Wealth and income inequality is discussed a lot today and with the economy struggling, the rich receiving a lot of the blame. Groups like the occupy movement and other socialist/communist/anarchist groups love to throw out the statistics that the to 1 percent of the earners have a growing percent of the total wealth and income. But is this true, and if so is it bad for America? If the rich are getting richer, are the poor getting poorer? How has the relative Like many other political discussions, the truth is often obscured by rhetoric and grandstanding.
To analyze these claims it is important to differentiate wealth from income. Like the debt and deficit debate, these two terms are also confused and used incorrectly interchangeably. Wealth is a stock measure, it is the sum of all the static assets in the possession of an individual. Things that account wealth are bank account balances, investment balances, property valuations, and the like. Income is a flow measure meaning it is the the difference between inflows and outflows over a period of time. Income measures include pay rates, capital gains, and interest on investments and accounts.
