By Robert A. Vella
Since the 2008 financial crisis, which has hurt middle class prosperity so profoundly, Wall Street has been slowly coming to the conclusion that wealth and income inequality is retarding economic growth and recovery from the Great Recession. Most objectively-minded economists not only realized this specific result years ago, but have been studying the macroeconomic phenomenon of aggregate demand for many decades. Simply put, the larger economy suffers when the bulk of ordinary workers and consumers have reduced buying potential.
New analysis from the rating agency Standard & Poor’s is giving Wall Street further information on this serious problem:
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…
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