Sunday, March 16, 2014

There is a Culture of Dependency and Income Inequality is a cause

and it can neither be solved by tax cuts alone or GOP policies without modification.

Unfortunately, the rural areas of America have been left behind by globalization, the integration of technology, and the deterioration of education.  This has added to a rural culture of dependency to the traditional urban culture of dependency.  Ironically, the urban dependent tend to vote Democratic while the rural, elderly dependent tend to vote Republican.

What are the vehicles of dependency?  Well, they are anything that avoids allowing a domestic version of the Irish Potato Famine, from which the only humane escape was the open immigration policy of the United States.   Tom Egan tells why Paul Ryan should remember to have compassion

There is nothing wrong with such vehicles if they serve a public purpose.  Not everything the government has ever done has served a public purpose, but the fact that people are not starving and dying in the gutter as they did in Ireland 170 years ago means that public policy is serving a humane function and the debate should be focused on what policy adjustments will make things more balanced or better.

Ironically, GOP opposition to increasing the minimum wage is fighting the one policy adjustment that would serve GOP purposes of reducing dependency on government programs.  If you raise the minimum wage, the working poor should not need or qualify for food stamps, heating subsidies and medicaid.  Anyone who works a 40 hour week should not be dependent on the government for anything, unless their employer does not provide health insurance, then some support is needed there.  Once this element of the culture of dependency is eliminated, the debate can properly focus on what standard of living should be supported by government programs and who should benefit from government subsidy in the process.

I know that current Agricultural Subsidies and numerous tax policies provide government funding for benefits only accrued by people who are very well off.  This is certainly a part of the Culture of Dependency.  After the Welfare Reform Act of 1996, I don't know how anyone on welfare can remain there for an entire life.  So while the GOP runs against this vision of the culture of dependency, I don't know how real it is because frankly I am in the top 5% and I don't hang out with people not in the top 5%.  I know the workers I meet who earn less are serious about their work and earning a living and not looking for the government for anything except affordable access to health insurance.

But the GOP brings Medicaid, Medicare and Social Security into their culture of dependency.  I don't know how a program a worker pays into for 45 years, expecting those savings to take care of them in retirement, creates a culture of dependency.  And what is truly ironic is that, now that the Heritage Foundation/Romney/ObamaCare is bringing down the rate of increase in the cost of government provided health insurance, all the GOP can do is run against the exact policies they designed and supported prior to the Democrats passing ObamaCare.

So, while the GOP wants to repeal ObamaCare and wants to talk rationally about not removing tax incentives to work as income rises, ObamaCare, with its gradually reducing support for people's privately purchased and managed health insurance, fits what the GOP want in concept.  The GOP frustrates me in so many ways because they campaign on not fixing entitlements, while they promote policies that will have a clear direct impact on people receiving entitlements.  I don't want social security privatized.  You can means test the cost of Medicare, but you cannot eliminate Medicare.  You cannot have people starving and dying in the gutters (Tom Egan says Paul Ryan is not advocating that but I am not so sure), but you must motivate poor uneducated people to participate in economic activity and that is where our current culture of dependency is failing.  Less educated and/or lower quality gene pools, just don't have what it takes to participate in the global economy or higher compensated domestic economy.  That is where the culture of dependency needs redesign, but it also needs economic activity.  The states must participate.  What works in the Northeast may not work in south Texas.  Government policy cannot solve that through direct action (sorry Democrats), it can only generate a stable economy with guidelines for how society should operate, while providing a safety net that meets the modern guidelines for humane behavior.

Ultimately, we need a rational allocation of government resources to support a minimum standard of living while people are of a working age, we need incentives to save for retirement, and we need a market based economy that is going to be an efficient engine of growth.  The NY Times today had a fascinating story on how private funding for scientific research is growing.  Traditional government support for basic scientific research has dropped in the recession and sequestration battles, but the private sector has stepped in with a focus on specific personal goals.  I could not help but conclude that this is what is supposed to happen in a market economy.  I could not help but conclude that concern about a lack of central direction is overwhelmed by the fact that centralized direction might miss something.  I wish the government could afford more, but until we have repaid the funding for the borrowed War on Terror, and the Baby Boomers pass through the Entitlement Dependency phase of their life, it is good that science continues to be supported.  I hope the government still funds some stuff just in case the private sector losses interest.

Privatization of Scientific Research


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