Now Consider This: Wealth gap also a problem for economy

08/14/2014 7:03 PM

08/15/2014 12:03 AM

The growing divide between the rich and everyone else isn’t just a fairness concern; it’s also a problem for the economy. The rating agency Standard & Poor’s lowered its growth projections for the U.S. economy because of the divide. It said that the wealth gap makes the economy more prone to boom-bust cycles and has slowed the recovery from the recession. Many economists agree, arguing that a healthy middle class is important to societal stability and economic growth. There is less agreement about what should be done about the divide. Economist Thomas Piketty argues for a wealth tax in his best-selling book, “Capital in the 21st Century,” while S&P favors increasing educational opportunities. – Phillip Brownlee

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