What does Arthur Okun mean when he says that government can
redistribute only in a Leaky Bucket? Explain why he may be right,
and why he may be wrong.
How much leakage would you accept? Why? In your answer, consider
Rawls’s argument about how people would feel from behind a “veil of
ignorance” about their own situation.
Review the articles in Real World Micro, chapter 8,
including chapter 8.6, “The Undeserving Rich” by Gar Alperovitz and
Lew Daly. Would your view of Okun’s argument change if much of
income inequality comes from the ownership of property rather than
from earnings from work?