Inequality Hampers Economic Growth

New IMF study shows that taxing the rich is good for the economy

Current economic trends continue to damage our economy increasing social issues like homelessness. (Marquette Magazine photo by Ron Caspi)

Marquette, MI – The IMF (International Monetary Fund) recently published results from a series of studies that prove beyond reasonable doubt how inequality hampers economic growth and that we shouldn’t worry about fixing it through taxation.

Surprisingly these new findings are being served up by researchers of IMF itself!  Their findings clearly show that the old pillars on which our western capitalistic economy stands are not serving us.  On the contrary they are actually harming our society.

IMF studies show that inequality hampers economic growth widening the gap between the rich and the poor. (Marquette Magazine photo by Ron Caspi)

The conservative economic ideas created during the Reagan and Thatcher era and continued for the past four decades, have failed to show impressive economic growth however, they registered a significant spike of inequality.  They are based on the concept that if you make a cake everyone will get a slice… and how do you make the cake?  By giving benefits to the rich because they are the developers and creators of jobs thus, if they have more money to invest in the economy everyone will benefit.  It further attests that taxing the rich to help the poor suppress economic growth.

The recently published paper by IMF researchers Jonathan Ostry, Andrew Berg, and Charlambos Tsangarides entitled “Redistribution, Inequality, and Growth,” directly challenges the “Reaganomics” model by showing convincing evidence that lowering the rate of inequality actually strengthens economies faster and enables longer more durable periods of economic growth and expansion.

Let’s hope now that our government will respond with changes and new policies to reduce the gap of growing inequality in our country before the level reaches a state of such great discomfort that we all break apart.

Marquette Magazine

by Ron Caspi

Ron Caspi has lived and worked as a photojournalist and visual artist for over 25 years. His travels have taken him from the shores of the Mediterranean Sea to New York, Los Angeles, Honolulu, and now Marquette. Caspi cares about what's happening in his community and the world at large and encourages others to express their opinions and take action!

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