Despite the natural optimism of Americans, poor people in the United States have almost no chance of ever becoming wealthy -- and poor blacks have even less chance of ever escaping poverty.
A shocking new study by American University economists shows how painfully unlikely it is that people in this country will ever get out of the hole they were born in.
The whole American Dream is a fraud, economist Tom Hertz explains in his report. Poor kids in Europe have a far better chance of becoming rich than Americans.
"Recent studies have highlighted growing income inequality in the United States, but Americans remain highly optimistic about the odds for economic improvement in their own lifetime," Reuters reported Wednesday.
"A survey for the New York Times last year found that 80 percent of those polled believed that it was possible to start out poor, work hard and become rich, compared with less than 60 percent back in 1983."
And yet just 1% of poor kids in America will ever become rich.
For black kids in the bottom quarter of U.S. household income, only 3% of them will ever know the comforts of living in the top 25% of U.S. income -- 14% of low-income white kids will eventually climb to the top quarter.
"Part of the reason mobility is so low in America is that race still makes a difference in economic life," Hertz said.
Even the children of the wealthy have no guaranteed easy ride to Moneyville; only 22% of rich kids will become rich adults.
Economists say U.S. income disparity -- the gulf between the extremely rich and the desperately poor -- has been growing for a generation and rapidly accelerating since 2000.
It's probably too late to save America from becoming a failed nation where a wealthy few nervously preside over an increasingly restless mob of poor people. Once the myth of the American Dream is completely forgotten in the coming years, poor people will know they have nothing to lose ... and then it will be open season on America's elite.
If the nation survives, it will look more like today's Russia with kleptocrats and oligarchs surrounded by Uzi-armed bodyguards while the masses succumb to AIDS, death by drug and alcohol addiction, a rapidly declining birthrate and the eventual death of the country itself.
The relative political stability of the United States -- it's the longest lasting "democracy" in the world -- has long been attributed to a robust middle class and the perception of a "classless society" as personified by Abraham Lincoln's rise from poor farm boy to gloomy president who presides over a terrible civil war and then gets assassinated.
But that middle class has been shrinking since the 1970s, and other than a late-1990s increase in American wages and living standards, it's been all downhill since.
For the 80% of Americans who survive on hourly wages, average incomes have just barely kept up with inflation. The elite 20% of Americans who regularly receive bonuses or stock as part of their work have done far better, averaging 7.5% increases per year compared to hourly workers' 2.7% in 2004.
"This contradiction, implying that while people think they are going to make it, the reality is very different, has been seized by critics of U.S. President George W. Bush to pound the White House over tax cuts they say favor the rich," Reuters reported.
While the Bush tax cuts have shifted most of the federal tax burden from the wealthy to the middle class and working class, the economic changes in the United States are not the result of one political party or another. It's the efficient global economy that lets corporations choose the cheapest place to hire labor even if it's half a world away from the product's eventual market.
The other major factor is the stupidity of Americans. Even though more Americans than ever are graduating high school and even college, they're significantly dumber than previous generations of educated Americans. The jobs that require brains are increasingly going to the far-better educated classes of Europe, India and China.
Started my first class at ASU, it's pretty amazing to be in the big time.
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