Blob Watch: Episode One
Where does the Gross National Income go?
Income inequality is a nice way of saying that the economy is rigged to enrich the rich, and impoverish the poor. Indeed, that may be the primary goal of deregulated capitalism. The rules of capitalism say that there is only so much money to go around. If that limited money supply is distributed more evenly among the populace, then the wealthy can’t be as rich, and therefore, the rich can’t have as much influence on government policy. Indeed, as income inequality rises, so does the power of the wealthy to control the economy, the government and the news media.
The United States has notably high levels of “food insecurity”, which is a nice way of saying we have a high incidence of hunger, including among school age children. During the pandemic as many as 23% of households reported that they did not have enough food to eat.
https://www.npr.org/2020/09/27/912486921/food-insecurity-in-the-u-s-by-the-numbers
This hunger situation is not due to a lack of food supply, but rather a lack of money to buy enough food on the part of many households. Working households whose wages don’t cover all their bills.
Credit card debt, medical debt, car debt, college debt, the list goes on. But the bills are not the problem, wages are. The current push for a $15 per hour federal minimum wage was a battle that should have been fought a decade ago, under Obama. That didn’t happen. At this point, we need a $20 per hour minimum wage at least, and that is not even under discussion.
But let’s look at the numbers. What exactly would it look like if money in the United States of America were distributed evenly among all the people living in the US? Let’s run the numbers on that.
In 2019 the Gross National Income was reported to be $21,690,012,900,000 (yeah, that is 21 plus trillion).
https://fred.stlouisfed.org/series/MKTGNIUSA646NWDB
In that same year, the US population was reported to be 328,239,523 citizens.
https://www.census.gov/newsroom/press-releases/2019/popest-nation.html
So what does this simple equation work out to? The income per person was $66,000 per year, which for married couples would work out to $132,000 per year.
Obviously, for a family of 4 this would come to a yearly income of $264,000 per year before taxes.
No one would go hungry due to a lack of money, that’s for sure. In fact, everyone would be pretty much set as a middle class wage earner.
This is not to say that money should or shouldn’t be distributed evenly among all Americans, but rather is meant to highlight the obscene levels of inequality that exist in the US today. When some people own billions of dollars, and many others are going hungry, something is wrong folks.
For a long time, rich people have told you that spreading the money around more evenly is bad because it will drive inflation, because too many people will be able to afford food and clothing and shelter. This will, according to them, drive up the prices for food, clothing and shelter.
With the current stimulus package, that attitude among the wealthy may be shifting. Since the 1980s we have been immersed in trickle-down Reaganomics, which morphed into Clintonomics, Bushomics and Obamaomics. But that trickle down trick imposed by The Blob has, perhaps, run its course. Now that the wealthy have benefitted so handsomely from their pandemic spoils and cash flow from stimulus checks, they realize that trickle up economics, fed by tax dollars, actually can boost the economy (and wealth generation) without causing even a bit of inflation. This is a paradigm destroying revelation by The Blob’s major players. If they can absorb even more government handouts indirectly, passed through the hands of consumers who get stimulus checks, then so be it.
Paradigm shifts within The Blob are rare. It will be interesting to see how this one plays out. But don’t count The Blob out, it is just running the numbers though some very, very big computers.