Reply #2: Equality [View All]

[Chef]

Very interesting reading. I have often thought about the subject of the widening gap of economic equality and wondered why it hasn't reached a tipping point that would bring about social and electoral change in the US. I guess my first thought has been that things haven't gone far enough to spark change which the article sort of addresses. Low interest rates, lax credit rules and home equity loans have brought some sense of economic well being resulting in a negative savings rate for the country. Also, inexpensive electronics, clothing and other "symbols" of wealth or economic well being which are produced in third world counties have kept the masses fairly anesthetized. Also relatively low unemployment has helped but, rates of employment have been high because of the building boom, defense spending and retail trade.

I hate to be a proponent of gloom and doom but, sometime soon, this will all end, as it has to. The real estate market is softening and with that all the rest will accelerate the widening of the gap. Since transfer payments have been reduced and tax policy made less progressive, things will only speed up at a faster rate. When this happens - what then?