A third world economy is not one in which everyone is poor, only most of the people with the elites still managing to do all right. The US is not there yet, but it is trying. This is an astonishing story, from The New York Times even, titled, The Typical Household, Now Worth a Third Less.
Economic inequality in the United States has been receiving a lot of attention. But it’s not merely an issue of the rich getting richer. The typical American household has been getting poorer, too.
The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.
To understand all this, you need to understand the nature of economies from a classical perspective. A modern textbook will leave you almost incapable of seeing what’s happening, in the same way that knowing one economy had 6% growth and another had 3% will tell you nothing about the relative standards of living.
But this much is clear. The US is heading into an astonishing level of poverty across a wide expanse of what had not that long ago been the world’s most productive nation.