This quote caught me off guard today, it was a part of a larger article that I tended to disagree with not because of the facts, but rather because of what to do about the facts. But never-the-less the reality is stunning and the question comes to us, "has the American economic juggernaut finally exhuasted itself?" I am not sure the answer is to give away free money, but when people are working more and more for less and less money we will inevitably end up in the crisis that we find ourselves in.
"The bursting of the housing bubble caused the current crisis, but the underlying problem began much earlier -- in the late 1970s, when median U.S. incomes began to stall. Because wages got hit then by the double-whammy of global competition and new technologies, the typical American family was able to maintain its living standard only if women went into the workforce in larger numbers, and later, only if everyone worked longer hours.
When even these coping mechanisms were exhausted, families went into debt -- a strategy that was viable as long as home values continued to rise. But when the housing bubble burst, families were no longer able to easily refinance and take out home-equity loans. The result: Americans no longer have the money to keep consuming. When you consider that consumers make up 70 percent of the economy, the magnitude of the problem becomes apparent.
What happened to the money? According to researchers Thomas Piketty and Emmanuel Saez, since the late 1970s, a greater and greater share of national income has gone to people at the top of the earnings ladder. As late as 1976, the richest 1 percent of the country took home about 9 percent of the total national income. By 2006, they were pocketing more than 20 percent. But the rich don't spend as much of their income as the middle class and the poor do -- after all, being rich means that you already have most of what you need. That's why the concentration of income at the top can lead to a big shortfall in overall demand and send the economy into a tailspin. (It's not coincidental that 1928 was the last time that the top 1 percent took home more than 20 percent of the nation's income.)"
The question I pose to you is, "how do we ethically and responsibly create an economy that tends away from the concentration of wealth in the top eschelons of society, without creating an excessively powerful or cumbersome government to enforce those standards?"