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Our Expanding Economy

Michael Daddino/flickr

Credit Michael Daddino/flickr

Despite setbacks from burst real estate bubbles, costly wars, deep recessions and disappearing industries, the U.S. economy has still managed to expand significantly over the past three and a half decades. As indicated by writer Patricia Cohen, the real economy has more than doubled in size over that period. The public sector now uses a substantial share of output to hand over as much as $5 trillion to assist working families, the elderly, disable, and unemployed to finance a home, visit a doctor, or put their children through school.

Roughly 30 percent of the nation’s income is channeled to federal state and local taxes. Despite the assistance, for half of all Americans, their share of the total economic pie has shrunk substantially according to recent research. New findings from economists Thomas Piketty, Emmanuel Saez, and Gabriel Zucman indicate that the share of income collected by the bottom half of the U.S. population was below 13 percent in 2014, down from 20 percent in 1980.

Where did all that money go?  Effectively, it went to the top one percent of income earners, whose share of national income nearly doubled to more than 20 percent during the same three and a half decade period.  

Copyright 2017 WYPR - 88.1 FM

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.