S&P: Wealth Gap is Slowing US Economic Growth

by onepercenttakers · August 6, 2014

WASHINGTON (AP) — Economists have long argued that a rising wealth gap has complicated the U.S. rebound from the Great Recession. Now, an analysis by the rating agency Standard & Poor's lends its weight to the argument: The widening gap between the wealthiest Americans and everyone else has made the economy more prone to boom-bust cycles and slowed the 5-year-old recovery from the recession. Economic disparities appear to be reaching extremes that "need to be watched because they're damaging to growth," said Beth Ann Bovino, chief U.S. economist at S&P. The rising concentration of income among the top 1 percent of earners has contributed to S&P's cutting its growth estimates for the economy. In part because of the disparity, it estimates that the economy will grow at a 2.5 percent annual pace in the next decade, down from a forecast five years ago of a 2.8 percent rate.
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WASHINGTON (AP) — Economists have long argued that a rising wealth gap has complicated the U.S. rebound from the Great Recession. Now, an analysis by the rating agency Standard & Poor’s lends its weight to the argument: The widening gap between the wealthiest Americans and everyone else has made the economy more prone to boom-bust cycles and slowed the 5-year-old recovery from the recession. Economic disparities appear to be reaching extremes that “need to be watched because they’re damaging to growth,” said Beth Ann Bovino, chief U.S. economist at S&P. The rising concentration of income among the top 1 percent of earners has contributed to S&P’s cutting its growth estimates for the economy. In part because of the disparity, it estimates that the economy will grow at a 2.5 percent annual pace in the next decade, down from a forecast five years ago of a 2.8 percent rate.