Abstract
In this chapter, the relationship between debt, inequality and economic growth is investigated. Information obtained from official and private sources, and reports issued by research institutes and not-for-profit organizations all suggest that debt contributes to widening the income and wealth inequalities; and inequalities cause the income of 90% of the population to remain stagnant, which causes demand for goods and services to be low. Weak demand causes rates of growth to remain low or decline. Owing to the excess global capacity to produce most goods and services, corporate profits tend to be modest and discourage new investment; meanwhile, unemployment rates remain high and the general economic situation worsens.
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Notes
- 1.
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- 2.
Global Inequality: Beyond the Bottom Billion – A Rapid Review of Income Distribution in 141 Countries, United Nations Children’s Fund, UNICEF, p 11. http://www.unicef.org/socialpolicy/files/Global_Inequality.pdf
- 3.
Ibid.
- 4.
Annie Lowrey , Income Inequality May Take Toll on Growth, the New York Times, October 16, 2012 (http://www.nytimes.com/2012/10/17/business/economy/income-inequality-may-take-toll-on-growth.html?_r=0).
- 5.
Katie Sanders , Bernie Sanders says 99 percent of ‘New’ income is going to top 1 percent, April 19, 2015 (http://www.politifact.com/truth-o-meter/statements/2015/apr/19/bernie-s/bernie-sanders-says-99-percent-new-income-going-to/).
- 6.
Eric Sherman ; America is the riches, and most unequal, country, Fortune, September 30, 2015.
- 7.
Ibid.
- 8.
Global Wealth Report 2015, Credit Suisse, October 2015, p. 13.
- 9.
Ibid., p. 8.
- 10.
Larry Elliott , Richest 62 people as wealthy as half of world’s population, The Guardian, January 18, 2016.
- 11.
Ibid.
- 12.
Ibid.
- 13.
- 14.
Credit Suisse, Global Wealth Report, October, 2014, p. 11.
- 15.
Ibid., pp. 12–13.
- 16.
Jason Hickel ; Aid in reverse: how poor countries develop rich countries; The Guardian, January 14, 2007. https://www.theguardian.com/global-development-professionals-network/2017/jan/14/aid-in-reverse-how-poor-countries-develop-rich-countries
- 17.
Ibid.
- 18.
Ibid.
- 19.
Ibid.
- 20.
Annie Lowrey , Income Inequality May Take Toll on Growth, the New York Times, October 16, 2012.
- 21.
Ibid.
- 22.
US Debt Clock (http://www.usdebtclock.org/).
- 23.
Mark Magnier ; China ’s economic growth in 2015 slowest in 25 years, the Wall Street Journal, January, 19, 2016.
- 24.
Ibid.
- 25.
Ibid.
- 26.
Susan Jones , Labor Force Participation Remains at 38 Year Low, CNSNews.com, October 2, 2015.
- 27.
Annie Lowrey , Income Inequality May Take Toll on Growth, the New York Times, October 16, 2012.
- 28.
Michael Snyder , Corporate Debt Defaults Explode to Catastrophic Levels Not Seen since the Last Financial Crisis, Washingtonsblog, March 31, 2016.
- 29.
Ibid.
- 30.
Michael Snyder , 19 facts that prove things in America are worse than they were six months ago, Economic Collapse Blog, April 22, 2016 (http://www.washingtonsblog.com/2016/04/19-facts-prove-things-america-worse-six-months-ago.html).
- 31.
Global Economic Prospects 2016, the World Bank, p. xv.
- 32.
Deepening Income Inequality, Outlook on the Global Agenda 2015, World Economic Forum (http://reports.weforum.org/outlook-global-agenda-2015/top-10-trends-of-2015/1-deepening-income-inequality/).
- 33.
Mohamed Rabie , The New World Order 1992, 18.
- 34.
US debt clock: National debt of United States. http://www.nationaldebtclocks.org/debtclock/unitedstates
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Rabie, M. (2018). Debt, Inequality and Economic Growth. In: The Global Debt Crisis and Its Socioeconomic Implications. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-66215-2_8
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