Sound Familiar
This week’s Old Testament reading is Amos 5:6-7, 10-15. Amos is one of the best reads in Scripture. He is one pissed off dude, who constantly speaks truth to power. He was, according to the Bible a dresser of sycamore trees. He was from the southern kingdom of Judah and was called to preach in the northern kingdom of Israel. Israel was much wealthier than Judah and had, even more than Judah, gone off the spiritual rails.
This passage lists the charges that Amos is making against this community. The rich abuse the poor, take from them their grain, build houses while the poor do without. These people are bribe takers, and serial abusers of those who are in need. All of this should sound familiar, it very much describes our society today.
The Continual Screwing of the Poor
One does not need to fall into socialist error to understand that the poor are indeed screwed by the policies of the wealthy. As I have discussed previously, this screw job is not via the federal budget. The poor still have little to do with the federal budget regarding either receipts or expenditures. Most federal receipts are made from the well off. These facts should establish this:
- In 2018, 144.3 million taxpayers reported earning $11.6 trillion in adjusted gross income (AGI) and paid $1.5 trillion in individual income taxes.
- Tax year 2018 was the first under the Tax Cuts and Jobs Act (TCJA). The number of returns filed and the amount of income reported grew in 2018 yet average tax rates fell across every income group and total income taxes paid decreased by $65 billion.
- The share of reported income earned by the top 1 percent of taxpayers fell slightly, to 20.9 percent in 2018 from 21 percent in 2017. Their share of federal individual income taxes rose by 1.6 percentage points to 40.1 percent.
- Since 2001, the share of federal income taxes paid by the top 1 percent increased from 33.2 percent to a new high of 40.1 percent in 2018.
- In 2018, the top 50 percent of all taxpayers paid 97.1 percent of all individual income taxes, while the bottom 50 percent paid the remaining 2.9 percent.
- The top 1 percent paid a greater share of individual income taxes (40.1 percent) than the bottom 90 percent combined (28.6 percent).
- The top 1 percent of taxpayers paid a 25.4 percent average individual income tax rate, which is more than seven times higher than taxpayers in the bottom 50 percent (3.4 percent).
On the expenditure side, the poor do not receive even 20% of federal expenditures. Total “means tested” programs are about 17-20% of federal spending. This means that 80+% of federal spending is given to recipients who are represented by effective lobbyists. This is borne out by the fact that the top 4-line items of the federal budget are Medicare, Social Security, the military, and interest on the debt. None of these recipients are what one could call poor. So, the federal budget is just exchanges from middle- and upper-class groups to other middle- and upper-class groups, depending upon the constellation of political factors.
The true way that the poor really get screwed is via the Federal Reserve and its money creation policies. These are policies that clearly enrich the banking and financial sectors of the economy at the expense of the rest of the workforce. If you are politically connected, like the financial sector is, then you get to play with the newly created money first before it has had an opportunity to raise prices and scramble the relationships between various asset classes. If you are not so connected, then you either get ahold of some of the freshly created money long after prices have risen, or you don’t see any of it at all.
On top of this, the creation of all this made-up money funnels resources away from the real economy and into the rip-off chamber that Wall Street has become. The financiers get something for nothing in return the rest of the economy gets nothing for something. The something are the resources to expand production into new and more efficient lines of goods and services, keeping in mind that producing more goods and services is the only way to increase our material wealth. This is what explains the inequality gap and stagnating real wages and wealth creation, not anything to do with a freely functioning market.
New Spending, Same as the Old Spending
None of this will change under the new spending proposals of the Biden Administration. Set aside that moving even more resources from the productive sector to the unproductive governmental sector is wholly bad for economic growth, regardless of how it is financed. Most of this new spending will not be specifically directed at the poor. Socialists will argue that this spending will help everyone, even more of the poor than are “helped” today. Yet in the end many more resources will flow to those who do not truly need assistance. That is by design, because this is a political ploy to build dependency on the government, then electoral support to maintain power. This makes the whole policy regressive.
Additionally, despite what the administration claims, most of this spending will not be covered by new taxes. There is simply not enough wealth among those making over $400K/year to cover this tab. This means that it will be deficit financed, adding even more to an already sky high debt. Since almost 40% of U.S. debt is purchased with newly created Federal Reserve dollars, the process of shunting more and more resources to Wall Street will continue. This too, is by design. The 1% still win at the expense of the rest of the economy.
Amos to the Rescue
The prophet, however, does not leave us without a solution. He advises us to seek good and not evil, to in fact hate evil and love good. Also, that we should seek to establish justice in the gate, and that the Lord will be gracious to the remnant of Joseph (verses 14-15). This in and of itself is sound advice, but we also have the revelation of our savior Jesus to guide and strengthen us. Through His earthly ministry Jesus puts within us the faith that restores our relationship with God. Fueled by this faith we can more faithfully follow Amos’ advice and seek justice here on earth.
What this means practically is a full liberalization of our economy. Ending cronyism and wealth transfers and the resultant dependency upon the government. Dismantling the Federal Reserve and return to market-based money would be an outstanding start. Eliminating all trade barriers would be a great next step. Moving the economy to a true and fair measure based upon the free, consensual interactions of people is the only thing truly consistent with what God has called us to be and do.
All of this is a fuller expression of a deeper faith that can allows us to give witness to the Good News of Jesus the Christ and at the same time to ameliorate the distress suffered by too many of God’s children.
Praise Be to God
