Economic inequality could cause U.S. debt downgrade, Moody’s says
By Andrea Riquier
Economic inequality isn’t just an academic idea, as the recent wave of populist voting has made clear. But a new report suggests that worsening inequality in the U.S. could have financial repercussions for the country. …Karen Petrou, who runs a well-regarded financial policy analysis firm, had this to say about Moody’s analysis: “Could it be that we have a negative feedback loop of systemic proportions? In it, will inequality spur crises that force spending that undermines fiscal discipline that then drops debt ratings, raises borrowing costs, and reduces transfer payments, making inequality still worse and starting this deadly cycle all over again?”