What has Caused America’s Economic Inequality and What Does it Mean for America’s Future?

Abstract

This chapter presents the case that escalating economic inequality in the United States in recent decades has been significantly the result of a dynamic set off by government budget deficits. It then discusses the broad-reaching implications of this process for society and politics. Specifically, government deficits spur corporate profits and capital gains while decreasing investment in real assets. These corporate profits and capital gains have increasingly driven the income of the wealthiest, while underinvestment in productive assets has left the income of the economy’s workers stagnant.