Essay on Government Spending

F wholly 12 Fall 12 Brigham adolescent University Brigham Young University 08 Fall 08 Fall Essay 3 Nguyen Bui A HTG 100, 103 Essay 3 Nguyen Bui A HTG 100, 103 People should be treated indifferently regard slight of their riches and complaisant standings. Yet, in reality, societies live experienced economical inequalities due to have a bun in the oven scales, tax brackets, and education level. A research study on 23 developed countries and 50 states of the US has shown that countries with higher degree of discrimination scat to have higher rates of health, social problems and lower rates of social welf are.To resolve such inequality, the U. S establishment has consistently intervened by alleviating unretentiveness and redistributing income in different forms of alter payments such as welfare, Medicare, Social certificate and employer-provided health policy. Despite the good intentions, these programs, which involved large expenditure, havent been entirely effective in table serviceing the poor. Therefore, even though the poor might suffer from an extensive economic inequality, the government potbellynot intervene by levying these transfer payments to focus on the equal outcome rather than individual(preno momental) freedom.Many studies have shown that transfer payments didnt help to redistribute income. According to Dwight R. Lee, merely 25% of $500 billion spent yearly on in the public eye(predicate) assistance and social insurance programs were distributed through Medicaid, food for thought stamps, Social Security, etc and 75% were allocated regardless of need. This suggests that a large portion of financial aid from the government went to those who were not in need. These programs were therefore proven ineffective since their means were to help the poor but the poor didnt actually receive the take in benefits the taxpayers gave up.One of the reasons was that these transfer payments policy wasnt specific luxuriant, so their main resolv e of feeding lonesome(prenominal) the poor hasnt been accomplished. In addition, when taxpayers were taken property away to help the poor, their personal freedom was constrained because they couldnt do any(prenominal) they want on their earnings completely, even in help the poor themselves. More importantly, many poor people receive no more than the average income people and the transfers they clear are worth less to them.Out of the 25% payment transferred that were means-tested, only about 30% was in currency and the remaining 70% came in the form of in-kind transfers such as food stamps, housing, and medical care. These in-kind transfers are less preferable to the poor as gold provides more spending flexibility. For every dollar the government spends, only 25 cents are transferred to the poor. Out of those 25 cents, only 75% or 19 cents is the actual capital the poor can receive and use for whatever they need. Even though the poor nevertheless receive a cash portion throu gh these transfer payments, the cash amount is not enough to satisfy their daily need.Those programs dont help the poor as much as expected and as a result, the poor are still poor and the income inequality still remains unresolved. Also, it is disappointing to taxpayers because they can no longer use their own funds to help the poor, and the money they give up doesnt maximize the poors utility-grade either. Some of the basic supporting arguments for transfer programs are that they help to bring low income inequality and social stratification. Particularly, the mathematical function explains this argument W= min (Y1, Y2, , Yn).This function states that societys utility (W) is dependent on the least(prenominal) of individual utility, which is the poorest in terms of income. Thus, the poor have to be prioritized when income is distributed until all are equal. This is totally reasonable since a society would be fairish only if the bottom individuals were also well taken care of. T he advocates of these transfer payments also argue that transfer payments even though cant help to redistribute income equally, at least they help the poor reverse better and thus, social welfare would increase as a whole.However, they plausibly never pay attention to the result. They probably havent asked themselves this suspense is the money actually transferred from the rich to the poor? Many studies have shown a striking fact that nigh government transfers are not from the rich to the poor. Instead, government takes from the relatively unorganized parties, like tax payers and consumers, and gives to elderly, sugar farmers, and brand producers, considered as the relatively organized parties.As mentioned above, only 25% of all the money spent yearly on public assistance and social insurance programs were distributed through Medicaid, food stamps, Social Security, and 75% were allocated regardless of need. People tend to believe that whatever tax amount they pay, either federa l or state or social security tax, the money would be fully transferred to the poor. But they have failed to recognize whether the transfer payments go to the poor or people who dont need it. They end up losing their spending flexibility to only help the poor a little.Would people still see the necessity of these programs if they realize that the poor dont get as much as they really need? Overall, the redistribution of income is important because inequality can only cause complex issues for society as a whole. But the most effective way of income redistribution remains controversial. While most people believe transfer programs are helpful because they help to balance income between the rich and the poor, I believe this is not an ultimate result for such a long-standing issue.The statistics are self-explanatory these programs didnt result in a good outcome for the poor and the poor were still restless after all. Its the time for us to make changes, whether to alternate these prog rams or totally get rid of them so that taxpayers no longer have to pay a large sum of money to help only a little to those in need. 1 . Richard G. Wilkinson and Kate Pickett, The Spirit Level why More Equal Societies Almost Always Do Better 2 . Dwight R. Lee, Redistribution of Income