Inequality - Crisis or Scam?

Alexis de Tocqueville saw it coming: "The sole condition which is required in order to succeed in centralizing the supreme power in a democratic community, is to love equality or to get men to believe you love it. Thus, the science of despotism, which was once so complex, is simplified, and reduced ... to a single principle." Get people to believe you are seeking the utopian goal of equality of all and there is no limit to the power you can amass.

When President Richard Nixon arrived in Beijing in 1972, Chairman Mao Zedong -- with his Marxist revolution, Great Leap Forward and Great Proletarian Cultural Revolution -- had achieved an equality unrivaled anywhere.

That is, until Pol Pot came along.

There seemed to be no private cars on Beijing's streets. In the stores, there was next to nothing on the shelves. The Chinese all seemed dressed in the same blue Mao jackets.

Today there are billionaires and millionaires in China, booming cities, a huge growing middle class and, yes, hundreds of millions of peasants still living on a few dollars a day.

Hence, there is far greater inequality in China today than in 1972.

Yet, is not the unequal China of today a far better place for the Chinese people than the Communist ant colony of Mao?

Lest we forget, it is freedom that produces inequality.

Even a partly free nation unleashes the natural and acquired abilities of peoples, and the more industrious and talented inevitably excel and rise and reap the greater rewards. "Inequality ... is rooted in the biological nature of man," said James Fenimore Cooper.

Yet for many people, from New York Mayor-elect Bill de Blasio to President Barack Obama to Pope Francis, income inequality is a curse in need of a cure, as there is today said to be an intolerable measure of such inequality.

But let us first inspect the measuring rod.

Though a family of four with $23,550 in cash income in 2013 qualified as living in poverty, this hardly tells the whole story.

Consider the leveling effect of the graduated income tax, about which Karl Marx wrote glowingly in his "Communist Manifesto."

The top 1 percent of U.S. earners pay nearly 40 percent of U.S. income taxes. The top 10 percent pay 70 percent. The top 50 percent pay more than 97 percent of income taxes. The poor pay nothing.

Surely, trillions of dollars siphoned annually off the incomes of the most productive Americans -- in federal, state and local income and payroll taxes -- closes the gap somewhat.

Secondly, though 15 percent of U.S. families qualify as poor, measured by cash income, this does not take into account the vast assortment of benefits they receive.

The poor have their children educated free in public schools, from Head Start to K-12 and then on to college with Pell Grants. Their medical needs are taken care of through Medicaid. They receive food stamps to feed the family. The kids can get two or three free meals a day at school.

Housing, too, is paid for or subsidized. The poor also receive welfare checks and Earned Income Tax Credits for added cash.

READ ENTIRE ARTICLE HERE: http://www.realclearpolitics.com/articles/2013/12/31/inequality_--_crisis_or_scam_121093.html

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