The Paradox of Rich-to-Poor Capital Flow Essay

In this paper I will be discussing the wealth gap. I will also be discussing if there should be a “special” tax to redistribute the wealth. I hope to enlighten the reader of the issue of the wealth gap, and if a tax would help.

According to the World Bank, from 1993 to 1998, poverty rate has reduced by 14 percent in developing countries, similar to about 107 million people. This may result from receiving foreign investment that plays an important role in local economy growth. For example, the proportion of population living in poverty in India decreased by half in the two decades, from the 1970s to 1990s, while the number of Chinese in poverty declined by approximately 210 million during twenty-one years, from 1978 to 1999 (Healey 2008). In other words, the standard of living is improving due to the benefits of international economic activities.

My research project is going to be about how the wealth gap in America is causing a slowdown in growth for the United States. I think because there is no more middle class and most people are poor while just a very small percentage of people make alarming amounts of money that it has stopped the growth of America. Im going to try and corellate different points in time when america was growing while at the same time showing that the weakth gap was less at the time.

America; the land of opportunities. How many times have we heard this phrase in our lives? This is the promise land and here, you will be treated equally and will be guaranteed freedom and justice. Maybe it is so in legal terms. However if we look closely, there are many injustice going on that is not protected by our constitution. Perhaps the most obvious one is the difference between the rich and the poor or the haves and the have-nots. First line in the constitution states; all men are created equal. Is that so? I see a tremendous disadvantage being born to a family of poverty than being born to the wealthy family. It’s not a just a matter of being able to be educated properly but a life or

Bernie Sanders once said, “A nation will not survive morally or economically when so few have so much while so many have so little.” In order words, Sanders was talking about wealth inequality.  What is wealth inequality? Wealth Inequality is a big problem in the United States today. Especially in today’s society, where the rich are getting richer while the poor stands where they are- in a limbo. Wealth Inequality can be described as the unequal distribution of assets within a population. Wealth Inequality has been a problem from the beginning of time; however, it was not always so serious and problematic. According to Jeffrey G. Williamson and Peter H. Lindert, wealth inequality changed two points in history, the first half of the nineteenth

The huge wealth gap that exists in the U.S. is a huge problem. The “us vs. them” mentality being nurtured by this gap separation only creates division among society. Those with the most wealth control resources, yet those with immensely less wealth manage those same resources. The end result could be as catastrophic as a revolution if confronted by the people. Or perhaps lack of confrontation would pose an even greater threat in regards to environmental disasters waiting to occur.

Some of the things I already know about this topic is that the way the wealth is distributed is broken down into several different categories. We have the upper class, middle class, and the lower class. The way the wealth is distributed amongst these groups is very uneven. There are many different factors which influence the way wealth is distributed amongst these groups.

In his 2002 article “Why the Poor Don’t Soak the Rich,” Ian Shapiro seeks to explain “why there is so much inequality” in American democracy, despite the fact that “most [American] voters, being relatively poor, would…[theoretically] favor taxing the rich and transferring the proceeds downward.” Contrary to what he calls “institutional accounts” of economic inequality, Shapiro argues that numerous social and psychological factors ensure that underprivileged Americans remain unaware of – or simply uninterested in – the overall income distribution in America. His theory, as he himself puts it, seeks to refute the common notion that most American voters “are like coiled springs…[in that] were it not for various external forces…pressing them down, they would leap into action and demand a greater share of the economic pie.”

Wealth and income inequality in America has progressively gotten worse. The recession in 2007 did not help to reduce the gap between the two either. Wealth is determined by everything a person owns and income is determined by how much a person makes at their job. The better the job a person has, the more income they have and this helps to increase their overall wealth. Wealth and income inequality can be reduced by lowering the cost of higher education, implementing a progressive tax, working with one another to end the stigma of the color of one’s skin, deportation of illegal immigrants, and by putting an end to the gender wage gap.

The way money is distributed within the United States is unbalanced, with the majority of the wealthy owning the bulk of the country’s wealth. Wealth can be defined as a person’s assets and monetary gains. This unequal distribution has caused numerous economic and geographical problems, such as how resources are divided among countries, how developed or industrialized a country is in relation to wealth distribution and the wide spread of disease and lack of medical attention due to an absence of money. In this paper I will address the negative and positive aspects associated with wealth distribution. I will explain how resource distribution contributes to an area’s economic growth. I will also discuss varying ways to measure wealth

The Solow Model is designed to show how the growth in the labour force, capital stock and advances in technology interact and how they affect a nations total output. The model is important for the analysis of economic growth in developing countries as it demonstrates the nature of an economy to be a key determinant of steady-state capital stock within a country. If the savings rate is high, the economy will have a large capital stock and thus high level of output and vice versa. Correspondingly changes in capital stock can lead to economic growth.

The era of volatility has created a shift from America being the middle-class society to simply rich or poor (Sachs, 2011). A gap this large has not been experienced since the 1920’s (Sachs). “The top 1% of households takes almost a quarter of all household income” but an economy this top heavy will not be able to succeed (Sachs, 2011, p. 30). The working classes are struggling with housing, wage, and employment issues. Rich individuals are ignoring these troubles, shipping their business operations out of the country, thus furthering the downward spiral of the economy (Sachs). To make matters worse, this has become in a large part a political issue, because the rich can influence candidates with funding, where the poor and working

In the book “The New Confessions of An Economic Hitman” by author John Perkins, he discusses in detail his experience as an economic hitman, and the role he played in underdeveloped and developing countries. He writes about his, various multinational corporations, political institutions, and the United States role in indebting countries to profit off them. Essentially, his book is about the United States way in expanding globalization and what can be done to stop the exploitation of other countries. John Perkins offers a new perspective on the study of international development and underdevelopment, and goes beyond numbers and graphs, to explain other factors that are a key contributor in the under development and development of some countries. In this essay, the strengths and weaknesses of this book will be discussed and compared to the perspectives of development covered in this course through the lectures and textbook. The opportunities that are presented around the world for this book to improve development outcomes, and threats around the world that may halt efforts to purse the changes that John Perkins wishes to see will also be discussed.

Eyeballing any cross sectional data on growth across countries shows that countries grow at different rates. Many theories try to explain this phenomenon with emphasis with capital accumulation being one of them. I will start by developing the standard neoclassical growth model as developed by Solow(1956)[1]. I will then proceed to discuss the extensions that have been made to this basic model in an attempt to better understand actual growth figures, for e.g. the standard neoclassical model cannot explain the magnitude of international differences in growth rates. Mankiw[2] points out that “the model can explain

They claim that international capital mobility, or, the ability of investors to freely allocate capital around the globe, engenders promise, while simultaneously entailing peril. This paper will attempt to address the arguments of both sides to foster greater comprehension.