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Among countless US citizens, the economy over the last half-decade has been challenging. Costs have skyrocketed while pay remains unchanged. Elevated mortgage rates have made purchasing property a grim prospect. The unemployment rate has been slowly rising.

Most people have stated they're postponing major life decisions, including raising children or moving to new employment, because of economic uncertainty. But for a very small group of people, the recent half-decade couldn't have been more successful.

The Billionaire Boom

The wealth of the world's billionaires expanded 54% in 2020, at the peak of the pandemic. And even throughout all the market volatility, the stock market has only kept rising. This increase has primarily advantaged just a limited group of Americans: 10% of the population holds 93% of stock market wealth.

Despite the imbalance as this allocation seems, it's the economic framework working as it is currently designed.

"The wealthy have acquired their jets, they've purchased their multiple houses and mansions, but now they're buying senators and media outlets," explained economic inequality analyst Chuck Collins. "We're now stepping into this other chapter of maximum resource removal where the wealthy are exploiting the system of inequality."

Analyzing Income Brackets

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

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

• At the base level, Affluent Town, are the 10 million Americans who have a family earnings 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 experiences vary dramatically.

"You could be in Lower Richistan, and you're still sitting in the coach section of a commercial plane," Collins said. "Whereas in Upper Richistan, you're flying in a private jet. That's a really distinct lifestyle. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system fails – you're set."

Ultra-Wealth Impact

The highest hill in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's richest. The power that this group has greatly exceeds those who are simply well-off, let alone the average American who doesn't live in "Richistan" at all.

But Collins thinks the activist mantra "end extreme wealth" fails to address the core issue and has a "suggestion of eradication" to it.

"It's the distinction between individual behaviors and a framework of policies," Collins explained. "We should be concerned about an economic system that funnels so much wealth upward to the billionaires."

Fortune Building Strategies

To understand how wealth at the billionaire level works, Collins divides it into four parts: accumulating assets, protecting assets, political capture and hyper-extraction.

When many Americans think about wealth, they usually think solely about the first step, Collins said. People can create a modest amount of wealth through establishing or managing 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 "asset protection sector": the tax lawyers, accountants and wealth managers who use their skills to ensure that the super rich are being strategic about their taxes.

"Wealth defense professionals use a extensive selection of tools such as financial instruments, foreign deposits, secret corporations, philanthropic entities and other mechanisms to hold assets," he details.

Political Influence and Hyper-Extraction

To advance a wealth defense strategy, a family needs political support. Wealth of over $40m translates to political power, Collins says, and can be used to protect assets and protect its accumulation.

The ultimate step is a different kind of wealth accumulation, one that Collins calls "maximum taking" to describe how the wealthy have come to influence nearly every single part of an Americans' daily existence largely through investment firms, which allows wealthy individuals to fund private companies.

"Private equity is looking for those areas of the economy where they can increase profits a little bit harder," Collins said. "One thing I don't think people understand 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 squeeze money out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can boost their expenses."

The Real Consequences

The effects of this inequality go beyond the wealth getting wealthier. It's about people spending additional funds 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 profound dissatisfaction.

"The most powerful affluent rulers understand people are being left behind [and] are monetarily hurting," Collins said, adding that Republicans have been good at connecting with a potent "false common-man appeal".

Political Reality

The irony, Collins points out in his book, is that government officials have appointed a string of billionaires to administrative posts. Along with wealthy entrepreneurs who had temporary but significant roles overseeing massive cuts to the federal workforce, other crucial appointments for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from political partners, helped pass huge tax bills, which will make lasting reductions for the wealthy and corporations.

Future Solutions

While political parties continue to argue that foreign entry and poor economic deals are the source of everyone's economic problems, "the question becomes: Will the alternative political group, which has also been controlled by the billionaires and big money, be able to effectively tackle the underlying harms?" Collins said.

Left-leaning officials, he argues, know what policies are needed to "alter economic flow", including significant reforms to the tax system, boosting the minimum wage and strengthening unions.

"It was so, so close, and the law really did reflect the will of the most of people who really want lawmakers to solve some of these urgent problems," Collins said. "Oligarchic power is not about developing so much as blocking. 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 continuous government action.

"It may be before we know it that the tide turns, and then it really is about preserving a sustained really popular movement to make progress on this severe disparity we're living in," he said. "We can fix this. It is fixable."