Posted 1 year ago on Nov. 11, 2011, 4:56 p.m. EST by puff6962
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The Great Compression From Wikipedia, the free encyclopedia
The Great Compression refers to an economic event in the United States in the early 1940s in which the economic inequality as shown by wealth distribution and income distribution between the rich and poor became much smaller than it had been in preceding time periods. The economist Emmanuel Saez has used income tax analysis to show that the compression ended in the 1970s and has now changed in the United States, Canada, and England into greater income inequality metrics and wealth concentration . In France and Japan, who have maintained progressive taxation this end has not happened. In Switzerland, where progressive taxation was never implemented, it never occurred. Economist Paul Krugman gives credit to the policies of President Franklin Roosevelt as having deliberately caused the event and points out that its effects have lasted up until the 1980s. Decades of conservative economic policies beginning in the 1980s and beyond have slowly resulted in a re-emergence of the wealth inequality that had existed prior to the great compression. The end of the great compression has been called the great divergence in a Slate article by Timothy Noah.
To read about the dramatic changes in income distributions since the 1970's, read the article in Slate titled "The United States of Inequality."