November 3, 2013

Another View: Wealth redistribution hurts poor, middle class of any age

Charges of ‘generational theft’ overlook the role of tax cuts and outsourcing in fostering income inequality.

M.D. Harmon’s recent column on the supposed bogeyman of “generational theft” (“Government steals from the young to give to the elderly,” Oct. 25) doesn’t pass the straight-face test.

about the author

Tom Kircher is a resident of Biddeford.

Harmon does deserve at least partial credit for indicting government’s enabling of wealth redistribution, or, in his words, “stealing.” According to a December 2012 Reuters series (“The Unequal State of America: Government’s role in income inequality”), the redistribution has not been across age demographics from the young to the elderly, but rather “up” class lines: namely, from the middle class and poor to the wealthy.

This has been accomplished through a combination of tax cuts, which have primarily benefited the rich, and outsourcing of government jobs to private contractors.

The entire argument promulgated in Harmon’s column conveniently skirts the reality of income inequality. The net wealth of the top 400 wealthiest Americans now surpasses the entire net wealth of the bottom 150 million Americans.

Not only is income inequality at a historical high, it is growing at an increasingly faster rate, according to a study by University of California, Berkeley, economist Emmanuel Saez.

Since the end of the recession in 2009, Saez discovered, the income of 99 percent of all American wage earners has hardly changed, rising a meager 0.4 percent, while the income for the top 1 percent has climbed by 31 percent.

It’s pretty clear in which camp the champion of the so-called “generational theft” construct, billionaire Stanley Druckenmiller, falls. If Harmon really wants to find out who’s doing the stealing, he might try looking at those who have managed to end up with all the money.

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