Inequality in the USA

1. Inequality in the USA A cause for concern?

2. The notion of the American Dream is very important to the nation’s psyche. Americans, in general, like to believe that hard work and enterprise will have its reward. Because the nation has many freedoms and opportunities, there is not the same welfare support available for those who are not financially independent. While the two main political parties are very different, both share the ideology of the American Dream; individual responsibility, civic duty and patriotism. The American Dream The American Dream

3. The rich get richer The richest fifth in the USA are 8.55 times richer than the poorest fifth. The Gini Co-efficient is named after Corrado Gini, an Italian economist. The Gini Co-efficient is derived from a statistical formula and expresses the degree of evenness or unevenness of any set of numbers as a number between 0 and 1. A Gini Co-efficient of 0 would indicate equal income for all earners. A Gini Co-efficient of 1 would mean that one person had all the income and nobody else had any. In 2010, the USA had a Gini Co-efficient of 45, one of the highest in the world.

4. It is not the case that the American Government does not help those who cannot support themselves. There are a variety of federal and state run schemes to help the poor. These vary from state to state and they are not intended to create equality, merely to alleviate extreme hardship. Congress is working on an update of the Elementary and Secondary Education Act (ESEA) which would replace No Child Left Behind. Measures being introduced would be incentives for states to help develop charter schools and make it easier for folks who operate charters with a track record of success to open more schools. TANF (Temporary Assistance for Needy Families) is available as are Food Stamps and Utility Benefits. It is likely that eligibility for these benefits as well as the amount paid in these benefits will come under pressure due to Government cutbacks. There is some government help

5. The American Dream: Still in business? Many in America are questioning what they've always been taught, that the next generation will always be better off than the one before it, that hard work will produce rewards and the freedoms to have a good lifestyle. The credit crunch and its recession hasforced a rethink of what traditional capitalism in the USA is all about. Who stole the American Dream?

6. In the aftermath of the credit crunch, new President Barack Obama sought to save the American economy. Obama’s Fiscal Stimulus In February 2009, the US Senate approved President Obama's fiscal stimulus package of $787 billion in tax cuts and public spending. Obama’s recovery plan

7. Re-defining the American Dream. Is greed still good? "Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms, greed for life, for money, for love, knowledge has marked the upward surge of mankind.” Gordon Gekko, Wall Street, 1986 So, in the aftermath of the credit crunch, the American Dream was effectively re-written. The US Government bailed out the banks and major companies such as General Motors. Government support for both individuals and organisations is now a mainstream political belief. Who’d have thought it? Greed is Good

8. “The American Dream is no longer just being deferred, it is being eliminated for many people who work hard, play by the rules, and yet nonetheless see themselves falling further behind.” Dr Amy K. Glasmeier Pennsylvania State University. Middle America gets squeezed Obama’s election in 2008 was partly because Americans believed his social democratic approach represented the best way out of the crisis.

9. Poverty 36.5m Americans are living in poverty. Americans are deemed poor if their pre-tax income falls below a certain amount—for example, $20,614 for a family of four. Home Ownership Falling

10. Health care The number and proportion of Americans who lack health insurance has climbed, from 44.8m (15.3%) to 47m (15.8%). As medical costs soar and recession bites, more firms are opting not to provide their staff with coverage. President Obama has promised to provide health insurance for all Americans by the end of his first term as President. The Republican dominated House of Representatives has tried to thwart “Obamacare” at every opportunity. Health Care Reform

11. Crime America jails more people than any other country in the world. 1 in 20 American men have had “prison experience”. The figure for black men is close to one in six. Aggressive sentencing laws, particularly for drug offences, mean that the proportion of cons and ex-cons has doubled since 1974, from 1.3% of the adult population to 2.7%. Crime across America is rising. Unless something changes (2/3 of prisoners are re-imprisoned within 3 years) 1 in 3 black men are expected to go to prison once in their lifetime.

12. The rise of the Tea Party The Tea Party is an internal pressure group within the Republican Party. It is diverse in nature but rallies around tax cuts, less government and, especially, opposition to “socialised medical care”. A large number of the Republican Congressmen elected in 2010 are Tea Party supporters. In the summer of 2011, the Republicans succeeded in cutting Government spending, cuts which will last for ten years. The Tea Party is now the driving force in Republican politics and has President Obama on the defensive. Tea Party ad

13. The fiscal crisis of 2011 In the summer of 2011, President Obama and the Republican dominated House of Representatives played brinkmanship over managing the US’s huge budget deficit. A last minute deal saved the American Government from defaulting on its payments, including wages to the American servicemen and women. The deal, the so-called “Satan’s sandwich” will mean long-term, ten year cuts in public services and welfare payments, meaning inequalities within the USA are likely to grow even more. 11th Hour Deficit Deal 2011

14. USA Loses AAA Credit Rating The US economy is in poor condition. The country has huge debts. Unemployment is over 9%. House prices have plummeted. In the immediate aftermath of the budget deal, the US stockmarket crashed again over fears the Government could not pay its debts. There are fears that the country could go back into recession. One of the world's leading credit rating agencies, Standard & Poor's, has downgraded the United States' top-notch AAA rating for the first time ever. This could make future Government borrowing even more expensive and interest rates for hard pressed ordinary Americans could go up too.