Foreclosures Widening Economic Gap between Rich and Poor
October 24th, 2008
Foreclosures are widening the economic gap between the rich and the poor in the developed world – especially in USA. The American dream of social mobility has been shattered as world careers towards recession. This is according to a survey conducted on 30 nations. Since the last two decades this gap between the haves and have-nots has been increasing. This is despite the impetus to growth given by trade and technology. Economies have advanced but at the cost of an ever widening gap. Foreclosure crisis has only hastened the trend.
The reasons are not far to find – unemployment and house foreclosures have forced many countries on to the brink of recession. If political leaders want to avoid surging heated feelings among the masses they must act quickly. A repeat of the Great Depression should be avoided at all cost. This was the opinion of Economic Cooperation and Development – a group based in Paris. The next decade might witness not world growth but world recession. This was the warning of Anthony Atkinson of Oxford University at a meeting at OECD headquarters.
The study has covered 20 years. According to its findings the gap has increased in 27 of its 30 member countries. The incomes of top earners skyrocketed while those of the majority stagnated.
USA has the distinction of having the highest rate of inequality accompanied by poverty. USA follows Mexico and Turkey. Since 2000 the chasm has widened rapidly in America. In France the gap has narrowed as the poorer working class are getting better paid.
The rising gap of wealth will prevent children from doing better than their parents and moving up. The poor has little or no chance of improving their living standards despite hard work. Inequality is high America, U.K. and Italy but less in Denmark, Sweden and Australia. The wealthy are leaving far behind even the middle class. The consequences can be ominous if the foreclosure related global financial crisis takes on the colour of recession that will be prolonged.
The two decades from 1985 to 2005 saw an increase in global trade and use of the Internet. There was all round strong economic growth. The study took three years to be compiled and will be of tremendous importance to countries directly in the line of the fire of the foreclosure related financial crisis. The frustration brewing up can burst dangerously.In America the richest 10% have an income of about $93,000 while the poorest 10% earn a meager $5,800.
- Spurt in Sales of Foreclosed Properties
- Foreclosure Climate Changes Spirit of Competition to Cooperation Among Contractors
- Bouncing Cheques Issued by Title Companies Lead to Foreclosures
- Increase in Foreclosures Prompting Class Action Legal Suits
- Avoiding Foreclosures by Walking Away From Loans are not Without Problems
- Foreclosure Assistance Being Taken on Tour by Housing Advocate
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