It’s bad enough that the top 1 percent — the super-rich — have been waging a class war against the bottom 99 percent for decades. What’s even worse is that the income inequality they have fought for isn’t even in their own best interests over the long term. New research for the International Monetary Fund shows that sustained economic growth requires a relatively equal distribution of wealth:

The difference between countries that can sustain rapid growth for many years or even decades and the many others that see growth spurts fade quickly may be the level of inequality. Countries may find that improving equality may also improve efficiency, understood as more sustainable long-run growth.

…taking a historical perspective, the increase in U.S. income inequality in recent decades is strikingly similar to the increase that occurred in the 1920s. In both cases there was a boom in the financial sector, poor people borrowed a lot, and a huge financial crisis ensued. [Finance and Development, via Wonkblog]

These findings reinforce my opinion that two of the best things we can do for our economy are increasing taxes on the super-rich to fund investment in our infrastructure and finding ways to increase wages for workers. These policies would result in higher levels of consumer demand, more efficient businesses, and greater income equality — all things that will bring us back to the path of sustained growth.