The Trouble With “Wealth Effects” Policy—The Top 5% Drive The Whole Economy

Here’s the problem with concentrating most of the income and wealth in the top 5%: the whole economy now depends on their spending and “the wealth effect” of bubbles driving that spending. As the charts below show, the top tier of households own the vast majority of the wealth and take home roughly half of all income, including virtually all (97%) the income derived from capital.