The Great Divide: America’s Economy and its Strategic Flaw’s
A prevalent topic in the past and during present times seems to be the significant concern of power and control the rich possess amongst the poor. How could this possibly be so? Would this not represent the corruption of a government where the rich essentially have full control and resistance against the poor simply nullifying their chances of escaping from their tax bracket? As discouraging as it may sound it is the truth of our system today.
With how America’s government is oriented a major factor toward success is the inequality and gap between the rich and the poor. The rich continuously pull more and more money from the poor, not only enriching themselves but causing those in or near poverty to delve further into their misfortunes. One sentence from Ezra Klein’s article, “What the Rich Don’t Want to Admit About the Poor” sparked my curiosity regarding the extent of how much control the rich truly carry over the poor. Klein states, “[t]he American economy runs on poverty, or at least the constant threat of it.” I read about a popular tactic once in an article written by a wealthy and successful entrepreneur that has stuck with me ever since. In the article the editor mentioned one method that the rich use to enrichen themselves even further and that was through the strategic use of debt. Since income is taxed the rich discovered a method to increase the value of their assets while also pouring more money into their ventures without having to deal with the nuances of taxes. This is through loans and the debt that follows. Since loans must be paid back, they do not count as income and are therefore not as heavily taxed if taxed at all.
Also, these rich individuals cannot maintain their status without having a quality credit score which allows them to obtain loans in higher amounts along with the increased feasibility of receiving these loans. The money borrowed is then poured into various investments that not only return the amount borrowed but also exceed the original amount resulting in profit made and more money to be expended and invested. Also, since the loans borrowed have essentially little to no taxes the rich do not have to worry about the shackle’s taxes hold upon the magnitude of one’s wealth.
Now this process may seem simple enough for anyone to mirror and become wealthy and rich themselves, right? Wrong. The issue with this process is the poor do not only not have enough upfront to expend on loans, but their credit score does not tend to be the best in regard to being accepted for loans applying for larger loan amounts. However, the rich are more than capable of this. It caused me to wonder could this systematic imbalance actually be resolved or would a resolution lead to the demise of our government and economy.
In “Why do Americans care about Income Inequality’’ the writer makes an interesting statement: “[w]hen faced with a forced choice between equalizing opportunity and equalizing outcomes, Americans will overwhelmingly favor the former.” Establishing that Americans are much more satisfied and content knowing that everyone is on the same playing field without another having an advantage over the rest. At first thought this concept seems coherent enough to successfully work, however, would an economy and government where everyone is equal amongst another not be communism? As great as this “equality” may sound there must be leniency in allowing individuals to excel over others because if not then everyone would be placed at a disadvantage exacerbating an already significant issue of the government having such immense control over the population. Nonetheless, one thought I have concluded is that regardless of the situation there will always be discontent expressed somewhere ultimately resulting in no “correct” system only systems that can be efficiently and practically improved upon.
Though I certainly agree inequality is rampant across the country I have the hot take that many, not most or not the majority, but that many who are bothered by this plaguing inequality are simply bothered by the fact that there are others who have received better opportunities than themselves resulting in a sense of envy for not receiving the same. This ultimately returns to the initial quote that Americans prefer equal opportunity as it satisfies their humane mind and soul knowing no one has a more superior position than themselves regardless of the outcome. Still the issue of unequal outcomes arises because although everyone was given equal opportunities not everyone will receive the same outcome resulting in this infinite contradicting loop of desires as opposed to the reality of our situations.
What is your take? Would you prefer to be in an equal position amongst everyone else regardless of the outcome? Or would you prefer having equal outcomes? Do you believe that we, Americans, tend to allow our emotions and potential envy overcome our judgment and opinions of income inequality? If so, do you find these feelings okay to be a part of this bias? Do you believe that for any government to succeed there must be a evident gap between the rich and the poor? Or should there be no form of inequality or discrepancies allowing everyone to fall under the same status? If so, how would such a system operate?
