Nobel Prize-winning economist Joseph Stiglitz on Sunday said the United States would continue to recover from the economic collapse at a snail’s pace unless the middle-class was strengthened.
During an appearance on MSNBC, he argued that economic inequality was weakening the economy because it resulted in a lack of demand for goods and services.
“What sustains the American economy is consumption, and the people at the top spend on consumption a smaller fraction than those at the bottom,” Stiglitz explained. “In fact, those at the bottom have to — to get by — spend about basically 100 percent. So when you move money from the bottom and the middle to the top, overall spending gets constrained, and that weakens the economy.”
Stiglitz noted that middle-class wages and incomes had only increased modestly, while 93 percent of income gains in 2010 went to the wealthiest 1 percent of Americans.
“With that kind of recovery, not a surprise that we’re not going to have robust demand and without robust demand, we’re not going to have a robust recovery.”
Watch video, courtesy of MSNBC, below: