Income Inequality in America

Recently there has been a lot of talk about income inequality in America.  There is some notion out there that it is ‘unfair’ for someone to make a lot of money.  The thing is that there are million of people working hard each day to get rich.  A few million people are entrepreneurs, people who take a risk and start a business, they hire people, come up with new ideas and in the mean time risk everything, and many of them fail, the best ones get up again and try again.  Many of them work for years without getting paid more than the people who work for them, some work a whole year and make nothing.  The stress about the business, the sales, the clients, and mostly about helping out the employees.  Why do they do all of this?  They do this because they have a dream, the dream to building something that will last, something they can give to their kids, and the dream of being rich.

So they work for decades and finally they are successful, they have a system that works and they are making good money, and they are now rich, making more money than any of their employees will earn in their lifetime.  These are the people that the pundits are calling the problem now, they took the risks and made the hard choices to put themselves in that position, and people look down on them for it.   It is a sad day in America where prosperity is a bad thing.

The main problem is that very few are educated now on how the economy works.  America is a great country, there still is a lot of opportunity here.  Someone can start with nothing, not even knowledge and learn in a short time how to do something useful for the economy, they can then work hard, and smart  and become successful in a short span of time.  I love to see how people come from other nations, nations where there is not much opportunity, and it is hard to get ahead, they come here and work hard, work smart and in a few years they are better off than most Americans.  And most Americans resent them for it, sad.

I think that a lot of this comes from the lack of education most Americans have about how the world really works.  Americans for the most part do not travel out side of the US.  In fact only 36% of Americans own a valid passport, and only 6% of Americans, on average, leave North America per year.  It is estimated that only 20% of Americans have ever left North America, and about a third of them did it while in the military.  Once you see how the world works, your understanding of how good things are here in America really changes.

The Philippines is a below average nation in wealth, with a per capita GDP of just about $3,000.  The average American makes more in 3 weeks than someone from the Philippines does in a year.  But they still need to spend on food and housing and many other things.  But no one there has an attitude of this being unfair, and that they should be given something for free.  That is a very American attitude.  They are thankful for what they have, they are happy for the most part, and everyone helps each other out.  If someone is in need the family and community helps them.  When they travel abroad, they come to work, because they know how they can make as much in a day here, as they do in a month there, they work hard, live simply and for that reason they usually have great success in the US and other nations.  If you earn $1000 a month there you are upper middle class.  People look at the wealthy there as something to aspire to become, not something to be taken down.

2015-08-23 10.50.40The attitude there is so much different and better than in the US.  In the US people feel entitled to free stuff, we are raising an entire generation who feel that if they don’t want to work they should have free health care, free food, free housing and free spending money just because they live here.  They feel that if they should bother working that they should make $15 per hour at least.  They have not yet seen the reality of the world.  Most Americans feel they need tons of money because they must have a $500 smart phone, with unlimited data, and they must have a nice big TV along with a big cable bill and of course, the most expensive of all they must have a car.  In almost all of the world a car is a luxury only the most wealthy have.   In most nations car ownership is under 15% of the population.  In our entitled society even the most poor among us feel that they need a car, and of course they should not pay for it.

I am a fair guy, I think that if you really can’t work that you still should be taken care of, I feel that the primary job of this should be done by charity, and that the successful among us should support such charity, but this is being done by the government, and we are forced, with threat of violence to support it, so we have become a less giving society.  I think that widows and orphans should be taken care of, given food and housing.  I think that the really disabled should be also taken care of.  In none of these cases should they be given money that they can spend on anything, but given vouchers for housing or food.  We need to redefine what a disability is, right now anyone with even a minor problem can be called disabled and get free money.  The vast majority of ‘disabled’ people could easily hold a job.  In fact many people who are getting free money from the government do hold jobs, they just work under the table, that is why the number of people working under the table or 1099 is now almost 1/3rd of the workforce, they want to work, but don’t want to mess up their free government money.  We have really gotten ourselves into a huge mess.  The problem is that about 1/3rd of the population is dependent on this system now.

We need to start to see things as they really are.  When you take money from someone who earns it without having the use of it and give it to someone who has it without earning it you are a thief.  You are teaching them both the wrong lesson, you are teaching the earner that they will be punished for doing well, most do it anyway because they still get to keep most of what they earn, but there is talk to make it more and more progressive of a tax if you earn more.  You are teaching the receiver that they can use the government to get them free stuff, that there is no need to better themselves and to work hard, that things will be handed to them.  This also puts the government in a morally wrong position, a position of being the thief, true everyone loves robin hood but he was still a thief.  This is on a much more massive scale.

I have no problem with a well run government to provide for the common defence, to build roads, and provide a good education, safe places to live and places to gather such as parks.  I even think that the wealthy enjoy such things more than others, and use such things to prosper themselves so they can pay a bit more.  I don’t think that there should be loopholes, the government should not use the tax policy to tell people what to do and what not to do.  But most of all I don’t think that they government should be taking money from one group and giving it to others as a wealth transfer.  Did you know that only 34% of our federal budget is spent to actually run the government, all the rest is used to move money around from one group to another.  Now to me that is what I call Unfair.  Some CEO who worked hard his whole life and makes a huge amount of money is ok by my, he worked hard to get there, he is likely providing much more in value than he costs or why would he be there.  But taking his money and transferring it is totally unfair.  Most people who are in favor of such transfers are usually the recipients of these transfers, or they hope to be.

I am sure that many will argue with this essay, they simply see the world differently than I do.  They usually have never owned a small business, have never traveled overseas, or they simply were raised with a different mindset.  People can rework stats and %’s to make almost any argument, all of my stats came from the most common official sources.

Let me close with a story I heard, if you have a bed to sleep in, a toilet that flushes, and a fridge to store your food you are in the richest 23% of the world population, if you have a computer or smartphone, now you are in the richest 17% and if you have a vehicle you now are in the richest 8% of the world population.  There are 6.4 billion people in the world, so 64 million people would make up the top 1%….of those 64 million people over 40 million of them live in the US.  If you live at the poverty line in the US, you are still in the top 5% of the world population.  If you live at half the poverty line in the US you are still richer than over 85% of the people on this planet.  So stop wining, and take advantage of the opportunity this nation provides, literally billions of people would do almost anything to be in your shoes.

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