Income Inequality: Playing with Fire

Whenever it is pointed out that there is definitely income inequality in this country, Republicans, the party of keep working people unemployed, and some of their DINO parrots (mainly millionaires) in their usual kneejerk prevaricating reaction scream class warfare.

However, the facts speak for themselves, and the economic injustice of income inequality has become a destructive reality.  Income inequality is usually a harbinger of economic catastrophes.

Sam Pizzigati writes at Our Future"Years ago, in the mid 20th century, no one in the United States spent much time talking about rising income inequality, for the simple reason that inequality wasn’t rising. But that all began to change in the 1970s, and, by the mid 1980s, independent economists were sounding a rising income inequality alarm.

"Conservative analysts, almost ever since, have been advising us to pay that alarm no attention. Anyone who takes the time to take into account all the government benefits that poorer households receive, these analysts have argued, would see we have no inequality problem worth worrying about.

"Researchers at the Congressional Budget Office, over recent years, have actually been doing exactly what apologists for our unequal economic order have advised. In their ongoing income calculations, these researchers have been taking government benefits into account, everything from Medicaid to food stamps.

"The CBO researchers now have comprehensive annual income data sets that go back to 1979. Last month, they updated their data with figures from 2007. The main take-away from the new numbers: We most definitely do have an inequality problem worth worrying about.

"Since 1979, the latest CBO stats show, America’s most affluent 1 percent of households have more than doubled their share of the nation’s after-tax income, to 17.1 percent. The actual average after-tax incomes of the top 1 percent have, over that same span, nearly quadrupled after taking inflation into account, from $346,600 in 1979 to $1,319,700 in 2007.

"The new CBO's most remarkable contrast of all: In 1979, America’s statistical middle class — that is, the 20 percent of households in the exact middle of the nation’s income distribution — took home well over twice as much income, after taxes, as the households in the top 1 percent.

"In 2007, our top 1 percent took home after taxes, as a new Center on Budget and Policy Priorities analysis notes, more than the entire statistical middle class.

"IRS stats, as crunched by economist Emmanuel Saez, let us track the U.S. income distribution picture back even further in time, to the World War I era. These numbers put the new CBO stats in an even more striking perspective.

"In 2007, the data indicate, America’s top 1 percent took in their highest share of the nation’s income since 1928, the year before the epic 1929 Wall Street crash sent the nation spinning into Great Depression.

"The year after 2007, we might want to keep in mind, saw a Wall Street crash that sent the nation spinning into Great Recession.

"Notice any pattern here?

"In 1928, we have a ridiculously high concentration of wealth at the nation’s economic summit. One year later, economic meltdown. In 2007, another ridiculously high concentration of wealth. One year later, another meltdown.

"....We play with fire when we let income concentrate. Eventually, people who live in staggeringly unequal societies will always get burned."

 

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