1) The document discusses several economic issues facing the United States, including slowing population and economic growth, rising income inequality, and high levels of private wealth. 2) It argues that income inequality in the US has increased sharply since 1980 and now threatens democratic politics. The top 1% earns as much as the bottom 50% and controls most of the country's wealth. 3) Several potential problems are identified if these trends continue, including social instability from a growing sense of unfairness, economic stagnation among the middle and lower classes, and the risk of another financial crisis triggered by over-indebtedness.

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American future economic
conjecture
From Piketty’s view about the American economy, I think
the most likely outcome during the next 20 or 30 years will not
be very good, may be massive bankruptcies, wars and
revolutions. Although we had a period which called Golden
Age, when the income inequality was very low, and the
economic growth stayed in a high rate. However, the 1945-1975
period high-speed economic growth was not normal, it was just
a historical exception. From Michael Lewis’s book Boomerang,
we knew that as recently as 1980s, Ireland was one of the
poorest countries in the world and it became the richest country
in 2007. However, when the financial crisis occurred in 2007,
the Irish economy suffered a devastating blow. The strength of
Ireland had not recovered yet.
There were many serious problems we are face right now.
Economic growth is usually driven by population growth and
production efficiency. However, both of these conditions have
slowed in the United States over the past decade. The newest
data from National Center for Health Statistics shows that the
number of American babies born in 2017 fell by 2% from 2016
to only 3.85 million. The birth rate has been falling for three
consecutive years and reached the lowest point in the recent 30
years. The Fed raised its short-term economic growth forecast
to 2.7% in March this year and 2.4% in 2019, in part because of
the government's tax cuts. However, the Fed’s longer annual
growth forecast is 1.8%, reflecting the resistance of the
population. In addition to the reduction in labor, an aging
society will delay economic growth as fewer and fewer people
buy homes, cars and other expensive items. As people age and

2. prepare for retirement, savings usually increase. Piketty’s the
second fundamental law of capitalism β = s / g explain this
situation. In the long run, the capital/income ratio β is related in
a simple and transparent way to the savings rate s and the
growth rate g. Based on the historical events, the capital/income
ratio β would be high when the country faced the financial
problems. For example, in 1990s, Japan faced a housing bubble,
the capital/income ratio reached to 700%. Japanese people lost
confident the government and saved their money as much as
they could, the Japanese economy almost destroyed. The
capital/income ratio for America today is about 500%, which is
closed to the point in the World War I. Something must be
happened so it can change this situation.
The income inequality is another serious social and
economic problem. Inequality reached its lowest ebb in the
United States between 1950 and 1980: the top decile of the
income hierarchy claimed 30 to 35 percent of US national
income. However, income inequality exploded in the United
States since 1980. In the U.S. the top 10% people own about
50% of total income in 2010. The top 1% even have 20% of the
total income. For the bottom 50% American people, they only
have 20%. So, this means, the top 1% people have the same
income as bottom 50% people have. This gap may become
larger with the time pass. The top 10% people may have more
than 60% of the total income in 2030. Piketty believes that, “the
increase of inequality in the United States contributed to the
nation’s financial instability.” The share of top 10 percent
peaked twice in the past century. One was in 1928 (before the
Great Depression), another one was in 2007 (before the
financial crisis). One main consequence of the increasing
inequality was virtual stagnation of the purchasing power of the
lower and middle classes in the United States, which inevitably
made it more likely that modest households would take on debt.
Especially, for some banks and financial intermediaries which
wanted to earn good yields on the enormous savings injected
into the system by the well-to-do offered credit on increasingly

3. generous terms. If the increase in inequality had been
accompanied by exceptionally strong growth of the US
economy, things would look quite different. Unfortunately, this
was not the case: the economy grew rather more slowly than in
previous decades, so that the increase in inequality led to
virtual stagnation of low and medium incomes.
One of the main reason we focus on the income inequality is
that the extremely inequality will threat the democratic politics.
If most people in the society want to be benefited by the
inheritance rather than fight by themselves. Then, more and
more people will be disappointment about the situation, even
result in the revolution. For example, during the war period, the
compression of the inheritance flow owing to the shocks was
nearly twice as great as the decrease in private wealth. And for
people who were born in that period mostly (may not be true)
worked very hard to accumulate the wealth. However, for
younger people who was born after 1970s, inheritance will once
again play an important role in their lives. The majority of the
society want to have a better life by the inheritance. American
people are living under a democratic society now which means,
everyone have the equal right. However, the living conditions
for each person are different. This causes a sharp contrast.
According to the Forbe’s 2018. We saw that Walton family who
were the owner of Walmart have several people are the richest
people in the world. They are not the founder of Walmart, but
they enjoyed the inheritance from Sam Walton, and have the
highest living conditions. Obviously, most people are envying
these people. Also, in the long run, the rate of return of capital
is greater than the growth rate. Compared to the small capitalist,
the bigger capitalist has higher rate of return on capital. The
bigger size of the capital, the more chance to invest. Also, the
more wealth they have mean they can endure higher risk which
always lead to a higher payback. This situation will make the
rich people richer, the poor people poorer.
Unfortunately, the society still not find a good solution to
solve these problems effectively. We can only see the inequality

4. in the U.S. become larger and larger. The country is in a huge
fiscal deficit. The budget for national defense stays very high
compared to the education and public wealth. The American
government should more focus on the domestic problems
instead of showing muscle to other countries.
Citation:
Piketty, Thomas, and Arthur Goldhammer. Capital in the
Twenty-First Century. The Belknap Press of Harvard University
Press, 2017.
Lewis, Michael. BOOMERANG: Travels in the New Third
World. W.W. NORTON & Company, 2012.
“Household Income in the U.S. - Shares of Quintiles |
Timeline.” Statista, www.statista.com/statistics/203247/shares-
of-household-income-of-quintiles-in-the-us/.
CBS News. “Jeff Bezos Moves to Top Spot on Forbes' Annual
Billionaires List.” CBS News, CBS Interactive, 6 Mar. 2018,
www.cbsnews.com/news/forbes-2018-list-of-worlds-
billionaires/.