income

Entitlement America? Who Has More Disposable Income?

by Lee Doren on November 22, 2010

in Economy

I just read an interesting report about disposable income in America. The claim is that the head of a household of four making minimum wage has more disposable income than a family making $60,000 a year. How is this conclusion reached? Well, supposedly after all government benefits, including food stamps and medicaid, the individual making less money can receive significantly more benefits than the person making $60,000.

Although there are some flaws in the report (one example being a failure to include employer healthcare benefits) the report does illustrate some severe flaws in our tax code and welfare system. If it turns out that individuals can work less, while doing financially better than people who make more money, why work? While some argue the Keynesian multiplier will boost the economy, at some point common sense has to come into play.

The best way to boost the economy is to have all citizens working productive jobs. Adding an unnecessary moral hazard by paying people not to work, while punishing people who do, will invariably result in a worse economy.  Sadly, anyone who advocates against the status quo is often accused of hurting the poor.

Photo Source and here.

Fascinating Error with U.S. Wages

by Lee Doren on November 3, 2010

in Economy

I’m sure you have heard the Leftist mantra before: “The rich are getting richer, the poor are getting poorer.” In fact, Robert Reich’s newest book rehashes Marx’s Theory of Capital Accumulation, which argues that too much capital is accumulated at “the top” and eventually the bottom doesn’t have enough income to purchase what the top sells. (Of course this is a simplified summary of Marx’s Theory, but that is the general idea).  Some have even argued that this caused the recent recession.

Those who are familiar with Thomas Sowell know that he easily debunked this nonsense by explaining that nobody “distributes wealth” to the top income brackets. In fact, people are constantly moving up and down the statistical brackets, often with age. ( For example, young people tend to be poorer than they are when they get older and develop more skills and earn more in income. )

However, another new development may destroy Reich’s argument without even needing to address what Sowell has discussed. It turns out that:

Two people were found to have filed multiple W-2 forms that made them into multibillionaires, an agency official said yesterday. Those reports threw statistical wage tables out of whack and, in figures released Oct. 15, made it appear that top U.S. earners had seen their pay quintuple in 2009 to an average of $519 million.

The agency yesterday released corrected tables that showed the average incomes of the top earners, in fact, declined 7.7 percent to $84 million each.

This would mean that all the claims that the top X % earned “obscene” incomes while the rest of the Country did poorly, isn’t true. Incomes in fact declined for almost everyone during this recession.

This isn’t something to be happy about. But, it demonstrates that there are lies, damned lies and statistics.

Photo Citation.

Are There No Workhouses?

by Richard Morrison on September 17, 2008

in Culture, Economy

Some people seem to think that having a mind for business and profit means you must be some kind of money-grubbing miser. Far from it, according to new research featured at the Insider Online. It seems that entrepreneurs give more generously to charitable causes, at every level of income, than non-entrepreneurs. Go figure.


Read the whole paper here.