“We’ve exhausted our Coping Mechanisms” Economy and American Budget

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According to a report by Bloomberg News American households are running out of places to grab from when trying to reach for that few extra bucks. Income inequality in the United States has grown significantly since the early 1970s. The distinction between the rich and the poor classes has grown substantially over the past three decades and families on the latter side of the line separation have found ways to deal with the tight squeeze on their earnings. Women have joined the labor force and many husbands have taken on second jobs and have been logging longer hours. Homeowners have taken out mortgages, taking advantage of the value of their properties.

A number of studies by the US Department of Commerce, Congressional Budget Office, and Internal Revenue Service, have found that the distribution of income in the United States – most commonly measured by household or individual – has become increasingly unequal since the 1970s. The UN, CIA World Fact book, and OECD have used the gini index to compare inequality between countries, and as of 2006, the United States had one of the highest levels of income inequality among similar developed or high income countries, as measured by the index.

  

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Alan Krueger, an economics professor at Princeton University in New Jersey and former chairman of President Barack Obama’s Council of Economic Advisers, said that “We’ve exhausted our coping mechanisms.”

Nobel Prize for economics in 2013, American Yale professor, Robert J. Shiller, believes that rising economic inequality in the United States and other countries is “the most important problem that we are facing now today.” In his Evangelii Gaudium, Pope Francis echoed this sentiment. He stated that “as long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world’s problems or, for that matter, to any problems.”

According to the latest Bloomberg National Poll, Americans have said that the U.S. no longer offers everyone an equal chance to get ahead. Saying the economy is unfair, that feeling of unfairness or inequality is especially pronounced among those making less than $50,000 a year.

Image Credit: www.sensiblereason.com