Income Inequality Caused By Government Spending And Regulation

Obama’s Latest Lie Makes Him a True Demagogue

Published Wed, Jan 15th, 2014   Floyd Brown, Chief Political Analyst

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As a worsening jobs picture appeared last week, Barack Obama sought to hit the reset button.

His strategy? Lie. (Surprise, surprise.)

You’re probably familiar with the little lies that the president has spewed in the past:

“If you like your plan, you can keep it.”

“You can keep your doctor, period.”

“The Affordable Care Act will reduce the deficit and save money for the economy.”

“The Benghazi attack was a result of an anti-Muslim video.”

“Al Qaeda has been decimated.”

“Republicans don’t care about people.”

But this time, it’s different.

Instead of a little lie, the president jumped right to a demagogue-level fabrication. (I guess Obama has become more comfortable in office during his second term.)

The lie was captured during a speech on income inequality…

“We’ve also seen how government action, time and again, can make an enormous difference in increasing opportunity and bolstering ladders into the middle class. Investments in education, laws establishing collective bargaining and a minimum wage – these all contributed to rising standards of living for massive numbers of Americans.”

But the problem is that this isn’t true.

The Lies Never End

More welfare, more federal regulations, more government intervention, more socialism… All of it has resulted in growing, not lessening, income inequality.

In fact, Obama’s central argument is so weak that the facts in his own speech show him to be dead wrong.

Obama said, “I’ll just give you a few statistics. Since 1979, when I graduated from high school, our productivity is up by more than 90%, but the income of the typical family has increased by less than 8%. Since 1979, our economy has more than doubled in size, but most of that growth has flowed to a fortunate few.”

But what the president doesn’t explain is that during the 1970s, the role of government in the economy was vastly expanded. In fact, the ’70s were the high-water mark of socialism until Obama’s own administration.

And ever since the passage of gigantic, welfare-state spending, income inequality has dramatically increased.

The reason is simple. People are poorer when they are young, and they’re richer as they get older. But most of the government’s income redistribution has taken from the young (the poor) and given to the older (the richer).

Only a seasoned demagogue could say otherwise, as the argument has no basis in fact or reality.

A more honest argument would say that as government spending has increased, income inequality has increased. As the public sector has robbed the private sector of vital capital needed to grow and expand private opportunity, wages have stagnated and income equality has become a growing problem.

Consider that government spending at the turn of the 20th century was less than 7% of GDP. In the 1930s, spending more than doubled (as part of Franklin Roosevelt’s New Deal) to 20% of GDP. And in the ’60s and ’70s, spending grew further as part of Lyndon Johnson’s Great Society social programs. In fact, it increased to about 36% of GDP.

In the ’90s and 2000s, government spending stayed in the range of 33% to 35% of GDP until Obama was elected. Today, spending has rocketed up to 40% of GDP.

Meanwhile, income inequality has steadily worsened. Therefore, giving the government more money (and more power) isn’t the answer. As it turns out, the fight for income equality is really a fight for freedom from the government.Se