Inequality rose under Reagan, falls due to Obamacare. But be careful which you wish for

How Obamacare reduces income inequality:

And how Reaganomics increased income inequality:

Question: Which of these situations would you rather have?

Would you rather have the one where everyone’s income goes up, even if it goes up by a larger percentage for those at the top of the income ladder — thus increasing inequality? Or the one where almost everyone’s income goes down, even if it rises a bit for those at the bottom of the income ladder — thus reducing income inequality?

Note that, with Obamacare, the two hardest-hit deciles are the third and fourth — equivalent to the second quintile on the Reagan chart. Under Reagan, that quintile saw income growth of about 8 percent. Obamacare, according to the calculations, stands to reduce their income by about 1 percent (versus before it was implemented). Note, as well, that the Obamacare effect on income even for the only two deciles that see increases is about the same as that group (the bottom quintile) saw under Reagan.

In short, the bottom 20 percent gained about as much under Reagan as they do thanks to Obamacare, but under Reagan everyone else’s income went up, not down. And the ones whose income falls by the largest proportion under Obamacare are those in the middle. What was that about growing the economy from the middle out?

Let’s be clear: This is pretty much the only way for inequality to be reduced under leftist economic and political theory. When the goal is reducing inequality, rather than improving the lot of all regardless of how they stand compared to one another, Obamacare is precisely the kind of redistributionist policy that’s called for.

So, again: Which would you rather have? Less inequality because 80 percent of people see their incomes fall, or more inequality while everyone’s income rises?

Note: The authors of the report on Obamacare’s impact on income have taken a broader look than just the “money income” measured for the Reagan years; their intent was to also measure the effects of insurance and other benefits, which aren’t cash. But this adjustment actually puts Obamacare in a better light than a simple “money income” measurement, so comparing their adjusted figure to “money income” under Reagan most likely puts Obamacare in the best light possible.

Reader Comments 0

47 comments
MarkVV
MarkVV

A closer inspection of Kyle’s words and the data he has presented yields even more interesting conclusions. The bottom 20% of people with income, those who are projected to benefit greatly from Obamacare, obviously have income (otherwise they would not be considered), but they are not “working poor,” who will not benefit but will suffer “ill effects,” according to Kyle.Apparently then, those bottom 20% of people get income but do not work at all! Will wonders ever cease?

MarkVV
MarkVV

Let’s be quite clear about Kyle’ view of the American society. According to him, Obamacare will have “ill effects on the working poor.” Therefore he views two tenths of the American people as “nonworking poor,” because the two bottom tenths certainly can be called poor, but according to Kyle’s data they will benefit greatly from Obamcare, therefore they cannot be the “working poor,” for which it will Obamcare will have “ill effects.” Perhaps Kyle will explain to us which columns in the graph he has presented are, according to him, those “working poor.”

IReportYouWhine
IReportYouWhine

By the way, the chart doesn't correspond with all the gruberish we been fed. 

Tiberius-Constitutionus
Tiberius-Constitutionus

@IReportYouWhine We can thus conclude that someone, somewhere, is being grubered.  Question is: who?

straker
straker

Rafe


Obama's amnesty plan will take months to implement.


This will give the new Republican Congress time to take it and Obamacare apart.


Obama knows this and is counting on the resulting bitterness and gridlock to result in a large Democratic vote in 2016.

Jefferson1776
Jefferson1776

@straker  The new congress will be just like the old congress,  just watch. Nothing will get done, unless their hair is on fire.

RafeHollister
RafeHollister

I normally think charts are just for the illiterate, but this one is the best I have ever seen.  It clearly shows that a rising tide lifts all boats, as Reagan promised.  The sinking swamp we have been in under Obama sinks everyone, but the ones who were at the bottom to begin with, are pushed the farthest below ground as those better off, weigh down those on the bottom.  Obama will go down as an economic failure as he has spent his political capital on score settling and income redistribution, rather than helping the economy to grow and prosper, which would have helped everyone. 


I heard today, his Amnesty EO will put more legal workers into the workforce than the total number of jobs he has helped create since 2009.  This is another boot on the throat of the working class in America.  Someday his supporters will realize that the only thing he has ever been focused on is implementing his agenda, with little regard to the unintended consequences of his policies.

LogicalDude
LogicalDude

@RafeHollister Really, those millions of undocumented immigrants do not currently work?  REALLY??


Of course most of them work.  They work under the table without benefits.  They are paid sub-standard wages.  They are threatened with deportation if they say anything. 


Now, if Obama also pushed for criminal convictions of companies that take advantage of the undocumented workers, then the huge influx would slow down.  Republicans, of course, fight this piece because money moves them more than humanity. 

RafeHollister
RafeHollister

@LogicalDude @RafeHollister Money rules both parties.  BTW both parties get the bulk of their campaign contributions from "companies", sometimes different ones, but often the same ones.  Companies donate to both sides, hedging their bets.


I am all for convicting companies illegally profiting from illegal immigrant labor.  Lock them up!  I think most Americans would support that, it is the politicians, both parties, and the Chamber of Commerce that oppose tightening the enforcement.  Once again government ruling against the will of the people.


The point on whether illegals currently work is immaterial.  The number of jobs Obama claims to have created is less than the number of illegals he is giving Amnesty.  Where are the jobs for Americans, or the illegals continuing to stream across the border?

MarkVV
MarkVV

@RafeHollister 

Apparently, you have not even noticed that some boats benefited much more than others, not just absolutely, which would be acceptable, but relatively.Further you have failed to notice that the “sinking swamp” you mention was caused by the pre-Obama policy that gave the President the worst recession in recent history.

dawgfacedboy
dawgfacedboy

@LogicalDude @RafeHollister 


Without benefits? They are illegal and pay no taxes, they shouldn't receive benefits.

Sub standard wages? They are illegal and pay no taxes, it is their choice to move here.

Deportation?? HAHAHA!!! It's not hard to find a bunch of Mexicans standing on the side of the road looking for work. If they were in danger of being deported they would've been by now.

straker
straker

"In progressive societies the concentration of wealth may reach a point where the strength of numbers in the many poor rivals the strength of ability in the few rich; then the unstable equilibrium generates a critical situation, which history has diversely met by legislation redistributing wealth or by revolution distributing poverty"


Will Durant


In a society like ours, which is described above, its just a matter of time.

IReportYouWhine
IReportYouWhine

The democrat solution; make everybody poor.


Except their politicians, of course.

Penses
Penses

Christ said "the poor will always be among you." Income inequality is a historical reality - period. And it will remain so for all time. Look a someone like AL Gore. It should be patently obvious to all that he is not personally very interested in spreading the wealth around. What he really wants, I guess, is to put a gun to the heads of taxpaxers and force them to spread wealth around. So he can look like he cares without really caring. Some progressives are more equal than others.


Helping others in need is primarily a personal mandate - not a legislative one. We need to put the neighbor back in the hood. 

straker
straker

DawgDad


We do NOT live in a socialistic society.


The leading advocates of Obamacare are, to the best of my knowledge, NOT communists or socialists.

DawgDadII
DawgDadII

"Income equality" in a socialistic society is a myth. The leading advocates of Obamacare and socialism (and communism) are doing what? Getting richer, becoming more powerful, sucking public funds, at the expense of everyone else, all while laughing at them.


I thought the top 1% today are far richer than they've ever been? Isn't that what the Democrats and the MSM keep pounding out, incessantly? Reagan is somehow responsible for THAT?


Instead of measuring "income equality" it is far, far more productive to measure and pursue economic opportunity and freedom, instead of taking it away from people.


If you want to do a welfare program, have the basic integrity to float it on its own merits, like Bush did with Medicare Part D. No, the Democrats lie, lie, lie and obfuscate, then taunt and laugh (remember, too, Pelosi's gavel march).


straker
straker

Kyle - If you agree that schools in poor area don't get as much TOTAL money as those in rich ones, then that is what I would like to see corrected, and that is policy and would not have any Obamacare effects..

AvailableName
AvailableName

Beyond the fact that you seem to be mixing apples, oranges and mangos with respect to cause and effect.  If my income goes down 1% and everyone gets healthcare, I'm a happy camper.

straker
straker

Kyle - "local tax dollars"


Which takes us back to square one.

Kyle_Wingfield
Kyle_Wingfield moderator

@straker Right, square one, where I explained you didn't have an example of the kind of policy I asked for.

straker
straker

"schools in poorer areas already receive more money than those in wealthier areas"


Really?


Then why do newspaper and magazine articles still talk about POOR schools and how much better schools in wealthy neighborhoods are?

dawgfacedboy
dawgfacedboy

@straker  the students are a big part. Graduation rates as well. Why in the world would you sink money into the schools in the ghetto???? My uncle teaches at an inner city school. Arrests are a daily thing. Teachers getting cussed at a daily thing. Dropouts, drug dealers, and baby mamas are so common they don't even raise an eyebrow anymore.


Yes lets keep worrying about the bottom of the barrel. There are plenty of future world leaders, doctors, lawyers, teachers, and fine upstanding citizens coming out of there. Nothing spells success like 3 kids with 3 daddy's who aren't around.

Kyle_Wingfield
Kyle_Wingfield moderator

@straker "Then why do newspaper and magazine articles still talk about POOR schools and how much better schools in wealthy neighborhoods are?"

Local tax dollars.

MarkVV
MarkVV

The whole comparison Kyle has presented makes no sense. No sense at all, as it “compares apples and oranges.”

The presented effect of Obamacare demonstrates the calculated effect of ACA on the income distribution. And as far as THAT is concerned, I am all in favor of the predicted large improvement in the lowest incomes vs. a small drop of the rest.


But there was no “Reghanocare” to compare these numbers with.It makes absolutely no sense to compare the effect of single healthcare law with the results of a general economic policy.And again, it also demonstrates what the Democrats have been pointing out – that that policy favored hugely the rich.

straker
straker

"center-left policy against income inequality"


How abut starting with a policy that would make all the public schools in America equal in the revenues they receive to operate, regardless of what part of town they happened to be located in?

Kyle_Wingfield
Kyle_Wingfield moderator

@straker With federal and state money, schools in poorer areas already receive more money than those in wealthier areas. So, changing federal or state funding would go in the opposite direction. And taking local money from wealthier areas to send to poorer areas -- which, of course, already happens with local and state money -- would be exactly what I've described.

LogicalDude
LogicalDude

"Which would you rather have? Less inequality because 80 percent of people see their incomes fall, or more inequality while everyone’s income rises?


Boy, if only those were the only choices.  They aren't, of course, but when the message is placed like this, you lead the audience to a false dichotomy. 


The result right now, is that the graph for that top % is actually so high, it wouldn't fit on the page.  It means workers are getting much less of the moving money (what people pay for stuff) than the owners, who are keeping more and more for themselves.   I'd rather the low and middle classes get more of the moving money and have less go to the owners.  There are many successful companies that pay well, give good benefits, but do not make billionaires out of the owners.  


It's an easy target, but Walmart shows what happens when we continue down the course we are headed. Workers need assistance because wages are so low, but the owners are among the richest people in the world.  IF they would raise incomes across the company, would it "hurt" them so much if they made only a billion dollars instead of 20 billion? (numbers are made up, but illustrates the point)


Kyle_Wingfield
Kyle_Wingfield moderator

@LogicalDude "There are many successful companies that pay well, give good benefits, but do not make billionaires out of the owners.  "

Such as?

Tiberius-Constitutionus
Tiberius-Constitutionus

@LogicalDude Well said, Logical.  With all respect to Kyle, the 'choice' presented represents nothing more than a gross oversimplification of a very complex and nuanced issue.  Addressing that properly, however, doesn't lend itself to prepackaged sound bites and attention-grabbing headlines.

LogicalDude
LogicalDude

@Kyle_Wingfield @LogicalDude Sorry for the delay, wanted to triple-check. 


Costco: CEO Craig Jelinek earned $650,000 in 2012, plus a $200,000 bonus and stock options worth about $4 million, based on the company’s performance. That’s more than (previous CEO) Sinegal, who made $325,000 a year.


Costco is well known for its generous employee compensation, and is #2 retailer in the US behind Walmart. 

(Walmart CEO Mike Duke’s 2012 base salary was $1.3 million; he was also awarded a $4.4 million cash bonus and $13.6 million in stock grants.)


from: http://www.businessweek.com/articles/2013-06-06/costco-ceo-craig-jelinek-leads-the-cheapest-happiest-company-in-the-world#p2

straker
straker

Jefferson - "the law will be hard to dismantle"


True. But every Republican who ran for election or re-election to Congress promised to repeal Obamacare.


Obama's action on immigration will only fuel that fire.

Jefferson1776
Jefferson1776

@straker  Watch GA rate soar when the states that care about the heath coverage of their people stabilize or go down. The new majority leader won't be able to take it away from his folks, they love it under another name.

straker
straker

Kyle, this is all rather moot as its clear the new Republican Congress will, one way or another, completely dismantle Obamacare.

Tiberius-Constitutionus
Tiberius-Constitutionus

@Jefferson1776 @straker I'd say it can't be dismantled, period. It can be improved.  It can be changed.  But the essence of the law is here to stay.  If the GOP is serious about recapturing the White House, they should let this one go.  But if the past 3 weeks are any indication, the GOP's strategy for 2016 is based more on a hope and a prayer than anything else.

MANGLER
MANGLER

Let's go ahead and grant amnesty, like Reagan did.  Seemed to have helped.

Garden Gnome
Garden Gnome

@MANGLER Yep, and watch every central and south american that can breed cross the border and drop an anchor baby. So we can go through this again 10 years  from now.