Income inequality has not been this disparate since 1929. The press put the news that senior citizens now have a record 47 times the wealth as young people on front page headlines.
They made it sound like something bad. I thought that it was great news. It says that hard work over time paid off and still should. It says the ladder of upward mobility was still being climbed and had grown taller for the last generation.
To me, it said that our economic system was working. I don’t know any senior citizens that didn’t earn what wealth they have today. Yes, they are getting more out of social security and Medicare than many of them paid in, but if they have wealth, they are paying more taxes too, so are certainly no drag on the system. That wealth will also transfer in estates, so it is not like it is ever destroyed. It will benefit the next generation.
The Federal government may be broke, but the benefits of that went to this generation. Had we not seen record wealth accumulation by seniors as an economic class, it would have been a bad thing for the country. Maybe not all is fair.
At age 59, I cringe at qualifying for senior citizen discounts at restaurants. A lady in a minivan with three kids comes in and pays full price while I could get a discount. That doesn’t seem fair.
U.S. ag productivity has made a tremendous contribution to the wealth of this country. In 1980, U.S. consumers spent 22 percent of their income on food. By 2010, they only spent 7 percent of their income on food.
In 1950, they spent just 3 percent of their income on health care. Today, they spend 16 percent on health care. Food has gotten cheap, but health care costs are eating consumers alive. Obamacare didn’t change that, but Republicans offer no comprehensive solution beyond ideology either.
Sixty-nine percent of Americans polled believe that Republicans favor the rich. I think that the other 31 percent are the rich; while 64 percent favor raising taxes on the rich to help with the deficit.
The range of thought on that runs between, “This is all my money, I earned it and the government deserves none of it” to to “This is a great country, I couldn’t have become wealthy without what the country has given me and I want to pay some back to sustain the country so the next generation can have the opportunity that I enjoyed.”
There are about 7.7. million households worth $1 million, another 2.29 million households worth $5 million to $30 million, and nearly 500,000 households worth $30 million or more.
According to the New York Times, all of the GOP presidential candidates are in the 1 percent wealth category by income. Michelle Bachman is the least paid, earning $800,000, while Mitt Romney earned $26.7 million. Barack Obama joined them earning $6.8 million.
In terms of wealth, only Barack Obama, Newt Gingerich, Jon Huntsman and Mitt Romney make the 1 percent cutoff. Romney has personal assets of $264.7 million.
I don’t think that Americans begrudge others wealth as long as they see a path of upward mobility. They all want the things being advertised in TV commercials.
Very few people that I know, who are wealthy today, started out with money. They worked hard and earned it, and were rewarded for their hard work and tenacity. That is really what the American Dream is all about.
Your station in life, where you start, does dictate the chance to achieve the American Dream. Time Magazine said that you have an 85 percent chance of achieving the middle class if you consistently succeed from early childhood.
This was put to us when we adopted a 6-year-old son. We were told that he was struggling in school because, at his previous home, he was spending his time and effort just trying to survive.
“Will I have clean clothes, a meal, will Mom get me to school?” Today, as a fifth-grader, he got his first graded report card and it was nearly all As, with an A+ in math.
If a child doesn’t have to worry about all the basic necessities of life, then he has resources with which to succeed at other things. A child with poor grades may be working harder than a kid with good scores, depending on his home life.
We want families who need them to get food stamps and health care. It is in the interests of our society and our country to help households succeed. The rich who have succeeded, will not be safe if the income and wealth disparity becomes too extreme for an extended period of time, and rungs of the ladder of upward mobility are greased or removed.
Wealth disparity is not a threat to social stability as long as the ladder of upward mobility is able to be climbed. People need to feel that they have a chance to get ahead, and it is the disillusionment that this may not be the case that can ferment angst and anger evidenced in ways such as the Occupy Wall Street movement.
By shutting down social services, repealing Obamacare and tightening education budgets, the paths of upward mobility are being blocked.
It is a warning. I’d call it a polite warning at this stage, that if the American Dream is not shared by all, it will be threatened in its entirety.
David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.