Saturday, September 3, 2011

When the Rich Get Richer, It DOESN'T Raise All Boats ... It SINKS The Standard of Living For Everyone Else


I've repeatedly noted that rampant inequality destabilizes the economy as a whole, and actually causes depressions ... but that government policy is increasing inequality.

I've also pointed out that no one - liberal or conservative - likes runaway inequality.

Now, Jeffrey P. Thompson (Assistant Research Professor at the Political Economy Research Institute of the University of Massachusetts, Amherst) and Elias Leight (Assistant Analyst Tax Analysis Division of the Congressional Budget Office) have demonstrated that when the wealthiest Americans get richer, everyone else becomes poorer.

For example, they demonstrate that when the wealthiest Americans get 10% richer, middle income Americans get 2% poorer.


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2 comments:

  1. AnonymousSeptember 4, 2011 at 7:14 PM

    A rising tide lifts all yachts.

    ReplyDelete
  2. mickeymanSeptember 6, 2011 at 7:50 AM

    A lot has to do with why the rich are getting richer. If the rich are getting richer because production is increasing, then the chances are that the poor are getting richer as well. If, on the other hand, the economy is shrinking, and the rich are getting richer through political advantage, then their wealth is made up by the poor getting poorer. Unfortunately, we are in the second boat right now.

    ReplyDelete

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