Daniel Garza: Freedom & Prosperity Should Be Our Heritage, Not Poverty

In these United States of ours, Hispanics share a variant of cultural, religious or ethnic commonalities that serve to identify us as an American social group. We are grouped together by shared heritage, language, and at times by skin color - but mostly by geographic origination.

And yes, while skin color is the most visible identifier of one’s ethnicity, Hispanics are actually not one race, but a mix of many. Still, as the author Richard Rodriguez writes, “I think brown marks a reunion of peoples.”

Today, a rising commonality amongst us is not that more of us have become penthouse dwelling metropolitans, college educated, or the executive level elites many worked so hard to become. Rather, the last few years have seen a rise in an old common identifier among Hispanics we thought had been left far behind. More of us are descending deeper into poverty every day.

Disproportionately burdened by diminished wealth and an economy that has been beset by stagnant and persistent high unemployment, Hispanics face a bleak future. As the current administration insists on continuing to spend unprecedented amounts of borrowed money with little results to show for it, threatening tax hikes on job creators, and growing the uncertainty with increased regulatory measures, Hispanic families are being brought to their knees.

A Pew Hispanic study shows that the net worth of Hispanic households decreased from $18,359 in 2005 to $6,325 in 2009 - The percentage drop of 66 percent was the largest among all groups.

The statistics showing a precipitous drop in wealth translates to real lives.

The number of Hispanic children living in poverty, for example, spiked 36 percentage points from 2007 to 2010. In real numbers, we now have a total of 6.1 million children in poverty according to data from the U.S. Census Bureau.

Poverty is spreading at record levels across many groups, from underemployed workers and suburban families to the poorest poor. While 1 in every 6 Americans now live below the poverty level, for Hispanics the numbers are more disheartening at  1 out of every 4.

Aggravating matters is the fact that nearly half the Latinas in the U.S. get pregnant before turning 20 years of age, making it much harder to avoid falling into a cycle of poverty.

Progressives argue that policies promoting “fairness” will decrease poverty. That is, in "redistributing" wealth by pushing tax hikes on higher income earners and increasing government spending we will see better days. But this is exactly what has been tried and the result has been a crushing burden of debt, a sluggish economy, unsustainable entitlement obligations, and a broken Federal government.

Historically, America adhered to the principles of economic freedom more than other countries did, and it made us the most powerful and prosperous nation on the face of the earth. But in the past several years, politicians needlessly unmoored our great nation from the economic system that had served as our anchor since America’s founding. And now we wonder why we find ourselves floating out to sea with no direction.

A sure fire way proven to reduce poverty is by advancing pro-growth policies that increase opportunities for all. Building a strong economy means ridding ourselves of excessive regulations, keeping taxes low, and reigning in government.

Mostly, setting a path to prosperity means we have to return to the principles that will secure us economic freedom:

- When property rights are clear and well-defined, one knows that what belongs to one person must be respected and will be protected under the law. With little uncertainty, a person can make informed decisions about whether to sell and/or invest in his/her own property, and what risks he/she is willing to take to move up the income scale and prosper.

- When laws are not stable or unclear, or when they change constantly, it is hard to know when one is acting lawfully. The business owner expends more resources to just keep up with the laws (and avoid breaking them), and less in producing, expanding and creating jobs.

When the value of a country’s money changes constantly, it creates a lack of trust among prospective investors. If they consider the risk of investing in one country too high, then they will likely decide to invest in another country with a more stable currency - less investment usually means creation of fewer jobs, resulting in decreased economic opportunities that can help individuals, families and communities prosper.

- I’ll quote the brilliant Adam Smith to make my point here - “It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy.. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.”

- When the government makes too many laws and regulations, it makes it more difficult for entrepreneurs to innovate, expand or simply manage their businesses. And when it spends too much, it becomes a massive burden on the private sector.

Today, total government spending is 36 percent of the Nation’s Gross Domestic Product and calls for increased spending by Washington politicians ring incessant. What we need is a fair, simple and competitive new tax code that closes special interest loopholes.

A recent report found that states with the lowest tax rates experienced considerable drops in the poverty level and increases in upward income mobility. For example, the 10 states with the lowest total state and local tax burdens saw an average drop of 13 percentage points in their poverty rates – two times better than the national average. In contrast, the 10 highest-tax states suffered an average increase in poverty of 3 percent.

If massive government spending, increased regulations, unfettered political cronyism, and threats of tax hikes are making us poorer… than shouldn’t we be doing exactly the opposite in order to generate growth, economic opportunities and a vibrant economy?

While we should seek share such things as prosperity, upward mobility and freedom in American, poverty should not be one of them.