Monday, November 23, 2009

10 Ways Government Hurts the Poor

A big H/T goes out to Chicago Ray for this article.

10 Ways Government Hurts the Poor

by Jerry Agar

"If I knew for a certainty that a man was coming to my house with the conscious design of doing me good, I should run for my life." Henry David Thoreau

"I am from the government, I am here to help you." Scary Bureaucrat

In no particular order, and in my opinion, here are 10 ways the government does the opposite of its announced intentions.

1. Minimum Wage If you charge more for something, you sell less of it. Labor is no different than any other commodity for sale. As economist Walter Williams says, "If higher minimum wages could cure poverty, we could easily end worldwide poverty simply by telling poor nations to legislate higher minimum wages." A higher minimum wage means fewer jobs and makes it more difficult for people to start a small business. If you tell me you'll pay me X dollars an hour to do a job, and I say, "That's fine," why shouldn't I be allowed to do so? Why not just declare that everyone has to earn at least $100,000 a year? The answer is no different at $100,000 than it is at $15,000. It is just a matter of scale.

2. Taxes Business taxes are built into a product at a number of levels along the production and distribution chain, and then sales tax is added at the end. An ever-increasing government can appear to fund its growth by “taxing the rich” and to make business “pay their fair share,” but low income consumers pay a higher percentage of their total income in taxes. All products and services include taxes even when it is not obvious. For instance, rent contains property tax. Gasoline is highly taxed, but the actual tax rate is not listed at the pump.

3. Over-Regulating Over-regulating of business costs money for those enterprises that survive. Less money - less employment. Over-regulation leaves so many hoops to jump through that it distracts from the aim of the business or company, and thusly hurts expansion. Plus, it makes it all the more daunting to start a business Wasting money on losing propositions like sports stadiums - which are always sold to the public as economic development - takes money out of the economy, which ultimately costs jobs.

4. Health Insurance The law denying the right of people to buy health insurance across state lines results in less competition which means higher prices. Mandated coverage forces us to buy insurance we don't need. As economist Thomas Sowell points out, "Mandated coverages include alcoholism, acupuncture, breast reduction and treatment for baldness, among other things. You may just want insurance to cover you in case you get hit with some big-time medical problem, but many state laws will not allow an insurance company to sell you "major medical" coverage without all the add-ons that politicians and special interests have come up with." Does a single mother struggling to make ends meet, yet wanting to protect the well being of her children, really need to pay for baldness coverage (pun intended) in her health plan?

5. Unions Governments often work in favor of unions to the detriment of taxpayers in general and the poor in particular. Two examples are prevailing wage laws and the fight to keep Wal-Mart out of Chicago. Unions today primarily survive in the public sector, driving up the cost of government, which lowers the efficiency of the economy and its ability to create jobs.

6. Education Monopoly - the cap on charter schools and the unwillingness of so many government entities to give power to parents through a voucher system keeps the monopoly going. In Chicago the graduation rate is 50%, but the education monopoly will not even consider trying capitalism, now that socialism has failed. Monopolies never favor the customer – in this case the children of people too poor to escape bad schools.


Fuzzy Slippers said...

This is a great post. It nails exactly what is so very wrong with liberal "thinking"--or what is so diabolical about it (I personally think it's the latter).

Anonymous said...

Education Monopoly is the one that gets me frothing with anger, and the little-brained students cannot see the shaping of their own minds.

conservative generation said...

teresa, nicely done. I've actually lost a job due directly to minimum wage increases. Supposedly, I was supposed to benefit by getting fired. I was living under the poverty line at the time.

Ron Russell said...

You make some very good points Teresa and the one about the minimum wage is very good. Labor is indeed a commodity and when the price of any commodity is set artifically high demand decreases and there is a surplus and in the case of labor this means higher unemployment. The law of supply and demand.

Teresa said...

Fuzzy Slippers,
Diabolical fits liberal thinking very well.

Teresa said...

The liberals have robbed many a kid of a good education. The education monopoly must stop.

Teresa said...

Conservative Generation,
For some reason Libs like the idea of making people lose their jobs. Oh yeah, that's because they want everyone reliant on the government so they vote Democrat.

Teresa said...

You are correct about the law of supply and demand. The minimum wage hurts the economy because than less people can be hired by employers.

WomanHonorThyself said...

great overview Teresa..but don't bother trying to convince the gimme gimme gimme LIBS!

RightKlik said...

Liberal powermongers use the poor as pawns in their statist schemes. They generally don't care about the poor as human beings.

Chicago Ray said...

Thanks Teresa that was a good article by Jerry Agar at WGN radio and thanks for posting it. Did he send you an email btw? He said he was gonna...

Teresa said...

You hit the nail on the head.

Teresa said...

Chicago Ray,
That was a great article and I hope this goes viral. People need to understand how much government can hurt the poor. Yes, Jerry Agar did email me. That was very kind of him. I will check out some of his other articles soon.