On September 16, 2012, an editorial in the Los Angeles Times states that more Americans would have been impoverished last year if not for federal and state governments’ spending on safety net programs––without stating that the money spent is derived from taxes and borrowing.
A new Census Bureau report confirms that the slowly rising tide of the U.S. economy hasn’t lifted all boats. The 20% of Americans with the highest incomes captured an even larger share of the earnings in 2011, while the rest collected the same share or less. The widening income inequality is disturbing, but as the report shows, things could have been considerably worse. Without such safety net programs as unemployment benefits and food stamps, millions more families would have fallen into poverty.
According to the Census Bureau, unemployment benefits kept 2.3 million Americans from falling into poverty. If the earned income tax credit had been factored in, 5.7 million people would have been lifted above the poverty line. If food stamps were considered, 3.9 million Americans would no longer be counted among the impoverished.
With 3 1/2 job seekers for every opening, it’s hard to argue that unemployment would drop significantly if the jobless were more desperate for cash. In fact, according to the Census Bureau’s numbers, the reductions that Congress made in unemployment benefits last year resulted in nearly 1 million more people in poverty, even as more people found jobs. Nevertheless, those benefits are slated to be cut further later this year, along with tax credits for the working poor and low-income parents. Congress is also considering a new farm bill that would narrow eligibility for food stamps. With the economy growing so sluggishly, all of these reductions seem premature and counterproductive.
The editorial then concludes that:
The best solution to these problems is returning to full employment. Not only does lower unemployment translate reliably into less poverty, but a tight labor market drives up wages, raising the median income. That’s when the rising tide would truly lift all boats. A second focus for policymakers should be preparing workers better for the jobs that are being created, which means improving education and training programs.
While tax and investment stimulus incentives are excellent tools to strengthen economic growth, without the requirement that productive capital ownership is broadened simultaneously, the result will continue to further concentrate productive capital ownership among those who already own, and further create dependency on redistribution policies and programs to sustain purchasing power on the part of the 99 percent of the population who are dependent on their labor worker earnings or welfare to sustain their livelihood. By stimulating economic growth tied to broadened productive capital ownership the benefits are two-fold: one is that over time the 99 percenters will be enabled to acquire productive capital assets that are paid for out of the future earnings of the investments and gain greater access to job opportunities that a growth economy generates.
The question that requires an answer is now timely before us. It was first posed by Louis Kelso in the 1950s but has never been thoroughly discussed on the national stage. Nor has there been the proper education of our citizenry that addresses what economic justice is and what ownership is. Therefore, by ignoring such issues of economic justice and ownership, our leaders are ignoring the concentration of power through ownership of productive capital, with the result of denying the 99 percenters equal opportunity to become capital owners. The question, as posed by Kelso is: “how are all individuals to be adequately productive when a tiny minority (capital workers) produce a major share and the vast majority (labor workers), a minor share of total goods and service,” and thus, “how do we get from a world in which the most productive factor—physical capital—is owned by a handful of people, to a world where the same factor is owned by a majority—and ultimately 100 percent—of the consumers, while respecting all the constitutional rights of present capital owners?”
http://foreconomicjustice.com/11/economic-justice/
Please see my article “Democratic Capitalism And Binary Economics: Solutions For A Troubled Nation and Economy” at http://foreconomicjustice.com/11/economic-justice/ or follow me on Facebook at http://www.facebook.com/pages/For-Economic-Justice/347893098576250 and http://www.facebook.com/editorgary
Also follow the Center for Economic and Social Justice at www.cesj.org and http://capitalhomestead.org/ Join the OWN Team to advocate OWNERSHIP CREATION at http://capitalhomestead.org/group/the-on-team
Also see The Kelso Institute at http://www.kelsoinstitute.org/
