"Something has gone terribly wrong with the American experiment. Our families are imploding. Our national debt is exploding. Experts on the left and the right warn we are on an unsustainable trajectory and urgently need to change course. Yet too many in Washington, academia, the media and even the church are in a 'business as usual' mode. As result, millions of America [sic] fear the ice is cracking under our feet." ~Joel Rosenberg
I agree. I really do. In the next few days I will be critical of this quote and many of its implications, but up front I want to go on record as agreeing with the statement as such. I agree that America is on an unsustainable trajectory, and in particular I agree that the escalating national debt is a contributing factor.
It may not be possible on Facebook, but I'd like to think we could carry on a civil discussion about the American experiment, the national debt, and other aspects of our economy. To do so we will have to look for principles on which we can agree, and then agree to respectfully disagree about the rest. That is why I started by agreeing that the national debt is a serious problem for our nation. We will disagree plenty on how and within what timeframe to bring the debt under control, but we can surely all agree that this needs to be done.
It will be tempting to bring up the presumptive presidential candidates and their political records and/or promises. Though I may succumb on occasion, I see little to be gained by this because it is little more than a quick way of eliciting antagonism, which is not what I want. Although much could also be said about comparing the current and previous administrations and their policies, it probably won't be possible to avoid such discussions entirely. For example, the Rosenberg quote was originally brought to my attention accompanied by a graphic implying that the present administration is to blame for the national debt. Eventually I will want to investigate this claim.
Where I want to start, however, is with the widening gap between the very rich and the poor. Inequality is now far higher than just 30 years ago. The top 1 percent today gets around 20 percent of the nation's income – twice what it did two decades ago. The top 0.1 percent's share has almost tripled. Disparities in wealth are even greater. The causes of these disparities and their remedies are open for discussion, but does anyone not think this is a serious issue? Click Like if you agree and please comment if you do not.
To forestall an argument I anticipate, I will not be suggesting that the answer to this inequality is to "steal from the rich and give to the poor." Some of my interlocutors may claim that this is my recommendation, but I will try to phrase my thoughts more clearly than that. I should also state that much of my thinking on this topic is based on the writings of economist Joseph E. Stiglitz, most recently in Politico. Here are the bullet points:
- If the economy is growing for everyone, inequality per se is not a problem. But in fact inequality is bad for growth.
- Those at the top aren't the true innovators – people who provided the intellectual foundations of the computer, for example, or the Internet.
- Much of the top-most wealth comes from successful "rent seeking" (income derived from owning an asset, rather than from effort).
- "Rent seeking" attempts to garner a larger share of the economic pie, rather than making the pie larger.
- The U.S. has more inequality than any of the other advanced industrial countries in which similar market forces are at play.
- Laws and regulations in the U.S. shape markets in ways that enrich the top – but don't necessarily enhance growth and efficiency.
If any of my friends disagree with one or more of these points, I would love to hear from you.