Originally posted by: HombrePequeno
Again, if we're trying to help out the lower income quintiles, it makes much more sense to raise the EITC as that's a lot more precise of a tool than the minimum wage is. Raising the minimum wage is a very imprecise way of wealth redistribution. Many minimum wage earners are teenagers, restaurant workers (relying mostly on tips), and spouses looking for extra income. These people aren't necessarily in households that are below the poverty line.
You may want to read the
blog article I posted. It's actually pretty interesting.
I'm agnostic on some of the choices on how to help the poor; I neither endorse nor oppose the EITC as an option, as I just don't have the full understanding of the pros and cons I'd need to have that opinion. Frankly, few of us have the expertise to really do so, and there's an infrastructure of experts we rely on to help inform us. My infrastructure has not informed me much of the EITC option.
I tend to be biased against the tax approach as a start, though - the use of the tax system for 'social engineering' seems to me to be not the first way to do things, though I'm in favor of using it in some areas where it makes sense (for example, the home mortgage interest deduction is imperfect - it has an inflationary effect on home prices as an example - but it has good points, such as encouraging home ownership and being a benefit aimed at the middle class.)
One issue is that tax policy is easily changed, and this 'welfare' or 'handout' can be pretty easy to chop anytime, especially in the coming years of tighter and tighter budgets.
I do see some fallacies in the article you listed, though. Putting aside the questionable factual positions, from the effects to the demographics (I posted an earlier link showing things like teens are a minority, and a majority are the primary household income), he neglects to consider that it's not zero sum: the higher wages will create additional spending which will create additional prosperity and economic activity.
He also alleges that raising the minimum wages means that we don't pay for the increase. Of course we do, as wages are built into prices.
As for free trade, protectionism is not good overall. Do the people in say India not deserve a job if they are willing to work their ass off for it even if it might take someone else's job in the US? Why is the person in the United States more important? Is the American somehow more of a person? I personally see a person as a person. If the loss of one American job opens up the opportunity of 2 jobs in India while still be cheaper overall, I see no reason why we shouldn't allow it
I understand this is an ideological tenant for some, but I don't acknowledge all protectionism is bad. 100% of our nation's federal revenue came from it from the founding to the civil war, it's not unknown. The US is a wealthy nation with 5% of the world's population. I see room for balance in how we approach what I see as ourmoral obligation to help the prosper, while not ruining our own situation. We need to think, why are we prosperous? It's a wide combination, some dark reasons involving the expploitation of weaker nations for resources, some more positive, a relatively educated society, and so on.
If we just say, hey, billions of poor, compete now with the 5% in the US, there are some pretty big downsides. You make it sound awfully innocent when you talk about one American worker and two foreign workers, but it's not quite so innocent on a macro level when you talk about devastating results for America, in a world where America as a leader for a political system standing for individual rights and freedom is about to be competing more and more with systems like China.
A person may be a person, but there are bigger issues - a person is also strengthening or weakening one nation or another, for example.
I think we need a much more considered approach to how to transition to the global economy in a way that protects Americans, and tries to help build wealth globally.
What we're doing now is trashing the interests of the US in order to serve the short-term needs of the corporations and countries like China who take our wealth gladly.
'Free Trade' is actually an attack on the very principle of democracy as it's being implemented - all the free trade agreements have provisions which tie elected governments' hands from being able to pass many laws in the interest of their people, if those laws have any harmful effect on the sales of a foreign company. It's an outrage and a move away from democracy to putting the corporations above the people.
If you aren't familiar with the clauses, they of course cannot say the governments cannot pass the laws, but they do say that the governments have to pay any companies who lose sales from a law for the loss, which can easily be many billions. The idea of democracy is saying the government can pass a law saying, for example, "no selling tuna which was gathered with methods that kill millions of dolphins". Normally, end of story - the fishers adopt their methods to comply.
Under the free trade agreements, the foreign fishers have a case to sue our government for the amount of lost sales, and the suit is heard in a secret forum appointed by the corporations, with no appeal, where the law has to be justified in the view of this secret panel - they get a veto over the elected government. So, governments just have to stop passing laws they'd like to pass and democracy, and the good the laws would do, suffer.
Facebook
Twitter