As probably many of you know, there is a cloud hanging over the future of the US and many other countries, the cloud of wealth concentration. There is nothing in life that will not be affected by this phenomenon. It obviously affects our allocation of resources and it will have tremendous influence on who gets what. It would affect the relations between the social classes and could lead to social unrest if we allow the fissure between the haves and have nots to increase. The following is only one part of an excellent article that speaks to this issue.
*********************************************************
Growing inequality is one of the biggest social, economic and political challenges of our time. But it is not inevitable, says Zanny Minton Beddoes
Oct 13th 2012 | from the print edition of The Economist
A bit over a century later, America’s second Gilded Age has nothing quite like the Vanderbilt extravaganza. Bill Gates’s home near Seattle is full of high-tech gizmos, but, at 66,000 square feet, it is a mere 30 times bigger than the average modern American home. Disparities in wealth are less visible in Americans’ everyday lives today than they were a century ago. Even poor people have televisions, air conditioners and cars.
But appearances deceive. The democratisation of living standards has masked a dramatic concentration of incomes over the past 30 years, on a scale that matches, or even exceeds, the first Gilded Age. Including capital gains, the share of national income going to the richest 1% of Americans has doubled since 1980, from 10% to 20%, roughly where it was a century ago. Even more striking, the share going to the top 0.01%—some 16,000 families with an average income of $24m—has quadrupled, from just over 1% to almost 5%. That is a bigger slice of the national pie than the top 0.01% received 100 years ago.
This is an extraordinary development, and it is not confined to America. Many countries, including Britain, Canada, China, India and even egalitarian Sweden, have seen a rise in the share of national income taken by the top 1%. The numbers of the ultra-wealthy have soared around the globe. According to Forbes magazine’s rich list, America has some 421 billionaires, Russia 96, China 95 and India 48. The world’s richest man is a Mexican (Carlos Slim, worth some $69 billion). The world’s largest new house belongs to an Indian. Mukesh Ambani’s 27-storey skyscraper in Mumbai occupies 400,000 square feet, making it 1,300 times bigger than the average shack in the slums that surround it.
The concentration of wealth at the very top is part of a much broader rise in disparities all along the income distribution. The best-known way of measuring inequality is the Gini coefficient, named after an Italian statistician called Corrado Gini. It aggregates the gaps between people’s incomes into a single measure. If everyone in a group has the same income, the Gini coefficient is 0; if all income goes to one person, it is 1.
The level of inequality differs widely around the world. Emerging economies are more unequal than rich ones. Scandinavian countries have the smallest income disparities, with a Gini coefficient for disposable income of around 0.25. At the other end of the spectrum the world’s most unequal, such as South Africa, register Ginis of around 0.6. (Because of the way the scale is constructed, a modest-sounding difference in the Gini ratio implies a big difference in inequality.)
7 comments:
There are many inequalities between classes of people in today's economy. The fact that the person with the largest house in the world lives in India and it is 1,300 times bigger than all of the shacks and mud huts around it astonishes me. If we are ever going to get out of the debt we are in, then we have to tax the wealthiest more, and stop worrying about them complaining all the time. By taxing the rich, it will stimulate the economy because the government will be bringing in massive amounts of money relative to when they were taxing the poor. Of course the poor should not be going out and buying flat screen TV's or fancy cars, because in reality they do not have the money. But they also should not have to pay more amounts of money when they cannot afford it in the first place.
We have the most billionaires in the world according to the forbes magazine rich list. This means that we should be able to generate alot more money from them than we actually do. If we can find a way to raise taxes to the upperclass we would bring the economy more money than when we tax the middle or lower middle classes. The amount of taxes that each class has to pay also adds to the growing equality problem in the united states.
Based off of the article, the gap between the rich and the poor is increasing. This is a huge problem, the rich are getting richer and the poor are getting poorer. Instead, the trend should be going in an opposite direction. The middle class would grow bigger if the poor get richer and the richer become less rich. This is why the concept of income tax makes so much logical sense. People who have higher income should pay way more than those with less income,it is only fair. We must create a balance between the poor and the rich. It's better to have 100 people living moderately well than to have 1 person living in great luxury.
From reading this article it shows that there was a difference between the two gilded ages. The wealthy are gettting wealthier as well as there isn't as many wealthy people as there used to be. Also it is apparent that there is an unequl distribution of wealth here in the USA.
From reading this artice, it seems that the 'rich are getting richer and poor are getting poorer' concept is increasing. The gap between the two is growing larger. I think the only way to conquer this issue is to tax people based on their income. If people are all taxed the same, then the people who has no money are paying what the rich pay which is clearly very unfair. The gap will only continue to increase if this is not done.
This article states one fact, ' the rich are getting richer and the poor are getting poorer'. This is somehing that everyone sould know by now. This is one of the biggest socio-economic issues in the country. Many people think that the sloution to this problem is to tax the 1% higher. First off the government considers persons who make more than $250,000 a year to be in the 1% so if there s a set tax from that income there on, there will be an even more inequality because $250,000 is a big difference from 1 million dollars. Also i understand that the economy will benefit from taxing the 1% higher but i like to look at things from both ends and put myself in a shoe of the 1%. I would noyt want tow ork for my money and have the government take most of it away in taxes. People keep talking about the poor when most of these people are lazy, they sit at home waiting for things to be handed down to them and i sure as hell would not want to give people my hard earned money just like that. Think about it the rich do alot to boost the economy. Without the rich, who would support those overpriced restuarnats they eat at, who would go to the opera, who would buy Tiffany's and many more things because the rich buy and spend their money on expensive things that go through the market and is counted in the GDP. who would contribute to the many charities if the government took most of their money away. This is a big issue and it is hard to solve because hard working peole do not want to give money to peole who dont even try to make a beter life for themselves.
From reading this article it shows the great strides man has made in recent times by increasing their wealth. Although there are more extremely wealthy people today there are even more extremely poor people. This is becoming a more evident separation of classes today; the number of persons in the middle class category is dwindling. It is becoming that we can classify people in only two class brackets: rich and poor. The gap between the classes will become more large and evident if something is not done.
Post a Comment