Individual state governments are taking a toll due to income inequality. As the rich get richer and the poor get poorer, our economy is sinking and it is sinking fast. The issue with the large wealth gap is that the wealthy often shield much of their income from taxes and tend to spend less than others do which limits sales tax revenue. While on the other hand the poor can barely afford to buy anything. States are being faced with the issue of either raising taxes or cutting spending to balance their budgets. This puts a pause on investments such as education and infrastructure since there is a weak flow of tax revenue.
Tag Archives: economy
It has been a long decline for America’s once-great city of Detroit. The city once had a population of over two million, now it is below 750,000. A vibrant city has slowly decayed as businesses have left or closed down. Unemployment is high among those who remain, whole neighborhoods have been deserted, and now we can add the indignity of a bankruptcy for what was once the richest city in North America.
Is it good news that our retail sales went up in the month of August? The answer is a profound no. What does it tells us? America has become a servant economy. We are a consumer nation. A consumer of cheap foreign made goods. This may be good news for countries like China and Germany who flood our borders with tons of cheap goods that we buy. But for America, it is terrible news that only increases our trade deficit.
We’ve already witnessed how harmful “free trade” can be. Under the North American “Free Trade” Agreement (NAFTA) and the Korean U.S. “Free Trade” agreement (KORUS) we’ve seen massive job losses, the decimation of entire industries, soaring national debt, alarming trade deficits, a flood of dangerous imports into our markets and more. We’re even beginning to see a rise in urban decay as businesses close down in big cities, like Detroit, for lack of jobs and the shrinking tax base.