In the midst of divisive debates around the country centering on issues such as illegal immigration, the war on terrorism, same-sex marriage, etc., one of the issues that is easily overlooked is wealth inequality -- the growing gap between the very rich and the average citizen, let alone the poor. The Federal Reserve just came out with a new report that details just how serious the problem is:

This report and other similar studies emphasize that this wealth inequality is growing and is becoming a permanent part of our society. . . . The total net worth of all Americans in 1989 was $25 trillion (in 2004 dollars). Of that amount, the top 1 percent owned 30 percent, or $7.775 trillion. The bottom half owned 3 percent of the total, or $763 billion.

Fifteen years later, in 2004, the total wealth of all Americans had doubled to $50.25 trillion. The top 1 percent of the population now owns 33.4 percent of the total, or $16.774 trillion. At the same time, the total wealth owned by the bottom 50 percent increased to $1.278 trillion, but its percentage of total wealth declined from 3 percent to 2.5 percent in the same time period. . . .

The SCF reports that the top 5 percent of the population owns 85 percent of closely held business assets in the country, 79 percent of the publicly traded stocks and 70 percent of mutual funds. . . . the bottom 50 percent own less than 1 percent of business assets, stocks and mutual funds.

The article, written by a Professor at Hofstra University for The Nation magazine, argues that the main reason wealth inequality has increased in recent decades is because of Republican administrations’ tax cuts for the wealthy and corporations that have made it easier for the nation’s upper class to concentrate more wealth.

The problem has become so immense that no less than Alan Greenspan, former Chairman of the Federal Reserve Board, has publicly proclaimed that rising wealth inequality threatens to destabilize democratic capitalism as we know it.

Sadly, most Americans know nothing about this increasing wealth gap. This is ironic given that the average American families has probably noticed that they are working harder than ever and barely making any progress in terms of saving for retirement, saving for college, keeping up with rising costs of living, getting out of debt, etc.

If Americans would stop for a minute to ask why is this the case, they might begin to see that it is because the rich are increasingly taking a larger share of the pie, while the rest of us fight over the crumbs left over. Ahhh, capitalism at its best -- or worse, depending on how you look at it.