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The Evolution of Incomes in the United States - Essay Example

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Traditionally it has been held that poverty is a vicious cycle that is sustained by those who are poor through their choices in life. The early leftists used these ideas to justify more resource allocation for the poor such as state sponsored education, health etc…
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The Evolution of Incomes in the United States
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Download file to see previous pages Traditionally it has been held that poverty is a vicious cycle that is sustained by those who are poor through their choices in life. The early leftists used these ideas to justify more resource allocation for the poor such as state sponsored education, health etc. However the provision of such services has failed to have any long term effects that would debilitate the cycle of poverty perhaps because the root causes of poverty are not struck at. Similarly poorer nations that afforded some form of a welfare program failed to see any results because of rampant corruption and mismanagement. In contrast Mexico has embarked upon a program of social uplift using a targeted approach to the causes of poverty. The program has shown a promising outlook as school enrollment has gone up; medical problems have gone down as well as domestic violence and male chauvinism. The recipients of the aid are provided money for fulfilling certain conditions that would improve their living conditions. Based on Mexico’s model similar programs are being launched across the world from China to the United States. Several American cities are already launching such programs in order to lift their urban crowds out of poverty. The success of Mexico’s program is a clear indication that current programs that aim to control poverty need to be redesigned with a more targeted approach. Moreover the legislation in use to support such programs would need a complete overhaul to support a new infrastructure in which the recipients are paid directly and accountability needs to be ensured. Striking it Richer: The Evolution of Top Incomes in the United States Emmanuel Saez The economic recession faced by the United States economy after 2001 has had a lasting impact on income distribution between the top income groups and bottom income groups. Overall the top income groups have accrued more and more income compared to bottom income groups. The share of top income groups in the overall income of the nation is growing while the share of bottom income groups is decreasing. Delayed statistics are only adding to the problem because estimating the distribution of top income becomes much harder. Hence it is far more problematic to guide the economy accordingly to come to a balance. The increase in top incomes has been greater in the 2009 recession than that for the 2001 recession. When compared to previous records dating from as far back as 1913 similarities and differences appear. While top income groups in the pre World War phases were largely rentiers but top income groups today are highly paid executives. Technology and institutional structure may be to blame for the large increases of income in the top income groups as bottom income groups suffer. This indicates that the current economy possesses lope sided growth that tends to favor the top income groups by design. In order to deal with such patterns of growth and to discourage income disparity it is essential to acquire income based statistics as early as possible for each passing fiscal year. Moreover any indications of lope sided growth need to be investigated further for their long term effects on the overall economy and effective legislation should be enacted as soon as possible to deal with these issues. The frame of reference as a public good Robert H. Frank Economists have long related consumption of utilities to personal happiness but recent research suggests otherwise. Consumption can only spur personal happiness to a certain limit after which its effect tends to disappear. The question of frame of reference is highly important with regards to consumption and personal ...Download file to see next pagesRead More
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