To boost economy, reduce the income gap
Published December 18, 2013
Editorial by News and Observer, December 17, 2013.
The Associated Press surveyed more than three dozen economists to find out what most shopkeepers could have told it: The richer getting richer doesn’t lead to more buying.
The rich are enjoying a surge in wealth from robust stock market gains, but it’s only when low- and middle-income people have more to spend that the economy rises, the economists said.
“What you want is a broader spending base,” said Scott Brown, chief economist at Raymond James, a financial advisory firm. “You want more people spending money.”
What’s wanted – broad gains in income – is not what the great majority of Americans will be getting this Christmas. Pay for low- and middle-income earners is barely rising, and the gap between the rich and the rest shows no sign of slowing its expansion. The result of flat incomes for most is flat consumption overall.
The most recent census figures reveal, the AP reported, “that the average income for the wealthiest 5 percent of U.S. households, adjusted for inflation, has surged 17 percent in the past 20 years. By contrast, average income for the middle 20 percent of households has risen less than 5 percent.”
What may be changing is that growing income inequality is moving from a moral debate about fairness to a practical discussion about its economic effect. That’s a good change. President Obama has moved the discussion that way. With luck, the mid-term election will take it further.
December 18, 2013 at 4:53 pm
TP Wohlford says:
I am convinced that the N-O has no one who has taken Econ 101. Then again, I'm convinced that the AP's standard economics writers are merely Dem spin artists with little knowledge themselves.
From the top:
The current rise in income / wealth inequality is primarily due to the massive run-up by the stock markets of the world. What has fueled that? Most experts agree that the Federal Reserve's actions called "Quantitative Easing" -- where they essentially print up money and buy bonds, including US gov't debt bonds, is the cause of this.
It has also has something to do a sputtering economy, whose job creation has been mostly part-time jobs. The fault there is Obamacare, which continues to put a chill on every employer who simply doesn't know what they don't know -- and what they do know sounds painful.
December 18, 2013 at 5:49 pm
Norm Kelly says:
But taking money away from 'the rich' and giving it to 'the poor' is NOT a way to eliminate the income gap. I believe it's true that more Demoncrat politicians are wealthy than Republican politicians. But it's the DemocRATs that whine so much about the income gap. What is the proposed solution by these lovable, kindly, 'for the little guy', non-racist liberals? So far it seems their only plan is to take money away from one group, by force if necessary, and give it to another group. What's left out of their plan is that they expect the group that is given to is indebted to them. And the indebted ones are usually quite happy to be indebted to the libs.
How about another plan? How about instead of Mr. Obama promoting the head of GE as a great provider of well paying jobs, and taking him into the administration as an adviser on job creation, Mr. Obama actually tries letting go of some stupid regulations and letting people make business decisions. How about Mr. Obama get rid of his ridiculous socialized medicine plan that is driving the part-time employment spike. How about the feds stop trying to pick winners and losers in the business world, using taxpayer dollars, and let the people decide which businesses they want to promote and help make succeed.
How about all the way around we get less market interference from the feds and more freedom for the people. Just remember it was the Demoncrats who supported & promoted the head of Fannie & Freddie when his income was astronomical, he was bleeding the 'company' dry, and using employees to get work done around his house. So, you see, when it's a good lib gaming the system, the other good libs come out for support instead of fixing the problem.
Continued federal deficit spending just might be the answer to all our financial problems.
