Economic Charts

It Keeps Widening: Wealth Gap Stats Will Shock

Updated: Mar 25, 2024 | Published: Mar 25, 2024
Verified Investing
By Verified Investing
It Keeps Widening: Wealth Gap Stats Will Shock

The wealth gap among the top 1% and the lower 50% keeps widening. Since Covid, the bottom 50% of people in the United States added $900 billion in assets. The top 1% added $12 trillion. This will lead to a revolt.

The vanishing middle class began when the Federal Reserve started tinkering with its dual mandate. The dual mandate states the Federal Reserve must focus on price stability (keeping inflation to a minimum) and employment.

The problem with this dual mandate is, the tools used always tend to stimulate growth in assets that the rich have exposure to. For example, the stock market or real estate. When the Federal Reserve lowers interest rates it causes assets prices to rise dramatically, when the Federal Reserve raise interest rates, the rich just rotate into bonds paying hefty interest rates and make out like a bandit.

On the other side, the lower 50% see home prices continue higher, putting home ownership out of reach for a majority, they see food, energy and rents rise as well. The lower 50% also has little exposure to the stock market so they don't reap the rewards.

The political unrest in this country is a direct result of the disparity in wealth. Over 50% of the country is just trying to keep their head above water while the top 1% rake in trillions.

Any society you look at where the disparity has gotten this bad ultimately saw a revolt. The French Revolution was a prime example of this, though there are plenty of others in history.