Topics – PF Apr ’16 – Income inequality – thoughts

Thoughts first: I still find there to be a fundamental disconnect between the topic’s theoretical core subject matter – income inequality – and the options for narrowing that.

Keep in mind the distinctions between income and wealth; I’m pretty sure that some of the statistics that will be thrown around will be about wealth (total asset values) and not about annual income amounts/differences. Call those out when you see them.

The topic doesn’t address structural issues. From my perspective the system is rigged: When capital gains (income from not working, via returns on wealth assets) is taxed at a rate lower than income from actually working at a job, the Orwellian nature of the system (all income is created equal, but some income is more equal than others) tells me that it’s an intentional structural problem (i.e. rigged). Nothing in the resolution addresses that.

Taxes and public spending is by its very nature redistributional – money flowing from one group to another. Traditionally we think of this as targeting those as the lower end of the spectrum, though the argument can certainly be made that there are corporate welfare programs (military-industrial complex, anyone?) that make government funds flow upwards.

The Pro side is limited to infrastructure spending. With infrastructure spending, the money isn’t strictly going to the people building the infrastructure. Funds would need to go for material and equipment (admittedly boosting business for suppliers), and for the services of the professionals to design and supervise the projects. Is the benefit more to the individual workers, or to the construction-industrial complex? While infrastructure jobs pay better than many other employment options, would this benefit people who are unemployed or underemployed, or people already further up the ladder with the more technical skills that construction can require? Statistically speaking, boosting such people and increasing their numbers would provide an overall rise in nationwide income stats, but would it really do anything about the top vs. bottom inequality? Or is the thought that the spending (and the benefits of an improved infrastructure) would spread throughout the economy as a whole – the rising tide/all boats argument? Philosophically, the arguments about the value of employment to individuals benefit the Pro position.

The Con side would seem to have two options. The most obvious is to defend direct transfers, most likely with the argument that this gets money directly to the people who need it the most. (This position is susceptible to the ‘value of employment’ argument.) How this closes the income inequality gap isn’t clear, since such amounts aren’t usually considered income in the traditional sense. From decades of observation, means-tested programs are anti-poverty programs; the amounts they provide are supposed to cover minimally necessary expenses and not extras – thus the conservative push to restrict what certain aid can be spent on (no lobster! – really). As such, even if you provided people with an amount equal to, say, twice the poverty level, you wouldn’t be giving them enough to have any noticeable impact on the overall question of income inequality. I suppose that the resolution could be interpreted to mean giving means-tested aid to the middle class so that they do not descent into poverty, but with something like 20-25% of children in the U.S. coming from households in poverty (or very near to it) it would be really hard to defend that interpretation.

It would seem that a second Con option would there be to argue that infrastructure spending isn’t preferable to means-tested spending because neither would really change the income inequality problem; the structural problems are the real culprit and aren’t addressed by infrastructure spending or direct aid. The topic should have been worded better, to preclude this sort of option, but it wasn’t, which suggests that in your Pro rounds you should be prepared for this possibility, however small the chances of encountering it might be.

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