Sunday, February 01, 2015

TNR: Closing The Racial Wealth Gap

   A very interesting piece according to me. One important paragraph:
The first [step toward a good asset-building program] would be to reengineer the misguided asset-building policy that the federal government already has in place, the most prominent parts of which are the home-interest deduction and tax-subsidized retirement plans. It’s a well-funded effort at some $500 billion a year. The trouble is that those policies are tilted overwhelmingly toward increasing the wealth of people who already have it—that is, homeowners and people with retirement accounts. Think of this as an accelerator to Piketty’s r > g. According to the Corporation for Enterprise Development, the wealthiest 5 percent of American households receive more than half of federal asset-building subsidies— $265 billion worth—while the bottom 60 percent receive only 4 percent. According to Shapiro et al.’s calculations, African Americans get just 3.5 percent of the total. That’s about $50 billion less per year in asset-building assistance than they’d be given if their share matched blacks’ 13 percent of the population.
   I'm conservative enough to be very wary about changing what seem to me like tried-and-more-or-less-true programs like these...but those are pretty damning numbers...
   The whole thing is way worth a read I think.


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