Universal Basic Income

[Arkady]

An idea that some progressives have been pushing, lately, to try to meet conservatives half-way, is a universal basic income, in lieu of welfare. The idea is that rather than things like food stamps, with all the rules about what people can buy with it and what they can't, and other things like subsidized housing, etc., you just have a simple cash payment the government hands to everyone, with which people can do whatever they want. Traditionally, this has been seen as a conservative alternative to liberal jobs- and welfare programs. Some conservatives like it because there are very low costs: no auditing for eligibility, no overhead for jobs programs, no policing what the money gets spent on, almost no bureaucracy, etc. And the distortions to the market are minimal, since government isn't trying to dictate where the demand and investment will be.

Switzerland, which is an arch-conservative nation by Western European standards, is considering a monthly basic income of around $2800 for its citizens.

http://www.bbc.co.uk/news/business-25415501

For practical purposes, Alaska, one of our most conservative states, already has something like this (although it's quite low, relative to what Switzerland is considering). Fans of the minimum income concept include arch-conservative economic godfather Milton Friedman, and Austrian Economic god-to-the-libertarians Friedrich Hayek.

Of course, in the US, implementation of this conservative-friendly idea would be confounded by the nature of our partisan politics. The moment some major Democrat starts pushing it, it will be labeled "socialism" and the Tea Party crazies will all go around screeching like little girls who got their hair pulled. Before long the very conservatives who promoted the idea will be leading the charge to attack it, and every ninny dittohead on the Internet will memorize the new talking points so they can provide the obligatory denunciations in chat forums. We saw that happen already with Obamacare, which started life as a conservative pet project, designed by the right-wing think-tank the Heritage Foundation, and championed by Mitt Romney. We've seen how quickly support of something by leading Democrats can cause conservatives to turn 180-degrees on their prior convictions. But it's an interesting idea, nonetheless.

 

[ya-ta-hey]

An idea that some progressives have been pushing, lately, to try to meet conservatives half-way, is a universal basic income, in lieu of welfare. The idea is that rather than things like food stamps, with all the rules about what people can buy with it and what they can't, and other things like subsidized housing, etc., you just have a simple cash payment the government hands to everyone, with which people can do whatever they want. Traditionally, this has been seen as a conservative alternative to liberal jobs- and welfare programs. Some conservatives like it because there are very low costs: no auditing for eligibility, no overhead for jobs programs, no policing what the money gets spent on, almost no bureaucracy, etc. And the distortions to the market are minimal, since government isn't trying to dictate where the demand and investment will be.

Switzerland, which is an arch-conservative nation by Western European standards, is considering a monthly basic income of around $2800 for its citizens.

http://www.bbc.co.uk/news/business-25415501

For practical purposes, Alaska, one of our most conservative states, already has something like this (although it's quite low, relative to what Switzerland is considering). Fans of the minimum income concept include arch-conservative economic godfather Milton Friedman, and Austrian Economic god-to-the-libertarians Friedrich Hayek.

Of course, in the US, implementation of this conservative-friendly idea would be confounded by the nature of our partisan politics. The moment some major Democrat starts pushing it, it will be labeled "socialism" and the Tea Party crazies will all go around screeching like little girls who got their hair pulled. Before long the very conservatives who promoted the idea will be leading the charge to attack it, and every ninny dittohead on the Internet will memorize the new talking points so they can provide the obligatory denunciations in chat forums. We saw that happen already with Obamacare, which started life as a conservative pet project, designed by the right-wing think-tank the Heritage Foundation, and championed by Mitt Romney. We've seen how quickly support of something by leading Democrats can cause conservatives to turn 180-degrees on their prior convictions. But it's an interesting idea, nonetheless.

Mr. Arkady,

Only trouble, by the 15th of the month, a good portion of the population, having spent their money on malt liquer, menthol cigaretts, junk food, drugs, gaudy bling, rap CDs, and other cheap crap they don't need would be broke again and asking for more handouts.

 

[Arkady]

Mr. Arkady,

Only trouble, by the 15th of the month, a good portion of the population, having spent their money on malt liquer, menthol cigaretts, junk food, drugs, gaudy bling, rap CDs, and other cheap crap they don't need would be broke again and asking for more handouts.

There's that dog whistle again. The list could have included, say, Lone Star beer, chaw, BBQ, ammo, shiny cowboy boots, and country CDs, but those totems of white rural poverty wouldn't have painted the target you were after.

 

[Jen]

And where is this universal income coming from? Does the government just print up enough money to hand it out......Monopoly Money when you pass Go?

Or does the government confiscate enough money from the evil greedy rich each month so that it can hand it out to others?

I could deal with that though. $2800 is more than I could make as a stay-at-home wife, so I'll take it. And I know several people who would rather stay home and get about $2800 a month.

Really, Arkady? You think this is a good idea?

 

[BobbyT]

And where is this universal income coming from? Does the government just print up enough money to hand it out......Monopoly Money when you pass Go?

Or does the government confiscate enough money from the evil greedy rich each month so that it can hand it out to others?

I could deal with that though. $2800 is more than I could make as a stay-at-home wife, so I'll take it. And I know several people who would rather stay home and get about $2800 a month.

Really, Arkady? You think this is a good idea?

Reread his first paragraph where he notes where the money would come from.

 

[Jen]

Reread his first paragraph where he notes where the money would come from.

The paragraph implies that money now used for welfare would just be switched to that payment for everyone. I seriously doubt if welfare money withdrawn would be the equivalent to any decent monthly payment -- to everyone? And if not to all, who would dictate who would get it and who would not? That sounds messy.

Alaska's system isn't anything like a minimum payment to everyone as Arkady suggested. It is a dividend for Alaska's oil. Alaska citizens own stock in their power companies and in their oil production. If oil is cheap, the pfd (permanent fund dividend) is low and if oil is expensive, the pfd is higher. The payment comes in October for the preceding year. Last October (2013) the pfd given was for the year 2012. It is a payment for each member of the family and a family has to be resident of Alaska from January 1 to December 31 - and prove it - in order to receive a pfd for that year (the following October). But it's a dividend. Not a salary. And the population of the entire state of alaska is about a half a million people and many of those are military who don't qualify for the pfd.

I wouldn't be closed to such an idea. I rather like it. I certainly enjoyed receiving the pfd for a few years. But I would want to see the particulars of such a plan.

 

[Arkady]

And where is this universal income coming from? Does the government just print up enough money to hand it out......Monopoly Money when you pass Go?

Or does the government confiscate enough money from the evil greedy rich each month so that it can hand it out to others?

I could deal with that though. $2800 is more than I could make as a stay-at-home wife, so I'll take it. And I know several people who would rather stay home and get about $2800 a month.

Really, Arkady? You think this is a good idea?

The money would come from eliminating welfare, etc., as explained in my first paragraph. However, to the extent that extra money was needed to make it work well (given that the incomes would go to more people than previously got the welfare), there are plenty of options.

Printing the money is a possibility, in the current climate, where inflation is sub-optimal. Bringing the inflation rate up, by putting more money in circulation, would have a number of positive effects, including coaxing money off the sidelines (the rich are current sitting on huge piles of under-used cash, which they'd be less willin to do if those piles were eroding faster from inflation, and so they had to put that money to work to hold onto it), and decrease real debt (if you're buried under a pile of fixed-rate debt, like an unaffordable mortgage, having inflation erode that pile helps you get out from under it faster). High inflation isn't a good thing, either, so just printing more and more money isn't a long-term solution, but it is something we could do to fund this in the short term, while inflation remains well below normal levels. Longer-term it could be funded by higher taxes on the wealthy. After-tax income for the top 1% has grown at far beyond the pace of GDP/capita growth in this country. That means you could hike their tax rates considerably and STILL leave them with a proportional share of future GDP growth -- as the pie grew, their slice would too, but it wouldn't be growing at a pace fast enough to cut into everyone else's portion. Recall that the top bracket paid between 70% and 92% in federal income taxes throughout our economic golden age, where they pay just over half the lower amount today, so there's a lot of room for tax hikes there without getting outside the range of taxes that we know from practical experience are compatible with superb national prosperity growth and economic expansion.

 

[Arkady]

The paragraph implies that money now used for welfare would just be switched to that payment for everyone. I seriously doubt if welfare money withdrawn would be the equivalent to any decent monthly payment -- to everyone? And if not to all, who would dictate who would get it and who would not? That sounds messy.

Alaska's system isn't anything like a minimum payment to everyone as Arkady suggested. It is a dividend for Alaska's oil. Alaska citizens own stock in their power companies and in their oil production. If oil is cheap, the pfd (permanent fund dividend) is low and if oil is expensive, the pfd is higher. The payment comes in October for the preceding year. Last October (2013) the pfd given was for the year 2012. It is a payment for each member of the family and a family has to be resident of Alaska from January 1 to December 31 - and prove it - in order to receive a pfd for that year (the following October). But it's a dividend. Not a salary. And the population of the entire state of alaska is about a half a million people and many of those are military who don't qualify for the pfd.

I wouldn't be closed to such an idea. I rather like it. I certainly enjoyed receiving the pfd for a few years. But I would want to see the particulars of such a plan.

If it made conservatives more comfortable, you could set it up as a kind of pfd. The government could take 10% ownership in all corporations that do business in the US (a cost for them being granted artificial personhood by the government) and the dividends from that could be distributed like the pfd in Alaska, to anyone who could demonstrate residency in the US during the year.

 

[PhilFish]

An idea that some progressives have been pushing, lately, to try to meet conservatives half-way, is a universal basic income, in lieu of welfare. The idea is that rather than things like food stamps, with all the rules about what people can buy with it and what they can't, and other things like subsidized housing, etc., you just have a simple cash payment the government hands to everyone, with which people can do whatever they want. Traditionally, this has been seen as a conservative alternative to liberal jobs- and welfare programs. Some conservatives like it because there are very low costs: no auditing for eligibility, no overhead for jobs programs, no policing what the money gets spent on, almost no bureaucracy, etc. And the distortions to the market are minimal, since government isn't trying to dictate where the demand and investment will be.

Switzerland, which is an arch-conservative nation by Western European standards, is considering a monthly basic income of around $2800 for its citizens.

http://www.bbc.co.uk/news/business-25415501

For practical purposes, Alaska, one of our most conservative states, already has something like this (although it's quite low, relative to what Switzerland is considering). Fans of the minimum income concept include arch-conservative economic godfather Milton Friedman, and Austrian Economic god-to-the-libertarians Friedrich Hayek.

Of course, in the US, implementation of this conservative-friendly idea would be confounded by the nature of our partisan politics. The moment some major Democrat starts pushing it, it will be labeled "socialism" and the Tea Party crazies will all go around screeching like little girls who got their hair pulled. Before long the very conservatives who promoted the idea will be leading the charge to attack it, and every ninny dittohead on the Internet will memorize the new talking points so they can provide the obligatory denunciations in chat forums. We saw that happen already with Obamacare, which started life as a conservative pet project, designed by the right-wing think-tank the Heritage Foundation, and championed by Mitt Romney. We've seen how quickly support of something by leading Democrats can cause conservatives to turn 180-degrees on their prior convictions. But it's an interesting idea, nonetheless.

OK interesting premise.

Do I take it that with the elimination of welfare....such things as means testing...percent of poverty, and so forth would also be eliminated??

further...is this an all in....i.e. all citizens....citizens of a certain age threshold...

and what of SS. a layer on top... or replace that too?

 

[connieb]

An idea that some progressives have been pushing, lately, to try to meet conservatives half-way, is a universal basic income, in lieu of welfare. The idea is that rather than things like food stamps, with all the rules about what people can buy with it and what they can't, and other things like subsidized housing, etc., you just have a simple cash payment the government hands to everyone, with which people can do whatever they want. Traditionally, this has been seen as a conservative alternative to liberal jobs- and welfare programs. Some conservatives like it because there are very low costs: no auditing for eligibility, no overhead for jobs programs, no policing what the money gets spent on, almost no bureaucracy, etc. And the distortions to the market are minimal, since government isn't trying to dictate where the demand and investment will be.

Switzerland, which is an arch-conservative nation by Western European standards, is considering a monthly basic income of around $2800 for its citizens.

http://www.bbc.co.uk/news/business-25415501

For practical purposes, Alaska, one of our most conservative states, already has something like this (although it's quite low, relative to what Switzerland is considering). Fans of the minimum income concept include arch-conservative economic godfather Milton Friedman, and Austrian Economic god-to-the-libertarians Friedrich Hayek.

Of course, in the US, implementation of this conservative-friendly idea would be confounded by the nature of our partisan politics. The moment some major Democrat starts pushing it, it will be labeled "socialism" and the Tea Party crazies will all go around screeching like little girls who got their hair pulled. Before long the very conservatives who promoted the idea will be leading the charge to attack it, and every ninny dittohead on the Internet will memorize the new talking points so they can provide the obligatory denunciations in chat forums. We saw that happen already with Obamacare, which started life as a conservative pet project, designed by the right-wing think-tank the Heritage Foundation, and championed by Mitt Romney. We've seen how quickly support of something by leading Democrats can cause conservatives to turn 180-degrees on their prior convictions. But it's an interesting idea, nonetheless.

The reason we give section 8 and have SNAP instead of just giving cash - is because people will not use the money they are handed wisely and will instead NOT pay rent and will not buy food - but waste it on all manner of other things.

At least when you pay their rent they have a house. At least when you buy their food -they can eat and even then many don't make good choices which allow them to get through the month and additional decided that instead of being "supplemental" their "snap" is the only money they will use for groceries.

Now, if you want to say give 2800 and say that-s it - that is all you get - there are no free or reduced price lunches at school - there will not be another cent - I could maybe get on board. But, what will happen is that people will be irresponsible with the money they get and then people like you will be right back asking for something else for them and crying for more.

Here is an interesting insight into the spending habits and spending thinking of the poor. http://www.cracked.com/blog/the-5-stupidest-habits-you-develop-growing-up-poor/

connie

 

[trapdoor]

The money would come from eliminating welfare, etc., as explained in my first paragraph. However, to the extent that extra money was needed to make it work well (given that the incomes would go to more people than previously got the welfare), there are plenty of options.

Printing the money is a possibility, in the current climate, where inflation is sub-optimal.

Right there is a fallacious statement. Inflation, optimally to maintain a currency's value, should be zero. Unless you mean it is "suboptimal" because it is more than zero. As it is, money devalues at a rate higher than people can safely save for their own futures.

Longer-term it could be funded by higher taxes on the wealthy.

Knew it. And the cutoff for "wealthy" will be (as it is today) somewhere in the upper-middle class -- which is the group that will be it by such a plan.
I'm not certain how you derive that this direct wealth redistribution plan is somehow "right friendly."

 

[Mr. Friscus]

If we audit the people who recieve money, and the able-bodied work a small amount of hours for the state to improve the community and get drug tested... I'm all for it.

We should be doing such now, but for some reason we don't.

 

[connieb]

If we audit the people who recieve money, and the able-bodied work a small amount of hours for the state to improve the community and get drug tested... I'm all for it.

We should be doing such now, but for some reason we don't.

Mr. Friscus, I can't keep business owners with a starff and doing several million dollars a year in business - to keep adequate and auditable records. I hold no nope that the average welfare recipient will be able to do what is necessary to be "audited".

connie

 

[Arkady]

OK interesting premise.

Do I take it that with the elimination of welfare....such things as means testing...percent of poverty, and so forth would also be eliminated??

further...is this an all in....i.e. all citizens....citizens of a certain age threshold...

and what of SS. a layer on top... or replace that too?

All good questions. I'm not sure. If I were to structure it, yes, the idea would be to get rid of means testing, etc., with the idea that you'd want the savings that come from just cutting a check and being done with it, rather than having to audit eligibility, etc. In that sense, it would be similar to SS. In fact, you could even make it part of SS if you wanted. Basically, start the payments high, gradually decrease them between age 18 and 25, so it was just a bare-subsistence payment during the peak earning years, then gradually increase it again between age 60 and 70, with the idea that you want to make it more than a bare-subsistence matter for someone to step away from working later in life.

 

[Dawg]

well that might work for a second, but, they couldn't sell the money like they do their food stamps..........

I always get a chuckle when lawyers making $150+hr--- employed by folks making $25+hr post of 'basic income'..............yep........as if they charge according to what the client makes hrly..................not.

 

[Corruptbuddha]

There's that dog whistle again. The list could have included, say, Lone Star beer, chaw, BBQ, ammo, shiny cowboy boots, and country CDs, but those totems of white rural poverty wouldn't have painted the target you were after.

Regardless of any 'dog whistle', what is your answer to the question proposed? What happens when folks run out of money before their next check?

 

[Arkady]

The reason we give section 8 and have SNAP instead of just giving cash - is because people will not use the money they are handed wisely and will instead NOT pay rent and will not buy food - but waste it on all manner of other things.

At least when you pay their rent they have a house. At least when you buy their food -they can eat and even then many don't make good choices which allow them to get through the month and additional decided that instead of being "supplemental" their "snap" is the only money they will use for groceries.

Now, if you want to say give 2800 and say that-s it - that is all you get - there are no free or reduced price lunches at school - there will not be another cent - I could maybe get on board. But, what will happen is that people will be irresponsible with the money they get and then people like you will be right back asking for something else for them and crying for more.

Here is an interesting insight into the spending habits and spending thinking of the poor. http://www.cracked.com/blog/the-5-stupidest-habits-you-develop-growing-up-poor/

connie

Could be. I'd be interested to know how this has worked out in practice when/if something like it has been tried. Do the poor, no longer being so poor, develop smarter spending habits? It's possible. Under the current system, with food and housing essentially handled separately, it encourages odd budgeting behavior. The poor can basically act a lot like kids, whose basic food and housing needs are covered by their parents, so they spend extra money on things that may seem frivolous (designer sneakers, concert tickets, etc.) Yet most of those kids, when they get older and handle their whole budgets themselves, don't respond by spending all their money on the frivolous stuff and wind up homeless and starving. Most, once in control of their full budget, step up their game. Would the poor do the same?

 

[Arkady]

Regardless of any 'dog whistle', what is your answer to the question proposed? What happens when folks run out of money before their next check?

I guess they have a lean couple weeks and, hopefuly, learn to budget better in the future. Someone who blows his check installing a new gun rack in the back of his pickup truck, and then spends the next two weeks eating nothing but rice for every meal because it's all he can afford, will maybe think twice, the next month, about blowing his check on NASCAR tickets rather than budgeting more wisely.

Another interesting idea would be to have this work as a debit card, with money trickled in, electronically, every day. That would naturally tend to favor saving up for purchases, and learning good budgeting habits, since it would give people a very real sense of how much they're allowed to spend every day. It would also make it less likely people would starve, since no matter how dumb you are with your money, when you get hungry enough that the food budget starts to take priority, you'll soon have enough of a trickle of money to more than get you through the day.

 

[Corruptbuddha]

I guess they have a lean couple weeks and, hopefuly, learn to budget better in the future. Someone who blows his check installing a new gun rack in the back of his pickup truck, and then spends the next two weeks eating nothing but rice for every meal because it's all he can afford, will maybe think twice, the next month, about blowing his check on NASCAR tickets rather than budgeting more wisely.

Hopefully?

Hopefully they would be able to do that now.

But they can't.

Why do you think Wal-Mart is so full of takers on the 1st and 15th?

Because they suck at handling money.

The very idea that handing people a check they did nothing to earn will teach them anything about responsible finance is absurd and reprehensible.

 

[PhilFish]

All good questions. I'm not sure. If I were to structure it, yes, the idea would be to get rid of means testing, etc., with the idea that you'd want the savings that come from just cutting a check and being done with it, rather than having to audit eligibility, etc. In that sense, it would be similar to SS. In fact, you could even make it part of SS if you wanted. Basically, start the payments high, gradually decrease them between age 18 and 25, so it was just a bare-subsistence payment during the peak earning years, then gradually increase it again between age 60 and 70, with the idea that you want to make it more than a bare-subsistence matter for someone to step away from working later in life.

I think an underlying question lingers.... what if anything is done beyond the issuance of monies (on whatever range of gradation based on age, etc..)

I would have to say .. nothing.