Federal government largest driver of income inequality?

[Valin]

Hot Air:

Ed Morrissey

12/23/12

 

I missed this when Reuters reported on it earlier this week, but it’s worth a close look. The scourge of income inequality has been the focus of Democratic politics since at least September 2011, when Barack Obama began demanding higher tax rates on the wealthy in order to achieve “fairness.” Obama and his party have played class-warfare games ever since, playong footsie for a while with the Occupy Movement, until the stories of abuse, criminality, and weirdness got to be too damaging. All the while, the Democrats have insisted that they are fighting income inequality, and that we need more government spending to eliminate it.

 

In their “Unequal State of America” series, though, Reuters discovers the epicenter of income inequality — and it’s right where all that federal spending starts:

 

(Snip)The top 5 percent of households in Washington, D.C., made more than $500,000 on average last year, while the bottom 20 percent earned less than $9,500 – a ratio of 54 to 1.

 

That gap is up from 39 to 1 two decades ago. It’s wider than in any of the 50 states and all but two major cities. This at a time when income inequality in the United States as a whole has risen to levels last seen in the years before the Great Depression. …

 

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Roughly 15 cents of every dollar from the entire federal procurement budget stays in or around the government’s hometown, said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University. Last year, that was about $80 billion out of $536 billion in procurement spending, he said. The 15 percent share is far greater than the region’s 2 percent portion of the U.S. population.

 

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The more regulation and spending expands, the richer Washington gets. With those incentives in place, is there any wonder why Washington is reluctant even to cut the rate of growth in spending? Anyone? Anyone? Bueller? Bueller?

 

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"In this present crisis, government is not the solution to our problem; government is the problem. From time to time we've been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden. "

Ronald Reagan

 

True in 1981....true today.