Saturday, August 16, 2014

A Supply Side Argument Against Inequality

Supply side economics has been based upon the claim that making some people rich is good for poor people.  That is the trickle down theory, promoted by Ronald Reagan,  for which there is no supporting evidence,  is still an article of faith in the GOP.  This article makes a supply side case for income redistribution to the poor so that it trickles up to the rich.  It also promotes political equality.

Redistributing income to poor helps the rich because it fosters economic growth.  Poverty destroys human capital formation.  Improving education and healthcare for the poor makes more and better human capital available.

Poor citizens are also deprived of political power in system in which money can purchase political power.  An income redistribution system that reduces income inequality also reduces political inequality.

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