Several Economic Issues

Peter Passell, in his article, "The Rich are Getting Richer, Etc., and It's Likely to Remain That Way," cites various economists who note that from a statistical standpoint, the rich enjoyed a substantial increase in their standard of living during the early 1990s and the poorest Americans suffered a decrease in their own living standards during the same time. It also became more difficult for the 'average' American to move from one economic class to another, and Passell sees no reason for this trend to reverse.

Passell does not explore the reasons for the change and so he offers no prescription for fixing the problem. He intends his article to be a wake-up call to the rest of the country to "fix" the problem without clearing identifying what the problem is. The United States currently has the lowest unemployment it has had in years, but CEOs also make considerably more here than in other countries when measured as a multiple of their workers' wages. This offers some help as to what may be causing the problems that Passell cites.

Until American companies begin compensating all of their employees at levels commensurate with their profits, the situation observed by Passell is unlikely to change. However, more study needs to be done in order to identify the underlying causes of the symptoms Passell notes; without such study, his observation that the gap will only widen is likely to be all too accurate.

"Social Security on the Table," by Quinn and Mitchell, is an attem

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dle from the left on a number of issues, and he has embraced economic conservatives as advisers. There is not likely to be a rethinking of the natural wage theory during his administration. According to Richard Sutch, the media, most politicians, many economists and the American public as a whole have misread the economic signals of the past half-century and are convinced that government spending in general, and social spending in particular, is spiraling out of control when, in fact, no such crisis exists. In "Has Social Spending Grown Out of Control?" Sutch presents statistics and graphs which indicate that government spending has grown as a percentage of GDP since World War II, but not at the same rates as other observers suggest. When certain factors are taken into account, such as social insurance, the growth rate falls considerably. Sutch also questions why the government and politicians have seized on balancing the budget within seven years (he does not address the larger issue of whether the budget should be balanced at all). Recent events, including the fasterthanexpected reduction of the budget due to a robust economy, would seem to support Sutch's claim that the long-term tinkering with the budget (and other g

Category: Economics - S