Econ103 Final Paper

INTRODUCTION:

The article I found describes the issue that the middle class in America is no longer the world’s richest, and compares this issue with other advanced countries. It states that in recent years, middle class families in America were receiving meager raised income than counterparts were around the world, and most of American families were receiving unequally income. Those income data were analyzed by LIS, a group that maintains the Luxembourg Income Study Databases, and by The Upshot, a New York Times website covering policy and politics, and also reviewed by outside-academic economists. The United States used to be a leader of after-tax middle-class income country among all the developed states, but now the other countries, such as Canada, has more income of middle-class citizen than America has. Although the United States economy growth is strong in the world, only a small number of top-class families can benefit from it. In other words, most of American families did not reach the average income level among the advanced countries. This article claims three primary factors that drive the income grow slowly in the United States: slowly education attachment, unequally distribution in companies, and unaggressive government policies. Increasing income will push aggregate demand, and then will improve aggregate output as well as Gross Domestic Products. As Kathy, an ordinary salariat in this article, said, “people need to start in between to work their way up.” In macroeconomic topic, we also learned that income taxes are an important part of government aggregate expenditure. When GDP rises quickly, the tax increases and this will decrease disposable income, but that is not fare to most of families in America, because most of citizens cannot catch up the fast growing economy, and this policy would cause citizens’ discontent of government.

THEORY REVIEW AND ANALYSIS:

The LIS maintained that per capita GDP could not capture the distribution of income,...