The Rich are Getting Richer: The Age of Plutonomy is Coming

The economic recession is a testament to how fragile the economy of the US is and how previous bad practices and decisions can greatly influence the future of the nation. So what are the causes for such sudden economic downfall? Simple, the US for how many years, have been shaping an economy where only the wealthy and the most influential individuals or companies dominate the economic scene. From hefty tax cuts to certain privileges, the wealthy has really benefited from the extreme support that the US government has given to them.

According to a recent search by Moody’s Analytics, the top 5% of richest Americans account for over 37% of consumer spending and different payments. In contrast, the bottom 80% only account for 39.5% of total consumer activities. It is evident the rich has been rapidly spending and is capable of spending more while the poor has been struggling and are limiting their spending activities. A report by various economist showed that the top 10% of earners gained about half or 50% of all income in the year 2007. This clearly shows how much of the money is now in the hands of those what we call the rich or the wealthy.

Poverty and the struggles of the middle and lower sector are not only the problems that are brought by unequal distribution of wealth. As stated in the book entitled “The Spirit Level: Why Greater Equality Makes Societies Stronger” which was written by British public health researchers Richard Wilkinson and Kate Pickett, social and health problems such as obesity, usage of illegal drugs, murder and teen pregnancy are all in one way or another connected to the notion of economic imbalance. Because of inequalities in wealth, more people are getting poorer and are resorting to other activities which are not in accordance to the norms of society.

Wilkinson and Pickett also emphasized that inequalities in wealth resulted in poorer health, lower educational attainment, higher crime rates such as murder and robbery, lower spending for basic social services and lower trust for the government. A graph shows that health and social problems are more evident in unequal countries and the US belongs to that category.

Indeed, the US has been slowly becoming a Plutonomy-an economy that is mainly dependent on the spending of the wealthiest individuals and companies. This makes the US economy very unstable and will easily submit to the demands of the very influential upper class. While the inequality worsens, social ills and health problems will only continue to surface and wreak havoc into the nation. The US government should stop giving special privileges to the wealthy and instead work to create balance in wealth. Economic decisions should not only be influenced by a few but should benefit the whole as well.