THE FACTS ARE A LITTLE DEPRESSING
The United States is approaching a level of inequality on par with the Great Depression, according to a paper by economists Emmanuel Saez and Gabriel Zucman.
In their paper, “Exploding wealth inequality in the United States”, the pair found that the wealth share of the top 0.1% of Americans rose greatly in recent decades, but eroded among the middle class and the poor.
DEBT IS THE CULPRIT
According to Saez and Zucman, increased debt is the main reason the bottom 90% of American families are struggling to get ahead.
The top 1% saw their wages grow fast, while wage gains were limited for the bottom 90% of families.
The result is that the share of wealth amongst the top 0.1% was almost equal to the bottom 90%.
PICKETTY MAY BE ONTO SOMETHING
French economist, Thomas Picketty, is onto something.
Saez and Zucman mention Picketty’s book, Capital in the Twenty-First Century, which argues income inequality is growing because of capitalism, and proposes a global system of wealth taxes to reduce world inequality.
While Picketty’s diagnosis is more persuasive than his cure, the subject demands a closer look by conservatives and liberal alike. Both sides must work together if the U.S. is to reverse a three decade trend. When it comes to income inequality, the dogmas of the past really are inadequate to the challenges of the stormy economic reality. “As our case is new,” Lincoln would say, “so we must think anew and act anew.”