Economics Research Paper Example | Topics and Well Written Essays - 1000 words

Economics - Research Paper Example In other words, 1% of people in America controls more than 1/5 th of the total income generate in America. This is a striking fact. The author argues that economic inequality is not all about how much you make — it’s about how much you have (Rampell). For example, it is quite possible that an average American makes substantial money from his profession or business. However it is not necessary that the amount he makes may be sufficient enough for his expenditure if he may have more family members. In other words, an American who has only 3 members in his family and another one who have 5 or 6 members in his family cannot be considered equally with respect to economic equality, even if they earn same income. The followi9ng chart illustrates this argument clearer. (Rampell) From the above chart, it is clear that even though the top 1 percent of earners receive about a fifth of all American income; they hold about a third of American wealth. In other words, the income recei ved and the income controlled by the top 1% is unequal. In fact the top 1% controls more wealth than the actual wealth they received or earned. From the above fact, it is clear that the richest people in America are able to save more than what the average Americans save. The recent recession underlined the above fact. Richest people in America succeeded in escaping from the recent recession without causing many damages to their economic interests whereas the average American suffered a lot because of the recession. In other words, the savings of the average Americans were not adequate enough to meet any unexpected economic catastrophes. Highest earning Americans save more whereas the lowest earning Americans save less. In other words, as time passes, more and more wealth will be controlled by the highest earning people compared to the lowest earning people which is the major reason for economic inequality in America. Along with the increasing economic power, the bargaining power and the influences of the rich people may also increase. In other words, more of the shares of the governmental subsidies, relief packages, rebates etc will come in the hands of the rich people rather than going into the hands of the poor people. For example, President Obama has recently huge stimulus packages to help the people to come out from the economic crisis. However, majority of the shares of these stimulus packages went in the hands of the highest earning people. Wolf (2009) has pointed out that the stimulus plan will strengthen the economy by creating millions of good-paying jobs; deliver tax relief for 95% of workers and invest in America’s future by fixing our communities' roads and bridges, improving our children's education and making America more energy independent (Wolf). However, as per the statistics available, it is quite clear that these stimulus plans failed to generate much impact in the lives of ordinary people. When Obama proposed the 700 billion bailout package to the struggling industries in America, many people have raised their eyebrows. Major share of this huge money was gone into the hands of the private business men. In other words, Obama collected the money from the taxpayer’s pocket and distributed it to the private businessmen. In other words, the rich people became major beneficiaries of these stimulus packages also. Under the above circumstances, Rampell’