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To numerous US citizens, the economic climate over the last half-decade has been tough. Expenses have escalated while pay remains stagnant. Elevated mortgage rates have made purchasing property a bleak prospect. The rate of unemployment has been slowly rising.

Most people have reported they're putting off major life decisions, including raising children or switching jobs, because of economic uncertainty. But for a select few of people, the past five-year period couldn't have been more prosperous.

Fortune Expansion

The fortune of the world's billionaires grew 54% in 2020, at the height of the pandemic. And even throughout all the financial uncertainty, the stock market has only kept rising. This growth has mostly helped just a tiny percentage of Americans: 10% of the population owns 93% of stock market wealth.

Despite the imbalance as this allocation seems, it's the system working as it is existing today.

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

Understanding Wealth Tiers

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

To update the concept, Collins classifies these "wealth villages" based on income levels:

• At the base level, Affluent Town, are the 10 million Americans who have a annual salary of at least $110,000 and an total assets 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 lifestyles vary dramatically.

"You could be in Lower Richistan, and you're still sitting in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're flying in 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 collapses – 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 most affluent. The control that this group has far surpasses those who are simply wealthy, let alone the typical citizen who doesn't reside in "Richistan" at all.

But Collins thinks the activist mantra "abolish billionaires" doesn't capture the real problem and has a "suggestion of eradication" to it.

"It's the distinction between private conduct and a framework of policies," 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 breaks it down into four parts: acquiring fortune, defending the wealth, policy control and extreme wealth removal.

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

But getting to Billionaireville requires substantial commitment and planning in those next three steps. Collins describes what he calls the "wealth defense industry": the tax lawyers, accountants and wealth managers who use their knowledge to ensure that the super rich are being calculated about their taxes.

"Wealth defense professionals use a extensive selection of tools such as trusts, offshore bank accounts, secret corporations, philanthropic entities and other methods to hold assets," he writes.

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 "extreme removal" to describe how the wealthy have come to touch nearly every single part of an Americans' routine activities largely through investment firms, which allows wealthy individuals to support private companies.

"Private equity is looking for those sectors of the economy where they can increase profits 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 stored 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 boost their expenses."

Tangible Effects

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 meaningful wage increases. And Collins said the pain and frustration of this kind of society can lead to serious unrest.

"The most powerful affluent rulers understand people are being left behind [and] are financially struggling," Collins said, adding that right-leaning leaders have been good at tapping into a potent "false common-man appeal".

Political Reality

The paradox, Collins points out in his book, is that government officials have appointed a string of billionaires to cabinet positions. Along with tech billionaires who had short yet influential roles overseeing massive cuts to the federal workforce, other crucial appointments for commerce, treasury, education and the interior are also all billionaires.

This government structure, along with help from congressional allies, helped pass significant fiscal policies, which will make permanent tax cuts for the wealthy and corporations.

Potential Changes

While political parties continue to argue that immigration and poor economic deals are the source of everyone's economic problems, "the challenge is: Will the other major party, which has also been influenced by the billionaires and big money, be able to effectively tackle the underlying harms?" Collins said.

Liberal leaders, he argues, know what policies are needed to "reverse the updraft of wealth", including significant reforms to the tax system, boosting the minimum wage and strengthening unions.

"It was so, so close, and the law really did represent the will of the bulk of people who really want lawmakers to solve some of these critical challenges," Collins said. "Wealthy influence is not about building so much as stopping. It's easier to block than it is to make something significant occur, but the muscle memory is there. We know what that looks like."

Collins is positive that there can be change, but said it would require sustained political momentum.

"It may be quickly that the tide turns, and then it really is about preserving a continuous public campaign to make progress on this severe disparity we're living in," he said. "We can address this. It is addressable."