2 min readJul 2, 2021
- I largely agree with your first point. Under Trump poverty dropped more than 10% due to the low unemployment rate. Studies show that if a family has at least one full time worker, the poverty rate drops to 3% from around the current 10–12% for the population at large. A job has been and remains the single best way to reduce poverty. Government programs largely soften the “pain” of poverty but studies show they also contribute to poverty in several ways.
- Actually, the US has tried for decades to do what you suggest and the theory sounds nice, but doesn’t work. Try to find out what happened to the billions in aide that went to Haiti in the massive relief effort there. The story repeats itself. The worse corruption occurs at the government to government aide level. The best results occur when private companies are able to operate “micro lending” but that is easier said than done. I have experience with one such program in Haiti. My church provide start up capital with great difficulty to a small “fish farm” operation in Haiti that would not only produce cheap protein for the people but a modest income for its operators who were connected to an orphanage. The amount of corruption involved and the subsequent seizure of the business by thugs highlighted how difficult it is to do what you are suggesting. When we tried to get the Haitian government to intervene they asked for a “bribe”, when we said we couldn’t do that under US law, they said “good luck”.
- The average effective tax rates of the top 1% today are the same as they were in the 50s. You are referring to the marginal tax rates that were much higher. Marginal tax rates influence how and where people invest not the actual taxes they pay. The average effective tax rates on the top 1% are up around 5% from 1950 at a Federal level, but that “savings” has been largely offset and in some cases more than offset by the rise in state and local income taxes since then, leaving the top 1% paying slightly more taxes as a percent of their income today than they did in the 50s. The boom in the 50s was largely the massive availability of jobs needed to produce the goods and services needed to rebuild the world after WW2 which continued for almost 20 years. Again it was all those jobs that accounted for the halcyon days… In many respects that is what Trump was referring to when he said “Make America Great Again” because that was when he grew up. Poverty levels drop when unemployment levels drop… Trump’s whole economic policy was built around expanding GDP which increases the number of goods and services available to buy, job growth which lowers poverty, and wage growth which increases the amount of goods and services people can buy. His strategy worked… and in fact, studies showed the income inequality and wealth inequality grew at a slower pace during his presidency until the 2020 stock market recovery disproportionately benefited the wealthy.
