If government is inevitable, the challenge is to come up with the most effective one possible.

In short both the things we feel we need and the things available for us to buy depend largely—beyond some point, almost entirely—on the things that others choose to buy.

When the economic pie grows larger, it's always possible for everyone to have a larger slice than before. So it's really in all of our interest to make the economic pie larger by eliminating waste whenever and wherever possible.

It is no exaggeration to say that rising inequality has driven many of the 99 percent into a financial ditch. It also helped spawn the housing bubble that gave us the financial crisis of 2008, the lingering effects of which have forced many OWS protesters to try to launch their careers in by far the most inhospitable labor market we've seen since the Great Depression. Even those recent graduates who manage to find jobs will suffer a lifelong penalty in reduced wages.

One reason that might motivate a worker to accept a riskier job at higher pay, for example, would be that doing so would enable him to bid more effectively for a house in a better school district. But if other workers did likewise, none would achieve the goal they were striving for.

We could curtail private spending by several trillion dollars a year without requiring painful sacrifices from anyone. That would be more than enough to rebuild our crumbling infrastructure and eliminate government indebtedness once and for all.

We're in a classic demand-shortfall recession. There aren't enough jobs because total spending is too low. Consumers won't lead the way because they're busy paying down debt and are fearful they'll lose their jobs, if they haven't already. Businesses, which are currently sitting on mountains of cash, won't spend either, because they already have sufficient capacity to produce more than people are willing to buy.