Poverty, Wealth, and Human Aspirations

Abstract

The years that ended the first decade of the new millennium were not kind to the economic situations of most people and institutions in the United States and much of the rest of the world, nor to the economic and financial theories that once explained and operated our economies so well, or so it seemed. For the majority of people it has become more difficult to meet basic obligations such as rent or mortgage payments or feeding or educating a family, and especially to do this when diminishing asset values, particularly home ­values, threaten future financial security. Ten to twenty percent of Americans have no job at all, a poorly paying job in the service sector, or work part time. Incomes for the middle class have been stagnant at best for decades while the size of the middle class shrinks. Many, perhaps most, new college graduates have had to greatly reduce their aspirations. The stock market and real estate have become far less reliable ways to amass wealth. Some 46 of our 50 states and many of our municipalities face crippling budget deficits, and many colleges, pension plans, charities, and other institutions are operating with diminished funds or going bankrupt. Even the U.S. government faces the prospect of seeing its credit rating diminished. “Tea Partiers” seek to cut debt and the role of government even while poll after poll shows the public does not want its health or most other benefits cut. There are many pronouncements about “waiting, or borrowing, until the economy grows again,” but little evidence of that growth happening. The inflation-corrected GDP of the United States was about the same in 2010 as it was in 2004.