SPECIAL REPORT: Gov't redistributes wealth, but not like you think
Findings reveal wealth distribution is upwards, not down.
Nobody can dispute that government redistributes wealth. The entire basis of the progressive tax system in the U.S. is redistributive. Those with plenty pay more and those with little are the beneficiaries. At least, that's the intent. However, new studies show that the government is redistributing wealth, just not in the way you might expect.
Most Americans can't afford a lobbyist because contrary to popular belief, wealth trickles up, not down.
More surprisingly, it's the wealthy living in and around the capitol that are benefiting the most.
The losers seem to be the middle-class, which is shrinking, and the poor who are making even less than ever before.
According to a report from Reuters, the gap between the wealthy and the poor is up from a ratio of 39 to 1 just twenty years ago to 54 to 1. The findings were based on Census Bureau data.
The working poor earn on average earn about $9,500 per year while the wealthy earn an average annual income of $500,000.
Why such a gap and why is it widening? The answer lies in a feedback loop of wealth where the richer some people become, the more money they can devote to promoting their political agenda, which is unsurprisingly centered on protecting and increasing their wealth.
A majority of the lobbyists on Capitol Hill are representatives of business interests. Their goal is simply to secure government contracts and to protect the wealth they are accumulating.
Conversely, less than one percent of the lobbyists in Washington are working for the poor. Those people tend to be the volunteer types, such as clergy, who believe in their cause.
There is no money in representing the poor as a lobbyist.
So, the government often makes decisions based on the powerful influences of business. This should come as no surprise to any student of history. Businesses have always been key influencers of government policy because they are channels of wealth. Also, the founding fathers were nearly all businessmen and it makes sense they would establish a republic that was very friendly to their business interests.
Today we merely see the natural evolution of that founding philosophy. The wealthy enjoy privilege and access, the poor are promised only opportunity, nothing more.
Yet even that opportunity is subject to question.
Contributing to the problem are changes in the way government operates. Many government jobs pay more than their private sector counterparts, but the government has paid for those increases by cutting back and outsourcing many others. For example, many blue-collar government jobs are outsourced to service providers.
Those providers pay their workers minimum wage, or slightly more, while the contracting business reaps the profits. Politicos can say they've made government more efficient, and even claim they have created jobs. All nice things to claim when you're running for reelection.
However, people in those jobs have virtually no opportunity to promote themselves.
According to Reuters, some 15 percent of every dollar of the government procurement budget, stays in and around the greater Washington DC area. This fact has attracted five of the top 10 major defense contractors to the region. Since 2000, nearly 400 small and medium sized companies have started up, more than in any other metropolitan area according to a study cited by Reuters.
All that money is staying in the hands of a few. It is certainly not trickling anywhere but up.
Meanwhile, around the rest of the union, inequality continues to grow. Income equality has increased in every state except Mississippi, which already has some of the worst inequality in the nation.
Poverty is up in 43 states.
Meanwhile, in every state, the wealthy have gained about 12 percent with those in states and counties around the District of Columbia doing best.
How this should be addressed is subject to much debate. However, the American republic requires a strong, conservative middle-class with equal access to opportunity for all citizens, who gain wealth based on merit, not privilege. The problem of course, is with merit comes wealth, and privilege follows wealth.
If one thing is certain, it is that the status quo cannot sustain without the nation witnessing a dramatic shift in the political psyche. For while the wealthy hold the dollars, the poor are the fastest growing demographic. Such people are powerful in large numbers.
As a nation, we would do well to address this issue now before it becomes a problem that changes the politics of our nation beyond recognition, forever.
© 2014 - Distributed by THE NEWS CONSORTIUM
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