Problem with the Economy and Wealth Inequality

Problem with the Economy and Wealth Inequality
Name:
Institution:
Course Title:
Instructor:
Date:
Problem with the Economy and Wealth Inequality
The economy of the United States is faced by the following problems. First, the economy has been seen to double since 1980, but wages remain flat. With the inflation that is experienced from time to time, the economy has doubled itself, but most people wages rarely increase. Secondly, all gains from the economy go to the super rich segment of the population. This segment used 10% of income, but they now take over 20% of income which is about 40% of the national wealth. Thirdly, money brings about political power. This can be revealed through the tax rate before 1980 that was over 70%, but with political power, it has reduced to 35%. Most of the income thus comes from capital gains which are subjected to only 15% tax. Fourthly, huge budget deficits are still a problem of the economy. The United States borrows money to fund construction of roads, schools, while other social amenities and social services have been sacrificed. Fifth, the middle class in the economy is divided. Most people are competing with other people for the scarce resources so that they are not left behind leading to division. Finally, there is anemic recovery in the economy. The policies that the administration is putting in place are costly yet ineffective leading to slow recovery of the economy.
Wealth Inequality
The people in America’s economy are said to be divided into 5 groups; top, bottom, and middle three groups. There is a huge gap between the top class and the bottom class. The wealth inequality weakens the economic growth through depressing social mobility and producing less educated employees who are not capable of competing in...