Disparity on the way to the debt ceiling

Michael Gerson writes:

The Pew Research Center issued a report showing that the racial disparity in net worth — the wealth gap in America — is growing. For people of every background, assets declined during the Great Recession, but the liquidation was faster among African Americans and Hispanics….

The trend is less shocking than the base line. In 1984, the ratio between white and black wealth was about 12 to 1. Now, the median net worth of whites is about 20 times that of blacks. According to the most recent figures, about 15 percent of white households have zero or negative net worth. The percentage is 35 percent among African Americans….

Current economic distress is compounding a long-term problem. The possession of assets provides a measure of security during an economic shock, allowing a family to weather a nasty bout of unemployment. In the absence of assets, unemployment can lead to dramatic downward mobility. And the consequences accelerate over time, since wealth is often used to purchase quality education for children, a source of upward mobility.

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One Comment
  1. Rod Gillis

    Interesting post Torey. I’m just back after spending another month in the States. As I look at the SUVs on the interstates and the fuel consumed, I’m thinking, debt ceiling my granny’s fanny!

    Most outside observers recognize that modest tax increases, especially on the wealthy,are a key component in successfully bringing the debt under control in a reasonable period of time. Perhaps TEC will advocate for the same as a matter of social justice?

    Also, as I watched the news on various cable outlets in hotels and motels, the debt crisis was everywhere. By contrast, there is by comparison very little coverage of the dire situation in the horn of Africa.

    Canadians, and I suspect folks in the EU zone, are far more concerned about US federal debt default with all it means for their economies, than we we are about the disaster unfolding in Africa. It raises questions about the realpolitik of “respect the dignity of every human being”.

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