There’s
plenty to go around – except it doesn’t (go around)
Get ready to hear a lot about baking
this campaign season.
When it comes to how wealth is
distributed in this country, “pie” is a favorite pundit metaphor. Some
politicians want to “re-divide the pie,” so everyone’s slice is more equal in
size.
But that’s “socialism,” some pundits
scold. Better to trust our billionaires and millionaires to “grow the pie” so
big that every American has a generous slice.
New York Times columnist Thomas
Friedman indulged a bit of this recently. Michael Bloomberg, Friedman explained, is a grow-the-pie
guy. Bernie Sanders, he warned, is a re-divide-the-pie guy.
Bloomberg has a net worth of about
$50 billion. How big would he have to grow the pie so that every American
household gets a slice as big as his? By my calculations, that would require
about a 500,000 percent increase in the size of America’s total wealth — to
over $600 quadrillion.
Let’s suspend reality for a minute
and pretend it’s possible to grow the pie just 1 percent that large, to a mere
$6 quadrillion — 60 times the pie’s current size. Would Bloomberg and his
fellow billionaires seek to share the pie’s growth equally with the rest of us,
or would they try to grow their own slices even larger?
Color me cynical, but I’ve no doubt
that if America managed to grow its pie 60-fold, those billionaires would be
turning themselves into trillionaires — we may even see our first
quadrillionaire.
You see, we’ve lived through this
experiment already.
In 1982, when Ronald Reagan’s massive tax cuts for the wealthy were taking effect, America’s aggregate wealth was around $10 trillion. Since then, it’s increased ten-fold — and we’ve experienced a concentration of wealth surpassing even the Gilded Age of the early 1900s.
America’s richest families — the Kochs,
Mars, and Waltons — inflated their wealth by 6,000 percent, while the median American family treaded water.
African-American households got clobbered, experiencing a 50 percent decrease in median household wealth.
And after all that growth, 40
percent of American adults don’t have the cash to handle a $400 emergency expense.
Funny thing, nobody from the
grow-the-pie crowd ever explains why growing the pie in the future would help
average Americans — not after enormous growth over the past several decades did
bubkus for them.
The bottom line: Growing the pie, by
itself, won’t cut it.
Does re-dividing the pie hold
potential, or is Bernie Sanders just talking pie in the sky (pun intended)?
Actually, it does. Quite a bit.
Dividing today’s $100 trillion American pie evenly among its 125 million
households would give each household an $800,000 slice. Grow that pie by a
realistically achievable 25 percent over the next decade, and we have a nation
of millionaires.
Many would contend that giving each
household an equal slice would be unfair or counterproductive. And that’s a
fine debate to have. But to suggest the pie isn’t already big enough to provide
for all Americans is a lie.
There’s plenty to go around. The
problem is that a relative handful of families have slices so gigantic that
they could never ever finish eating them, while millions of Americans are
living on crumbs.
Bob Lord is a Phoenix-based tax
attorney and an associate fellow at the Institute for Policy Studies.
Distributed by OtherWords.org.
