07.20.2011 Policy Points

Inequality And Social Spending

Mark Thoma wonders how rising income inequality has shaped American attitudes towards social spending.

… As most everyone is aware at this point, inequality has been growing steadily since the 1970s. There have been substantial gains at the top of the income distribution charts, but incomes for those in the middle and bottom have been flat. As households have come under increasing stress because of their stagnant incomes, many people have started to wonder why they should share with others when nobody is sharing with them. Let those who received the gains – those at the top who don’t have to worry about making it to the next paycheck – bear the burden.

In order to overcome the increasing resistance to social spending, we must do a better job of educating people about how their tax dollars are used and who those tax dollars actually support. But that alone won’t be enough. We must also find a way to solve the growing inequality problem, or support for important social programs will continue to fall.

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