Via Think Progress, you can see Paul Krugman and Neil Cavuto duke it out over Krugman’s new article, “How the Super-Rich Are Screwing America,” in Rolling Stone Magazine. Cavuto tells Krugman he is lying to people and that income inequality is actually not worse now than it was 10 and even 20 years ago, as Krugman argues in his piece. Income inequality seems to be the topic of the day. Over at the Economist‘s Free Exchange, they argue, citing an in-house report, that although “high earners experienced more than a 30% increase in their real income over the last thirty years…[and] the bottom 50% of wage earners saw their real income increased by only 5-10%,” income inequality isn’t that marked and if it is, who really cares anyway? It might spawn economic growth. Whether you want to argue that economic inequality creates an incentive for education, which then leads to a more productive workforce and greater economic growth, as the folks over at the Economist have done today, is up to you. Although Clive Crook from the Atlantic Monthly would definitely disagree. In his article “A Matter of Degrees,” Crook argues that education is not an “economic cure-all,” which it is so often touted as, but in fact it is just a way to differentiate oneself from another (so if everyone is going to college, then it won’t give you a leg up anyway). Regardless, the facts are in. The income gap is growing and the effects of this are dire (for many). In “How the Rich Get Richer” and “Poor Losers,” Mother Jones highlights this growing chasm between the rich and the poor:
In 2005, there were 9 million American millionaires, a 62% increase since 2002.
Since 2000, the number of Americans living below the poverty line at any one time has steadily risen. Now 13% of all Americans—37 million—are officially poor.
Only 3% of students at the top 146 colleges come from families in the bottom income quartile; only 10% come from the bottom half.
Since 1983, college tuition has risen 115%. The maximum Pell Grant for low- and moderate-income college students has risen only 19%.
Bush’s tax cuts give a 2-child family earning $1 million an extra $86,722—or Harvard tuition, room, board, and an iMac G5 for both kids.
Bush’s tax cuts (extended until 2010) save those earning between $20,000 and $30,000 an average of $10 a year, while those earning $1 million are saved $42,700.