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Among countless individuals in the United States, the economy over the past five years has been difficult. Expenses have skyrocketed while wages remains unchanged. High mortgage rates have made buying a home a grim prospect. The rate of unemployment has been creeping up.

Most people have stated they're delaying major life decisions, including having kids or moving to new employment, because of financial volatility. But for a very small group of people, the past five-year period couldn't have been more prosperous.

The Billionaire Boom

The fortune of the world's billionaires expanded 54% in 2020, at the climax of the pandemic. And even amid all the economic instability, the stock market has only kept rising. This increase has primarily advantaged just a tiny percentage of Americans: 10% of the population controls 93% of stock market wealth.

Despite the imbalance as this allocation seems, it's the system working as it is presently configured.

"Affluent individuals have purchased their jets, they've bought their multiple houses and mansions, but now they're acquiring senators and media outlets," stated wealth disparity expert Chuck Collins. "We're now stepping into this other chapter of extreme wealth extraction where the wealthy are preying on the system of inequality."

Understanding Wealth Tiers

To help others grasp what exactly it means to be "affluent" in the US, Collins utilizes a concept from journalist Robert Frank who, in a 2007 book on the rich, envisioned the different levels of wealth as "Affluencia" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To modernize the concept, Collins categorizes these "wealth villages" based on income levels:

• At the lowest tier, Affluent Town, are the 10 million Americans who have a household income of at least $110,000 and an overall wealth of over $1.5m.
• The villages get more restricted as wealth goes up: Lower Richistan has 2.6 million households who have wealth between $6m and $13m.
• Middle Richistan has 1.3 million households who have assets worth an average of $37m.
• Upper Richistan, made up of 130,000 Americans (roughly the size of a small city) has between $60m to $1bn in wealth.

In total, the residents of these villages comprise the top 10% of the wealth income distribution, about 14 million Americans altogether, though their circumstances vary dramatically.

"You could be in Lower Richistan, and you're still sitting in the coach section of a commercial plane," Collins explained. "Whereas in Upper Richistan, you're traveling via a private jet. That's a really separate reality. You fly private, you have no stakes in the commercial aviation system. You don't care if the whole system shuts down – you're set."

Ultra-Wealth Impact

The summit in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's wealthiest. The control that this group has greatly exceeds those who are simply affluent, let alone the ordinary person who doesn't live in "Richistan" at all.

But Collins thinks the political catchphrase "end extreme wealth" fails to address the core issue and has a "hint of elimination" to it.

"It's the difference between personal actions and a system of rules," Collins commented. "We should be focused on an economic system that channels so much wealth upward to the billionaires."

Fortune Building Strategies

To understand how wealth at the billionaire level works, Collins separates it into four parts: acquiring fortune, defending the wealth, government influence and hyper-extraction.

When many Americans think about wealth, they usually think solely about the first step, Collins said. People can create a reasonable quantity of wealth through starting or running a successful business, which could get them residency in Affluent Town.

But getting to Billionaireville requires significant resources and strategy in those next three steps. Collins describes what he calls the "asset protection sector": the tax lawyers, accountants and wealth managers who use their expertise to ensure that the super rich are being deliberate about their taxes.

"Wealth defense professionals use a extensive selection of tools such as legal entities, international accounts, undisclosed businesses, non-profit organizations and other mechanisms to hold assets," he explains.

Government Power and Extreme Wealth Removal

To enhance a wealth defense strategy, a family needs policy assistance. Wealth of over $40m converts to political power, Collins says, and can be used to protect assets and maintain expansion.

The ultimate step is a different kind of wealth accumulation, one that Collins calls "maximum taking" to describe how the wealthy have come to touch nearly every single part of an Americans' routine activities largely through private equity, which allows wealthy individuals to invest in private companies.

"Private equity is seeking those areas of the economy where they can squeeze things a little bit harder," Collins said. "One thing I don't think people realize is these billionaire private-equity funds are what happens when so much wealth is accumulated in so few hands, and they can kind of turn around and say, 'Where else can we extract profits out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can raise their rents."

Actual Impacts

The results of this inequality go beyond the wealth getting wealthier. It's about people facing higher costs for their healthcare, rent and vet bills without seeing any significant salary growth. And Collins said the hardship and discontent of this kind of society can lead to serious unrest.

"The most powerful affluent rulers understand people are being excluded [and] are financially struggling," Collins said, adding that right-leaning leaders have been good at tapping into a potent "fake grassroots movement".

Government Truth

The contradiction, Collins points out in his book, is that political leaders have appointed a succession of billionaires to government roles. Along with affluent innovators who had short yet influential roles overseeing substantial reductions to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from congressional allies, helped pass huge tax bills, which will make permanent tax cuts for the wealthy and corporations.

Future Solutions

While political parties continue to argue that foreign entry and unfavorable commercial treaties are the source of everyone's economic problems, "the challenge is: Will the other major party, which has also been controlled by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

Liberal leaders, he argues, know what policies are needed to "change wealth distribution", including deep changes to the tax system, raising the minimum wage and supporting labor organizations.

"It was so, so close, and the bill really did represent the will of the bulk of people who really want lawmakers to fix some of these critical challenges," Collins said. "Wealthy influence is not about creating so much as stopping. It's easier to block than it is to make something meaningful happen, but the historical precedent is there. We know what that looks like."

Collins is positive that there can be change, but said it would require ongoing legislative effort.

"It may be sooner than expected that the pendulum swings back, and then it really is about preserving a continuous public campaign to make progress on this extreme inequality we're living in," he said. "We can fix this. It is addressable."