Saturday, February 28, 2009

Restoring (some) Equality

We seem to be entering a period in which it will actually be possible to talk frankly at the highest levels of government about how government has contributed to economic inequality in the past thirty years.

The argument has been there all along, if you knew where to look for it, but the general public dialogue in the Reagan-Bush eras has derided the notion that the government had anything to do with rising inequality -- a widening gulf between the very rich and everyone else, a gulf that in some ways contributes to the inevitable crash of the market itself as the ability of the middle class to gain access to higher education and to spend on quality of life has eroded.

David Leonhardt in the Times on the Obama administration's new budget:
The budget that President Obama proposed on Thursday is nothing less than an attempt to end a three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters. . . .

More than anything else, the proposals seek to reverse the rapid increase in economic inequality over the last 30 years. They do so first by rewriting the tax code and, over the longer term, by trying to solve some big causes of the middle-class income slowdown, like high medical costs and slowing educational gains. . . .

Before becoming Mr. Obama’s top economic adviser, Lawrence H. Summers liked to tell a hypothetical story to distill the trend. The increase in inequality, Mr. Summers would say, meant that each family in the bottom 80 percent of the income distribution was effectively sending a $10,000 check, every year, to the top 1 percent of earners.
David Leonhardt, "A Bold Plan Sweeps Away Reagan Ideas," New York Times, 26 February 2009.

See also Wikipedia, "Income Inequality in the United States."

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