Since the 1930’s, the US has seen its economy rise once more, get hit by the Second World War, rise again and suddenly fall as huge shifts in the country’s bureaucracy and leadership take place, which are usually accompanied by massive changes to the populace’s attitudes towards politics and management of the country’s capital assets.
However, only a couple of weeks ago, Janet Yellen, the Federal Reserve Chief, warned that the gap between the rich and the poor had been widening far more violently than expected and is about to hit a level not seen in over a hundred years. Worryingly, the gap between the various social castes is propagated circularly. She argues that inequality “contributes to economic growth, because it creates incentives to work hard, get an education, save, invest, and undertake risk.â€
However, Yellen noted that this same concept also can be pushed to limit access to valuable resources for breaking the chain of inequality, the most obvious of which being the huge rise in student debt over the last decade. In 2004, US Student Loan debt was at an already high $260 Billion, which was more than a ball-and-chain around many students across the country. Due to a growing population, inflation, universities charging more for courses and political decisions to cut funding to schools, today student debt topples the $1.1 Trillion mark, quadrupling where it was just ten years ago.
Education is widely considered the most valuable resource that a country has to change the prospects of individuals motivated to climb the job market ladder. But this is not possible in a country where a motivated individual is buried under a mountain of debt, many of which struggle for decades to pay off or are unable to pay off at all.
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[Source: Channel News Asia - US inequality near highest levels in 100 years]