…but is instead falling short due to income inequality.
The elimination of the barriers between commercial and investment banking returned the United States to the boom and bust cycles common in the 1800′s and early parts of the 20th Century. Income distribution went on its head, resulting in the total of income which could be taxed for Social Security going from 90% to 83%, a huge shortfall. And income growth for the majority of Americans stagnated. Once adjusted for inflation, most Americans make the same, or less, than they did in the 1980′s for the same positions. In a Forbes article where they interview Josh Bivens, the acting Research & Policy Director at the Economic Policy Institute, he is quoted as saying “Sixty percent of the current shortfall would be eliminated by a reversal of two adverse economic trends that have emerged since 1983: sluggish growth in average (real) wages and erosion of the tax base due to rapid growth in the inequality of earnings.”