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US has regressed to developing nation status, MIT economist warns

‘America is regressing to have the economic and political structure of a developing nation, an MIT economist has warned.

 Peter Temin says the world’s’ largest economy has roads and bridges that look more like those in Thailand and Venezuela than those in parts of Europe.

In his new book, “The Vanishing Middle Class”, reviewed by the Institute for New Economic Thinking, Mr Temin says the fracture of US society is leading the middle class to disappear.

The economist describes a two-track economy with on the one hand 20 per cent of the population that is educated and enjoys good jobs and supportive social networks.

On the other hand, the remaining 80 per cent, he said, are part of the US’ low-wage sector, where the world of possibility has shrunk and people are burdened with debts and anxious about job security.

Mr Temin used a model, which was created by Nobel Prize winner Arthur Lewis and designed to understand developing nations, to describe how far inequalities have progressed in the US.

When applied to the US, Mr Temin said that “the Lewis model actually works”. ‘ (The Independent)