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The Top 1% of Americans Have Taken $50 Trillion from the economy?
Tell me it's all a big lie and after having getting off the gold standard in 1971 had nothing to do with it!
serf
The three decades following the Second World War saw a period of
economic growth that was shared across the income distribution, but
inequality in taxable income has increased substantially over the last
four decades. This work seeks to quantify the scale of income gap
created by rising inequality compared to a counterfactual in which
growth was shared more broadly. We introduce a time-period agnostic and
income-level agnostic measure of inequality that relates income growth
to economic growth. This new metric can be applied over long stretches
of time, applied to subgroups of interest, and easily calculated. We
document the cumulative effect of four decades of income growth below
the growth of per capita gross national income and estimate that
aggregate income for the population below the 90th percentile over this
time period would have been $2.5 trillion (67 percent) higher in 2018
had income growth since 1975 remained as equitable as it was in the
first two post-War decades. From 1975 to 2018, the difference between
the aggregate taxable income for those below the 90th percentile and the
equitable growth counterfactual totals $47 trillion. We further explore
trends in inequality by applying this metric within and across business
cycles from 1975 to 2018 and also by demographic group.
President Richard Nixon’s actions in 1971 to end dollar convertibility to gold and implement wage/price controls were intended to address the international dilemma of a looming gold run and the domestic problem of inflation. The new economic policy marked the beginning of the end of the Bretton Woods international monetary system and temporarily halted inflation.
Comments
I started with a small nest egg when my kids were young, pre-teen. I invested it with jointly owned accounts and their "permission" and we watched it grow. When they reached 16 it was no longer "In Trust For" and the kinds manage it now. One of them has nearly quintupled her nest egg and the other is happy to let it ride with the investments we chose together. One will be a millionaire before she's 50 and the other will simply have a nice fat nest egg. Same environment, same rules, different tastes for risk/reward.
And because that system had become a globally interdependent one, the U.S. financial crisis precipitated a worldwide economic collapse. So…what happened?
Fortunately, wealth in this country is limitless. Just because there are a rich few doesn't mean that there isn't a way for you to become wealthy without taking from/ taxing the mega rich. Currency, precious metals, gems are a way of making that wealth portable but we could actually use any agreed upon medium for that. The wealth that disappeared in 2008 was not currency or any common means of exchange. It was the value of what the currency could buy. Real estate, stocks, commodities all became cheaper and the key was to invest your currency into assets at the right time. Bob
Your concerns are noted.
Don
Brad Steele
Worse of all we have more poverty and welfare than ever.