America: Land of shrinking opportunity

Wealth does not trickle down from the rich to the poor. Period.

That's not Senator Elizabeth Warren talking. That's the latest conclusion of new research from the International Monetary Fund.
In fact, researchers found that when the top earners in society make more money, it actually slows down economic growth. On the other hand, when poorer people earn more, society as a whole benefits.

The researchers calculated that when the richest 20% of society increase their income by one percentage point, the annual rate of growth shrinks by nearly 0.1% within five years.

This shows that "the benefits do not trickle down," the researchers wrote in their report, which analyzed over 150 countries.

By contrast, when the lowest 20% of earners see their income grow by one percentage point, the rate of growth increases by nearly 0.4% over the same period.

Related: Class war locks poor kids out of top U.K. jobs

The new report called widening inequality "the defining challenge of our time," echoing earlier comments from President Obama.

The authors explain that high levels of income inequality drag down growth because poor people struggle to pay for health care and education, which hurts society as a whole.
"For instance, it can lead to under-investment in education as poor children end up in lower-quality schools and are less able to go on to college," the report says. "As a result, labor productivity could be lower than it would have been in a more equitable world."

The report builds upon research from other international organizations and Joseph Stiglitz, the Nobel laureate who has been campaigning against rising inequality.

money.cnn.com/2015/06/15/news/economy/trickle-down-theory-wrong-imf/

lee wrote on Feb 2^nd, 2016 at 10:34am:



So Lee tell us all how trickle down effect is working.

It's a misnomer. It should be called the trickle-up-effect.

Is that the same IMF that is doing such a sterling job in Europe with their austerity backed programmes.

The US is not a good example. The corporate tax rate over there is 40c in the dollar and the Neanderthals at the IMF can't see a problem with that. FMD, any wonder world economies are shot.

The rich are renowned for their generosity.

http://news.yahoo.com/ex-imf-chief-rodrigo-rato-stand-trial-misusing-153513594.h...

Madrid (AFP) - Rodrigo Rato, a former chief of the International Monetary Fund (IMF), is to stand trial for misusing funds when he was head of a bailed-out Spanish bank, a court in Madrid said Monday.

One time Spanish finance minister Rato is one of 66 accused in a scandal that allegedly saw executives and board members at Caja Madrid and Bankia -- the group whose near-collapse sparked an EU bailout of Spain's financial sector -- spend around 12 million euros ($13 million) on themselves between 2003 and 2012, with some media reports putting the total figure above 15 million euros.

The court said the investigating magistrate found there was "sufficient merit" in pursuing a case against the group.

No date has been fixed for the trial of Rato and his co-defendants who allegedly benefited from undeclared credit cards for personal expenses between 1999 and 2012 at Caja Madrid, which merged with six other savings banks to create Bankia.



yeah right!

To this point we have 2 posts on topic and 6 shooting the messenger with a couple of not relevant.

Sadly it is trickling down.....large percentage of wealth to the well off, and scraps go to the less well off.