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View Full Version : Economic: Ron Paul says "Entitlement system helps the wealthy" - Please Explain




JoblessRecovery
02-29-2012, 11:27 AM
In a speech by Dr. Paul's in Virginia he made the comment "The entitlement system tends to help the wealthy much more than the poor." I'm struggling to understand how he came to this conclusion and am hoping someone can help me connect the dots. I'm hoping for a very clear answer, not reasoning that has to go through a few assumptions to get there.

To see the words in context please view the video link below. The line I am referring to happens at ~6:05

Thanks for your thoughts!

bluesc
02-29-2012, 11:32 AM
I think he would consider the entitlement system to include corporate subsidies and tax breaks, bailouts and the printing press.

All of the above help the rich at the expense of the poor (especially those on fixed income, such as entitlements).

CaptUSA
02-29-2012, 02:04 PM
Leaving aside bluesc's comments which are 100% correct, even regular entitlements cause a wealth transfer to the rich. This is because entitlements are never really paid for. They create a drain on our economy. This drain creates the need for currency devaluation in order to sustain them. If your assets are in currency or the equivalent (bank accounts), then when your currency is devalued, you have less actual wealth. (even if you have the same amount of 'money', it buys less.)

Since the poor and middle class are less likely to have real assets (those that the price goes up when the dollar goes down), the wealth gets transferred. Make sense?

rpwi
03-03-2012, 09:26 AM
Good points above ^...

Also when government helps individual X pay for expense Y...usually they aren't helping out X...but the seller of Y. Take tuition...seems noble to help out poor suffering students pay for college. But historically the more government has loaned/given to students the more colleges have raised their tuitions. So this extra money instead of helping students...is going to fatten over-paid administrators, over-paid professors and general waste.

Cabal
03-03-2012, 10:03 AM
When you subsidize something, you get more of it. Thus, when you subsidize being poor, you tend to get more poverty. Entitlements may also be argued to remove incentives for personal responsibility--if people know they can get away with being a burden on their community and other tax payers, thanks to the State's use of force on their behalf, they have less reason to want to change their circumstances.

Most importantly, I think, entitlements are funded by deficit spending--credit expansion via fiat currency and monetary policies. Empirical evidence tells us that this sort of inflationary policy necessarily transfers wealth from the poor/middle-classes to the rich, effectively keeping the poor bogged down whilst eliminating the middle-class over time. There have been studies done on this; it is not news. When new money created and introduced into circulation, it goes to the banks first, and then it goes to the wealthy from the banks--so, in practice, the banks and the wealthy get the current value of the newly created money/credit before the devaluation from inflation sets in; in the meantime the savings and wealth of the poor/middle-class is devalued, and by the time the newly created credit reaches them, it's no longer worth what it was when it was in the hands of the banks and wealthy.

W_BRANDON
03-03-2012, 10:04 AM
You also have to consider all the high-paid bureaucrats and central planners that administer and manage the entitlement systems.

Then there is the social security fund with all its many abuses. Among these being investment banks who profit from managing and brokering these funds.

For medicare and medicaide: Special interests in the health care industry (big pharma, health insurance firms, supplementary insurance providers) all benefit greatly from government sponsored health care programs.

Harald
03-03-2012, 10:11 AM
Let's take for example state colleges. It is subsides with sales taxes which everybody pays. Kids from poor families attend college at much lower rate than well to-do families.

I saw a breakdown in numbers. State college is one of those programs where poor families subsidize well-to-do.

Liberty74
03-03-2012, 10:16 AM
I think he would consider the entitlement system to include corporate subsidies and tax breaks, bailouts and the printing press.

All of the above help the rich at the expense of the poor (especially those on fixed income, such as entitlements).

^THIS

The "entitlement system" is more than simply SS, Medicare and Medicaid. Ron is referring to how the wealthy uses government to benefit them i.e. special interests. Seriously, all one has to do he look at the bailouts like GM. GE is in bed with Obama and which company is buying thousands of Volts and getting tax incentives? Bingo, GE. The plunder of the poor and the middle class continues.

W_BRANDON
03-03-2012, 10:21 AM
^THIS

The "entitlement system" is more than simply SS, Medicare and Medicaid. Ron is referring to how the wealthy uses government to benefit them i.e. special interests. Seriously, all one has to do he look at the bailouts like GM. GE is in bed with Obama and which company is buying thousands of Volts and getting tax incentives? Bingo, GE. The plunder of the poor and the middle class continues.

He asked for a "very clear answer" about entitlements, so i just gave a few examples. Corporate welfarism I think is a whole different animal.

The Free Hornet
03-03-2012, 10:27 AM
You also have to consider all the high-paid bureaucrats and central planners that administer and manage the entitlement systems.

Yep, it is never as simple as taking from the top 10% and giving to the bottom 10%. Overhead, fraud, abuse (taking advantage rather than fraud) ensure that most money does not get to the needy.

This is also why public education is an even more unbelievable crock. Approximately 90% of kids attend public school. Consider that these must be both used and paid for by the average taxpayer. The public school costs twice what a private school does (at K-12 education). In order to come out ahead of where you would be otherwise, you likely have to be in the bottom 20% or so of income earners. Even then, you need to be both a bottom income earner and live in a good school district or be lucky enough to have your child attend one by choice. The rest are subsidizing a really crappy system (especially for the poor who this whole thing is supposed to help).

It would be far better - but still a harmful waste - for a voucher system or where public education is the very rare exception (like for kids in juvie detention) and not the norm. However, the system does not exist for the kids but for the teachers' unions. If it was about forced charity, there are far more efficient systems. After all, food stamps do not mean we have government managed restaurants and grocery stores.

rpwi
03-03-2012, 10:51 AM
This is also why public education is an even more unbelievable crock. ...Not to deviate too much from the original posters subject...

But, did you guys know Wisconsin spends between 8,000 to 19,000 per student PER YEAR? (varies by district) I'm sure most states are not that dissimilar to Wisconsin...it just goes to show the staggering waste the government can create.

Nastynate
03-03-2012, 10:52 AM
http://www.youtube.com/watch?v=eYRG9f5F4gw

Liberty74
03-03-2012, 11:15 AM
Not to deviate too much from the original posters subject...

But, did you guys know Wisconsin spends between 8,000 to 19,000 per student PER YEAR? (varies by district) I'm sure most states are not that dissimilar to Wisconsin...it just goes to show the staggering waste the government can create.

Public School $12K Per Year Average v. Private School Is Only $8K (http://www.weeklystandard.com/articles/end-them-don’t-mend-them)

Those numbers above are an average. Book mark the article for ammunition for when you get into a public school cost argument with a Leftist idiot most likely a Union thug. Many of us can go to college much cheaper than it costs to go to public schools.