Timothy Noah's "The Great Divergence."

http://www.slate.com/articles/news_and_politics/the_great_divergence/features/2010/the_united_states_of_in

equality/introducing_the_great_divergence.html

Noah's article regarding income disparity is an analysis of the causes of income disparity, but there is one section I find compelling. Comparing income data from the Census with income date from the IRS, Saez and Piketty come up with three discoveries regarding income disparity and the "Great Divergence" that has occurred in the past half decade.

1) The American aristocracy, unlike in the pre-World War II era, derive most of their income from their employment wages from rather than wealth holdings such as dividends. So disparities in wealth today exist within the American wage structure.

2) The share of national income going to the top 1 percent more than doubled during "The Great Divergence" (of growing income disparity, particularly since 1970), and now stands at 21 percent. This is evidence for some economists to raise taxes on the rich.

3) The share of national income going to the top .1 percent of Americans has increased nearly fourfold during the Great Divergence, showing growing inequality that becomes more extreme the further you rise in income distribution. Canada and the UK have a similar trend, but Japan and France do not. This top percent of American wealth share 7.7 percent of the national income in the United States.

These findings point to a disturbing phenomenon of inequity in American wealth distribution. My question for politicians is why this growing divergence between the richest in America and the rest of the society is not an impetus for taxing this concentration of wealth.

Despite Scant Results, Bloomberg's Anti-Poverty Project Goes National.

http://www.gothamgazette.com/article/finance/20110518/8/3529

It is interesting to me that Bloomberg is bringing his local NYC anti-poverty initiatives national, when the results from his projects in the Center for Economic Opportunity are not necessarily proving valuable. Bloomberg is championing the public/private funding for his pilot programs, and highlighting the city's "most promising programs" through grants from the Corporation for National and Community Service. This article, however, illustrates that although the ten year experimental project has received a large amount of public and private funding (centralized through the mayor's office), there have been little notable effects on poverty in New York City.

Recommendation for Defense Spending to Shrink.

The Washington Independent newspaper sites that defense spending is reaching a high percentage of nearly 5 % of the GDP, which is higher than the 3.5% rate during the George W. Bush years. (http://washingtonindependent.com/75451/defense-spending-almost-5-percent-of-gdp). The current rate of 4.7% is higher due to continued Iraq and Afghanistan spending, which seems problematic during the current economic downtown. Op Eds in the Washington Post recommend cuts in defense spending considering cuts in other Federal spending, as well as the unprecedented consistently high percentage it contributes to the GDP. ( http://www.washingtonpost.com/wp-dyn/content/article/2010/06/22/AR2010062201999.html, http://www.washingtonpost.com/opinions/why-defense-spending-should-be-cut/2011/08/03/gIQAsRuqsI_story.html). The bipartisan Sustainable Task Force’s June 11, 2011 report recommends cuts to defense spending, siting specific areas to cut waste. Cuts made to defense spending will require a reassessment of what American politicians value in the name of security (ie: responding to danger rather than seeking danger out). Rather than simply trimming unnecessary weapons spending, this will require a reassessment of America’s role in the world as world security officer. Fareed Zakaria sites that the Pentagon budget has consistently risen for thirteen years, which is unprecedented in situations where military force has withdrawn. Although this consistently high defense spending is not surprising, it warrants concern about the other components of American spending.

Conservatives want to limit Federal funding for Medicaid and allow the state to determine Medicaid spending allotment, as state needs vary. With increased Medicaid spending in 2009 and 2010, conservatives see cuts in Medicaid spending as a way to address problems with the Federal budget.(www.nytimes.com/2011/05/16/us/politics/16medicaid.html?pagewanted=all). In 2009, National Health Spending grew 4%, accounting for 17.6% of the GDP. Within this, Medicaid spending grew 9%, comprising 15% of National Health Spending. (www.cms.gov/NationalHealthExpendData/25_NHE_Fact_sheet.asp). stating that 2009 National Health Spending grew 4% to $2.5 trillion, accounting for 17.6% of GPP. Medicaid spending grew 9 %, to 15% of National Health Spending.

The budgeted Federal spending estimate on education for 2011 is 3% of the GDP. (http://www.usgovernmentspending.com/education_budget_2012_2.html). As defense spending consistently rises, it seems necessary to reassess the relatively lower proportion that education spending attributes to the U.S. GDP. As education sets the foundation for mobility and opportunity in American society, the education percentage can stand to rise as defense is cut.