Essay 4

Essay 4

It has always been everyone's hope to see economic growth, a more balanced distribution of wealth and the improvement of overall living standards. There was a time when the American people went through such a period of economic prosperity that they were called the Golden Age after World War II. Although the Golden Age did bring prosperity, and it continued and was wonderful, everything was over. Now, more importantly, we need to think about whether we can try to repeat or even surpass it. In Das Kapital, the author, Thomas Picty, expounds his optimistic view of capitalism and claims that it is possible to avoid such a huge wealth gap, as we are now experiencing in the United States and the United States, that people's economy may be undergoing major changes. In the near future. I agree with the optimistic view that we are likely to experience the results described in a) in the United States, but as in the golden age, if we want to continue living in the American Dream, it will be a huge challenge for us.

The causal relationship in the golden age after the Second World War is quite special, because war plays an important role in boosting our economy. Looking back on the war to end the use of nuclear energy reflects the important role technology played during the war. It forces innovation, and once the war is over, advanced technology is put into use in manufacturing, which has created a boom in overall productivity. Industries used to wage war entered the public sector, and former soldiers became workers. In the rush to rebuild after the disaster, the government has provided more jobs and helped create wealth among the people. In addition, large-scale urbanization has boosted the demand for housing and education as well as contributing to economic growth.

The Golden Age has made many people optimistic about the economic crisis and the problems they were experiencing, because with the precedents of a successful period, nothing seems inevitable. After the end of the Golden Age, the U.S. economy has been struggling relatively, as a result of the depressing state maintained by the oil crisis of the 1970s and the growing wealth inequality. Thomas Piketty pointed out that the main factor contributing to inequality was that the rate of return on capital grew faster than economic growth. Moreover, because the poorest people cannot spend their budgets on education for themselves and the next generation, they can hardly escape poverty. Although the main force in creating the Golden Age seems unrepeatable, because we can't count on war to drive us, we can still try to achieve a better state, first of all, the gap between the rich and the poor that Piketty is targeting.

Society needs to levy a more progressive tax on overall wealth, targeting the richest population, and restricting the rich to invest a large amount of wealth in highly profitable capitals, thus maintaining return capital outpacing economic growth. According to the data shown in Capital, the overall tax revenue of the highest percentage of wealth after the Golden Age is lower than that during that period. Although keeping the highest wealth intact in their position keeps doubling their wealth, a narrow gap between the rich and the poor will never be realized. In addition to progressive taxes, the government should increase investment in education, because education is one of the most important factors in economic growth, helping to make the poor richer. With more people receiving better education or education, a large number of highly skilled labor force will raise productivity to a higher level with the development of technology. Technology has changed the type of work, and at the same time, more skilled labor force is needed to do this work. At the same time, productivity is another factor affecting long-term overall growth, and also the main reason for economic growth in the golden age.

History seems unrepeatable, but we can find some patterns that form a cycle through peaks and recessions. After a long recession, we can find the fundamental problem. If we can make the current situation better, I believe we can experience the “American Dream” again. However, as I mentioned earlier, I still want to describe it as a cycle rather than a static state. Sometimes we will have higher top income tax rates, meaningful wealth and income taxes, more generous public pensions, “debt jubilees” and higher minimum wages, but it will end.

One of the main causes of unsustainability is the current debt situation of our government; it is heavily indebted. Most of the richest countries in the world have national debt that exceeds their GDP. Without budget surpluses, it is impossible for governments to continue investing heavily to maintain fast-paced growth. From Michael Lewis' Boomerang, we have seen examples of financial crises caused by excessive borrowing. Although the United States will not fall into such a dilemma, it is easy to conclude that debt is never a long-term and reliable solution to the problem. If the government continues to borrow, in the long run, it will inevitably face an increase in interest rates, because people want to get more return from higher risks: lending a lot of money to the government. With high interest rates, the government will feel uneasy about debt refinancing, because a lot of money needs to be spent on debt repayment. The longer the period of such borrowing, the greater the impact of debt on the government. Therefore, it is difficult to maintain growth.

I hope to remain optimistic about the current economic problems and look forward to the near future economic growth. It's hard to tell if there will be another golden age in the United States. It's certain that the situation will become happier and that we will experience a period of economic growth. However, once we reach a better state of national wealth, growth will be difficult to sustain; we need to come up with better policies and solutions to prevent it from bottoming out again.