[Kajian Post] "Of the 1%, by the 1%, for the 1%" Joseph Stiglitz

Oleh: Emilio Valeri | Trainee Divisi Kajian Kanopi 2012 | Ilmu Ekonomi 2012

The ‘democracy’ in America should give an impression of equity in a society. But nevertheless statistic actually shows that inequality does happen in the democracy of which we all know as America.

There has been this growing in equality, not only in income, but wealth indicates a wider gap. It’s not just that, the people of the top are getting richer but they create the shrinking of opportunity. If they gain more because they contribute more to a society it’s a totally different matter. But these gains from the top 1% are actually creating the decrease of wealth from the other. In fact it’s just not the bottom, but the middle class started to suffer to. The medium income – half above and half below, are poorer today than they were a decade ago. So to say all the grow, that has happen in America goes to that upper 1%

This is something dramatic that has happened for the last 30 – 40 years. This dramatic event took place because lots of reason. One of them is bonuses. The question was “why do they gain so much bonuses?”. If they were gaining bonuses because they contributed more, it’s a whole different story. But what we saw with that crisis is, that this ‘titan’ of the mega industries, got bonuses while their company suffer losses. And the result of their losses, the global economy went into a crisis, which until now is still on a recovering process. This only contributed to a larger deficit

There is two ways a country can decrease deficit. One is by cutting spending, or the other by increasing revenues. And by this 1% gaining so much, there is only one place really to get those revenue, and that is by raising taxes on those top 1%. And by raising just a bit of taxes on those top 1%, a country can actually gain a lot. And even more calming is that if a country would give a fair taxes to those top 1%, a country can actually decrease deficit to a much safer percentage.

This act does not only creates a smaller gap for inequality, but also decrease the deficit of one’s country

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