by hamilcarr 78 Replies latest social current
It may be the case that this social spending itself is a contributor.
Again, you're giving a false causality. Social spending has been much higher in other developed countries where inequality has stayed the same or even declined.
Besides, empirical evidence shows that social taxes reduce poverty in wellfare states.
If you were a billionaire would you be willing to shovel my snow or mow my lawn for $20? $50? $1000? I doubt it.
If everyone was a billionaire money would be worthless.
W
Reason Magazine is always a great resource:
Some people still seem to think Republicans take a hands-off approach to regulation, probably because the party is always quick to criticize the burdens regulations place on businesses. But Republican rhetoric doesn't always match Republican policy. In 2007, according to Wayne Crews of the Competitive Enterprise Institute, roughly 50 regulatory agencies issued 3,595 final rules, ranging from boosting fuel economy standards for light trucks to continuing a ban on bringing torch lighters into airplane cabins. Five departments (Commerce, Agriculture, Homeland Security, Treasury, and the Environmental Protection Agency) accounted for 45 percent of the new regulations.
Since Bush took office in 2001, there has been a 13 percent decrease in the annual number of new rules. But the new regulations' cost to the economy will be much higher than it was before 2001. Of the new rules, 159 are "economically significant," meaning they will cost at least $100 million a year. That's a 10 percent increase in the number of high-cost rules since 2006, and a 70 percent increase since 2001. And at the end of 2007, another 3,882 rules were already at different stages of implementation, 757 of them targeting small businesses............
Overall, the final outcome of this Republican regulation has been a significant increase in regulatory activity and cost since 2001. The number of pages added to the Federal Register, which lists all new regulations, reached an all-time high of 78,090 in 2007, up from 64,438 in 2001.
Figure 1 shows the real increase in regulatory spending by full presidential term between 1960 and 2009. During both his terms, President Bush outspent every one of his recent predecessors. In his first term, he increased spending on regulatory agencies by $8.3 billion, almost doubling what President Clinton—the second biggest spender—spent during his second term.
The data also show that, adjusted for inflation, expenditures for the category of finance and banking were cut by 3 percent during the Clinton years and rose 29 percent from 2001 to 2009, making it hard to argue that Bush deregulated the financial sector.
lmao....how dare you go against scripture...didn't jesus tell us "the poor will always be with you?"...............oompa
Again, you're giving a false causality.
I am only speculating a possible causality. There is a definite long-term correlation based on the data.
Social spending has been much higher in other developed countries where inequality has stayed the same or even declined.
Besides, empirical evidence shows that social taxes reduce poverty in wellfare states.
The empirical evidence upthread does not show this.
Here we see certain things demonstrated that have developed in the environment since the 1980s:
A large increase in regulation.
A large increase in social spending.
And yet we see an increase in income inequality.
Over a period of time of increased economic regulation and social spending we have a concomitant increase in income inequality. This is indisputable. We now need to find out why?
What say you, Hamilcarr?
Your worldview now faces the reality.
BTS
What say you, Hamilcarr?
Thanks for asking my advice. I was reconsidering to put forward the Swedish redistributive wellfare state model with its far reaching commitment to equality via institutional care.
Welfare state supporters typically contend that social-welfare programs reduce poverty. Critics argue that, over time, such programs instead may increase poverty by inhibiting growth of economic output and/or employment. A number of recent cross-country empirical studies have found that welfare state generosity is strongly associated with low relative poverty, but there has been virtually no cross-national analysis of welfare state effects on absolute poverty, which is at the heart of the critics' argument. This paper uses Luxembourg Income Study data to examine the relationship between welfare states and absolute poverty for working-age households in Sweden, Germany, the United Kingdom, Canada, and the United States from the mid-1970s to the mid-1990s. Consistent with the critics' charge, there is an association across these five countries between welfare state generosity and rising pretax-pretransfer absolute poverty. Yet the largest decline in posttax-posttransfer absolute poverty during this period, and the lowest level as of the mid-1990s, were found in Sweden, the country with by far the most generous welfare state. Canada's superior performance relative to the United States also suggests that social-welfare policies can help to reduce absolute poverty.
1999 deregulation of US financial systemn which did away with the restrictions imposed by the Glass-Steagall Act of 1933.
This deregulation coincided with the expansion of the Community Reinvestment Act, one of the causes for the financial crisis.
But even that is not the largest cause. Monetary and credit expansion. Finance led economic growth nearly always increases income inequality, economic history bears this out. It also leads to defective economic judgement by market players. When the bears come, the whole thing blows up. How many times do I have to repeat myself?
Ludwig Von Mises, Human Action, page 546 (incidentally first published in German in 1940 -Nationalökonomie: Theorie Des Handelns und Wirtschaftens)
It would be a serious blunder to neglect the fact that inflation also generates forces which tend toward capital consumption. One of its consequences is that it falsifies economic calculation and accounting. It produces the phenomenon of illusory or apparent profits.
Thanks for asking my advice. I was reconsidering to put forward the Swedish redistributive wellfare state model with its far reaching commitment to equality via institutional care.
Thanks. But we are not considering Sweden, Hamilcarr. I am not familiar with all the factors in that small country, social spending being only one of many I am sure. I am more familiar with the factors in my own country. And I do not see increased spending and regulation decreasing income inequality here in such a manner, if the numbers mean anything. In fact, over time, we see the exact opposite here. Since we are discussing the US, lets stick to the environment in the US, which is far different than Sweden.
BTS
Since we are discussing the US, lets stick to the environment in the US, which is far different than Sweden.
Strange. In your first reply to my OP you yourself have pleaded for a comparative approach. Your assertion that there's a negative correlation between generous social spending and income equality just doesn't stand up to scrutiny. It's a wild idea. Of course, it's necessary to go outside the American perspective.
Actually, you only want me to discuss Austrian School theories on inflation and business cycles because that's your field of expertise and it turns away our attention from the issues at stake. The problem of course is that Austrian theories are unscientific by nature, they're undebatable because there's no empirical evidence to back them up. Austrian depression economics, for instance, fail the test of reality.
Of course, it's necessary to go outside the American perspective.
Of course it is, since the American experience disproves the thesis. You are simplistic. There are many more factors at work than mere social spending and economic regulation. You pointedly ignore them.
Actually, you only want me to discuss Austrian School theories on inflation and business cycles because that's your field of expertise and it turns away our attention from the issues at stake.
No. It provides a cogent explanation, and testable predictions. All this is coming to pass before our very eyes. Austrians have been waiting for what is happening now. This crisis is straight from a textbook. Yet you do not want to engage with the ideas in the Austrian School. Why?
Austrian depression economics, for instance, fail the test of reality.
Please explain.
You said America has dismantled government. I have shown you that the governments grip and share of the economy has increased greatly. Your premise was wrong.
You say that increased social spending leads to decreased income inequality, yet in the case of the world's largest national economy, this has not been the case over the last several decades. Yet you fail to offer a plausible reason why.
BTS
