Face to Face: How should the economic system in the United States be structured?

Drake Goodman

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Face-to-Face is a feature that allows two members of the Redwood community to debate with each other, argue or simply converse about a relevant issue or event. We provide the topic, and they do the rest. This month’s participants are seniors Will Lester and Andres Martinez, discussing the benefits and drawbacks of the current capitalist system in the United States.

 

What are your general thoughts about capitalism in the United States of America?

Andres Martinez: I think it’s the best system, but in America, it has to be changed because of how we’re trending toward in the future with automation and the disparity between the rich and poor.

Will Lester: I think capitalism is what allowed America to get to where it is now. Obviously things are changing as the government becomes more involved; capitalism becomes less of a pure system. So honestly, the best option would be for the government to become less involved, allow the free market to handle it and adapt to the changing conditions that this world is having.

What do you think should be done about the healthcare system in our country?

AM: Healthcare is a right for every citizen in the United States, so it should be universal for anyone that wants it. It should be a private and public company. The way markets work, if there’s only one single force handling the Medicare system, it’s not going to improve, so anyone that wants to keep their private insurance can keep it. But if you want to opt into the public insurance, that’s fine. We have to restructure corporate taxes so they actually pay taxes to help pay for public healthcare, and I’m mostly talking about big tech right now. Then, you can raise taxes on the rich. 

WL: Healthcare is not a right. Rights are things we get that come before government: the right to own property, the right to life and the right to pursue happiness. The government is not there to give us new rights. We don’t need comprehensive healthcare for people who aren’t working jobs if they are able. If you work a job, you get healthcare. People don’t have the right to force me to give you service for a certain price, and it’s not the government’s job to do that. Already, there are systems like Medicare for people where if they’re low income, they can get very affordable healthcare. Honestly, public healthcare never works. Everyone with any bit of money in Canada will come to the United States for any healthcare. I’m not a fan of the government interfering in anything, but I don’t want people dying on the streets because they can’t afford healthcare, so the government should intervene in extreme cases. 

Are the different welfare systems and social programs in our country enough or too much?

AM: It should be done more efficiently because the incentives are completely off. It’s necessary though because, as a comparison, if you’re a teenager, and you mess up, then the policy at school is if it’s your first time you get a clean slate. That’s what the purpose of what welfare should be. It’s a fallback net so you can bounce back. 

WL: It needs to be completely reformed because the incentives in the system are awful right now. People are still in the spot where if they need a job, they can find a job. Most of those jobs will come with healthcare and benefits. So I don’t really think we need to expand our social system, our Social Security system or any of our transfer payments, because it works right now. We’re technically in an economic growth period right now, so we shouldn’t be running a deficit. If we spend even more than we are now, imagine what happens when the recession hits and how much we need to spend with that.

Do you think that a corporate tax is beneficial to our country?

AM:  If Apple needs to pay American corporate taxes to be in the United States, they’ll pay the taxes. The problem is the way the tax system is structured now for corporate taxes. They can go to register a patent under Ireland and just pay Irish taxes. Because of the deductions they give to the United States, they don’t have to pay anything. Just because you lower corporate taxes, not every corporation is going to invest more, but some will actually just keep the profits.

WL: I think the issue that people have with corporations is that they don’t realize they’re just people. People join corporations to hedge their bets and reduce their risk. So when you make a corporation, you’re reducing the personal risk on you if it fails, but you’re also spreading the winnings if you do well. So the whole point of it is to allow for innovation without as much risk. That’s why corporations happen and they’re just groups of people. People are already taxed. So why are we taxing corporations on top of that?

Should we increase the current federal minimum wage of $7.25?

AM: It should increase but then also let states mainly dictate if it goes up to $15 an hour because while California can afford that, states like Wyoming can’t. One of the things that people say against the minimum wage is that you’re going to be paid based on what you produce, but I don’t think that’s necessarily true. If there’s no minimum wage, Americans are just not going to have these low entry jobs. If there is a Mexican that’s coming across the border looking for work, desperate for at least seven bucks an hour, he’ll gladly take a low paying job. No American is going to take a job less than five bucks an hour. Let’s face it, no American is that desperate for money. 

WL: Every logical economist thinks that minimum wage hurts the economy because it’s similar to rent control. You just can’t efficiently do that. Why do we not see people at a gas station to pump your gas anymore in most states? It’s because they don’t want to pay for that with a minimum wage. If you didn’t have minimum wage, we’d have more entry-level jobs, meaning if we do fall into a recession, we’re going to have open jobs for people. The whole point is you’re not supposed to be working for years on minimum wage. Let the market decide wages. If you do good work, you’re going to get paid more.