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Bye, Bye American Dream! U.S. Economic Inequality Is Permanent, Study Finds


Society & Culture  (tags: abuse, americans, culture, dishonesty, economy, education, environment, ethics, family, freedoms, government, income inequality, law, media, politics, society )

Kit
- 513 days ago - alternet.org
"We also find evidence that the U.S. federal tax system helped reduce the increase in household income inequality; but this attenuating effect was insufficient to significantly alter the broad trend toward rising inequality."



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Kit B. (277)
Sunday March 24, 2013, 12:31 pm
Photo Credit: Shutterstock.com








A new study by a team of economists in academia and the government has concluded that economic inequality is a permanent—not temporary—feature in the United States, based on an analysis of 350,000 federal income tax returns between 1987 and 2009.

“For household income, both before and after taxes, the increase in inequality over this period was predominantly, although not entirely, permanent,” the highly technical report concluded. “We also find evidence that the U.S. federal tax system helped reduce the increase in household income inequality; but this attenuating effect was insufficient to significantly alter the broad trend toward rising inequality.”

The study by economists at two state universities, the Federal Reserve and U.S. Treasury Department, also found, not surprisingly, that the wealthiest Americans consume more than less well-off people, and that disparity causes poorer Americans to suffer as a result.

“Our findings, along with economic theory, suggest that the increase in income inequality observed in roughly the last two decades should translate into increases in consumption inequality, and is therefore likely to be welfare-reducing, at least according to most social welfare functions,” the report said. “Although measurement problems with household consumption data in the U.S. have made it difficult to convincingly measure the degree of the increase in consumption inequality, some recent studies… suggest that the increase in consumption inequality was indeed substantial.”

Simply put, the study confirms what Vermont's U.S. Sen. Bernard Sanders has been saying for years, “The rich are getting richer and the poor are getting poorer.”

“The takeaway here is rough,” the Washington Post’s Ezra Klein wrote in his Wonkblog column. “The reason the permanent/transitory distinction matters is that lifetime earnings are much more important than a single year’s earnings. It’s lifetime earnings that decide how you live in general, what sort of house you can afford, whether you can send a kid to college, whether you can retire comfortably.”

Better-off Americans often opine that those below them on the economic ladder should just work a little harder. But this study suggests that there are irreconcilable gaps in income, lifetime wealth, consumption and the resulting health between the haves and have-nots in America. It also suggests progressive taxation can buffer those inequalities a bit, but not make up for the gaps.

It will be curious to see if this study will be cited in Washington’s ongoing debate about 'reforming' entitlement programs—namely Medicare and Social Security. It suggests, if anything, that growing slices of American society are heading to less financially secure futures, especially in old age. That means federal safety nets are more needed than ever—despite the GOP’s ideological crusade to cut spending on them.
****Links to study and other links within article at VISIT SITE***

By: Steven Rosenfeld |alternet |
 

Tamara Noforwardsplz (185)
Sunday March 24, 2013, 2:26 pm
Such a frightening and ugly truth. It makes me very nervous for the future. Thanks Kit.
 

Laurie H. (703)
Sunday March 24, 2013, 2:48 pm
We are in very shaky times now for sure, Kit. The wealthy are getting wealthier and the poor getting poorer.We've known this for some time now. I wonder if there will be middle class some day. This country needs to put it's citizen's first, I thought that's what we did here in America- set us apart from many other countries. Tamara is right when stating;"Very nervous for the future."~ Many Thanks for sharing, Kit!!~
 

Yvonne White (231)
Sunday March 24, 2013, 3:00 pm
Guess what? ANYONE living these last 20 years could've told them that :"Simply put, the study confirms what Vermont's U.S. Sen. Bernard Sanders has been saying for years, “The rich are getting richer and the poor are getting poorer.”
Without substantial changes America is heading toward hell in a handbasket! CONgre$$ is too wrapped up in politics & picking pockets to notice that History always repeats itself - rebellion, riots, & revolution seem the next Logical step... Governments that hate their citizens often find role reversal equally Painful - in a Monty Python "bring out your dead" kinda way!
 

Patricia Cannell (746)
Sunday March 24, 2013, 3:04 pm
This is not surprising to me. This has been happening for the last few years. Anyone with half a brain can see it coming. The writing was splashed on the walls. The rich, obviously, have set it this way. What do they care about the middle class, let alone the poor. It is a sad situation and it is just going to get worse. Just waiting for the people to stand up for themselves. Perhaps a civil war is not far in the making?? Thanks for sharing Kit
 

Elle B. (81)
Sunday March 24, 2013, 3:05 pm
Thank-you Kit. . .

Ezra Klein has a very welcome and keen mind. . .yet having said that. . .where has everyone been? This story and scenario have been unfolding moment by moment. . .day by day. . .for over 40 years. What? . . .a whole lot of somebodies thought the Tooth fairy. . .the Easter Bunny and all their buddies had everything covered...so they told their descendents all is well? Welcome to reality and the civilization you really live in. . .even if it is decades late and trillions short. . .The simultaneous building of a Corporate Feudal System and the "Culture Change" required to accomplish it. . .coupled with the complete dismantling of the greatest participatory democracy in the making. . . while [long pause] . . .making the majority believe they're building one. . .a plain old fashioned double-cross with all the trimmings. . . "Have It YOUR Way" . . .while you cruise down the road to Permanent Servitude in an MBM [Marketing Based Management] Kingdom Come. . .better get real busy real soon. . .that little agenda is about 7/8 complete. . .everything "public" is being intentionally "starved" into oblivion so that no one will remember what it looked like when it was alive and well. . .

[Thanks again Kit. . .Caturdays are the bomb. . .wish the multitudes had your wit, wisdom and astute ascertainment. . .we wouldn't be scrambling around intentionally set fires in the underbrush. . .

“There is a mysterious cycle in human events. To some generations much is given. Of other generations much is expected. This generation of Americans has a rendezvous with destiny. In this world of ours in other lands, there are some people, who, in times past, have lived and fought for freedom, and seem to have grown too weary to carry on the fight. They have sold their heritage of freedom for the illusion of a living. They have yielded their democracy. I believe in my heart that only our success can stir their ancient hope. They begin to know that here in America we are waging a war against want and destitution and economic demoralization. It is more than that; it is a war for the survival of democracy. We are fighting to save a great and precious form of government for ourselves and for the world.” ― Franklin D. Roosevelt

"No business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By living wages I mean more than a bare subsistence level --I mean the wages of decent living." ― Franklin D. Roosevelt

“. . . Exactly as the special interests of cotton and slavery threatened our political integrity before the Civil War, so now the great special business interests too often control and corrupt the men and methods of government for their own profit. We must drive the special interests out of politics.” ―Theodore Roosevelt

“We have always known that heedless self interest was bad morals, we now know that it is bad economics.”
― Franklin Delano Roosevelt

“More striking still, it appeared that, if the process of concentration goes on at the same rate, at the end of another century we shall have all American industry controlled by a dozen corporations and run by perhaps a hundred men. Put plainly, we are steering a steady course toward economic oligarchy, if we are not there already.” ― Franklin D. Roosevelt

This concentration is seriously impairing the economic effectiveness of private enterprise as a way of providing employment for labor and capital and as a way of assuring a more equitable distribution of income and earnings among the people of the nation as a whole.” ― Franklin D. Roosevelt

“Taxes, after all, are dues that we pay for the privileges of membership in an organized society.” ― Franklin D. Roosevelt

“It is the purpose of government to see that not only the legitimate interests of the few are protected but that the welfare and rights of the many are conserved.” ― Franklin D. Roosevelt

“True individual freedom cannot exist without economic security and independence. People who are hungry and out of a job are the stuff of which dictatorships are made.” ― Franklin D. Roosevelt
 

Lois Jordan (54)
Sunday March 24, 2013, 5:08 pm
We've watched this happen, step-by-step, throughout the past couple decades. When the homeless were living in the streets in huge numbers during the 1st Bush, many came forth like Willie Nelson--to help farmers; and don't forget Comic Relief, which went on for years. Occupy was the 21st century answer to inequality, and they're still having great impact in many areas. We needs movements like this to continue and expand. The future world that my kids & grandkids face right now is a scary one that I don't like to imagine...we must change this.
 

Angelika R. (146)
Sunday March 24, 2013, 7:30 pm
Brings up the question if it is time to redefine the "American dream"...fill it with new meanings, different ideals. The current way is undoubtedly a nightmare.
Lois-what's there to "imagine", it is right here in the present, how worse can it get ? Only if you let it.
 

Sandra Patterson (60)
Sunday March 24, 2013, 8:33 pm
So much has changed through the years,and most of it has been negative.Time to make the earth move :) noted
 

Kit B. (277)
Sunday March 24, 2013, 8:49 pm

American dream? More like a nightmare. This is not the country where a person can work hard, save money, provide for her family, and in later years live on a comfortable if not posh retirement. Sure, we can work hard, every person a with job does that every day, save money and pay the bills, few can or will be able to do both, and retirement, well forget that. Most of the seniors I know are working for minimum wage, some working two jobs, their pensions were flushed with the "crash" and Social Security, well that barely buys food for the month.

Join Represent Us - let's clean up this economic disaster, get some jobs and get Money out of our political system.

Elle - thanks for those FDR quotes. I always enjoy reading those.
 

Kit B. (277)
Sunday March 24, 2013, 8:51 pm


“The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism -- ownership of government by an individual, by a group.”
(Franklin D. Roosevelt)
 

Kit B. (277)
Sunday March 24, 2013, 8:52 pm

I think we have tolerated enough ownership of the government by the few, with nothing for the many.
 

D D. (102)
Sunday March 24, 2013, 9:08 pm
This wassucht a depressing story....thanks for posting --- its needs to be read.
 

Marie W. (65)
Sunday March 24, 2013, 9:22 pm
No surprise.
 

cecily w. (0)
Sunday March 24, 2013, 9:38 pm
Many of our politicians are owned by the elite, or are themselves among the elite. It's very hard for new ones to break in unless they are wealthy or are willing to sell their souls.

Our population growth has been too high for some time, and we are projected to add another 106 million people within the next 37 years. We were warned about this nearly 50 years ago. I am not suggesting increasing the death rate, but politically motiviated immigration policies* should have been done away with a long time ago. And births have outnumbered deaths every year since 1946. (2011 was a "low" year; births outnumbered deaths by 1.56 million.) *BTW more than one million immigration visas were issued in 2010--but only 9% of these were for asylees and refugees.

As far as Social Security Old Age Benefits, a 75 year old policy of making fully-abled perpetual housewives a protected group should have been phased out 25 years ago, but no politician had the guts to deal with it. And a 48 year old Medicare policy gives this same protected group "free" Medicare Part-A.

 

Lynn Squance (230)
Sunday March 24, 2013, 9:58 pm
"It suggests, if anything, that growing slices of American society are heading to less financially secure futures, especially in old age. That means federal safety nets are more needed than ever—despite the GOP’s ideological crusade to cut spending on them. "

And this is why SS, Medicare and Medicaid can NOT be on the table in any, shape or form during the budget "grand bargain"!

Kit love the FDR quote : “The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism -- ownership of government by an individual, by a group.”

It seems that this is where the US, and other countries, are already at.
 

Bryan S. (98)
Sunday March 24, 2013, 10:06 pm
Well, you know, we just gotta reduce taxes more on the 'job creators' and loosen the 'red tape' so the rising tide can lift all boats and such. Everyone knows that economic studies are something done by just a bunch of pointy-headed liberals! Sheesh.

Elle, great quotes by FDR. Indeed, to some generations much is given. Of other generations much is expected. And other generations watch Dancing With the Stars while eating Doritos while their jobs are shipped over-seas.

Sorry, don't mean to make light of the issue or any posts.


"“We have always known that heedless self interest was bad morals, we now know that it is bad economics.”
― Franklin Delano Roosevelt "

I've often thought that money is the religion of this nation, but 'self interest' is a better term. And as with other religions, it's the leaders that do the real damage.
 

Jennifer C. (172)
Monday March 25, 2013, 1:08 am
Thanks.
 

Craig Pittman (45)
Monday March 25, 2013, 3:59 am
As an outsider it seems to me that the U.S. Government is acting towards the general population like the British Goverment did with the 'colonies' prior to 1776. Whoa and just looked what happened then.
 

Arielle S. (316)
Monday March 25, 2013, 6:46 am
Way too much money and power on one side, too much apathy and ignorance on the other. We could make a difference if people just woke up and decided to step away from the tv and DO something....
 

Connie O. (42)
Monday March 25, 2013, 6:57 am
very depressing and been happening for a very long time...
 

Birgit W. (144)
Monday March 25, 2013, 3:46 pm
The American Dream is long gone!
 

pam w. (191)
Monday March 25, 2013, 4:24 pm
I wonder....is this the mandatory result of capitalism? Unrestrained greed on the part of those who have money has put us into a seriousl mess. Can it be fixed?
 

Robert B. (57)
Monday March 25, 2013, 4:25 pm
This all started when Wall Street pulled a coup and installed Reagan as their puppet president. It's been uphill for the rich and downhill for the poor ever since. What needs to happen is for the public to get royally pissed and fight to break the iron grip the Greedy Banksters have on our country's economy and Democracy.
 

Yvonne White (231)
Monday March 25, 2013, 9:07 pm
I seriously think that this Era of Greed will crash & burn very soon - history loves repeating itself...so I am not as pe$$imistic as I was during the Bu$h the Le$$er years. GreedyOnePercenters are pushing their luck too far, as those stereo-types tend to do - we've all seen the movies (though not everyone has read the books ;)..this orgy of greed can only end with the Usual violence - riots, rebellion, & revolution (though I'm thinking Most of it COULD be Tweeted or Facebooked - so we might win with a Virtual Reminder of what Could Happen - images of the French Revolution, cake eating, etc..;) Anyone else think that might be fun? Because I really don't wanna have to go to D.C. & start Actual riots...
 

Gloria picchetti (286)
Tuesday March 26, 2013, 4:45 am
Anyone that doesn't know this to be true is dumber than a box of rocks.
 

Winn Adams (191)
Wednesday March 27, 2013, 12:10 pm
No surprise here . . . .
 

Helen Porter (40)
Friday March 29, 2013, 2:30 am
thank you for the information
 
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