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Are There Any Real Winners from Widespread Economic Stress?

In a traditional children’s story, a mouse exchanges a modest, quiet but secure life in the country for life in a luxurious town house. The change meant he would get more lavish rewards (cake morsels instead of breadcrumbs). But it turned out that the improved environment brought along with it the perpetual threat of being eaten by a cat. Is there a lesson in this for the U.S. today?

The continuous economic growth of the United States over the past forty years — like the sudden ‘boom’ in the circumstances for the legendary country mouse — has not come without a downside. Economic disparities among various levels of today’s American society have increased just as dramatically as the economy has grown.

The rewards for those at the top are greater than ever. But those in the privileged echelons are vastly outnumbered by those left increasingly financially insecure. In a dramatic change from conditions in the mid to late 1900’s, the vast majority of those under 40 years of age expect to be less financially secure than their parents. For much of this group, the prospects of home ownership, retirement, or even freedom from massive debt seem out of reach.

Without digging into economic data, does this increasingly ubiquitous economic disparity and insecurity provide the best environment for the long-term development of our country? The future of our society will be determined by the quality of our families. Yet, statistics indicate that strained finances have long been by far the leading source of contention between husband and wife. Does today’s increasingly widespread economic stress provide the environment that best serves our society for nurturing families?

Do you agree with this simplified macro-economic analysis, or is there an alternative narrative that more accurately describes the consequences of U.S. economic growth?

Is the growing disparity in the distribution of wealth and income in our country simply a natural, acceptable biproduct of economic growth; or does it create a sub-optimal outcome for everyone?

If this is a problem, who should be depended upon to work out solutions —

          The economically stressed?

          The government?

          Those at the financial top?

          No one — because there is no solution?

What are the various approaches to addressing this problem and which do you recommend? 

Please share your thoughts below.

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John Hessell
John Hessell
2 years ago

If there were an easy answer to this problem, we would have already found it! Political thinkers since Plato have sought a solution. Should government give a ‘hand out’ or a ‘hand up’? Should the needy be supported by local charitites, or the federal government? Some social programs have proven to be effective over time, such as social security, which provides for the elderly. Other programs have a number of unintended consequences, such as welfare for unwed mothers, where there is a financial disincentive to marriage, at least partially responsible for the decline in fathers present in the home. I doubt the federal government can solve this in an effective and efficient manner, especially considering that we are borrowing from our grandchildren, with a nearly 30 trillion dollar debt. We must have compassion for the needy, the disabled, the disadvanteged, but the federal government is too big. During the pandemic,… Read more »

Wayne Hankins
Wayne Hankins
Reply to  John Hessell
2 years ago

The economist W. Edwards Demming turned around the shoddy manufacturing practices after WWII in Japan making Japanese products synonymous with excellence. By critically examining every step of manufacture to learn where the break downs, the unnecessary duplications and inefficiencies were that led to loss of money and the creation of mediocre products, Demming revolutionized Japanese business. He taught his economic principles to the business leaders that took them to heart and implemented them making Japan an economic powerhouse.
Yes, the corruption of billions stolen during the Pandemic is disheartening,
The revealing of similar fraud and corruption of economic aid to Afghanistan is another striking example of a broken abused system. This is an important discussion for IAED to compare and critique successful and failed economic programs.

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