Confronting Inequality, Essay Example

In chapter 12 of Krugman’s book “The Conscience of a Liberal” (Krugman 244-264) the author describes a number of issues relating to economic inequality in the United States.  He begins by comparing contemporary economic class divisions to the Gilded Age following the Civil War whereby the rich were very rich and almost everyone else was poor.

In recent years, the days of a strong middle class have dissipated as the classes have stratified into the haves and the have-nots. Krugman asserts that this stratification “has a corrosive effect on social relations and politics.”(Krugman 245) He points out that the lack of income equity has had a negative effect on social and political equity.

Krugman describes how those with money have turned our political system into a plutocracy.  Those with money are advantaged in terms of access and ultimately, favorable legislation allowing them to enhance their financial status even more.

The author also addresses the advantages of a more socialized system of government such as is found in Europe or Canada.  He emphasizes that although taxes are higher, the standard of living is comparable with the US because everyone is “protected against experiencing really severe material deprivation (Krugman 253). Currently the US spends a miniscule amount of GDP on programs that help reduce inequality. This is ultimately problematic because poor people who struggle with no access to healthcare and other basic human needs tend to be less productive in the long run.

Krugman suggests several common sense solutions to American inequality.  The first suggestion is to restore “progressivity to the tax system” (Krugman 257).  Wealthy people and corporations should be paying much higher taxes. The second suggestion follows the first and involves closing tax loopholes. The third ides is to tax capital gains as ordinary income (Krugman 259). This is a great idea.

The United States was founded on the idea that all men are created equal. This chapter illustrates that while all Americans may be born on equal terms, their legal, social and political powers are purchased for cash.

Works Cited

Krugman, Paul. “Confronting Inequality.” The Conscience of a Liberal. Ed. Editor. Edition ed. City: Publisher, Year. 244-264. Print.