Intelligencer Journal/Lancaster New Era
Sacrifices should be made to get on stable ground
DAMIAN HONDARES, 18, Freestyle Staff Writer
"Doing what is right isn't always popular, just as doing what is popular isn't always right."
This quote -- of which I am particularly fond -- is commonly featured on posters hanging in schools, and I have seen it almost every day for the past four years. Only recently did I truly think about its message and I came to understand that, other than just being meaningful in a philosophical sense, it is more importantly the fundamental truth of economics.
In recent months, it has become evident that some individuals (admittedly on both sides) in our government are attempting to sway voters using fallacious economic analyses and, quite frankly, lies.
It is time for someone in this country to stand up for what is right, as opposed to that which is popular.
The first major understanding that we must possess is that economics cannot be adequately assessed in terms of the unemployment rate. Too often, our leaders attempt to use unemployment figures to sway election outcomes in an attempt to solidify support from individuals from poorer backgrounds. It is also grossly shortsighted; the private sector works in a cyclical manner. People who may not be well off today have a much better chance to move up the socioeconomic ladder than they would in other countries.
"Wealth Inequality in America," a viral video released several months ago, painted a grim picture of the distribution of wealth in the U.S. However, it was horribly misleading. No one will deny there is wealth inequality in the U.S. There should be. The U.S. has a great deal of social mobility. If you analyze documents from the Treasury Department, you will find that between 1965 and 2009, the real mean household income (adjusted for inflation) of families in the top quintile increased by 71 percent, quite a large jump, whereas the real mean household income of families in the bottom quintile increased by 25 percent.
This fails to show the large number of individuals (approximately 45 percent) from lower income brackets who moved up the socioeconomic ladder between 1987 and 1996, and the equally large number of individuals (approximately 42 percent) from higher income brackets who dropped several rungs.
The other factor that must be taken into consideration is the disparity in wages earned by parents and their children. More data provided by the Treasury Department suggests that in 2000, workers who came from the top 20 percent were earning on average the same as their parents had earned in the 1970s (adjusted for inflation, of course). On the other hand, workers who grew up in the poorest 20 percent of households were on average earning double what their parents had earned. This is a surprising display of the considerable upward mobility possible in American capitalism.
Of course, this is only a partial picture. Throughout this article, I have mentioned inflation, which is a topic on which many Americans are sadly misinformed (or underinformed). It is a rather simple fact that the more you have of something, the less it is worth. When the United States government spends in excess, it prints more dollars. The more dollars the government prints, the less each individual dollar is worth. To compensate for this loss in value, prices on goods and services are raised, leaving the consumer to pay increased prices.
To an extent, there is a healthy level of inflation that occurs. However, there comes a point at which, as economist Milton Friedman suggested, there is quite simply "too much money chasing too few goods." When this happens, and prices continue to rise, the wealthy are unhurt. They are the people with the most political connections, the people running the big banks and corporations. Money flows to them first, not necessarily to the poor. So the wealthy can afford to raise prices and to subsequently pay the increased prices, but the individuals at the bottom are hurt.
Wealth does indeed trickle down, but it does not happen overnight. The poor are forced to pay higher prices for years, continually being hurt more and more, waiting for wealth to trickle down. It does, but the increased government spending and subsequent inflation are making matters much more difficult for the individuals at the bottom of the socioeconomic ladder. Interestingly enough, decreased spending (likely on entitlements) could theoretically have a much more beneficial impact on the average consumer.
We should take a serious look at minimizing entitlement programs (and, yes, defense spending), even if it means hurting some individuals in the short run. In the long run, those individuals have greater opportunities for success. These are not false assumptions or idealistic dreams. I am, for the most part, everything but an optimist. I understand that there is a greater level of opportunity present than some in the political system would have you believe. Does it require a greater level of trust in the system than we are used to? Yes. And will it require some sacrifice? Yes. Is sacrifice popular? Not at all. But then again, doing what is right isn't always popular, just as doing what is popular isn't always right.