Categories:
Income Distribution
The most striking of the report’s findings is how little of the federal government’s mobility expenditure goes to those with low incomes. This chart shows the estimated amounts that go to lower-income households (bottom two quintiles of the income distribution) versus middle-and-upper-income households (top three quintiles). In total, only about a quarter goes to the former group.
His conclusion is not that government income mobility spending is pointless. It is that we are doing it wrong.
The Left’s working hypothesis is that good government would solve all of our problems. The hypothesis is nonfalsifiable. The statement “If we had good government, then X” is always going to be true.
READER COMMENTS
manuelg
Feb 25 2008 at 9:02pm
The poor don’t vote. The poor make no campaign contributions. The poor don’t maintain a revolving door between public sector and cushy corporate jobs. The poor, even with the most regressive taxation, can contribute very little in tax revenue.
It would be a bizarre world where the government actually helped the poor.
A world where the government claims, in a non-binding way, to help the poor… not so bizarre.
JMR
Feb 25 2008 at 9:35pm
Everyone develops an economic model of the world, not just us economists. The basic of the economic model is one in which rational actors respond to incentives. Those who endlessly advocate that our problems will be solved with “good” government use an economic model where the world is divided into good guys and bad guys, and incentives play little or no role. Their model carries little explanatory power, and ultimately leaves you with a dim view of mankind. I think it will ultimately render their users with a depressing mood, because by ignoring incentives, they will find themselves forever saying “we just need the good people to be in charge.”
mgroves
Feb 25 2008 at 9:41pm
An entire 1/3 to 1/2 of politicians and voters are victims of the “No Good Scotsman” fallacy.
kebko
Feb 25 2008 at 10:40pm
The federal budget includes $2 trillion in social spending. If that amount were divided equally & simply paid out in cash to the bottom 1/4 of American households, they would each receive about $65,000 a year.
Jim
Feb 26 2008 at 2:54am
Well, I don’t think Lane Kenworthy believes government can solve all our problems. How about you ask him? I’d be interested to see his response – but maybe you think you know his mind better than he does.
As far as I can see, he’s taking an empirical approach to understanding whether some measures benefit the poor more than others. And it turns out that countries that adopt more of the measures he sees as pro-poor have higher mobility than the US. This also suggests that the claim is falsifiable – you can analyse the relationship between welfare and genuinely pro-mobility spending and actual mobility across countries and see if Lane is wrong, though I don’t expect you’ll be happy with the answers.
I’m not exactly sure what the response of the American ‘Right’ is to this: it seems to vary between “Those measures don’t work”, which appears to be false, and “Those measures won’t be implemented here”, which is a political claim and an attempt at self-fulfilling prophecy. I would appreciate more clarity from Arnold as to whether he thinks he is making empirical or political claims on these issues.
Alex J.
Feb 26 2008 at 8:57am
Arnold, that’s hilarious.
Suzanne Jones
Feb 26 2008 at 11:46am
The writer clearly believes that government needs to have more of a hand in helping the unemployed and lower incomed in the US. However, the role of government is not to provide, but to protect. If the government and welfare wasn’t there for people to depend, there might be more of a motivation to work, and there wouldn’t be such a high unemployment rate. There is no intiative in the US anymore to work and make a living and to not depend on someone else to do it for you.
Troy Camplin
Feb 26 2008 at 4:37pm
This is the same thing that happens when people argue that the only reason Communism has failed each and every time it’s been tried is because “the right people” haven’t tried it. Of course, they always imagine themselves as the right people.
Comments are closed.