Math is not one of my better subjects, so for those of you that are a little better at this than me, here's my question.... I have seen on T.V. that instead of bailing the banks and companies that have gotten into a jam because of their mismanagement, instead we give everyone (legal residents) over the age of 18 $100,000.00, we might also exclude those that have been convicted of a felony (maybe just elegible boters?). How much would this cost??? Even if we toned that down to $50,000.00? This would help all those facing foreclosure and help the banks as they would be getting the money from the people that owe it. It may even help the car companies, people might buy cars. It would for sure help the whole economy as everyone would have money to spend. Seems to me this would do more good than the current plan to bail the companies out.
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As The Rich Get Poorer
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The presumption implicit in the criticism of growing economic inequality is that society's income is a given and, if the rich have less, others will have more. Up to a point, that's true. The government already redistributes much income, often for the good. During the boom years, companies might have been less lavish with top executives and slightly more generous to other workers or shareholders. Some new fortunes stem from self-dealing and financial razzle-dazzle, not the creation of real economic value. It's just deserts that some of this wealth has evaporated.
But the redistributionist argument is at best a half-truth. The larger truth is that much of the income of the rich and well-to-do comes from what they do. If they stop doing it, then the income and wealth vanish. No one gets it. It can't be redistributed because it doesn't exist. Everyone's poorer.
This isn't just theory. Last week, New York Gov. David Paterson pleaded with Congress to provide emergency aid to states. Heavily dependent on Wall Street for taxes, he testified, New York faces a $12.5 billion budget deficit next year and expects joblessness to rise by 160,000. Wall Street bonuses will drop by 43 percent and capital gains income by 35 percent, he estimated. People in New York would be better off if the securities industry were still booming, even if there were more economic inequality.
Americans legitimately resent Wall Street types who profited from dubious investment strategies that aggravated today's crisis. And government properly redistributes income to reduce hardship and poverty. But that's different from attempting to deduce and engineer some optimal distribution of income. Government can't do that and shouldn't try. Scapegoating and punishing all of the rich won't do us any good if the resulting taxes dull investment and risk-taking, discouraging economic growth that benefits everyone.
© 2008
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