http://www.project-syndicate.org/commentary/rogoff77/English
Kenneth Rogoff, posted an article about one of the big topics at Davos. He argues that inequality within countries has been rising even as inequality between many countries has been falling. Ordinarily, countries are able to deal with inequality by redistributing income. However, many countries are unable to redistribute income because of the fiscal burdens they are dealing with in response to the financial crisis and the worldwide recession. For example, Spain has a 20% unemployment rate but its government is unable to increase its debt burden in response to the inequality problems that it faces. He views the recent problems in Egypt as an issue that many countries may have to face in the future if they are not able to resolve their problems through democratic processes.
He does not refer specifically to rising inequality in the US but he does not believe that governments can raise taxes on the rich because they can take their businesses elsewhere. In fact, the CEO of JP Morgan, and the CEO of Barclays in the UK made that point at Davos. In any case, this could become an issue in the US and it has not been addressed by government. Most of the economic proposals from the administration, such as improving access to quality education, do not reduce inequality in the short term.
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