Darby Quast, Chapter 2, Question 6

The thing that stood out to me the most while reading chapter two was the issue of trying to move money from the wealthy too the poor.  There are many ways this is trying to be accomplished and none seem to be working. Having high taxes on corporations lower their incentive to invest in plants, research and other things that would produce economic growth.  While the tax could give more benefits to disadvantaged people, it discourages the kinds of investments that could make them better off.  Another example would be programs like welfare.  By giving people generous benefits while unemployed, it lowers the incentives to find a job.  The earned income tax credit was an idea created to try and solve this problem.  Subsidize low- wage workers so that their total income is raised above the poverty line.  Doing this it raises the incentive to work immensely but offers no aid to people who cannot find a job at all.  Not all government benefits go to the poor either.  Social Security and Medicare are given to all Americans, even the very wealthy.  One problem that is cause by these programs, is by giving a guarantee of benefits in old age, people may be less likely to save their money.  The wealth gap is a complicated issue that may never be solved.  Like Wheelan said, we live in a country that is able to send a man to the moon yet still has people living in the streets.