This post originally appeared on the New Deal 2.0 Blog as part of the Roosevelt Institute's "New Agenda for America."
Today, we have the highest level of income inequality in our nation's recorded history. We must address the structural flaws in our economy that created, and continue to widen, this divide. History teaches that extreme inequality leads to political instability. We cannot assume that we are immune.
In President Obama's words, the middle class is experiencing "the American Dream in reverse." Rising long-term joblessness and the possibility of 13 million foreclosures (more than one in every four American mortgages) create the potential for the former middle class to move from frustration to anger -- an anger sparked by reduced circumstances and the belief that they have been treated unfairly.
With each job loss or foreclosure, another family -- now on a down-ward spiral -- potentially loses its faith in our basic economic system and our basic system of governance. America's ongoing vitality requires that people trust that these systems work, and that our democracy is self-correcting. With rising income inequality, this trust is now at risk.
America has never been a nation of haves and have nots. If the gulf widens, it's hard to imagine that our future will be marked either by a healthy economy or a healthy democracy.
The only other time in our nation's recorded history that income inequality approached current levels was 1928, just before the Great Crash. The New Deal eliminated the excesses of an unsustainable system. It was not easy then, and it will not be easy now. But, it is essential.