Big Government and Wealth Gaps

March 8, 2012

One of the last outposts of the once celebrated Occupy movement resides in Washington DC. The remaining tents whip in the early spring breeze. Tattered signs still putter their 99 percent message at passers by who no longer care. Tourists see them as a curiosity, rather than political inspiration. Occupy looks more like a zoo or a museum exhibit than a movement.
But the District of Columbia’s Fiscal Policy Institute released a study that wealth gap enthusiasts should find interesting. The nation’s capital has one of the most substantial separations between the wealthiest and poorest in the nation. Only Atlanta and Boston have larger gaps.
Washington DC’s highest earners outstrip San Francisco and even New York, making over $470,000 per year.
Although Defeat Poverty DC’s Joe Weedon told the Washington Examiner that the problem lies in education, two themes connect all three cities. One is a national capital and two are major state capitals. That means that government represents a major push in the economy. Liberal Democrats have also generally controlled these cities for a long time. Washington alone has some of the most restrictive regulations and taxes of any government in the nation.
Is it not possible, even likely, that big government tends to widen wealth gaps rather than close them?
If big government could cure poverty and reduce wealth gaps through programs and economic policies, wouldn’t cities with generations of liberal leadership be cities upon a hill for these policies? This study backs the idea that government investment and employment does not have the same dynamic ripple effect as a healthy private sector. Poverty programs that keep people in place instead of encouraging movement to regions that need workers only maintain a poor population. They do not provide any help up at all.
Wealth gaps in a free market driven society are not negatives. Since a free market encourages social mobility, they serve as a motivating factor to work harder, take chances, and innovate. When government policy results in wealth gaps, they become more destructive, because bureaucracy is invested in social stagnation, not mobility.



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