well. One such paper, published by the Pew Charitable Trusts in 2012, measured “whether a person has more or less income, earnings or wealth than his or her parents did at the same age” and concluded that “the vast majority” of Americans had higher incomes, while 50% had greater wealth.

In other studies, Pew has found generational stagnation but the authors have noted that it didn’t apply to immigrants. If low-income immigrants are able to rise even when the native-born don’t, writes Mr. Sowell, “that strongly suggests that American society continues to offer opportunities to move up economically, but that not all groups make the same use of these opportunities.”"

Summing Up

No, life isn't always fair.

And the plain fact is that things aren't going well for too many Americans.

That said, there is still ample opportunity for all Americans to achieve great things on their own, especially if the government would stop hindering progress and simply lead, follow or get out of the way.

And if We the People would encourage more self help and greater individual choice with respect to educational and entrepreneurial private sector driven opportunities, things would become much more equal for those who dare to work hard and improve their lot in life.

Isn't self help the real American ideal?

That's my take.

Thanks. Bob.

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