Afternoon Must-Read: Paul Krugman: Inequality Is a Drag

Paul Krugman: Inequality Is a Drag: “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… coming from places like the International Monetary Fund… high inequality is a drag on growth…. Do talented children in low-income American families have the same chance… as those born higher up the ladder? Of course not…. Consider… food stamps, perennially targeted by conservatives who claim that they reduce the incentive to work. The historical evidence does indeed suggest… food stamps… somewhat reduces work effort, especially by single mothers. But it also suggests that Americans who had access to food stamps when they were children grew up to be healthier and more productive…. The same thing, I’d argue, will end up being true of Obamacare…. Will the new view of inequality change our political debate? It should. Being nice to the wealthy and cruel to the poor is not, it turns out, the key to economic growth…. Hello, trickle-up.