Many people have been of the opinion that racism is the biggest problem facing America. The bold prediction has been that the rising income inequality will be the most crucial political battleground for the next few decades (Cal et al). Surprisingly, most of the American problems have resulted from income inequality and this problem has been there for so long. Economists have assumed the income inequality problem for so long despite its consequences. The gap between the rich and the poor has been increasing on a daily basis. The rich are spending more simply because they have more cash to spend. Their spending has been shifting the frame of reference that shapes the life of those who are in lower economic class, travelling in overlapping social circles. The middle class also spends more, shifting the reference frame for the group just below it, and the income ladder continues this way up to those living below the poverty line. Such cascades have made it more expensive for middle income earners to achieve basic financial goals.
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