Despite setbacks from burst real estate bubbles, costly wars, deep recessions and disappearing industries, the U.S. economy has still managed to expand significantly over the past three and a half decades. As indicated by writer Patricia Cohen, the real economy has more than doubled in size over that period. The public sector now uses a substantial share of output to hand over as much as $5 trillion to assist working families, the elderly, disable, and unemployed to finance a home, visit a doctor, or put their children through school.
Roughly 30 percent of the nation’s income is channeled to federal state and local taxes. Despite the assistance, for half of all Americans, their share of the total economic pie has shrunk substantially according to recent research. New findings from economists Thomas Piketty, Emmanuel Saez, and Gabriel Zucman indicate that the share of income collected by the bottom half of the U.S. population was below 13 percent in 2014, down from 20 percent in 1980.
Where did all that money go? Effectively, it went to the top one percent of income earners, whose share of national income nearly doubled to more than 20 percent during the same three and a half decade period.