Inequality Is Root Of U.S. Problems

There is little doubt that the United States is in a mess right now, especially economically, and that this mess is causing many problems for U.S. citizens. The top chart above was done by researcher Richard Wilkinson (a British epidemiologist). Wilkinson says that economic inequality has consequences for a society. And the more unequal the income distribution in a country, the more health and social problems that country will have.

Note that on his chart, the United States has not only the highest inequality, but also the most health and social problems (and these are many including a high unemployment rate, rising poverty, disappearing middle class, stagnant wages & loss of buying power for most people, record foreclosures & bankruptcies, growing homelessness & food insecurity, millions still without health insurance or preventative medical care, environmental destruction, and an education system that falls further behind other countries each year).

The reason for both the inequality and the social problems can be found in the economic policy followed by the government in most of the last 30 years (trickle-down or supply-side economics). This policy deregulates financial markets and corporate rules, funnels more money into the hands of the rich, lessens the power of unions, and cuts the educational and social programs that have traditionally been the path to upward mobility for many citizens.

The result is that the rich have gotten much richer, while most Americans have gotten poorer. The second chart shows the growth of wealth between 1983 and 2009, and it is a picture of gross economic inequality. Note that the top 5% have sucked up 81.7% of all the wealth created since 1983 (and the top 1% have gotten 40.2% of that wealth). Meanwhile, the bottom 60% of all Americans have actually lost 7.5% of their wealth instead of sharing in the wealth gains.

It is this kind of unequal wealth distribution that is the root cause of most of this country's economic and social problems. And it is the failed trickle-down policies (instituted by the Republicans) that has caused this unequal wealth distribution.

When we talk about wealth distribution (and redistribution), we must come to terms with the idea. The right-wing would have Americans believe that wealth redistribution is a dirty socialist idea, that just means money will be taken from the successful and given to the lazy. That is ludicrous. All countries and all economic systems are continually distributing and redistributing wealth and income. It is just an economic fact. It is impossible to have an economic system that does not distribute and redistribute wealth and income continuously.

But there is a choice to be made -- and that choice involves how we want the wealth and income distributed in our society. Do we want nearly all of the gains in productivity (wealth) to go to the rich (our current reality), or do we want everyone in our society to share in the gains in productivity? If we continue with trickle-down, we will continue this nation on a path to a society of haves and have-nots -- rich and poor, with no middle class.

But if productivity is shared by all, and everyone pays their fair share in taxes, we will have not only a more economically equal society, but a healthier economy which will benefit everyone (including the rich). That's because the mass of Americans will have more money to spend, creating demand, which creates more business profits and new job creation -- and that creates more demand which creates more profits and jobs. It is a circle that makes the economy grow.

That is the choice we have, and we must make that choice in November. A vote for Republicans is a vote for the failed and unequal trickle-down policies. A vote for the Democrats is a vote to return to a system of shared productivity and economic health. It really is that simple.