One conclusive hallmark of a failed state is that the crooks are inside the government, using government to protect and to advance their private interests.

Another conclusive hallmark is rising income inequality as the insiders manipulate economic policy for their enrichment at the expense of everyone else.

Income inequality in the US is now the most extreme of all countries. The 2008 OECD report, "Income Distribution and Poverty in OECD Countries," concludes that the US is the country with the highest inequality and poverty rate across the OECD and that since 2000 nowhere has there been such a stark rise in income inequality as in the US. The OECD finds that in the US the distribution of wealth is even more unequal than the distribution of income.

United Nations Development Program concluded that the US ranked third among states with the worst income inequality, after Hong Kong and Singapore, both city states, not countries, leaving the US as the country with the most inequality in the distribution of income in the world.

The stark increase in US income inequality in the 21st century coincides with the offshoring of US jobs, which enriched executives with "performance bonuses" while impoverishing the middle class, and with the rapid rise of unregulated OTC derivatives, which enriched Wall Street and the financial sector at the expense of everyone else.

A pathetic Greenspan had to admit that the free market ideology on which he had relied turned out to have a flaw.

Is there another country in which in full public view so few so blatantly use government for the enrichment of private interests, with a coterie of "free market" economists available to justify plunder on the grounds that "the market knows best"? A narco-state is bad enough. The US surpasses this horror with its financo-state.
As Brooksley Born says, if nothing is done "it'll happen again."

The crooks control the government.

The OECD report shows that despite the Reagan tax rate reduction, the rate of increase in US income inequality declined during the Reagan years. During the mid-1990s the Gini coefficient (the measure of income inequality) actually fell. Beginning in 2000 with the New Economy (essentially financial fraud and offshoring of US jobs), the Gini coefficient shot up sharply.
Excerpted from Paul Craig Roberts @ Counterpunch