The U.S. economy continues on the path to enriching the lives of those in the top 10 percent of the wealth curve at the expense of all those in the bottom 90 percent. This inequality gap is the widest of all the industrialized nations on Earth, with a Gini coefficient approaching 0.9.[1] Those at the top (32 million persons) now hold $80 trillion of wealth; the next 40 percent (130 million) hold $8 trillion; while the bottom 50 percent (163 million) holds less than $1 trillion. Put another way, the top 1 percent hold more wealth than does the bottom 99 percent combined. This outcome is the direct result of a) our inheritance laws and income tax laws; b) of a banking system that is dedicated to directing income and wealth flows to the top; c) of an interconnected network of bankers and corporate executives working together to maintain or to increase the status quo; d) of a conservative political ideology and its adherents also dedicated to maintaining and increasing the wealth distribution pattern as it is; e) of a general population that is essentially ignorant about and impotent against the facts and procedures in the first four steps that they are supporting without their knowledge and against their interests. Each of these outcomes is explained in greater detail in the text that follows. In addition, I have listed specific actions that you can take to begin shifting a portion of the flow of wealth from the top 10 percent to those in the bottom 90 percent. 

It is also very important to show what the future portends if we do nothing to change the present condition and its pathway forward.  Since 1950 wealth has increased at a compound rate of return of 7.2 percent.  At that rate wealth doubles in value every 10 years.  By carrying this same rate forward we find that the top 10 percent will hold $160 trillion in 2026; then $320 trillion by 2036; then $640 trillion by 2046; and then $1,280 trillion of wealth by 2056.  That final projection is 25.7 times worse than today’s inequality, a level that cannot possibly be sustained short of a revolution the likes of which this world has never before seen.  And I do not forecast revolutions.  That conclusion leaps off the page propelled by the same growth rate that got us into the present quagmire.  Suffice to say, we ignore it at our peril.  

Inheritance Taxes.  The U.S. Treasury collects approximately $50 billion per year in inheritance taxes. That total represents just 0.0625 of one percent of the total wealth of those at the top.  It is equal to the appreciation in their wealth that occurs every 3 days.  It is the lowest tax rate of any source.  Conservative ideologues nevertheless continue to call it an unconscionable “death” tax while fighting for its repeal altogether.  Progressives such as Warren Buffett call this tax the source of “dynasty” building that is completely unearned save only for the effort one expends in choosing their parents or other benefactor wisely.  This tax could be raised tenfold with no burden on anyone.  

Banking System.  The economy is fueled by spending with 70 percent of our GDP coming from consumer spending.  The next 23 percent comes from government spending.  The last 15 percent comes from business investment that comes from profits that come from spending.  Net exports accounts for -- 8 percent.  In order to grow the economy, new money must get into the hands of consumers.  Money in circulation is called M1.  This relationship is found in the notation money in circulation times its turnover rate = GDP.  Substituting values it become $3.3 trillion X 6.0 = $19.8 trillion.  GDP produces the income that pays all employment, all taxes, and all business investment.  It all comes from M1.  

Conversely, wealth is the value of all stocks, bonds, real estate, commodities and their derivatives, minus the debts incurred in creating them.   The money that goes into wealth is called M2.  But M2 also includes M1, therefore, it is only M2 – M1 that finds its way exclusively into wealth.    

The important distinction between M1 and (M2 – M1) is that M1 creates GDP, jobs, income, taxes, infrastructure, defense, research and development, and all the other needs that government provides.  (M2 – M1) is the source of savings that goes into wealth.  It does nothing for the economy, or jobs, or taxes except in a negative way.  It has an “opportunity cost” in that every dollar that is directed into (M2 – M1) amounts to $6 in GDP that is denied the economy.[2]  

New money is ordered to be printed by the Federal Reserve.  The Fed does not lend directly to the public.  Instead, it makes all new money available to banks.  Bankers decide whether to direct that new money into loans to individuals and/or to small businesses, or into (M2 – M1).   Therein lays the key to more jobs, incomes, and prosperity to the bottom 90 percent; or more wealth to the top 10 percent.  Bankers opt to make the majority of new money available to the wealthy—and at the expense of all others.  

The Interconnected Network.  Bankers do not act in isolation of all others, nor do they seek to promote economic growth, jobs, and all that flows from them.  They live among the wealthy, they associate with the wealthy, and they are connected to the wealthy.  There are 7,000 banks, and 10,000 CEOs of major corporations.  This is the network that creates wealth at the top. According to one source [3] members of the Fortune 500 also sat on the Board of Directors of 7.65 other members of the Fortune 500.  I will leave the task of digging into the disparate data and sources to provide a more detailed accounting of those who sit on other boards of directors, how well they are compensated, etc. on others who like that kind of work.     

Bankers direct most of that new money into (M2 – M1). There is currently $13 trillion in M2, and $3.3 trillion in M1.  (M2 – M1) totals $9.7 trillion.  If those two dollar totals were reversed, all of our economic woes would disappear, along with 95 percent of our social ills that are linked to poverty.   

 Actions you can take.  The conservative ideology is based on a set principles that almost anyone could support (freedom, independence, and the Bill of Rights).  In practice, however, its practitioners pursue a set of objectives that no fair, honest, and rational person could ever support (shifting wealth and prosperity to the top 10 percent while denying the same to the bottom 90 percent).  Here are changes that can make a difference in how wealth is distributed over time:  

1. Become a thoughtful, independent thinker and act in your own interests.  This takes deep introspection about who you are, what you like and need, and what kind of government best serves you and all like you.  It begins with the simple acknowledgement that we all create America’s wealth.  In fact, those who work and produce goods and services are the primary wealth creators.  Those in the top 10 percent are the wealth inheritors and the passive recipients of wealth.  Their wealth is excessive today, and it will continue to grow beyond all reason.  It is also the primary cause of poverty and all the social ills that exist among the poor.  Unless you elect those who seek public office with you and the other 90 percent in mind, nothing will ever change. Those political leaders who are dedicated to following a conservative ideology are also dedicated to serving those in the top 10 percent, regardless of their rhetoric. It is that simple.
2. Withdraw all your money from corporate banks (members of the Federal Reserve System), and move it to a credit union. Encourage all your friends to do the same.  Credit unions are friendlier, and they have better terms in all your financial needs than do banks. They also lend nearly all their funds to individuals and to small businesses. FRS member banks are the key element in retarding economic growth, in creating unemployment, in lower incomes, tax shortfalls, budget deficits, and in denying prosperity for all. They can deny it, but the wealth transfer data and facts dispute every denial.
3. Insist that Congress pass a law that compels all new money to be directed into M1, and that 90 percent of all new loans go to individuals and to small business owners.  Look up the FAX numbers of members of Congress and use that medium to communicate with them.  A Fax will reach their office without having to filtered and delayed. Send a copy of your request to your local newspaper, to your mayor, and to your governor.  Follow up by asking what they are doing to honor your request.
4. Insist that Congress truncate inheritances so that individual beneficiaries cannot receive more than $5 million.  All the rest of an individual’s wealth must be transferred to churches, schools, and charities, or it will be sold at auction.  Thoughtful individuals can likely improve on the method of how wealth gets back to those who created it.  The objective is to stop the creation of family dynasties.
5. Insist that Congress substantially reduce or eliminate the corporate tax.  This would have many good effects on the economy and in the creation of jobs and wealth.  It would first improve corporate profits.  This would put workers in a better position to bargain for higher wages and for a share of profits. It would also make U.S. corporations competitive in international trade, thus improving our balance of trade accounts.  It would clear the way to repatriate the $2.7 trillion in corporate profits now held overseas.  New GDP, jobs, tax revenues, and falling budget deficits would follow.
6. A healthy and educated society is essential to life, liberty, and the pursuit of happiness.  Both are also good for any society at all levels.  There is no better investment.  The best way to guarantee both is to make them 100 percent free so that no one is burdened for life because they lack either.  Insist that Congress direct new tax revenues to those ends.
7. Insist that Congress safeguard Social Security and Medicare by forbidding the Treasury from taking one cent from the payroll taxes intended for their use, and use them for any other purposes.  We know that the federal government has taken approximately $7 trillion from payroll taxes and used them to pay for other programs in the past 35 years.  That is the sole reason why projections for Social Security and Medicare show shortfalls in the future.  But projected shortfalls are not a reason to eliminate either program.  We simply need to stop the government from using those funds for other purposes.  These “stolen” funds show up as “intra governmental borrowing” in the federal budget.  They will never be paid back into either Social Security or Medicare unless you and I demand it. 

In summary.  There is power in numbers.  I recently received this email:  “Campaign for America’s Future, the strategy center for the progressive movement, is combining its operations with People’s Action.  This partnership connects the nation’s largest and most effective network of community organizations, now in 30 states, with our national policy and communications shop. The result: A powerful new force in national politics.”  Go to their website and find more of what you can do to bring about change (https://ourfuture.org/).  Also read about the Economic Polity Institute and their efforts.  Join them at www.epi.org.   

That is enough for now.  Remember:  Constructive criticism is nothing without presenting a solution to the problem.  You have just read about the greatest economic challenge of our time, perhaps of all time, and a solution to it.  Now the ball is in your court.