Sunday, December 15, 2013

1% is Hogging So Much of Our Income That It’s Holding the Economy Back

read more http://www.juancole.com/2013/12/hogging-holding-economy.html

"Over the past few years, I have encountered a lot of myths about the so-called "One Percent." Now that my book Letter to the One Percent has been published, I'd like to share one of the most pernicious myths with you.

We all know that inequality has been rising and the average American household has been suffering. There is a myth that says all this suffering is necessary, that extreme inequality is the by-product of a rapidly growing economy—or worse, that it's a good thing because it motivates everyone to work hard and climb the long ladder to the One Percent.

Even a brief glance at the historical record reveals just how perverted this hypothesis is.

For one thing, the economy has not been growing rapidly since inequality started climbing. From 1950 to 1980, "real gross domestic product (GDP)"—the output of the economy, adjusted for inflation—grew by 3.8 percent per year. From 1980 to 2010, it grew by 2.7 percent per year. (Since then, it's been even worse.)

So income inequality hasn't been "growth-enhancing" at all. In fact, just the opposite.

The United States isn't alone in this experience. Economists at the International Monetary Fund recently compiled the most comprehensive data set to date: 140 countries over 6 decades. They consistently found that countries with less inequality experienced stronger, more sustained economic growth and fewer, less severe recessions."

1 comment:

  1. The question of social inequality is rather ticklish. Everyone wants to be on the top of the long ladder to the world One Percent but it is quite necessary to understand tension and instability accompany these people each moment. Most of us really need emotional tranquility and stability and UK loans with no credit check will afford you to have everything you want.

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