This is the Cato Daily Podcast for Thursday, December 22,

I'm Caleb Brown.

To the extent that income inequality is a problem,

it turns out we've possibly been measuring it incorrectly for decades. is a

quality quality measuring it incorrectly for decades.

John Early is co-author with former Republican

U.S. Senator Phil Graham, an economist Robert Eekland

of the new book, The Myth of American Inequality, how government biases policy debate.

We spoke in September.

One, how do Americans think about income inequality and what kind of policy intervention does that thinking give us?

Well, Americans are told rather systematically both by

political commentators and by the official statistical agencies of the United States government,

that income is highly unequal, that it has been growing more unequal over time,

and as a result there is substantial more unequal over time.

And as a result, there is substantial belief

that there ought to be more income redistribution

in order to alleviate that inequality.

All right, so why is that not true?

Well, there are a number of detailed reasons,

but the highest reason why inequality is not high and not growing. The that is used to calculate the inequality, omits important pieces of information.

It does not count two-thirds of the $2.8 trillion in transfer payments that government gives to households, and it does not adjust

the income for the taxes that households have to pay.

...