Capitalism, Poverty, and Government in America in 2017

Capitalism is alive and well in America in 2017.  Unemployment is in the four percent range, which we saw last in late 1999, early 2000, and before that from the end of World War II until the early 1970's. 

Jobs are out there today. Yet poverty has hovered between 10 and 15 percent of the population since 1965. For the last fifty years we have had a large group of people, today numbering about 43 million, unable to enjoy the fruits of our economic system.

Poverty is not a new problem. It is probably as old as human civilizations. Poverty is not capitalism's problem. Poverty is government's problem. 

Capitalism provides us a system to create wonderful tools. Capitalism motivates people to work their fingers to the bone to realize their personal dreams. It is a dreamer's marketplace and it is designed to meet the needs of dreamers, protecting their products, encouraging them to think big and take risks, which coincidentally benefits us all. 

Capitalism is not the ideal tool for full employment. Frequently it does create high employment and frequently the monetary benefits flowing from capitalism are shared with not just the dreamers but the majority of us. But we can't expect capitalism to always meet the needs of full employment. Capitalism is best suited for creating great products, not jobs for everyone. Government can and should fill that gap.

Where jobs are lacking, government can put people to work. Where housing is missing, government can provide food and shelter. Our society as a whole is rich and vibrant. Given this environment, government can find the resources to employ those of us on the fringe. There are many ways to tackle this problem, including a guaranteed income for all taxpayers or a national job corps that trains and employs any who sign up. 

The federal government is the ideal tool for full employment and decent housing and health care for all our citizens. Only the federal government can create money. The federal budget is unlike any other budget, personal, state, business or otherwise. All budgets but the federal must be balanced. Expenses must equal income or the budget and enterprise will fail. Not so with the federal budget. If there is not enough money flowing in the economy, if folks do not have jobs or cannot afford food, housing, education, or medical treatments, the government can step in and create money to fill those needs. Whether it solves the problem through jobs or guaranteed income or stipends or free health service is immaterial. The government is paying to provide the service. 

If the government can print money and solve all of our problems, why hasn't it been doing so, why isn't everyone behind this? There are two reasons, one practical and one cultural. The practical issue is inflation and the cultural issue is survival-of-the-fittest.

If the government prints money with abandon, inflation will occur, prices will rise exponentially, and the economy will fail. So how much money can we create before inflation sets in? We don't know. But we have the tools to address the issue. We can monitor prices, and when they rise, we can impose taxes, taking money out of the economy. Removing money will cure inflation, plain and simple. All economists know this. It's not an issue being debated or contested.

We already have lots of experience printing money, adding dollars to the economy. Whenever we have a war, we add gobs of money to the economy. No one complains because our lives seem threatened. Which is worse, inflation or being defeated by some enemy? No contest. No debate. We do whatever is necessary to arm ourselves and fight the foe. 

If life and liberty are not at stake, though, we suddenly have scruples about creating money to fix a problem, and herein lies the cultural issue. Those of us who succeeded in our economy, through hard work, a little luck, and perhaps a little chicanery, aren't very keen on helping the poor slob who isn't as smart or is clearly a boozer or is just plain lazy. We are not so much a communal society as a pull-yourself-up-by-the-bootstrap society. "Socialism" is a dirty word and "communism" is downright blasphemy. We would sooner hear a racist give a speech than a communist! (Actually we have applauded racism for a good many years, but that's another discussion.)

I welcome the debate and I respect my neighbor who insists that the unsuccessful should be left alone to succeed or perish. Though lacking in compassion, it is an open and honest argument. What I don't welcome is the politician who claims to care for all his citizens, but doesn't want to spend the money to do the job. He says, "I care for you all and my solution will help you." He's dishonest. His solution without money will not help you. He should say, "I care for you, but I don't have any money to help you, so you're on your own." That's an honest position.

Whatever the path, caring for all of our citizens should be central to today's national discussion. Addressing poverty in today's economy is doable, is compassionate and is one more reason we are a beacon in the world. Our democracy and our diversity already shine a light on our way of life. Our drive and enterprise and laws attract the best and brightest from all over the world. Our sense of fairness and our concern for the disadvantaged should also describe our ethos and reflect our success.