“If Americans want to live the American dream, they should go to Denmark.”
Richard Wilkinson explains this chart in the video:
And that’s what I’m going to show you. I’m not using any hypothetical data. I’m taking data from the U.N. – it’s the same as the World Bank has – on the scale of income differences in these rich developed market democracies. The measure we’ve used, because it’s easy to understand and you can download it, is how much richer the top 20 percent than the bottom 20 percent in each country. And you see in the more equal countries on the left –Japan, Finland, Norway, Sweden – the top 20 percent are about three and a half, four times as rich as the bottom 20 percent. But on the more unequal end – U.K., Portugal, USA, Singapore – the differences are twice as big. On that measure, we are twice as unequal as some of the other successful market democracies.
Now I’m going to show you what that does to our societies. We collected data on problems with social gradients,the kind of problems that are more common at the bottom of the social ladder. Internationally comparable data on life expectancy, on kids’ maths and literacy scores, on infant mortality rates, homicide rates, proportion of the population in prison, teenage birthrates, levels of trust, obesity, mental illness –which in standard diagnostic classificationincludes drug and alcohol addiction –and social mobility. We put them all in one index. They’re all weighted equally. Where a country is is a sort of average score on these things. And there, you see it in relation to the measure of inequality I’ve just shown you,which I shall use over and over again in the data. The more unequal countries are doing worse on all these kinds of social problems. It’s an extraordinarily close correlation.But if you look at that same index of health and social problems in relation to GNP per capita, gross national income, there’s nothing there, no correlation anymore.
What all the data I’ve shown you so far says is the same thing. The average well-being of our societies is not dependent any longer on national income and economic growth. That’s very important in poorer countries,but not in the rich developed world. But the differences between us and where we are in relation to each other now matter very much. I’m going to show you some of the separate bits of our index. Here, for instance, is trust. It’s simply the proportion of the population who agree most people can be trusted. It comes from the World Values Survey. You see, at the more unequal end, it’s about 15 percent of the population who feel they can trust others. But in the more equal societies, it rises to 60 or 65 percent. And if you look at measures of involvement in community life or social capital, very similar relationships closely related to inequality.
Senator Bernie Sanders (VT-I) spoke directly about the income inequality issue on Monday on the Senate floor – watch the video HERE.
“It is absurd that at a time when our country has a $15 trillion national debt and enormous unmet needs, the wealthiest people in this country have an effective tax rate that is lower than many middle-class workers. It makes no sense that the richest 400 people in our country, who earned an average of more than $270 million each in 2008 pay an effective tax rate of just 18 percent, which is less than many small businessmen, nurses, teachers, police officers, et cetera. That is wrong from a moral perspective, it is also very bad economic policy.
We have by far the most unequal distribution of income and wealth of any major country on Earth. This is not what democracy looks like. This is what oligarchy and plutocracy look like.”
“The United States is getting accustomed to a completely crazy level of inequality. People say that reducing inequality is radical. I think that tolerating the level of inequality the United States tolerates is radical.”
~Thomas Piketty (economist)
The NY Times chronicles to economists who have written very important papers on income inequality and it’s negative impact on the economy – the story HERE:
As much as Mr. Piketty’s and Mr. Saez’s work has informed the national debate over earnings and fairness, their proposed corrective remains far outside the bounds of polite political conversation: much, much higher top marginal tax rates on the rich, up to 50 percent, or 70 percent or even 90 percent, from the current top rate of 35 percent.
The two economists argue that even Democrats’ boldest plan to increase taxes on the wealthy — the Buffett Rule, a 30 percent minimum tax on earnings over $1 million — would do little to reverse the rich’s gains. Many of the Republican tax proposals on the table might increase income inequality, at least in the short term, according to William G. Gale of the Tax Policy Center and many other left-leaning and centrist economists.
Conservatives respond that high tax rates would stifle economic growth, at a minimum, and cause some businesses and high-income workers to flee to other countries. When top American tax rates were much higher, from the 1940s through the 1970s, businesses could not relocate as easily as they can now, say critics of Mr. Piketty and Mr. Saez.
Meanwhile – Republicans are pushing hard to cut food stamps and other vital services when people can barely afford to feed their families – Politico has the story:
But what’s also driving the latest cuts is a newer narrative, voiced by House Budget Committee Chairman Paul Ryan (R-Wis.), that the social safety net is at risk of becoming a “hammock.” And even as the unemployment rate has begun to fall, conservatives are alarmed that the level of income-related government benefits continues to rise.
Nothing better illustrates this perhaps than the renewed focus on food stamps — now titled SNAP (Supplemental Nutrition Assistance Program). And the estimated $33.2 billion in 10-year savings there could have an immediate impact on the farm bill debate and come November, the 2012 elections.
An average family of four would face an 11 percent cut in monthly benefits after Sept. 1 and, even more important, tighter enforcement of rules would require that households exhaust most of their liquid assets before qualifying for help. This hits hardest among the long-term unemployed, who would be forced off the rolls until they have spent down their savings to less than $2,000 in many cases.
Catholic groups are standing up for the poor and lobbying lawmakers through public shame:
In the letter to the Agriculture Committee, the bishops urged lawmakers to reject “unacceptable cuts to hunger and nutrition” programs for “moral and human reasons.” They said spending cuts should instead be made to subsidy programs that “disproportionately go to large growers and agribusiness.”
Lawmakers should “protect essential programs that serve poor and hungry people over subsidies that assist large and relatively well-off agricultural enterprises,” said the letter, signed by Bishop Stephen E. Blaire.
“Cuts to nutrition programs such as the Supplemental Nutrition Assistance Program (SNAP) will hurt hungry children, poor families, vulnerable seniors and workers who cannot find employment. These cuts are unjustified and wrong.”
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