On the weekends, Triumph and I go for very long walks all around Santa Fe. From our house in the South Capital neighborhood, we mosey to the far end of Canyon Road, around the Plaza area, and down the Railyard Trail. Often I take the opportunity to listen to some of my favorite podcasts: a baseball podcast or two, sure, but also Planet Money from NPR, and On Investing from Charles Schwab, for example.
This past weekend, though, I listened to an excellent episode of Pitchfork Economics, a podcast from Civic Action. In last week’s episode, they spoke to Carter Price, a mathematician and policy analyst with the RAND Corporation, one of the world’s leading “nonprofit, nonpartisan research organizations”. They talked for the better part of an hour about the growing economic inequality that we have seen in America over the last 50 years or so — and the impact it has had on the incomes of the bottom 90% of Americans, on the economy’s overall growth rate, and on our national deficits and debt. Their key point and question: “Over the last 50 years, nearly $79 trillion that could have gone to the bottom 90% … didn’t. Where did it go — and what did that cost you?”
From the end of WWII through the mid-1970s, the US economy grew at a remarkable clip, and overall economic inequality declined: “The middle class swelled, as did GDP and productivity. The US underwent its own golden age of economic growth. This growth was distributed fairly evenly across the economic classes”. But in the 1970s, as oil shocks and “stagflation” pushed politicians to consider “neo-liberal” economic policies like those espoused later by Ronald Reagan and Margaret Thatcher, that era of shared prosperity came to a screeching halt. Economic inequality has increased dramatically since then.
In a remarkable study from 2020, Carter Price and co-author Kathryn Edwards, an economist for RAND Corporation, noted that “income has been increasingly concentrated at the top of the distribution since the middle of the 20th century” — and asked what impact that had on the aggregate incomes for those in the bottom 90% of households since 1975. And in a follow-up study published in 2025, Price updated the numbers through 2023:
- If, in 2023, we still had the same income distribution that we had in 1975, that bottom 90% of working households would have made an additional $3.9 trillion in income; and
- In 2023 dollars, the cumulative gap between what they actually earned and what they might have would have come to a total of $79 trillion.
According to Price, that money instead primarily ended up in the hands primarily of the top 1% of American income earners.
In the podcast episode (not in these published papers), Price also argued that a less-unequal economic system would result / would have resulted in greater economic growth through that 50-year period. This seems intuitive, and is supported by some reputable research, though not by all of it.
And in what might be something of a surprise, in a 2025 study Price and his co-authors demonstrate that the level of our national debt (measured by the Federal debt-to-GDP ratio) dropped from a post-war high of 103% in 1946 to only 23% in 1974 — but it’s jumped back up to around 100% now, and is projected to rise to well over 150% in the next 20 years. But, Price argues, if income inequality had not increased so dramatically in the last 50 years, the national debt would also not have increased so dramatically, and we would not be facing such stark economic and social choices.
I believe that the stagflation crisis of the early 1970s, the rise of neo-liberal economics, and the domination of Reagan and Thatcher through the 70s and 80s all made a huge difference in the way the world has turned out since the mid-70s. (Link for graph.) This research from the RAND Corporation seems to confirm that thought. Their strict non-partisan stance prevents them from taking a stand on the causes of the problem, but I think that the conclusion we should draw is clear.
In order to move the US — and the rest of the world — forward from our current economic mess, we need to address the core problem of economic inequality. Dramatic changes to tax codes, new policies favoring economic redistribution, and long-term projects designed to promote the well-being of the worst-off are vital to an inclusive economics for the rest of this century.
