You know wealth inequality is bad when even the ruling elites are concerned.

“The biggest danger right now is whether this dysfunctional economics produces not the wisdom of crowds in democratic governments but creates something that looks more like a raging mob and deforms the way we live,” said INET President Robert Johnson. “Behind the scenes if you’re talking to state leaders right now, they’re scared.”

They may be scared of the blowback, but not so scared as to actually do something about inequality. That would require caring about the 99%, and they aren't going to do that.
According to the Fed, the top 10% now control 77.1% of the nation's wealth.

wealth that is increasingly retained through intergenerational bonds, meaning that wealth is apportioned by accident of birth rather than merit; and (unsurprisingly, given the foregoing), the browner you are, the less you have.

Wealth inequality isn't simply a part of the system we must tolerate.
It has multiple negative consequences, all of which will ultimately undermine the system itself.

Inequality has led to a decline in public trust of institutions, social cohesion, and faith in the political process the report says. "Civic engagement and political participation have declined as economic inequalities have risen. Inequality is also linked to rising support of populism," the report adds.
Citi Research and the Oxford Martin School also confirm a trend recently highlighted in research from the International Monetary Fund. That is, inequality can hurt economic growth, and more unequal countries tend to grow more slowly over time than more equal ones.

In other words, dramatic and increasing wealth inequality leads to a breakdown in trust of public institutions, societal order, and economic growth. Basically everything goes to sh*t.
Which brings us to the questions of why this happens and what can we do about it?
Unlike what many will have you believe, the answers to both questions are already known.

Using a mathematical model devised to mimic a simplified version of the free market, he and colleagues are finding that, without redistribution, wealth becomes increasingly more concentrated, and inequality grows until almost all assets are held by an extremely small percent of people.
“Our work refutes the idea that free markets, by virtually leaving people up to their own devices, will be fair,” he said. “Our model, which is able to explain the form of the actual wealth distribution with remarkable accuracy, also shows that free markets cannot be stable without redistribution mechanisms. The reality is precisely the opposite of what so-called ‘market fundamentalists’ would have us believe.”

Hmmm. Wealth becomes increasingly more concentrated. Where have I heard that before?
Oh, right. Karl Marx proved it 150 years ago, and Thomas Piketty proved it again three years ago.

There is plenty of research that shows why those that fall behind can never catch up.

Other points include that only about one-third of people in the bottom 60% save any of their income and a similar number have retirement savings accounts. These three in five Americans have also seen an increasing rate of premature death and spend an average of four times less on education than those in the top 40%, Dalio wrote. Those without a college education see lower income rates and higher divorce rates.

A more immediate impact of wealth inequality is the working class borrowing money in order to maintain a lifestyle they can no longer afford. This is not sustainable.

A scary little statistic is buried beneath the US economy's apparent stability: Consumer-debt levels are now well above those seen before the Great Recession.
As of June, US households were more than half a trillion dollars deeper in debt than they were a year earlier, according to the latest figures from the Federal Reserve. Total household debt now totals $12.84 trillion — also, incidentally, about two-thirds of gross domestic product.
... Michael Lebowitz, the cofounder of the market-analysis firm 720 Global, says the US economy is already dangerously close to the edge.
"Most consumers, especially those in the bottom 80%, are tapped out," he told Business Insider. "They have borrowed about as much as they can. Servicing this debt will act like a wet towel on economic growth for years to come. Until wages can grow faster than our true costs of inflation, this problem will only worsen."
The International Monetary Fund devotes two chapters of its latest Global Financial Stability Report to the issue of household debt. It finds that, rather intuitively, high debt levels tend to make economic downturns deeper and more prolonged.

Some may say that high debt levels alone will trigger recessions.
Others say it was the regressive way the debt was distributed that cause the crisis.
I say they both are right.

What is interesting is how the ruling institutions are reacting to these trends, and how indifferent they are.
Consider the banks.

Now, though, those businesses are flagging, in part because financial markets have been eerily calm.
So banks are turning more to lending to consumers — especially through credit cards — to pick up some of the slack.
Banks earn money from credit cards in two ways: They take a small cut of each card transaction as a fee, and they typically charge annual interest rates of 15 percent or more on balances that customers don’t pay off at the end of each month.
That business model is increasingly lucrative. Many consumers, their wages stagnant and their costs rising, are growing reliant on credit cards for essential goods and services, including medical and dental care. Across the industry, profits rose in the latest quarter.

Banks are getting the very last drops of blood from the stone.

The other institution is Washington D.C.

The committee’s Republican chairman, Rep. Jeb Hensarling of Texas, sent a letter to Education Secretary Betsy DeVos the other day praising her for cutting ties with the Consumer Financial Protection Bureau, a federal agency charged with safeguarding people from abusive and illegal lending practices.
Hensarling, who has led Congress’ efforts to cripple or eliminate the CFPB on behalf of business interests, said it was “most welcome” that the Education Department would reduce federal oversight of student loans and said he hoped other agencies would follow the department’s example.

Much like climate change, the science is in on wealth inequality, but the ruling elites don't care because they are blinded by greed.
This bus is headed for a cliff.