http://money.cnn.com/2014/01/24/news/economy/middle-class-economy/
When President Obama was elected president, he made a promise to fix the economy to help the middle class. However, this article claims that only the 'super rich' and corporations have benefited. One reason the article gives states that while US income sits around $15.8 trillion a year, and while this is one of the largest on record, the profits of large corporations have grown. Another reason given is that income inequality in the United States has grown tremendously. The richest 1% (earning more than $394,000 a year) of the United States have captured about 95% of the income gains.
The article continues saying that about 15% of the US population is living in poverty and that a record number of Americans are receiving food stamps. Currently about 48 million Americans are receiving food stamps, the largest number of recipients since 1968. During the State of the Union speech, President Obama put a goal of doubling US Exports by 2014. Currently they sit at about $1.4 trillion and would need to grow 57% to meet his goal.
There are many reason why the middle class has not been doing too well. Although they can get by, many of the middle class and especially those living in poverty, are pushing for more equality across the classes. However, this is not a free economy works. Unfortunately, they might be pushing for something that will never happen.
We must also realize that the US economy isn't a pure market economy. The government is involved with some policies to help with regulation, seeing as not all theories work perfectly in practice. With some government regulation, we can help those in poverty get back on their feet to make a living while contributing more to the economy.
ReplyDeleteProvided we can continue to give people a college education, more people may achieve higher paying jobs. With a higher income, these people would have more to spend on goods and services, which would help to raise the GDP. With more people having the education required for jobs, the unemployment rate should drop, showing a healthier economy.
I agree with you in theory, Chrissy. But just like all other social programs we eventually reach the question of finding financing. Who is going to pay for increased social welfare spending? In my opinion increasing taxes on the wealthy to fund more and more welfare programs is not the answer.
ReplyDeleteI want to agree with both of these comments. Though I believe that taxing the wealthy is probably not the best route, some of these welfare programs should stay supported. I think a natural, pure market economy would be best in the long run- but this is obviously unrealistic in today's society. Although, I think the United States should be trying to somewhat mimic that with smaller support in welfare programs, or hold a strong focus on a handful. I think another interesting part is that some people have the income to spend on goods and services, but since the crash, have changed their lifestyle from lending for investment to saving in fear of another crash. Many in the U.S., and even Europe, are uneasy about spending because they're concerned about the ticking time bomb in the market.
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