Book Review: The Myth of American Inequality: How Government Biases Policy Debate

Abstract

Gramm, Ekelund, and Early demonstrate in _The Myth of American Inequality_ that the official statistics we rely on grossly misstate poverty, income inequality, and other measures of well-being. They ignore two thirds of welfare benefits as income, omit the income lost due to taxes that people pay for such programs, and use outmoded price indices that magnify price inflation and thereby understate growth in real income, employer-paid benefits and other variables over time. The result is grossly over-hyped problems of poverty, income inequality, and stagnation in living standards.