The inequitable distribution of America's wealth is a story all too familiar. An increasingly large portion of the country's wealth is concentrated into the hands of an elite few. For instance, the six Wal-Mart heirs control more wealth than the poorest 30% of Americans. But who exactly are these elites, who individually control more wealth than millions of people combined? Here is the story of Lucy.
Lucy is not the kind of person you would expect to have more accumulated wealth than the poorest 25% of Americans combined. In fact, she's not a person at all. Lucy is a 2 year-old pit bull with no job or formal education.
It is unclear how she came into her wealth, but in spite of owning a larger portion of the country's wealth than almost 25% of the population, she has never been required to file for taxes, and has never paid a dime into the system that rewarded her with the combined wealth of 1 in 4 Americans.
Lucy, who could not be reached for comment, has no credit record of any kind and no debt whatsoever, according checks performed with Equifax and TransUnion, and no known bank accounts within the United States. Her only known asset, in fact, is a pink polka-dot collar given to her as a gift. It is valued at a resale price of $3. Amazingly, without any irony, with only $3 to her name, she actually does have a higher net worth than the 75 million poorest Americans.
How is it then, that the poorest 75 million Americans could have a combined net worth of less than $3? Debt. Most of those 75 million Americans have much more than a pink polka-dot collar to their name, but alongside they have accumulated trillions in household debt ontop of it. Until your assets exceed the value of your debt, you're below the water line, at a negative net worth.
How did this happen? In many ways, but the chief reason that I see isn't bad law, since bad laws have always existed. It isn't greed. That's always existed, too. It isn't even outsourcing, which had a role to play. The real reason is rarely talked about because it's boring: the trade deficit. You can't put a face on it. You can't demonize it with tales of lurid excess and Gatsbyesque parties. So no one talks about it. But it is ultimately the root of the problem.
Think about it.
We've been importing more stuff than we've been making since about 1975, when the wheels really started falling off the country. All together, we've exported about $7 trillion dollars of our wealth overseas by doing this, so it should come as no surprise that Americans have around $900 billion in credit card debt, a trillion dollars in student loans and $8 trillion in mortgage debt, all accumulating faster than the economy is growing.
We are, as a country, perfectly able to provide better economic opportunity to millions of people by producing domestically the goods we currently import with debt. A trade imbalance, by its definition, is the replacement of productive work and wages with debt. The systematic exportation of our wealth is no way to run a country, and is the very reason that 1 in 4 Americans have to purchase everything they own with debt.