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Wealth Gap Has Slowed Economic Recovery, S&P Says

"A lifeboat carrying a few, surrounded by many treading water, risks capsizing," the ratings agency argues.
/ Source: Associated Press

The rising tide lifts all boats, or at least that's what many economists have argued concerning how the wealthy can influence the economy. Now, however, credit ratings agency Standard & Poors says: "A lifeboat carrying a few, surrounded by many treading water, risks capsizing." A new analysis by S&P says 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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-- The Associated Press and NBC News staff