According to a recent study by two really smart egghead economists, the rich got even richer in the past year. Their numbers show that the top 10% of Americans took home over 50% of all income in this country, the highest concentration of wealth since 1913. Breaking it down further, the top 1% brought home 22.5% of all income, the highest since the years right before The Great Depression. *red flag!*
The top 1% saw their wealth increase by 20% from two years earlier, while the top .001% saw theirs increase 32%. The authors point out that much of that increase was the result of special tax advantages the rich enjoy. In contrast, the other 99% saw theirs increase by just 1%.
I'm not making a moral judgement here. You can make up your own mind on that. But what I am saying is that when this much wealth is concentrated in the hands of so few, the few cannot come close to spending it fast enough to generate new production, necessitating new hiring.
A million people with $1 each could buy a million $1 widgets, requiring the widget factory to ramp up to make those one million widgets. One wealthy person with $1M would have no need for a million widgets. A hundred, or even a thousand....maybe. But not a million. Production at the widget factory would languish, meaning no new hiring.
This principle x cars, houses, washing machines, iPads, ceiling fans, etc, is what drives our economy.
Do you see where this is going? The struggling 99% will more than likely have to resort to taking on more debt in order to make ends meet, even on an austerity budget. The debt bubble will grow and grow until it eventually does what all bubbles do.
To make a fortune due to superior intellect or plain old fashioned hard work is good. To make a fortune simply because the tax code gave you a wink and a nod will ultimately backfire and take us all down. Again.
Think.
S
