Economist Joseph Stiglitz says that control of 25 percent of U.S. wealth by 1 percent of its citizens will prove ruinous to the economy.
“Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few,” Stiglitz writes in Vanity Fair.
“Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income — an inequality even the wealthy will come to regret.”
Some people, Stiglitz notes, look at income inequality and shrug their shoulders. So what if this person gains and that person loses? What matters, they argue, is not how the pie is divided but the size of the pie.
"That argument is fundamentally wrong,” says Stiglitz. “An economy in which most citizens are doing worse year after year — an economy like America's — is not likely to do well over the long haul."
Measuring by wealth rather than income, the top 1 percent of Americans control 40 percent of the money.
“Their lot in life has improved considerably,” Stiglitz points out. “Twenty-five years ago, the corresponding figures were 12 percent and 33 percent.”
And, while that top 1 percent have seen their incomes rise 18 percent during the past decade, those in the middle have actually seen their incomes fall.
“For men with only high-school degrees, the decline has been precipitous — 12 percent in the last quarter-century alone,” Stiglitz says.
“All the growth in recent decades — and more — has gone to those at the top.”
Economist and former Secretary of Labor Robert Reich says the only way the U.S. can reduce the long-term budget deficit, maintain vital services, protect Social Security and Medicare, invest more in education and infrastructure, and not raise taxes on the working middle class is by raising taxes on the super rich.
“The vast majority of Americans can't afford to pay more,” reich writes in his blog. “Despite an economy that's twice as large as it was thirty years ago, the bottom 90 percent are still stuck in the mud.”
“If they're employed they're earning on average only about $280 more a year than thirty years ago, adjusted for inflation. That's less than a 1 percent gain over more than a third of a century.”
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