Thursday, March 20, 2014

Incentives

Speaking of poor people having too much money, I saw a clip of Congressman Paul Ryan trying to explain his recent remarks on the lack of work ethic among inner city folks. There has been a lot of commentary about whether Ryan's statement was racist. I'm going to try to put that question aside and just focus on the Ryan's explanation that what he is disturbed at are incentives for poor people not to work.

I'm assuming what Ryan means by that is that if a family gets enough in food stamps to feed the children, they have less incentive to go out and find a job. Let's say that's true for some people. But by that logic, Ryan should also grant that food stamps also give families less incentive to steal or to mooch off their relatives or to let their children go hungry. And possibly, if they have the peace of mind that comes from being able to feed their families, parents might in some cases actually have a better chance of finding work. Anyway, let's give Ryan the benefit of the doubt and say that in addition to not questioning whether he's a racist, we'll also grant he is raising a legitimate question about whether payments such as food stamps or unemployment compensation reduce people's incentive to work.  

Still, even giving Ryan the benefit of every doubt, the question I would want to ask him is this: if it's so important for you to take food out of the mouths of hungry children to provide their parents with more incentive to find jobs, why don't we apply those some incentives to rich people? In the case of the well-to-do, Ryan and his Republican colleagues always make the argument that rich people, who by definition are already pretty well off, still need more government benefits to incentivize them to work. All of their tax deductions are precious and untouchable. Farm subsidies and oil depletion allowances must be preserved so the well-off can be persuaded to create more jobs. Though the top 1% have a larger share of the wealth than at any time since the 1920's, no attempt should be made to tax any more of that wealth lest the wealthy decide to drop out of the work force. Republicans believe we should even abolish inheritance taxes, even though inherited wealth for the most part goes to people who did not lift a finger to earn that money.

Whatever someone thinks about how economic incentives work, I would ask that we at least apply those beliefs equally to rich and poor. Let's not punish the poor and coddle the rich, both in the name of providing incentives. That makes no sense. Instead, if we're going to cut food stamp benefits, let's cut some tax loopholes also. Maybe that would get everybody working harder. Alternatively, if we're going to continue to be generous with the wealthiest among us, then we can afford to be generous to the poorest also. And maybe that would give everyone the proper incentives.

Or maybe Ryan and his ilk should just cut the crap about economic incentives, and admit that they are instead making a moral argument: they believe in every man for himself, and that it is just wrong for the government to try to help the least fortunate among us, or to demand anything more of the most successful. Admit that, and at least then you'll be honestly answering your constituents' questions.

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