Thursday, February 26, 2009

Who is getting the money?

This is an excellent start, anonymous economist! Way to take the plunge into a plethora of economic, political and moral issues all at once.

First, I have to make the point that the official poverty line is a rather meaningless concept when it comes to evaluating need for assistance. The idea is out of context and provides a quantitative definition to a qualitative problem. My trusty friend Wikipedia tells me that the poverty line for a family of four in 2007 was $21,027 in the United States. For our purposes, we'll compare this family of four with another family of the same size making $42,054.

Great, now we're out of context and thinking purely quantitatively like any good government bureaucrat. On paper, our $40k family is twice as wealthy as our poverty family. Thus, we'd expect them to feed themselves and leave the food pantries for those less fortunate. Now, let's add some context. Our $42k family has lil' Johnny who was born with a rare form of cancer. Medical bills to keep Johnny alive eat up substantial portions of the combined income, and both parents work and have to pay for a babysitter to watch Johnny and his sister during their long hours. Worse yet, the family has almost maxed out the lifetime benefits for Johnny's medical insurance, meaning none of his treatments will be covered after next year. By contrast, our hypothetical poverty family could have one working adult and no health issues. Who should visit the pantries? What if our poverty family earns an extra dollar this year? Can we really define things this way?

As for the posed question, anonymous economist, I have to say I'd make a distinction between states and the individuals on one hand and corporations on the other. First, we can hold states accountable for the money we provide to them. Ultimately, they are elected officials under the authority of the ballot. Second, assistance and security for the individual is the core value in the creation and perpetuation of democratic rule. Finally, the corporation is an abstract concept that carries no meaningful legal status (regardless of what delusions the US Supreme Court hands down) and falls beyond the immediate jurisdiction of the voter. In that sense, it seems to me that assistance to commercial entities is a dangerous process of removing capital from political influence.

Surely, an economist can't allow me to disparage the invisible hand so openly?

1 comment:

  1. But Adam Smith could have never predicted Global Capitalism-- no more than Marx did. Seems like the invisible hand is really an antiquated concept.

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