One hundred trillion dollars. That’s the total net worth of all Americans in 2017*. It’s a staggering number. For practical discussion purposes, we might say that figure is the net worth of rich Americans. The top 160,000 households (one tenth of one percent) control a quarter of this wealth. About half of all this U.S. wealth is held by the top 2% of wealthiest households and about 80% by the top 10%. The bottom half of U.S. households owns almost nothing of significant value.
Total wealth of our nation continues to grow at an impressive pace while the wealth distribution continues to widen. The rich get richer and the poor get poorer. I have long believed that this issue of wealth inequity, far more so than income inequity, is our nation’s top risk for the future.
What does this mean for us in the near future? The predictable outcome, assuming that the rising affluent class acts logically in its own best interest, is increased hostility between citizens and government, increased efforts by government to find a ‘scape goat’ other than the ruling class, the rise of populism, an increase in weapons armament among citizens and government, increased investment by the wealthy in “bunker” type products and strategies (safe rooms and power generators, for example), increased exploitation of natural resources, a decrease in public safety measures and cuts to entitlement programs, and a shifting in tax burden from the rich to the working class.
What does this mean to us in the long term? Throughout human history this trend almost inevitably accelerates until at some point – through peaceful or violent means – the balance of power shifts back to a more democratic leadership and the cycle begins again. (This is a theme of the writings of Professor Jared Diamond who who is known for his work in anthropology, ecology, geography and evolutionary biology. His book “Collapse” published more than a decade ago is mentioned on another blog post here.
*Actual data for 2017 is not yet available. This estimate is an extrapolation of published 2016 data and forecasting an overall increase in value of financial assets and real estate values continues in 2017 as we have apparently seen so far in the year to date.