Wednesday, July 12, 2006

Income Gap

THE NEW INCOME distribution numbers are out and the gap between the rich and the poor is getting wider in the United States. Before we sound too many alarm bells, let's understand that income disparity is not a bad thing. In a free-market economy there is going to be a substantial difference between, say, the richest 5% and the poorest 25%. The question about how to deal with this gap must be posed in very general terms if it is to answered adequately. As far as I am concerned, distribution of wealth issues are not worth getting too upset about as long as three conditions are being met: 1) the economy is growing and getting wealthier as a whole, 2) there is a safety net in place to protect the very poorest people, and 3) everyone has the ability to move up the economic ladder.

America has no problem with number 1. It's numbers 2 and 3 that sometimes worry me. That's where the discussion should begin.


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