A Reuters analysis, “In debt row, hints of emerging-economy crisis”, highlights the point that the United States’ current debt ceiling stalemate, brought on by highly factionalized political camps, is akin to crises faced by emerging economies. The analysis itself is worth a read, although one quote, from Argentine President Cristina Fernandez de Kirchner, stands out:
“When did the American dream become a nightmare?”
“What’s pushing the wealth of whites is the rebound in the stock market and corporate savings, while younger Hispanics and African-Americans who bought homes in the last decade – because that was the American dream – are seeing big declines, said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in income inequality.”
The developed world often scolds Latin America for having some of the world’s largest disparities between rich and poor, yet within the United States, the wealth gap has been growing, at least according to some analysis.
The data in Latin America are indeed disturbing. Gini coefficients, the measure of income distribution as determined by the United Nations, consistently ranks Latin America as the world’s most uneven region. Development experts consistently point to this discrepancy as one of the largest problems facing the region, claiming that it is partly responsible for high levels of urban crime and a risk to internal security.
The deadlock here in the United States has me thinking about this (and I am not the only one). Regardless of this week’s outcome, narrowing this gap is something the United States must address.