Thursday, September 15, 2005

Term paper: Who benefits from keeping the poor in poverty and how do they do it? part 2, The Money

This is a roundabout essay on who has a vested interest in keeping the poor people in this country right where they are. Last post, I looked at the major players in getting the current bunch of self-serving sleazeballs elected. In this post, I would like to share my thoughts on money. I have a Bachelor of Science (yeah, BS) degree in Accounting, and even though Macroeconomics was taught by a woman who spoke in a monotone, making a boring subject almost intolerable, I paid attention. I just bring this up so the reader will know that I didn’t just cook this up on my own.

You often hear money referred to in the same terms that you hear used for water or other liquids; cash flow, financial drain, Federal Reserve (reservoir), bleeding money, (loan portfolio) runoff, pooling resources, inflows, outflows. This is because money really does emulate flow mechanics. Now, one thing to be aware of: THERE IS NO SUCH THING AS TRICKLE-DOWN! Money, and water, all trickle UP! I don’t mean uphill, that’s the thing used to confuse. I mean, that money always flows FROM small TO large concentrations, like water that starts in rivulets and runoff, and flows into brooks, that combine into streams, that combine into rivers, that flow into lakes or into the ocean. There are only two ways that water moves from greater to lesser concentration: evaporation and condensation, and pumping and piping (distribution). Evaporation is analogous to a progressive tax; the small streams experience less evaporation and the large lakes and oceans experience more due to larger surface area. Now, picture corporations as lakes and governments as oceans. Money flows to these accumulation points, and then is taxed, and/or distributed. Condensation is a more generalized distribution, and pumping and piping is a more targeted one. For the purposes of this discussion, equate condensation with Government programs and private charities, and pumping and piping with payrolls, government contracts, and stock dividends.

If you look at the bottom rungs of society, you see pensioners, Social Security recipients without other means, Welfare recipients, the working poor, and illegal immigrant workers. All of these folks are living from check to check. What this means is, that no matter how much the so-called Conservatives bitch about how much money is going into social programs, THE POOR PEOPLE AREN’T KEEPING ANY OF IT! That’s right, THEY SPEND ALL OF IT! So who gets it? The banks, who charge these folks a higher interest rate than I can get because they are a “bad risk”. The credit card companies because the poor carry credit card debt and pay the minimum amount on their cards and barely cover the interest (16-22%). The pharmaceutical companies who don’t care how they are paid and charge excessively to keep the Medicare “percentage” payments profitable. Wal-Mart. Grocery stores. The check cashing services. The rent-to-own scams. The pawn shops. The gas station. The State Government (sales tax, gas tax, vehicle registration, the lottery), Mother Church. Anheuser Busch. Home Depot. The auto parts store. If you haven’t read part 1, go take a look at the list of Republican Donors, and see how they fit into this picture.

Aside to those who know exactly what I am talking about and wish that they could shut me up: John Maynard Keynes is not dead, merely buried.

Next post will be about progressive versus regressive taxes.


At 1:19 PM, Blogger kalanchoe542 said...

Have you read "Nickel and Dimed: On (Not) Getting By in America" by Barbara Ehrenreich? Excellent corroboration of the theory that the poor get poorer because they can't afford to save. The system fails the financially disadvantaged because they never have a chance to get ahead of the curve.

At 1:47 AM, Blogger Gabe the Beaver said...

Water, water everywhere and
All the boards did shrink
Water, water everywhere nor any drop to drink.

At 8:55 PM, Blogger DUB said...

I'm dirty and parched while they bathe in Evian.

This reminds me of the many friends I have who were raised in communities that presented so few options that they gave in and sold drugs, were convicted, and now can't go to college to better themselves, because their conviction prevents them from receiving federal aid for education. Shit, even without a drug conviction, they pitiful grant amounts can barley (if at all) cover tuition alone, much less pay for books. And you can forget about focusing entirely on education, 'cause you're gonna HAVE to be employed at at least one full-time job. No education? Keep that full-time job, and hope you don't get laid off in 20 years when you're kids are trying to go to college.

Only the rich can afford the education from an accredited institution which can "prove" you know enough to attain employment that will pay enough to keep you out of poverty.

Vicious circles.

At 5:12 AM, Blogger BEAST said...

As the saying goes:"The rich will get richer, the poor will get poorer".

Hence you see the widening gap between the rich and the gap in developing and developed countries.

The rich will always have a way to get themselves off the taxes: vote for pro-rich parties, convert excess cash to assets, etc, while the poor have little or no excess to such underhand political and legal means.

Its unfair alright, but this is the reality of the situation.

The Beast


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