Income Inequality

Income Inequality

(Where has all the Money gone!)

In the 1930’s Franklin Delano Roosevelt initiated the,”New deal” and established a way to socialism in America with his emphasis on big government.  The country was in depression, the economy a shambles and unemployment running a muck.  Roosevelt attempted to spend his way out.  His “New Deal” consisted of government jobs, most were menial, such as street sweepers and low paying road workers.  These jobs were better known as the WPA, (Works progress Administration). (American-Music and Mammoties)  (Infoplease)

In this same time the Social security Administration was born.  Later in 1936 unemployment insurance was born. The national debt as a percent of GDP, (Gross Domestic Product) began to grow from a 1920’s of just a few percentage points, to 20% by 1935 and up to nearly 40% by 1940,  All this prior to the start of world War Two. (Forecast Chart.com)  The controls of the economy by the government grew rapidly during this period of time, and much like today it was all deemed an emergency. 

Social security, unemployment compensation, Medicare/medicate are all programs today the average American cannot do without.  Things like caring for the elderly may not have been a bad idea, it was however a bad idea to let the government handle it.  With the government in charge of a program, there will only be a negative effect on supply and demand.  The government does not make profit and therefore only derives its monies from the people, through taxes.  When this happens there is no personal drive to do better, there is no competition to allow for prices to find equilibrium.  The cost will always sore and the government will always grow in order to maintain a control over those programs. 

It is my opinion that the free market is and will always be the best driving force for a healthy economy.  There are needs for the government to step in and regulate, to obligate people for a better future.  Social security in the hands of a regulated private industry will make money and will be more beneficial to the American citizen.  Unemployment where the worker, who chooses along with the employer are putting money away for that rainy day through a private company would be far better for that employee that has been laid off.

It is reported that the Government owes 14.3 Trillion dollars to the following.  To itself, 4.6 Trillion mostly borrowed money from social security.  What happens when say a union takes money from a pension plan, Duh they go to jail!  The remaining 9.7 trillion is borrowed from treasury securities, banks, pension funds, individual investors, and foreign governments.  Nearly half is held by those foreign governments, mainly China 1.15 Trillion, Japan 947 billion and so on. (The associated Press, Washington July 2011)

We as a nation need to stop this now.  It is too late to stop the entitlement we now have, but cutting them back is necessary.  Ryan’s plan sounds dramatic and maybe a little dangerous, but why won’t the Democrats take it and try to amend it rather than just saying old people will be thrown from the cliffs to their deaths!   

Young people need to realize that when social security was established, people only lived to 61 years old. (Mostert)  Today that same 65, recently raised to 66 retirement age is in existence even though the average American is living to be 78.2 years old. (Stein)  If we go by the 1936 concerns, the present retirement age would be 82.  If you raise the retirement age to 75, a person today in their 40’s will probably live to be 85. 

Social security was never meant to be a person’s main retirement fund, but rather a supplement to an American taking responsibility to their own well being at that age.  In fact according to (Mostart,) the original retirement age was set at 65 to get old people to leave their jobs and allow younger ones to work.   

What's your opinion?     

Works Cited

American-Music and Mammoties. March 2010. 25 January 2011 <http://www.americana-music-and-memories.com/roosevelts-new-deal.html>.

Forecast Chart.com. 2008. 25 January 2011 <http://www.forecast-chart.com/forecast-national-debt.html>.

Infoplease. 2007. 15 July 2011 <http://www.infoplease.com/ce6/history/A0835397.html>.

Mostert, Mary. RenewAmerica. 04 Feb 2005. 15 July 2011 <http://www.renewamerica.com/columns/mostert/050204>.

Stein, Rob. Washington Post national. 16 March 2011. 15 July 2011 <http://www.washingtonpost.com/blogs/the-checkup/post/death-rate-down-life-expectancy-up-in-us/2011/03/15/AB4UYlY_blog.html>.