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Politics : Actual left/right wing discussion -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (169)	9/6/2006 6:59:37 PM
From: TimF	Respond to of 10087

A comment to the last post in that series dcw said... In regard to your two scenarios, Kilroy: you present a classic growth-equality dilema to which there is no objectively correct answer. I'd like to point out that there actually is a more realistic set of scenarios for which there is an objectively correct answer. Suppose one scenario ("USA") is 3%/year GDP growth, with 10% of GDP going to the poor and 90% to the rich. Suppose another scenario ("Europe") is 2%/year GDP growth, with 20% of GDP going to the poor and 80% to the rich. You might think that there is no objectively correct choice here either, but you'd be wrong, at least if the criterion is the long-term standard of living of either the rich or the poor. In the long run, the poor will be better off under the "USA" scenario than under the "Europe" scenario. That's because faster exponential growth always eventually overwhelms a fixed-fraction disadvantage. That's also precisely why so many economists are loathe to sacrifice any growth to the cause of a more equal distribution of spoils. gregmankiw.blogspot.com Edit - Also another post to add to the series janegalt.net