Obama chief economist uses Occupy Wall Street Rhetoric

It is hard to believe that Krueger really thinks that redistribution of income would increase spending. It is this notion of saving that is equivalent to putting the money in a hole in the backyard. If wealthy people leave money in the bank or bonds or stocks, someone else will spend it. From The Hill newspaper:

Council of Economic Advisers Chairman Alan Krueger echoed Obama's 2012 campaign theme of defending the middle class against Wall Street, arguing income inequality is a “threat” to the economy.

“The evidence suggests a more fair distribution of income would stimulate economic growth,” Krueger said.

He argued that a more progressive tax code would reduce inequality and increase consumer spending, since middle-class workers tends to spend most of their income.

The result could be in the neighborhood of $440 billion in greater consumption, and a higher GDP, Krueger said. . . .

Krueger argued that the Bush-era tax rates should be allowed to expire for the wealthy at the end of this year and said the estate tax should return to 2009 levels.

Doing so would help reverse an estimated shift of $1.1 trillion of annual income to the top 1 percent from the bottom 99 percent, he said. . . .