Analysis of the Distribution of InCome In the Usa

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Analysis of the Distribution of Income in the USA

Abstract

America is among the sovereign states in the world. It has a very staple economy which is able to supply her large population with income and employment and at the same time to migrants. It also gives grants to borrowing countries. America mostly relies on the taxes it imposes on the workers, industries and private sectors. It is however clear that there is a problem in the distribution of income in her various sectors, counties and even to borrowers abroad. It calls for proper mechanisms to be underplayed to correct the situation. The paper critically analyzes the money circulation in the USA and the resulting challenges in distribution of income. It should also be noted that the inequality in income distribution causes a negative effect on the health sector. The health of the Americans especially in the Latin American has been greatly affected by inadequate income allocation in these countries. Remember, the more the health of the society deteriorates the backward the economy of that country lags. The research also shows that the disequilibrium in the economy can be brought to balance or equilibrium by various other methods. Such methods include improved education, government policies to boost employment to full employment, cultural interactions, and improved technology among other devised techniques.

INTRODUCTION

Imagine a society or a nation with perfect economic equality. Maybe by a sheer coincidence, the supply and demand for different types of labour produce an equilibrium at which wages are equal to income. As a result, no one minds about the gap between the rich and poor, and no one discusses to what degree public policy should make income redistribution a priority (Mankiw p. 1). It is an important aspect to be considered to narrow the gap of social classes. Because people earn the value of their marginal product, everyone is fully incentivized to provide the efficient amount of effort. The general public still needs the government to provide public goods, such as national defence, but those are financed with a lump-sum tax (Mankiw p. 1). The society needs a mechanism to employ such a scenario with no imperfections in revenue collection and allocation; not the case in America.

Effect of income distribution on health

The link between low income and poor health is highly consistent when individuals are com- pared within a country, but there is little association between low income and health status when compared across countries. Countries with higher average incomes do not invariably have better overall health status.^[1] Health of individuals links them to doing many things in the social, political and economic world. A health population will aid in the development of the economy. It will work efficiently to create more employment to other and to earn more wages. In thinking about how material, cultural, behavioural and psychosocial factors might be associated with income inequality and health status. Generally, it is important to understand that some of these ‘categories of explanation’ are linked, as indeed they are at the individual level (Lynch and Kaplan p. 311). The tables (1 and 2) show the effects of disequilibrium in distribution of income on health.