Socio-Economic Reform means providing an equal opportunity for everyone in this country to work hard and to succeed in their life. Our future, economy, health, education, and quality of life are all dependent on socio-economic reform. But our current system only favors a small percentage of the ultra-wealthy population to accumulate most of this nation’s wealth. The rest of the population, especially the bottom 50% of Americans live in debt for their entire life with no real economic growth. This means our government is failing the majority of people in this country. I collected the following data from the wealth disparity graph on federalreserve.gov web portal.
In the last 15 years the wealth of
The Top 1% of Americans increased from 16 Trillion to 44 Trillion, a 28 Trillion increase
The top 10% of Americans increased from 36 Trillion to 96 Trillion, a 60 Trillion increase
But for the Bottom 50% of Americans, the change was 1.29 Trillion to 3.32 Trillion, only a 2 Trillion increase
This means, bottom 50% of Americans own less than 2.5% of this country’s wealth. The top 1% owns 32% of this country’s wealth and the Top 10% owns 70% of the wealth. For the bottom 50% of Americans, the wealth was never even increased to line up with the inflation that happened in the last 15 years either. Please see the Federal Reverse graph showing the Distribution of Household Wealth in the U.S for the last 15 years
Federal reserve graph showing the Distribution of Household Wealth in the U.S
This wealth gap is affecting all aspects of life for the bottom 50% including their opportunities to succeed, jobs, health, kids education, and overall quality of life. Why is it so? All the trillions of spending packages that were passed by congress in the last 15 years by both Republicans and Democrats alike, were supposed to be for the betterment of the Bottom 50%. This includes the recent pandemic relief spending as well. But you can see from the above graph that it has not anyway benefitted the bottom 50% at all. As soon as the spending packages get announced, the stocks of corporations go up. That’s because Wall Street knows that those trillions are going to flow to corporate America and then to the wealthy people who own them. Politicians then take credit for that calling it a booming economy. But there wasn’t much of a boom for the average Americans who live paycheck to paycheck. These politicians claim that they represent the poor and middle-class America. But as a matter of fact, they represent the wealthy in this country. Corporations through lobbyists influence these politicians to make sure that the government policies and spending benefits them rather than people for who these spendings are intended. That’s why 10% has around 70% of this country’s total wealth and the bottom 50% has 2.4% of this country’s total wealth. Now if you further look at this, you will also see that the minorities, mainly Black and Hispanics, fall under that bottom 50% category. Please see another federal reserve.gov article which shows the median and Mean net worth based on race in this country. Quoting the federal reserve article below. "A typical White family has eight times the wealth of the typical Black family and five times the wealth of the typical Hispanic family"
Now to fund these huge spending packages, The US government uses our Taxpayer money and also borrows money selling Treasury bonds as securities to fill the deficit. if you break down the federal government’s total tax income, most of it’s the income tax we pay plus the social security and Medicare taxes. If you fall in that top 1% you pay less than 1% in income taxes while the middle-class pays around 25% of their income in taxes. In 2021, the federal government collected $4.05 Trillion and spent $6.82 trillion resulting in a deficit of $2.77 Trillion which then got added to the country’s debt. This debt kept growing every year and now it’s at 28 trillion dollars. So we are using our money and then also borrowing money to make the wealthy in this country get wealthier. Please see the USASpending.gov article below on this.
The only way you can fix this wealth gap is by the progressive taxation of the top 10% in this country who are not paying their fair share. If the government does that, then we won’t have any federal deficit, and Government will have enough money to help the bottom 50% in this country. I am not talking about a type of help that gives out money in public assistance in order to lure people to vote for them. Instead, It should be spent on providing an opportunity for the underprivileged to broaden their job prospects by investing in their education and training. Also, money needs to be invested in setting up a state-of-the-art transportation infrastructure so that people can commute and relocate anywhere in this country cheaper and faster. Invest in automation in both manufacturing and agriculture sectors so that we can make and produce cheaper than any other country in the world. This is where training people is crucial to re-shore the manufacturing jobs with the use of automation and revitalize the agriculture industry through smart farming. But before we spend all that money, we need to first understand the following. I have separate articles for each of these and linking them here
We don’t expect the Biden administration to tackle all these issues at once and fix them all. But at least some progressive initiatives to achieve them will be promising for many. Unfortunately, the Infrastructure plan which just passed didn’t even include the basic few I have listed above. Linking back to my main article for further read
by Hari Ramachandran