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Krugman: Even Conservatives Are Realizing that Inequality Is a Drag
August 8, 2014
It probably had to come to this before anything could be done: even conservative economists are starting to grudgingly realize that drastic inequality is a problem for everybody. So says Paul Krugman in his Friday column. "American inequality has become so extreme that it’s inflicting a lot of economic damage, " he writes. "And this, in turn, implies that redistribution — that is, taxing the rich and helping the poor — may well raise, not lower, the economy’s growth rate."
iMFdirect
"The conclusion that emerges from the historical macroeconomic data used in this paper is that, on average across countries and over time, the things that governments have typically done to redistribute do not seem to have led to bad growth outcomes. And quite apart from ethical, political, or broader social considerations, the resulting equality seems to have helped support faster and more durable growth.
To put it simply, we find little evidence of a “big tradeoff” between redistribution and growth. Inaction in the face of high inequality thus seems unlikely to be warranted in many cases."
IOWs redistribution of wealth, i.e. making the poor richer is good for the overall economy and-----and what's good for the overall economy keeps the rich -- rich.
The conservative iMF isn't the only conservative outfit that has concluded that inequality of wealth distribution is a drag on the economy. Below is an excerpt from a study done by Standard & Poor.
How Increasing Income Inequality Is Dampening U.S. Economic Growth, And Possible Ways To Change The Tide
05-Aug-2014
Overview
Now that conservative economic gurus are bailing out on "trickle-down" I wonder how rightwingers on the USMB are going to try to defend the policies that they bought into (hook, line and sinker) that threw us into the worst economic downturn since the Great Depression?
.
Krugman: Even Conservatives Are Realizing that Inequality Is a Drag
August 8, 2014
It probably had to come to this before anything could be done: even conservative economists are starting to grudgingly realize that drastic inequality is a problem for everybody. So says Paul Krugman in his Friday column. "American inequality has become so extreme that it’s inflicting a lot of economic damage, " he writes. "And this, in turn, implies that redistribution — that is, taxing the rich and helping the poor — may well raise, not lower, the economy’s growth rate."
iMFdirect
"The conclusion that emerges from the historical macroeconomic data used in this paper is that, on average across countries and over time, the things that governments have typically done to redistribute do not seem to have led to bad growth outcomes. And quite apart from ethical, political, or broader social considerations, the resulting equality seems to have helped support faster and more durable growth.
To put it simply, we find little evidence of a “big tradeoff” between redistribution and growth. Inaction in the face of high inequality thus seems unlikely to be warranted in many cases."
IOWs redistribution of wealth, i.e. making the poor richer is good for the overall economy and-----and what's good for the overall economy keeps the rich -- rich.
The conservative iMF isn't the only conservative outfit that has concluded that inequality of wealth distribution is a drag on the economy. Below is an excerpt from a study done by Standard & Poor.
How Increasing Income Inequality Is Dampening U.S. Economic Growth, And Possible Ways To Change The Tide
05-Aug-2014
Overview
- At extreme levels, income inequality can harm sustained economic growth over long periods. The U.S. is approaching that threshold.
- Standard & Poor's sees extreme income inequality as a drag on long-run economic growth. We've reduced our 10-year U.S. growth forecast to a 2.5% rate. We expected 2.8% five years ago.
- With wages of a college graduate double that of a high school graduate, increasing educational attainment is an effective way to bring income inequality back to healthy levels.
- It also helps the U.S economy. Over the next five years, if the American workforce completed just one more year of school, the resulting productivity gains could add about $525 billion, or 2.4%, to the level of GDP, relative to the baseline.
- A cautious approach to reducing inequality would benefit the economy, but extreme policy measures could backfire
Now that conservative economic gurus are bailing out on "trickle-down" I wonder how rightwingers on the USMB are going to try to defend the policies that they bought into (hook, line and sinker) that threw us into the worst economic downturn since the Great Depression?
.
