Summary: we have used increasing debt loads to cover the wealth redistribution post war which has seen earnings concentrated in a small group.
How to measure wealth? The Walton family (WalMart) are richer than the bottom 1/3rd of the US (100m people). This doesn´t feel right. Are they philanthropic (maybe, in 2006 and 2007) with the more money than anyone could ever need?
The US net debt is $53trn; net worth of households (after debt) is $50trn. That feels large but doable: a debt/equity ratio of 1 isn´t catastrophe for a company so should it be for a country?
And how to pay off that debt? The writer suggests these three:
- Increase productivity through innovation and creating new markets". I´ve never been clear that creating a new market can create money to pay off debts. Surely we have to use assets more effectively (including the flow of energy from the sun, oil, etc)?
- "Live within our means": very much agreed. Ever since I understood how my familiy finances failed, I´ve spent less than I earned.
- "Distribute the higher tax burden carefully". While high marginal tax rates tend not to work, the income disparity (cf Waltons) is too excessive to allow to continue.