IMF: Inequality is the "defining issue of our time"

According to the International Monetary Fund, income inequality is the “defining issue of our time.”

That's the finding in their new report on how the gap between the rich and poor is harming people and economies all over the world. That new study was conducted by five of the IMF's top economists, who surveyed data from different economies from 1980 forward, and urged governments to enact policies that help the bottom 20 percent of citizens.

In addition to the obvious human cost of high levels of inequality, this study confirmed that the massive wealth gap actually harms overall the economic growth of a nation. The authors wrote, “If the income share of the top 20% increases, then GDP growth actually declines over the medium term, suggestion that the benefits do no trickle down.” They added, “In contrast, an increase in the income share of the bottom 20% is associated with higher GDP growth.”

In other words, if we want our nation's economy to grow and prosper, our government needs to worth for more than just the one percent.

While the economists acknowledge, “there is no one-size-fits-all approach to tacking inequality,” they do lay out some meaningful reforms to address the problem. They suggest more progressive tax policies, which means higher taxes on investment income, and better living standards for those at the bottom of the income ladder.

It's all about making those at the top pay their fair share and making sure those at the bottom don't fall through the cracks. For more than three decades, Reaganomics has made the few extremely wealthy and left the many trying to catch up.

We don't need any more proof that all that wealth is never going to trickle-down.

Andrew Jackson once said, “We should measure the health of our society not at its apex, but at its base.” And, it's time to strengthen that base by fighting income inequality and recreating the just society that gave birth to the American Dream.

Comments

chuckle8's picture
chuckle8 9 years 1 week ago
#1

The empirical data says raise the taxes on the rich and they provide less revenue. The empirical data also shows with the higher taxes (preferably a top tax rate of 83%) the GDP, DOW, number of jobs and the median wage (adjusted for inflation) all improve. The people that Thom has on that report this empirical data are Ravi Batra and Larry Beinhart.

The reason I point this out is I want everyone to think of the economy and not the tax revenue generated by any policy.

Another reason I point this out is that I am not an expert. I want the friendly people (not the trolls) on this blog to point out the weaknesses in my arguments.

Stella Jane's picture
Stella Jane 9 years 1 week ago
#2

Very simple solution TAX WAR <:::> FEED KIDS

We can Feed ALL children for ONE MILLION $$$ of each Billion spent harming others.

UN REPORT says FARMING SMALL PLOTS only way to save children/families.

Edward J. Dodson's picture
Edward J. Dodson 9 years 1 week ago
#3

Part of the solution to the problem of wealth and income inequality is the language we use to describe the problem. Inequality is a natural outcome of our differences in our ability to produce wealth or provide services others need and are willing to exchange for. The real problem is a problem of wealth distribution from producers to non-producer rentiers.

A rentier is a person or entity that is able because of privilege granted by law to claim what others produce. The historical context was that of the landlord versus the peasant in agrarian societies. In the age before coinage was commonplace, rents were taken as a share of foodcrops produced. A second stage began when surpluses became available for export, triggering the privatization of land ownership and the payment of rents by tenant farmers in cash rather than crops. Commercial agriculture soon followed, removing most subsistence farmers from the land, replaced by cattle and sheep. Then, when mineral resources were discovered and mined commercially, land values climbed and the rentier owners grew increasingly wealthy by leasing access to land to extractive industries. The movement of people off the land and into the towns and cities created a new class of urban rentiers as land rents became measured not by acres or hectares but by square feet or square meters.

If we seriously are committed to minimizing inequality we must change the way we raise funds to pay for public goods and services. Rents are societally-created and not created by any individual. Rents arise out of aggregate demand, pushed up higher and higher by land speculation and land hoarding. The only solution is to impose an annual tax on the potential annual rental value of land, which will remove the profit from acting as a rentier and require all to produce goods or provide services in order to EARN income and wealth.

sandlewould's picture
sandlewould 9 years 1 week ago
#4

Speaking of wealth inequality...sort of off-topic, but on topic re. todays shows;

Listening to the end of the Big Picture..Thom is ranting about Nixon and China being the end of American prosperity. I wonder if he read this?

Also, he’s expressing the sentiments of a listener who spoke out against mud slinging. I’m all for a mud slinging-free campaign. Smearing a person regarding petty gossip, or lying about one’s opposition in order to smear them is mud-slinging. As a democratic candidate, Bernie should avoid any derogatory discussion of other Dem. candidates…but discussion of legitimate unethical and possibly illegal behavior by those not running for office or holding office is not mud slinging, it's their civic duty. David Sirota, when he wrote here about Hillary’s use of the SOS office to expand arms sales in the middle east while increasing gov. contracts for defense contractors in exchange for huge contributions to the Clinton Foundation was living up to his responsibility as a member of the media. Don’t take just Sirota’s word for it, read this by Greg Palast if you want a glimpse into Hillary’s character.

If those with a microphone dare to speak honest truth to power where Hillary is concerned NOW, we just might get Bernie nominated, if not…sure, THEN keep silent about Hillary's record, if Hillary's the nominee and one feels that strongly about the Supreme Court well hold your nose and pull the lever. Or …is it legal to write in a candidate who was defeated in the primary? If Diebold and voter suppressors get their way, Hillary will win with a minority. I can’t remember…think it was in MO in ’12 or ’14, where polling places were closed in districts where McCaskill was behind and voters from those districts had to drive, in some cases, for hours to cast their votes.

It’s like Pap told Thom on TBP a week or so ago, eventually, one has to stand for something. If Hillary appoints justices who are progressive on social issues but regressive when it comes to rulings in favor of corporations and banks and the WTO can declare any law in the US illegal, then it won’t matter who sits on the bench. Who cares (& I’m gay) if LGBTs have the right to marry if they don’t have the bill of rights?..if they can’t afford food...to live? If the WTO can declare national laws illegal, the US Gov. will be nothing more than a parliament of elites who maneuver levers for the Global oligarchs.

SHFabian's picture
SHFabian 9 years 1 week ago
#5

No, the "inequality" discussion we've heard from Democrats and most of the media marketed to libs has been a false discussion, limited to the gap between the better off and the very well off, working class and rich. This reinforces the notion that our corporate state is so successful, everyone is able to work and there are jobs for all. Put bluntly, it's a lie. In reality, America has been growing a poverty crisis since the 1980s. Do some research. The US shipped out a huge number of jobs since the 1980s, ended actual welfare in the 1990s, leaving a portion of the population with no means of providing for themselves. Have you ever wondered what happens to those who become ill/lose their jobs? Keep wondering -- media won't touch this issue. When it's your turn to be bumped out, becoming one of the jobless poor, you'll find out for yourself.

We've created a huge surplus of job-ready people who are absolutely desperate for any job at any wage. US corporations are no longer dependent on US consumers OR workers, We have made ourselves dispensible. Our own modern history shows why it is impossible to save/rebuild the middle class without shoring up the poor, putting the rungs back on the ladder out of poverty. We won't do that. Overall impact: When Reagan was first elected, launching the long campaign against our poor, the overall quality of life in the US was rated at #1. Bythe time Obama was elected, this had already plunged to #43, and we can no longer adequately compete in the modern world market. All the banner-waving for the middle class can't change any of this.

RJ Schundler's picture
RJ Schundler 9 years 1 week ago
#6

"They suggest more progressive tax policies, which means higher taxes on investment income, and better living standards for those at the bottom of the income ladder." ..... These suggesttion are not based on good economics. Lets but good economics to use. First, lets have some pro employment policies. Repeal all labor/employment base taxes .... That means repealing the FICA taxes on both the employee and their empoyers. After all we want people to have jobs and we want they to take home as much as possible. Repeal the FUI taxes and the Income Tax based on employment/work). Next, we also want to keep businesses here in the USA and not to drive them overseas ... Lower all business taxes. We want investments so repeal all taxes on investments made in the USA. Now, for people to earn more they have to be more productive, so education should be paid for at the state level (all children children of the same age should get equal funding) and parents should be free to send their child to any school that the parent feel meets the needs of their child. Give all Businesses a 100% tax credit, for funds they donate to local colleges, department, and students up to a fixed credit. To keep the cost of education down, no credit for colleges that are listed as the top 20% or the most expensive schools. .............. Now we cannot cut taxes and give tax credit without making up for lost revenue somehow. We pass a progressive carbon tax, those who use more pay a higher rate, big business use more carbon fuel, than small business that may use less that homeowners. This would promote energy conservation (not a bad thing). Then, we should also pass the FAIR TAX on all goods (labor/service are not tax). This would make domestic producers more compeditive with foreign producers, by taxing both the same. ... By the way, the supper wealthy do not make thier money by working .... Having a very progressive income tax at the higher income levels just tax the workers, and enable the super wealthy protection from the up and coming, same is true for companies that are growing .... we want them to grow and to employ more people ....

SHFabian's picture
SHFabian 9 years 1 week ago
#7

It's in America's best interests to shine a light on H. Clinton's own record. We don't need lies or "misrepresentations" to appropriately dismiss Clinton. An equally interesting issue is that of why certain media marketed to libs went into over-drive to sell Clinton, with her consistent record as a neoliberal -- pro-war, anti-poor, pro-corporate empowerment, anti-New Deal.

Economic issues drive social policies. H. Clinton has consistently been on the right wing -- NAFTA, the TPP, corporate tax cuts, finishing off Social Security, etc.

That said: Normally, the VP goes on to run for president, and VP Joe Biden will be launching his campaign later in summer (check his website). Any Dem pol can then challenge him for the nomination, and the primaries will determine which one goes on to run for president on the Dem Party ticket. This is how the system works

2950-10K's picture
2950-10K 9 years 1 week ago
#8

The findings of the IMF study were surely predictable. Increase the income share of the bottom 20% and the GDP grows. It's pretty obvious that the bottom 20% will spend virtually all of the increase in their income, and create jobs by doing so.

The IMF's solution, "progressive taxation," should include abolishment of all regressive taxes such as property tax, and replace them with ability to pay taxes, such as income based ones.

I've said it before, and I'm confident most participants on this blog would agree, tax laws are the best immediate solution to the mushrooming problem of concentration of wealth.

Loren Bliss's picture
Loren Bliss 9 years 1 week ago
#9

Actually the "defining issue of our time" is whether life as we know it -- including our own species -- will survive capitalism. -

As evidenced by our capitalist masters' escalating efforts to provoke an extinction-level war with Russia and their ongoing refusal to act against terminal climate change, they have already concluded we are a dead species on a dying planet.

Indeed it is an Occam's Razor moment of the most terrible sort: no other hypothesis explains the totality of Ruling Class behaviors, including the no-tomorrow savagery of their run-amok greed -- a global orgy of exploitation, oppression, contractual theft and outright armed robbery with no precedent in human experience.

That said, such an uncharacteristically humanitarian conclusion from the Imternational Monitary Fund, which is one of capitalism's chief economic executioners, indicates the Ruling Class is finally awakening to the fact the global proletariat -- even broken as it is by the One Percent's imperial omnipotence -- is not so subjugated as to plod submissively into the grave. And it makes no difference whether the genocidal intent is obvious (as when the killing is done by soldiers and police), or whether it is disguised by rhetoric (as when the mechanism of murder is euphemizsed as "austerity").

Obviously the real message of the IMF study is that the Ruling Class is becoming terrified.

Ninety-eight years ago, faced by the same sort of hopeless inequality and abject powernessness that has been inflicted on us all by the One Percent of today, the Russian people rose up in a revolution that truly changed the world. Though that revolution was later betrayed and undone, its triumphs remain part of Russia's collective consciousness, the wellsprings of a yearning as profoundly heartfelt as Dark Age Britian's folk- remembrance of Arthur and their desperate longing for the rescue-from-chaos they symbolized as "the return of the king."

Foolishly we regard our overlords as stupid, and in so doing we commit what to Sun Tzu was the warrior's ultimate and ultimately fatal error: we underestimate our enemy. We fail to acknowledge the horrid truth the One Percent is brilliant -- diabolically so -- and in its Machiavellian wisdom it no doubt recognizes that as the Russians once rose to fling off the shackles and hangman's-knots of capitalism, so might they rise up again.

And if it is not too late for our species -- if it is not the ultimate absurdity of revolution by a doomed species on a ruined planet -- this time the revolution might go as global as the malevolence of capitalism has already gone.

If our species survives -- or maybe as the very fulcrum of our survival -- that is surely the legacy of the inequality thrust on us by capitalism. That is its teachable essence.

And because the Russias have already learned that lesson so well they were able, for a time, to teach it to the rest of the world, that is perhaps why the One Percent in the person of the United States government is now trying to provoke a war with Russia: anything to maintain capitalism's imperial power, anything to perpetuate its signature inequality, anything -- even the dying gasp of one triumphant Kochroach to another,"we had to destroy the planet to save it."

Aliceinwonderland's picture
Aliceinwonderland 9 years 1 week ago
#10

BRAVO, Loren! I concur.

RFord's picture
RFord 9 years 1 week ago
#11

The cause of wealth inequality has many facets. One cause is the loss of manufacturing jobs. This could have been prevented by our lawmakers but they did nothing. The jobs the displaced workers got did not pay very well. Another facet is the decline of unions and stagnant wages. The wealthy business CEOs are like the asian monkey that sticks his hand in a cage and grabs a piece of fruit. His greed will not allow him to see the benefit of letting go so he can pull his hand out and escape before the human catches him. The CEOs greed will not let them see that if all workers are paid more, they will spend more money, the economy will get a boost and the CEOs companies will make more money.. .The workers will also pay more taxes. If the extremely wealthy and extremely profitable corporations pay more taxes, the government can create good paying jobs. Narrowing the wealth gap will not hurt business. It will help business.

Loren Bliss's picture
Loren Bliss 9 years 1 week ago
#12

Thanks, Alice.

Too bad there are at least three typos that make me look like a drooling idiot. These are the result of typing way too fast with entirely too arthritic fingers during a too-short break from a too-long housecleaning binge in preparation for the humiliating quarterly inspection intrusively inflicted on us denizens of senior housing to remind us our poverty defines us as total failures and utterly worthless pieces of shit.

I didn't have time to properly edit because "quiet time" -- no vacuum cleaning, no destruction tests on stereos, no sustained operation of unlubricated bedsprings etc. -- was only 30 minutes away (9 p.m. to 8 a.m.), and I still had to Hoover the living room and the bedroom. (Impertinent question: since senior housing is the last stop before the grave, isn't the"living room" inappropriately named?)

In any case, because of the peculiarities of this website, I can't go back and correct the errors without destroying the dialogue.

Ergo:

Yes, I know the correct spelling of "euphemizsed" (fourth graf) is "euphemized." (No I was not being a Liberal and trying to defuse controversy by combining both British and American spellings.)

"Powernessness" (sixth graf) should have been "powerlessness." (I wanna make that point especially clear as some syntactical PollyAnna might try to argue "powernessness" is the diameterical opposite of "powerlessness.") (In which context note that an entomologist is somebody who writes about bugs while an etymologist is somebody who can bug you about writing.)

"Russias" (last graf) should have been "Russians." (No further comment comes to my alleged mind.)

Such is the condition of my condition on the eve of the quarterly inspectuion. (At least in the service we who stood especially tall in inspections were often rewarded with three-day passes.)

Alas there is no three-day pass from old age. Nor is there any R and R (rest and recuperation) from poverty.

As it should say atop the U.S. version of the Crucifix -- the proper capitalist replacement for the Roman execution order (Iēsus Nazarēnus, Rēx Iūdaeōrum) -- "have a nice day."

Complete with a big grinning yellow smiley face, of course.

Carpe diem...

Craig Ziegler's picture
Craig Ziegler 9 years 1 week ago
#13

Okay, one more time, just to make sure I got this right. One million billionares buy one million phones..........300 million millionares buy 300 million phones.........and so on and so on...........so having one million billionares pretty much defines a dysfunctional business environment..........now, what would 6 billion people with one hundred thousand each be able to buy........if I were a ruthless money means everything captilist kind of guy where is the most likely mega profit going to come from.........you can do it, all you financial wizards, I know it is painful, thinking through it.........but you can do it.........just a simple math problem.....think of it as supply and demand..........there you go your dam near there.........I love ya man........hugs and kisses Craig

chuckle8's picture
chuckle8 9 years 1 week ago
#14

E J Dodson #3 -- What was wrong with the policies of the New Deal and the Great Society?

Why try something new, when we have policies that stood the test of time (50 years)?

The main problem I see with the policies of the New Deal augmented by those of the Great Society, they were too effective and scared the fascists s&#$less.

chuckle8's picture
chuckle8 9 years 1 week ago
#15

SHFabian -- How many times do I have to point out to you that economic inequality is measured by the ratio of the top 20% to the bottom 20%? There is no middle class involved.

chuckle8's picture
chuckle8 9 years 1 week ago
#16

R J Schundler -- Most of the things you suggest have been tried to some extent and have destroyed our economy to some extent. I totally agree on the carbon tax, but with a rebate.

The number one policy that has been shown to help our economy is a top tax rate over 50%.

However, I think with our huge trade deficit nothing is going to work. Bring back tariffs. Incidentally, the top tax rate policy above 50% always had tariffs to protect it.

chuckle8's picture
chuckle8 9 years 1 week ago
#17

2950-10K -- I see how sales tax is regressive. I have a harder time seeing how property tax is regressive (except in CA and the con job of Prop 13).

chuckle8's picture
chuckle8 9 years 1 week ago
#18

Loren B -- Stalin destroyed the Russian revolution. The Reagan revolution destroyed the New Deal. Hope is hard to find.

sandlewould's picture
sandlewould 9 years 1 week ago
#19

Craig Ziegler

Ha! Here's an interesting answer to your math problem...

mathboy's picture
mathboy 9 years 1 week ago
#20

The typos weren't too bad, Loren. None would cause any confusion, even if there are 3 Russias.

So somebody's dropping in to see what condition your condition is in? I remember that song by the First Edition.

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