7 ms·

Some things are already starting to give way pretty loudly, and others are yet to come. You simply cannot maintain a democratic society (for whatever nominal va

Some things are already starting to give way pretty loudly, and others are yet to come. You simply cannot maintain a democratic society (for whatever nominal value of democracy you want) with these levels on inequality and non-shared misery. I’m not sure what the next decade holds for the US, but it’s either gonna be some major-scale reinvestment and redistribution or it’s gonna get pretty damn unstable.

refurb 6y ago
Prior to Covid the unemployment rate was the lowest it’s been in 40+ years and wage growth was 6%+ in 2019. The issues this article highlights are not systemic, they are because of the pandemic.
- simongr3dal 6y ago
  Wage growth and gdp increases don't really do much for a lot of people if inequality is high. Unemployments statistics also differ heavily on what the specific statistic consider unemployment to be.
  - refurb 6y ago
    https://www.census.gov/library/publications/2020/demo/p60-270.html https://www.census.gov/library/publications/2020/demo/p60-27... 6.8% increase in median household income from 2018-2019. Look at the stats, most of that growth went into the lower quintiles. And no, even if income inequality increases, higher incomes for low wage workers have real, immediate benefits.
- therealdrag0 6y ago
  Not discounting the pandemic. But how good it was before could be debated further around how much those income gains were slurped up by rising education/healthcare/housing costs. Furthermore income isn’t everything. If wealth inequality wasn’t so great than even those unemployed would be able to weather C19 must more comfortably.
donw 6y ago
Given that the duopoly is beating the war drums again, I'm figuring "pretty damn unstable" is a lot more likely than any sort of focus on pesky trifles like "national infrastructure" or "healthcare".
seibelj 6y ago
The US has the most progressive tax system in the world - far more than Europe. The middle and lower classes pay basically 0 tax, or even get refunds (negative taxes), while the rich pay basically all taxes https://www.economist.com/united-states/2017/11/23/american-taxes-are-unusually-progressive-government-spending-is-not https://www.economist.com/united-states/2017/11/23/american-... The middle and lower classes in Europe pay very high tax rates, but get a lot in return. The left in America is promising European-style safety nets without any tax raises - but the rich simply can’t afford this amount of safety net. Bernie was at least honest in that he plainly said new, broad-based taxes would be necessary to fund his proposals. Edit: HN is hilarious because people downvote facts they don’t like. At least admit reality to yourself - or post a comment that refutes the statistics.
- chronofar 6y ago
  Which just goes to show you can't tax your way out of inequality. You need better incentive structures.
  - WalterBright 6y ago
    What high marginal tax rates do is make upward mobility far more difficult.
- cmrdporcupine 6y ago
  Is it not the case that taxpayers in the U.S. can write-off interest on their mortgages? That's insanely regressive. My understanding is that it's all the deductions that make the US system on the whole quite regressive. In any case US taxpayers don't appear to be getting good value for their money. They do have a pretty insane military though... The Economist article is paywalled so I can't read beyond the intro. But the headline is intriguing: "gov't spending is not." That seems to be me to be the crux of it; Canada's tax system isn't terribly effective and we've been running deficits for seemingly forever, but at least all that debt is on the whole focused on things like health and education; while the US has an absolutely huge debt that seems to produce little of value for its population. EDIT: I'll add that Canada is no worker's paradise. Inequality here is still very pronounced, and the gov't is also involved in all sorts of stupid subsidies on failing industries, and seems unable to effectively build new infrastructure. And our housing market just gets more and more irrational every year.
systemvoltage 6y ago
As soon as the vaccine is distributed on a mass scale, things will start to become normal. Stability is directly proportional to the strength of economy. When people struggle, they take up on the streets. Not to take away anything from the BLM movement (I support it obviously), but my guess for its stronghold and how it became mainstream is because of the pandemic. 2 months into the pandemic in May 2020, a lot of anger was pent up. It was all released in the unrests we saw in pretty much all major cities. Same goes for far-right extremists, Boogaloo boys, QAnon, etc. There hasn't been as many protests in the world in pretty much every country as much as we had in 2020.
- david38 6y ago
  Of course it was because of the pandemic. Too bad people are more focused on social identities than poverty. If the unrest was more about poverty there would be a lot more people involved, and people would have a harder time painting it as thing for restless black people. If the demonstrations were about poverty, and every group could see “people who look just like me” I bet there would be more success.

refurb 6y ago

Prior to Covid the unemployment rate was the lowest it’s been in 40+ years and wage growth was 6%+ in 2019. The issues this article highlights are not systemic, they are because of the pandemic.

simongr3dal 6y ago
Wage growth and gdp increases don't really do much for a lot of people if inequality is high. Unemployments statistics also differ heavily on what the specific statistic consider unemployment to be.
- refurb 6y ago
  https://www.census.gov/library/publications/2020/demo/p60-270.html https://www.census.gov/library/publications/2020/demo/p60-27... 6.8% increase in median household income from 2018-2019. Look at the stats, most of that growth went into the lower quintiles. And no, even if income inequality increases, higher incomes for low wage workers have real, immediate benefits.
therealdrag0 6y ago
Not discounting the pandemic. But how good it was before could be debated further around how much those income gains were slurped up by rising education/healthcare/housing costs. Furthermore income isn’t everything. If wealth inequality wasn’t so great than even those unemployed would be able to weather C19 must more comfortably.

donw 6y ago

Given that the duopoly is beating the war drums again, I'm figuring "pretty damn unstable" is a lot more likely than any sort of focus on pesky trifles like "national infrastructure" or "healthcare".

seibelj 6y ago

The US has the most progressive tax system in the world - far more than Europe. The middle and lower classes pay basically 0 tax, or even get refunds (negative taxes), while the rich pay basically all taxes https://www.economist.com/united-states/2017/11/23/american-taxes-are-unusually-progressive-government-spending-is-not https://www.economist.com/united-states/2017/11/23/american-... The middle and lower classes in Europe pay very high tax rates, but get a lot in return. The left in America is promising European-style safety nets without any tax raises - but the rich simply can’t afford this amount of safety net. Bernie was at least honest in that he plainly said new, broad-based taxes would be necessary to fund his proposals. Edit: HN is hilarious because people downvote facts they don’t like. At least admit reality to yourself - or post a comment that refutes the statistics.

chronofar 6y ago
Which just goes to show you can't tax your way out of inequality. You need better incentive structures.
- WalterBright 6y ago
  What high marginal tax rates do is make upward mobility far more difficult.
cmrdporcupine 6y ago
Is it not the case that taxpayers in the U.S. can write-off interest on their mortgages? That's insanely regressive. My understanding is that it's all the deductions that make the US system on the whole quite regressive. In any case US taxpayers don't appear to be getting good value for their money. They do have a pretty insane military though... The Economist article is paywalled so I can't read beyond the intro. But the headline is intriguing: "gov't spending is not." That seems to be me to be the crux of it; Canada's tax system isn't terribly effective and we've been running deficits for seemingly forever, but at least all that debt is on the whole focused on things like health and education; while the US has an absolutely huge debt that seems to produce little of value for its population. EDIT: I'll add that Canada is no worker's paradise. Inequality here is still very pronounced, and the gov't is also involved in all sorts of stupid subsidies on failing industries, and seems unable to effectively build new infrastructure. And our housing market just gets more and more irrational every year.

systemvoltage 6y ago

As soon as the vaccine is distributed on a mass scale, things will start to become normal. Stability is directly proportional to the strength of economy. When people struggle, they take up on the streets. Not to take away anything from the BLM movement (I support it obviously), but my guess for its stronghold and how it became mainstream is because of the pandemic. 2 months into the pandemic in May 2020, a lot of anger was pent up. It was all released in the unrests we saw in pretty much all major cities. Same goes for far-right extremists, Boogaloo boys, QAnon, etc. There hasn't been as many protests in the world in pretty much every country as much as we had in 2020.

david38 6y ago
Of course it was because of the pandemic. Too bad people are more focused on social identities than poverty. If the unrest was more about poverty there would be a lot more people involved, and people would have a harder time painting it as thing for restless black people. If the demonstrations were about poverty, and every group could see “people who look just like me” I bet there would be more success.