One of my problems with economic analyses of society is that they tend view society, naturally, through an economic lens. Although almost everybody could find some good application of more cash, in my experience most people do not make the pursuit of cash their only goal in life, or even their primary goal, beyond providing decent living conditions for one's family. One must assume that people construct the life they want, or do their best to attempt to.
If people want more money, they can find a second job, or start a business. That's the American Way.
One thing large economic inequality can breed, however is envy and resentment. Envy is bred from an ignorant view of wealth as a zero-sum game. It also happens to be a Deadly Sin.
The problem is this: You create your Marxist materialistically-egalitarian utopia or dystopia or whatever, with only your Dear Leaders getting the limos and caviar and palaces, and then a Steve Jobs or Lebron James or Picasso or Steven King or Spielberg or Bob Dylan or Bill Gross appears, and everybody wants to buy their work. What then? Their work is not a commodity because they have a talent and make the effort to produce unique creations that people want to spend money on, and they expect to be compensated for it.
I want all Americans to be wealthy and Americans are, compared to the rest of the world. I am not in the .01%, or even in the 1%. I am in the 5-10% I suspect, and, while I believe I am especially good at the work I produce, it's basically a commodity. We have a comfortable life, but not so cushioned that I could stop working even if I wanted to. Which I do not.
Harvard Prof. Mankiw has a good essay on the topic: Defending the One Percent
