This mistaken notion widely believed in academia makes the poor poorer.
AP survey: US income gap is holding back economy
By CHRISTOPHER S. RUGABER - AP
WASHINGTON (AP) — The growing gap between the richest Americans and everyone else isn't bad just for individuals.
It's hurting the U.S. economy.
So says a majority of more than three dozen economists surveyed last week by The Associated Press. Their concerns tap into a debate that's intensified as middle-class pay has stagnated while wealthier households have thrived.
Selected by AP.
A key source of the economists' concern: Higher pay and outsize stock market gains are flowing mainly to affluent Americans. Yet these households spend less of their money than do low- and middle-income consumers who make up most of the population but whose pay is barely rising.
"What you want is a broader spending base," says Scott Brown, chief economist at Raymond James, a financial advisory firm. "You want more people spending money."
Demand management. Increase demand and all is ok? Since the lower half spend more or most of their incomes whether they remain constant or rise there's progressively left over to be used to increase production. Once income equals outgo the plight of the lower half reverts to its previous state.
Spending by wealthier Americans, given the weight of their dollars, does help drive the economy. But analysts say the economy would be better able to sustain its growth if the riches were more evenly dispersed.
What analysts? The ones the author invents, for not even the usual academic types will embrace that view.
For one thing, a plunge in stock prices typically leads wealthier Americans to cut sharply back on their spending.
Either non sequitur or trivially true.
"The broader the improvement, the more likely it will be sustained," said Michael Niemira, chief economist at the International Council of Shopping Centers.
Intntl Council of Shopping Centers? Oh, he isn't prejudiced to his false view...
A wide gap in pay limits the ability of poorer and middle-income Americans to improve their living standards, the economists say. About 80 percent of stock market wealth is held by the richest 10 percent of Americans. That means the stock market's outsize gains this year have mostly benefited the already affluent.
A false claim since most pensions of Lil Guys are gaining.
AP is the worst news fraud out there. They've even gone below NYT. |
