The New York Times: Paul Krugman: 'Inequality is a Drag'

Source:New York Times- left-wing columnist Paul Krugman.

“For more than three decades, almost everyone who matters in American politics has agreed that higher taxes on the rich and increased aid to the poor have hurt economic growth. …

But there’s now growing evidence for a new view — namely, that the whole premise of this debate is wrong,… coming from places like the International Monetary Fund, that high inequality is a drag on growth, and that redistribution can be good for the economy. …

But how is that possible? Doesn’t taxing the rich and helping the poor reduce the incentive to make money? Well, yes, but … extreme inequality deprives many people of the opportunity to fulfill their potential.

Think about it. Do talented children in low-income American families have the same chance … to get the right education, to pursue the right career path … as those born higher up the ladder? Of course not. … Extreme inequality means a waste of human resources.

And government programs that reduce inequality can make the nation as a whole richer, by reducing that waste.” 

From The New York Times 

“CAP’s Senior Economist Heather Boushey, explains how middle out economics helps bolster the United States economy.” 

Source:Center For American Progress- people who were at one of President Barack H. Obama's 2012 reelection campaign rallies.

From the Center For American Progress 

If you are familiar with my blogging you know that I’m not a redistributionist in the sense that I believe the way to close the wealth and income gaps in America is to take from the rich to give to government to take care of the poor.

What I want to is to expand economic opportunity to the poor and low-end middle class so they can be successful as well. And not need public assistance at all and not become dependent on public assistance as part of their income. So that is just one issue where I disagree with Paul Krugman on.

I believe in economic growth that everyone feels and benefits from with a middle-out approach. Not trickle down which obviously doesn’t work, or wealth redistribution. But empowering people in need to get the tools that they need to live in freedom and not have to be government dependent.

You can expand economic freedom to the people who don’t currently have it by empowering people at the bottom and near bottom through education and job training so they can get themselves the skills that they need to get a good job.

We saw the benefits of the middle-out approach during the Clinton Administration where we had low unemployment during most of the 1990s. High economic growth from 1994 for the rest of the decade. And with Welfare to Work educating and training low-skilled adults on Welfare so they could get the skills that they need to get themselves a good job and get off of public assistance all together.

You expand the pot so more people can take out of it and you’ll encourage more people to be successful. You redistribute from the current pot and you encourage fewer people to be successful on their own. 

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