How Income Inequality perpetuated in America through a handful of industries; And what it means to the future of Democracy?

Politics Jan 14, 2020

Excerpt —

For decades, self-centered politicians and greedy corporates helped create this broken system in the vital sectors of the economy. Systematically supporting the policies and enacting laws with loopholes perpetuating economic injustice for generations among the American middle class.

Introduction —

What could be that one thing possibly challenges Democracy as we know it today? Most of the economist and politicians, from both left and right political affiliation, should think that as "The rising income inequality in this country."

And it does not just spring up, out of the blue, into the system — administration from both parties have equally contributed to this creation of social and economic imbalance that widely exists today.

Through systematically supporting the policies and enacting laws that help create loopholes, and enable broken systems into the vital sectors of the economy.

In everyday life experience, this imbalance is making most of the insufficient income earner family to depend, to an extent, on the welfare system and cut them off entirely from benefiting any economic gains.

Such lower-income households make up much of the underprivileged and minority communities; they are the last, and not to mention the least, to benefit from any economic booms and asset value appreciation. And, these neighborhoods tend to receive less social safety net investment for schools, hospitals — and this will further limit their opportunity to progress in upward mobility for generations.

Since healthcare, education, and housing sectors are the key drivers in deciding much of the welfare of the people living in any given area in this country. Unfortunately, these industries heavily burdened by special interest groups and greedy corporations lobbying politicians and bureaucrats to bend the rules and laws to their favor.

And it's reflecting in the current state of dysfunction, and level of the problem-plagued in each one them.

How Income Inequality perpetuated in America through a handful of industries -

Human capital —

In education, the 2005 bankruptcy bill signed by the Bush administration has catalyzed the explosion of lending to the college education as student loans.

It's unfathomable to see that financial institutions are pinning their hopes on the future yearning potential of seventeen years old adult.

On the other hand, these adults should not be in the business of accessing capital to the tune of hundreds of thousands of dollars. And, as a result, made this generation of the college-educated and young workforce among the high debt burdens ridden group.

Recently, many studies have found the trend of this demography increasingly living with their parents, and dealing with a reality of less disposable and savings potential than the previous generation.

The role of the educational institutions is equally troubling, for their part in inflating the cost of education and making this sacred service sector as a for-profit venture than developing future human capital required for country development and economic prosperity.

The health care industry —

Driven primarily by insurance, to guarantee access to treatment and care, are destined to be complicated and failure from the get-go.

When the system is designed to collect money from a pool of individuals to spend it on a smaller set of population, and to make a profit by spending less, Total Premium Received - Claim Paid = Profit, the insurer interest will not be at the forefront.

Complicated partnership and structure among various industry participants, from care providers, the insurer to drug companies, and coupled with a lack of transparency, making this industry harder to regulate and simplify.

In the housing market

During and after the last financial meltdown, and the Fed intervention that followed prop up this economy and led to the longest-running bull market country ever witnessed.  All the while, recovery only disproportionately benefited the country's affluent community with assets like housing and investment in stocks and left the affected low-income earners without any gains from government stimulus.

Despite the record increase in credit availability, only pockets of markets and narrow section of society can afford to buy into this property boom. In part, speculative price bubble and stagnated wage growth, in the face of increased productivity of last decades, have made property out of reach for a large population.

Insufficient policy initiatives, either at the local or state level, to address this problem are compounding affordable home crises and homelessness across the country. Demands coming out of population growth and demographic changes are hardly matched with the supply side initiative, to stem the artificial pricing bubble and affordability.

There is Hope

All told, is there a way out of this hot mess? Or, are we facing the imminent collapse of this experiment known as a democracy?

Not really, but before getting better, many things have to change on both sides. And this divided nation must find a way to have a common understanding of the facts surrounding politics and the influence of money and corporations and how they are influencing our daily struggles. Come together and strive for a collective solution.

On the conservative side, the notion of solving income inequality as a threat to capitalism, and viewing ideas proposed by left as antithetical to the free market and smaller government doctrine.

On the Democratic side, they should be willing to espouse ideology in true spirit — believing that society should change gradually. That paved the way for money, property, and power are shared more fairly — and adopt progressive changes by working with all stakeholders involved rather than radical changes to disrupt everything in one presidential cycle.

However small, there is hope, when individuals from all walks of life start seeing what is at stake here. From partisan politicians profit through hate, tribe-driven media networks, and fringe groups create an ideological reality in the social medium to greedy corporations.

Come together and subscribe to the idea of not promoting profits and personal gains, and put country interest at the forefront.

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