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Among countless US citizens, the economic climate over the recent five-year span has been challenging. Costs have soared while wages remains flat. Elevated mortgage rates have made purchasing property a bleak prospect. The unemployment rate has been slowly rising.

Many Americans have reported they're putting off major life decisions, including starting a family 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.

Wealth Explosion

The assets of the world's billionaires expanded 54% in 2020, at the climax of the pandemic. And even amid all the financial uncertainty, the stock market has only kept rising. This increase has largely benefited just a small number of Americans: 10% of the population holds 93% of stock market wealth.

As uneven as this division seems, it's the financial structure working as it is existing today.

"The wealthy have purchased their jets, they've acquired their multiple houses and mansions, but now they're buying senators and media outlets," commented economic inequality analyst Chuck Collins. "We're now entering this other chapter of hyper-extraction where the wealthy are taking advantage of the system of inequality."

Understanding Wealth Tiers

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

To update the concept, Collins categorizes these "economic communities" 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 net worth of over $1.5m.
• The villages get more select 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.

Altogether, the residents of these villages make up 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 traveling in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're traveling via a private jet. That's a really different cultural experience. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system collapses – you're set."

The Billionaireville Effect

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

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

"It's the distinction between private conduct and a structure of regulations," 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 divides it into four parts: getting the wealth, protecting assets, government influence and hyper-extraction.

When many Americans think about wealth, they usually think only about the first step, Collins said. People can create a limited sum of wealth through starting or running a successful business, which could get them residency 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 expertise to ensure that the super rich are being deliberate about their taxes.

"Wealth defense professionals use a broad range of tools such as financial instruments, offshore bank accounts, secret corporations, philanthropic entities and other methods to hold assets," he details.

Political Influence and Hyper-Extraction

To further a wealth defense strategy, a family needs political support. Wealth of over $40m translates to political power, Collins says, and can be used to secure fortune and ensure continued growth.

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

"Private equity is searching for those sectors of the economy where they can extract value 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 basically shift and say, 'Where else can we generate returns out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can raise their rents."

The Real Consequences

The consequences of this inequality go beyond the wealth getting wealthier. It's about people paying more for their healthcare, rent and vet bills without seeing any significant salary growth. And Collins said the pain and frustration of this kind of society can lead to serious unrest.

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

Government Truth

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

This political landscape, along with help from political partners, helped pass huge tax bills, which will make permanent tax cuts for the wealthy and corporations.

Potential Changes

While government groups continue to argue that border policies and bad trade agreements are the source of everyone's economic problems, "the challenge is: Will the alternative political group, which has also been captured by the billionaires and big money, be able to meaningfully address 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, boosting the minimum wage and empowering worker groups.

"It was so, so close, and the bill really did reflect the will of the most of people who really want lawmakers to solve some of these urgent problems," Collins said. "Elite control is not about building so much as blocking. It's easier to block than it is to make something significant occur, but the historical precedent is there. We know what that looks like."

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

"It may be before we know it that the tide turns, and then it really is about sustaining a continuous public campaign to make progress on this extreme inequality we're living in," he said. "We can fix this. It is solvable."