1. 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.
2. 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.
3. Review the articles in Real World Micro, chapter 8, including “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 earnings from work? Why?