Buying votes

The question of why people do not feel the improvement in the economy keeps coming up. The stock market is up, housing has bottomed out and the stated unemployment rate is down to 5.6% so why are people still in the doldrums. The answer is the labor participation rate and wages. The percent of eligible people working is 62.9 and this is the lowest since 1979. In addition wages for middle and low income Americans have been stagnate. The government has been handing out benefits to these middle groups but what they really want is a job and that has to come from the private sector. One of the economic arguments for handing out money is that it will stir up the economy but the same argument can be made for reducing taxes. What is the difference between handing out a billion dollars in benefits and reducing taxes by a billion dollars? In the first case the government gets to control the spending and in the second case the individual gets control. When the government controls the spending it helps them control the voting which in turn leads to more spending which leads to more votes. This is the path the country seems to be on and will likely continue unless some changes are made. Here are quote from a couple of very smart people. “Once the people find they can vote themselves money, that will herald the end of the Republic.” – Benjamin Franklin “The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.” ― Alexis de Tocqueville