The Cost of Redistribution

This piece by Ezra Klein got me thinking. He argues that the wealthiest among us have "stolen" the productivity gains of the economy is bad and we should do something about it. I have always wondered how proponents of this line of thought propose to get people to pay $7 for a Big Mac because we raised the minimum wage to $11/hour, but that's neither here nor there.

My main question today is, is it not possible that the reason our economy has grown and recessions have gotten gentler over the past thirty years or so is that very inequality? Is it not possible that Paul Krugman's Great Compression is what was holding the economy back? Government redistributions have a cost; $1 in taxes costs the economy more than $1, and I propose that all that money we were spending on bureaucrats instead of people who actually produce something is the difference between the 50's and today. I'd love to see some serious analysis of this idea -- I'm not equipped to do it but it passes the smell test with me.