Social Policy
Inequity and Ideology	Social democrats such as Secretary of Labor Robert Reich passionately insist that "growing" inequality in the United States is a fact which everyone must recognize, and they seem to believe government redistribution of income is the cure. However, even if real wages are stagnating, they are among the highest in all human history. Internationally, if it is true that at the lowest levels the United States does badly, at the highest levels we do better than anybody else, and at the median levels, average Americans are ahead of everyone except the Swiss. Today, only one of every five adults in the bottom income quintile works full-time year-round, and two-thirds of the households in this quintile are headed by single women -- about half younger women with children and half widows, mostly over 65. Unlike the other four-fifths of households, the bottom fifth doesn't contain many intact married families, or full-time workers, and the majority of householders are not working, even part-time. In the upper four quintiles, more than half the women have gone to work in the past 20 years, increasing the income gap with single female family heads. Yet this is not simply a dispute about facts: it is a philosophical and theological argument. For "equal" used to refer to reducing privileges to give everyone the same status under the law. Then the religious Levelers in England advocated making people uniform. The French Revolution contributed the idea of cutting everyone down to size (egalitarianism), and socialism claimed that justice requires bringing down the rich as well as the privileged. Today, equality, a mathematical term, is misused to mean equitable, an ethical term; and "unequal," a characteristic of nature, is used interchangeably with "inequitable." This allows social democrats to move back and forth between claims about fact and moral imperatives. Now, confused with the religious value of compassion, equality has become the vision of social welfare states and a passion among democrats. Economist Lester Thurow and others claim that "growing inequality" will rend the social fabric. However, that could only happen if inequality were unjust, instead of a welcome effect of liberty, and the people were envious. And that is why James Madison regarded a passion for equality as wicked. Source: Michael Novak, "Inequality and Ideology," On the Issues, February 1996, American Enterprise Institute, 1150 Seventeenth Street, NW, Washington, DC 20036, (202) 862-5800.
Don't Confuse Charity with Income Redistribution	The Christian notion of charity is frequently confused with the redistribution of income and wealth that occurs in the modern welfare state. The latter, suggests Jennifer Roback Morse, is morally and spiritually corrupting not only to recipients, but to the rest of society. Morse, an economist at the Center for the Study of Public Choice at George Mason University, believes the moral costs of the welfare state should receive more attention. Although established with the best of intentions, the welfare state corrupts compassion toward those in distress through no fault of their own by creating an avoidable temptation -- what theologians call an "occasion of sin." It tempts potential recipients to abuse the system, since in many cases poverty doesn't merely happen to a person, but is the result of personal choices. Thus it creates incentives for rent-seeking -- an activity to earn a profit the government has made unusually high -- tempting some to make themselves eligible for welfare by sloth and to take actions to maintain eligibility. Additionally, as coerced donors, taxpayers are cut off from the spiritual benefits of charity -- and are misled to believe they can satisfy the requirements of charity without inconvenience or having to see the faces of the poor. The final temptation of the welfare state may be to regulate the personal choices of recipients, since these choices determine whether or not they become impoverished or stay in poverty. But whose morality is the state to impose? Private charity appears to be the way out of the moral dilemma of the welfare state. Source: Jennifer Roback Morse, "The Modern State as an Occasion of Sin," Policy Study No. 71, February 29, 1996, Heartland Institute, 800 E. Northwest Highway, Suite 1080, Palatine, IL 60067, (847) 202-3060.
How State Lotteries Transfer Income from Poor to Middle Class	While the odds are against them, in 1994 people wagered $34.5 billion on lotteries -- with state governments receiving $14.1 billion as their share. In a 1995 survey in Money magazine, 11 percent of respondents even said the best way to achieve financial security is to play the lottery. Critics claim the benefits of lotteries have been oversold, while the costs to society are ignored. They cite studies showing that: Lotteries contributed only 2.2 percent of state government revenues in 1992. Although more than half of all state lottery revenues are dedicated to education, they are more often used as a substitute for other funds. Rather than improving state economies, lotteries simply transfer wealth from the many to the few, and ticket sales decrease other retail purchases by about the same amount. There is evidence that lotteries transfer income from the poor to the middle class: For example, lottery-funded college scholarships in Georgia go to students in families with a 1994-95 average income of $44,876, compared to the state's average household income in 1993 of $31,663. Ticket sales are highest in neighborhoods with the lowest income levels and the highest proportion of minority residents. The poor are more likely to play than any other income group, and spend a larger faction of their income. There are also studies showing lotteries create societal costs that have to be weighed against income to the state. For example, lottery gaming is second only to alcohol among illegal teen activities; and adopting a lottery is associated with a 3 percent increase in a state's crime rate and a doubling of the number of compulsive games. Thirty years ago, only New Hampshire permitted a lottery. As recently as 1960, lotteries were banned in every state. Today, 36 states and the District of Columbia have legalized state-run lotteries. However, the administrative costs for lotteries have risen faster than those for any other form of revenue collection -- and revenues decline after a few years. Source: John Hill, "Theft by Consent: The Lottery's Economic and Social Impact on Alabama," 1996, Alabama Family Alliance, P.O. Box 59468, Birmingham, AL 35259, (205) 870-9900.

Social Policy

Inequity and Ideology

Don't Confuse Charity with Income Redistribution

How State Lotteries Transfer Income from Poor to Middle Class