Losers Magazine (tm) Article No. 12 (10/6/95) by Carl E. Person

How Government Policy Is Destroying the Middle Class

Various articles explain the author's views about how the U.S. government is destroying the middle class. But I would like to focus on that idea in this article.

The middle class is being destroyed by a complex set of circumstances, even the abortion issue plays a significant role. I might add that O.J. has made a contribution to the decline in the economy. You just can't say one thing is wrong with the economy, such as interest rates which are too high or too low, or something as facile as that.

No, the economy is the result of millions of decisions, many of which have been made by government with an effect, sometimes good, and more often bad.

Government policy as it really affects the economy, other than to make the rich richer without being too obvious, is not very coherent. The policy is a mix of micro-economic decisions, in the form of statutes, rules, regulations, bureaucratic decisions ( all of which I'll collectively refer to as DecisionsL and even inaction which collectively add up to long-term, continuing injury to our economy.

If each bad economic Decision could be calculated, such as the cost to the economy in issuing illegal parking tickets to raise revenues for local government, the billions dollars a year throughout the U.S. for illegal parking tickets alone (and related un warranted towing charges) when added to the billions of dollars spent in waiting time at toll booths, plus the billions of dollars in excessive compensation paid to government employees, plus the billions of dollars given in unnecessary farm aid, plus the hundreds of billions of dollars in unwarraned depletion allowances, plus ... well, you get the point. If all these government giveaways were suddenly stopped, the amount available to the economy for creation of new jobs and putting downsizees, underempl oyeds, unemployed and unprofitable small businesses to work properly would have a staggering and favorable impact on the economy, without question.

Government's present policy is to tax (and destroy private-sector jobs) and spend in a massive bureaucracy (which adds a further level of destructive power to businesses which survived the tax hit). There is no incentive for politicians to eliminate wast e. The public isn't appreciative because it hardly knows what's happening. The public is told to hang in there, because everything sooner or later will come out alright for them. The tide will come in for us all, and all that sort of B.S.

Government policy has been to create a state monopoly in education, thereby driving the costs of tuition sky high and putting students and their parents into economic prison for 10 years or so paying off loans and as a direct result suffering from a decli ne in standard of living in comparison to students who did not borrow to go through college.

Government policy has been to finance K-12 education even though it isn't working, because bad teachers can't fired and school administrators politically are unable to turn away troublemaking students, unlike private schools, including schools run by the Catholic Church, in which bad teachers can be and are fired, and troublemaking students are thrown out when deemed to be beyond reasonable salvation by school administrators.

Education, of course, is the most important part of our economy, and if the problems with our poor educational policy were cured, we probably could forget about many of the other needed reforms.

The next bad governmental policy is to protect poor and middle-class persons from being exploited by offerings of securities in new and small businesses. The evil here is devastating to the economy for various reasons. The first is that on a cost/benefit analysis, the billions of dollars lost to the economy is not justified by the saving of seveal tens of millions of dollars in bad or fraudulent investments. Anyone knows that risks entail losses, and the government's policy of prevent any losses whatsoev er attributable to new and small business investment is plainly stupid, and a policy obviously designed to prevent competition for major corporations.

The nation's laws prohibiting fraud are already sufficient to protect the public against stock fraud, and the elaborate securities and blue sky laws are no more than a governmental bureaucracy which serves big business by stifling competition from small b usiness. This governmental policy must go.

Governmental policy in negotiating which U.S. businesses will be permitted to sell goods and services in Japan must give way to standards of law which any U.S. aggrieved businessperson could bring into court to prohibit what the law says is illegal. I nstead, the way it works now, one or more political negotiators go to Japan and discuss specific goals for film, used car parts, new cars and chips, and the rest of American industry be damned! That's not a reasonable public policy; it's a governmental g iveaway for which lots of campaign contributions are due from the favored four.

The nation's welfare problem is a mix of the foregoing problems and would be reduced significantly without the present reforms which are being made. If capital and education were made available on a competitive basis, there would be less reason for perso ns to fall back on welfare. Also, for-profit education or training centers would be available at highly competitive prices to take persons off of welfare. We don't need political grants to perform this mission, because the money seldom goes to anyone who can do any good. We need free enterprise to develop ways to remove persons from welfare. I know. I have been trying for years to get the various governments involved (federal, city and state) to permit me to take persons off of welfare at my own expense , in exchange for a percentage of the money saved by these governments if and when I succeed as to any one welfare recipient. Nobody is interested in having a citizen from the cost of welfare reform, because it would eliminate the need for a highly-paid and highly political welfare bureaucracy.

Another governmental policy is to avoid competitive bidding whenever possible, by forcing bids to be made through big business rather than having the government puts the bids of small business into an overall package itself. Thus, when a defense contract or puts in a bid to build a new aircraft, the defense contractor (I believe, but admit that I am not totally sure on this point) is not obligated to put each component of its package out for competitive bidding, or to accept the lowest bid, and is free to use high-cost suppliers in its overall bid.

If government could put out requests to bid for the xerox equipment, its maintenance, and its supplies, the net result would be a much lower cost for government, at a higher administrative cost, but with substantial overall savings, and with much greater profitability and opportunity for small business.

Tax policy is also in favor of big business, which is able to allocate income and profits to other countries, pay little or no taxes in the U.S., but continue to enjoy the profits from seling to the U.S. market. What is worse, the government has a policy of giving hugh tax breaks to business in exchange for campaign contributions, while the middle class and poor pay more taxes to make up the deficiency.

This practice should not be allowed, and would either take political or constitutional reforms to stop, I would think.

There are various other governmental policies which are helping to destroy the U.S. economy from the standpoint of the poor and middle class, but some of the main ones make the point, I think.

Copyright © 1995 by Carl E. Person. Permission is given for non-commercial users to send a copy of the data processing file for this work by electronic means to a specific individual for his or her own use, and then only if the entire file is sent, including this copyright notice, but no permission is given for anyone to copy or transmit this file for or to any person for public viewing or downloading. It is intended by the author of this work that the work shall be made available in electronic fo rm only through LawMall (tm).