Economic inequality could cause U.S. debt downgrade, Moody’s says

It’s official, income inequality is not only a social evil but a threat to the economy:

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.

That report, out in early October from the credit-ratings agency Moody’s Investors Service, is called “Government of the United States: Rising income inequality will likely weigh on credit profile.” It may go without saying that when a ratings agency suggests something may “weigh on” a borrower’s credit profile, it’s a warning that a debt downgrade is what’s at risk.

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