Not a Government Policy | Michael D. Tanner | Cato Institute: Commentary

Not a Government Policy | Michael D. Tanner | Cato Institute: Commentary: "Income inequality is the wrong focus for government policy. After all, if we doubled the income of every American tomorrow, inequality would actually increase — but we would also lift a lot of Americans out of poverty.

In the context of deficit reduction, that means we should keep this goal in mind: not punishing the rich, but reducing poverty. And we know that in the long run, the best way to reduce poverty is to create more jobs and opportunity. Too many think of the economy as a fixed pie, and the role of government is to divide up the slices of that pie. If one person gets a bigger portion of pie, others of necessity get smaller pieces.

But in reality the size of the pie is not fixed. We can pursue policies that grow a bigger pie, allowing a bigger slice for everyone. Conversely, we can shrink the pie, meaning everyone gets less. And unfortunately, if the pie shrinks, those without skills and connections in society — the poor — are likely to end up with little more than crumbs."