Americans are currently having a lengthy discussion about income and wealth inequality. A contribution by the Manhattan Institute’s Diana Furchtgott-Roth, “The Myth of Increasing Income Inequality”, points out, for example, that
The lowest 20% income quintile only has 1.7 persons per family unit while the highest quintile has 3.1 persons per family unit.
In 1970, 18% of households had only one person as compared with 27% of households in 2012.
In 1970 62% of women were married compared with 52% of women in 2012.
54% of all Americans say that taxes should be raised on the wealthy and corporations in order to expand programs for the poor.
Only 35% believe that lowering taxes on the wealthy to encourage investment and economic growth would be a better approach.
Unfavorable opinions of the Tea Party have increased from 25% in 2010 to 49% today.
The public has more confidence in Democrat’s handling of healthcare by a 45% to 37% margin.
Just 42% to 38% favor Republicans in handling the economy.
My conclusion from all of this data is that fiscal conservatives need to do a much better job of showing sympathy and concern for those who are struggling at the lower ends of the income scale. Success in implementing the sound policies which are needed to turn things around depends on accomplishing this!
The retirement explosion. Today’s 45 million aged 65+ population will increase to 70 million by 2030.
The color explosion. Today’s 65% Caucasian population will likely shrink to 43% by 2060.
The ideology gap. The four current American generations; the Silents, the Boomers, the Gen Xers, and the Millennials are increasingly less conservative and more liberal.
The inequality gap. Both income and wealth inequality are growing rapidly and this trend is likely to continue.
Each of these trends is firmly established by data as shown in the accompanying charts. There are huge political implications for these mega-trends. For starters, the biggest threat to our nation’s finances is the rapidly increasing cost of entitlements, especially Social Security and Medicare. Where will the political will to control this spending come from when there are ever more retirees who want to keep their benefit programs? With a surging immigrant population, primarily Hispanic and Asian, constantly gaining more political clout, it becomes more and more urgent to move our 12 million undocumented aliens out of the shadows with some kind of legal status. A broad based guest worker program would be a good way to get started. The ideology gap is more difficult to interpret. The four groups are more conservative than liberal and people in general become more conservative as they grow older. Nevertheless, there is an overall trend towards liberalism as age decreases. Finally, the growing inequality gap will inevitably create much resentment if ignored by our political system. Each of these four mega-trends will create pressure for more federal spending to address the needs and interests of various segments of society. We already have huge deficits, and rapidly increasing national debt, to contend with. How do we balance the pressure for more spending with the need for fiscal restraint? Stay tuned!