Breaking Down the Income Gap Into Real Terms

Impact beyond the pocketbook. The income gap doesn't just impact those middle-class families whose income growth has stagnated. It also impacts the ability of the U.S. economy to get back on track.

Without increases in income, middle-class families have less to spend and attempt to save more. Without spending, growth is almost impossible. So until the middle class has more money to invest back into the economy, growth will be difficult.

At the same time, rich Americans are able to save more. They have the ability to invest this money. Any money made on these investments benefits the investor, not the economy in general.

The income gap isn't likely to shrink soon. According to the Gini Index, which measures global income gaps, the separation between the rich and poor in America is among the worst in the world. Without dramatic changes to fiscal policy, which is unlikely given the deadlock in Washington, this will be tough to reverse.

"There has been class warfare going on," said Warren Buffett, famed investor and chairman of Berkshire Hathaway, in a September 30 interview on PBS. "It's just that my class is winning. And my class isn't just winning, I mean we're killing them."

@davidcfrancis

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