Healthcare reform, NAFTA renegotiations, tax reform,and the review of the Dodd–Frank Wall Street Reform and Consumer Protection Act, which offers individuals and small businesses numerous protections at the expense of banks, have primed the debate on economic development, job creation, and poverty. Healthcare reform, in particular, tends to provoke heated responses, because the inability to pay for healthcare is a matter of live and death. As a form of financial compensation for employment, insufficient and increasingly expensive health benefits simply reflect the struggle to earn a sufficient income. As a form of public welfare, government health insurance and subsidies only mirror the growing need for social welfare spending.
Poverty around the world has a surefire cure. It is income from employment and business ownership. More specifically, it is a source of income capable of supporting a modern lifestyle and the opportunity to grow one’s income based on merit and hard work. Absent an economy that delivers opportunities to the majority of people, social welfare spending is needed to ensure the basic needs of people are met and people can access the means needed to eventually uplift themselves from poverty. Unfortunately, productivity-enhancing technology, outsourcing accelerated by disruptive trade, and the redistribution of wealth into concentrated pockets are factors fueling a growing need for public welfare.
The principle role of any economy is to redistribute the wealth of a nation, and the world, to provide for the current and future needs of the population. If the economy does not properly distribute enough wealth to provide for the needs of a critical majority, the government must do it in order to ensure economic and social stability. This, of course, concentrates wealth into the hands of government officials, which is detrimental when they are corrupt, oppressive, and abusive leaders. In the US, which leads the global economy, there is fierce resistance to increased dependence on social welfare spending, but there is also resistance to address systematic issues feeding the need.
What the US has done is reform public welfare to provide greater benefits to the so-called working poor as well as increased benefits in the form of tax credits. Today, about one in seven Americans are able to rely on food stamps alone to subsidize their incomes. Whether discussing period or chronic reliance on government aid, as well as periodic or chronic unemployment and underemployment, it is essential to recognize job seekers are not job creators nor do they determine their pay scale. Quite frankly, there are not enough well-paying, accessible jobs being created in the right areas to fulfill the needs of a modern lifestyle for those who need them.
On average, Americans need to earn an income equivalent of nearly $15 per hour for a 40 hour work week in order to provide for a basic standard of living and shed their dependence on government. Absent this, an individual has a personal budget deficit. Those who living in deficit must find ways to share unmet costs with others, e.g. roommates and multiple incomes, displace costs onto those willing to subsidize their incomes, including family and government, forgo necessities, or fiance their deficit with debt. These unstable situations require them to rapidly increase their wages. Unfortunately, income growth tends to be realized over years and decades; whereas, the capacity to live at a deficit is usually exhausted within weeks and months.
The economy grows, which means the cost to live rises. For a select few, accelerated economic growth is a windfall, but the benefits of economic growth are not shared evenly. Those at the top see massive gains in wealth as corporations deliver ever mounting profits, which are amassed by siphoning dollars from the rest of the nation and world, to investors. Most others are considered lucky when there is sufficient economic growth to avert a recession and they can keep their jobs. Due stagnant wages, however, fast paced economic growth means their incomes are actually shrinking. This, in turn, translates into an even greater need to expand one’s income.
For those already working at a deficit, the ability to catch up becomes increasingly elusive. With wealth being redistributed and concentrated into the hands of fewer individuals and fewer communities, economic growth is becoming more of a financial poison than a panacea to poverty. As innovation outmodes the skills of and need for workers, the competition for dollars and jobs, especially well-paying jobs, translates into intensifying downward pressure on wages, incomes, and small business profits. Until, and unless, some revolution in innovation spurs the development of some novel labor-intensify industries, the ability of individuals to improve their own economic prospects is becoming increasingly limited.
Tariff-free trade and and unbalanced tariffs have, in turn, further intensified the competition for income by transforming national competitions into a global competition between billions of workers instead of millions. Nations able and willing to pay for the basic needs of their citizens are essentially subsidizing cheap labor, thereby further easing the upward pressure on wages. Depending on how generous the total of the subsidies are, people will either be left to convulse in stagnation or perceptually struggle with desperate poverty. In the world’s wealthiest economy, the shaming of reliance on social welfare and an unwillingness to tax, coupled with a massive National Debt, ensures public welfare spending will be scare.
America is leading the world in the building of an economy that starves people of opportunity and neuters government, so it is powerless to secure the needs of its Peoples. The US is not the only developed nation facing the issues that contribute to a growing reliance on government, which cannot be relied upon. Ironically, the human race formed society to shield people from the harsh realities of nature and Darwinian competition. Humanity developed economies to ensure goods would be plentiful and the fruits of one’s labor could lead to prosperity. The toxic competition of today’s economic climate is, however, returning mankind to a perpetual state of prosperity-killing scarcity and uncertainty.
Social welfare spending may help ease the growing want, but it is a poor substitution for opportunity while will weigh government down until it collapses. Starving government of tax dollars will do nothing to ease the human need being created by economic forces. It will only create more of the the fake asset called debt, which cannot, and will not, be repaid. Once the economy is forced to recognize this reality, even those being enriched by debt-fueled economic bubbles will face the harsh realities of economic collapse and desperation. Unless economic policies start to foster viable and accessible economic opportunities for the masses, a permanent degenerative interdependence will replace the constructive cooperation needed to fuel prosperity on a national and global scale.
Read old posts