Salah M Salah
Policy response
April 25th 2014
From Rags to Riches to Rags

Introduction-

The author discusses how the entire argument regarding the top 1% and the “bottom” 99% of society is a void one, claiming that a large proportion of the population here in the US have been a part of the top 20, 10, 5, even top 1 % of the income distribution at some point in their lives for at least a year of their lives, where they enjoy economic prosperity during the time, albeit a relatively short one. The author stresses that the top 1 percent and bottom 99 percent are not fixed nor are they static, and they change through time, as most experience both poverty and prosperity throughout their lifetimes through economic mobility.

The Social insurance problem chimes in into this topic. The US’s largest chunk of spending goes toward social insurance in the form of Medicare, social security, welfare, etc… and the funding for these programs comes from tax payers, from all spectrums of the income distribution. Therefore, most of the US population will at some point of their lives use these social insurance programs.

Analysis- The author analyzed forty four years’ worth of data, and discovered some intriguing results. As it turns out, 12 percent of the American population will be in the top one percent of the income distribution for at least a year in their lives, and that thirty nine percent of the American population will spend a year the top 5 percent of the income distribution, and finally, seventy three percent of the American population will find themselves in the top