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After shock: Is america ready for social cohesion? - Essay Example
Author : hackettandreann
Pages 6 (1506 words)
In his book,Aftershock,Robert Reich contends that the primary cause of America’s financial turmoil is the economic inequality that characterizes the contemporary American Society.He recommends that an apt remedy would be to strive for economic equality. …
In his book, Aftershock, Robert Reich contends that the primary cause of America’s financial turmoil is the economic inequality that characterizes the contemporary American Society. He recommends that an apt remedy would be to strive for economic equality. Equitable wealth distribution where the middle and lower class have a bigger share of the national cake would result in increased spending, which would in turn stimulate the economy. This paper will seek to summarize and review Reich’s recommendations as well as draw a level of inference with regards to whether or not American society is ready for a greater degree of social cohesion. Reich contends that it is in order to enact measures that would result in increased equitability in the distribution of economic resources. To achieve this, he asserts for example that a reverse income tax mechanism could be adopted, whereby the rich are taxed more while those earning less have their income supplemented by the government (Reich). This would aim to increase the amount of disposable income available to those in the middle class, increasing their purchasing power and spending capacity, thereby stimulating the economy. Another proposal set out by Reich is to have corporations pay a severance tax of 75% of an employees annual pay when an employee is laid off. In doing so, the aim would be for the taxman to reap from the increasing layoffs by corporations as they seek to outsource labor. Ostensibly, however, the move is aimed at deterring layoffs, thereby protecting the interests of workers. ...