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Scrap the Welfare State and Give People Free Money

143 points by thejteam 13y ago

Retric 13y ago
I think a basic income is a decent idea but 583$ a month aka 10k - 3k for heath insurance seems rather low to replace things like disability checks especially if your removing all benefits for children. It's also not goig to satisfy people on social security who are getting checks for as much as 3,000$ a month.
- megaman821 13y ago
  I think this would have to be combined with universal healthcare. If basic income is enough to live on barring any medical issues, then universal healthcare would take care of the medical issues part. As for social security, it would have to be slowly phased out. The people on it now and the still working have been paying into the system, and should at least get there money back plus interest.
  - jrs99 13y ago
    universal health care is coming no matter what. The best governments will figure out a way to provide that, and if we want to stay competitive, that's what we'll have to do.
- salient 13y ago
  It definitely needs to be combined with a huge overhaul of the healthcare system (no, I don't think ACA is quite enough), and another huge overhaul of the education system (stop giving unlimited guaranteed money from the government to universities for starters).
saosebastiao 13y ago
Some libertarians may not be fans of a guaranteed or basic income because such a system would, they argue, disincentivize work. Murray believes that his surtax scheme would incentivize work after someone began earning over $25,000. I'm fairly libertarian and also agree with the concept of a basic income or negative income tax, but phrases like this are very dangerous. It would only begin incentivizing work after you make 25k? And what about people like me that took 28 years to get to that point? I would have never worked as hard as I did to finish college if I didn't have the threat of perpetual poverty and possibly homelessness hanging over my head. When I was 22, a $25k income with no work attached would have been the party of a lifetime, and I would have never tried going to college, let alone struggle (albeit mostly with ADHD, not college itself) to finish. There is a reason people get a little squeamish about proposals to just give poor people money...we all know what it does to us. You can't just go proposing something like this and throw out a magic number ($25k) and an assertion of how people will react to the incentive. You have to be much more careful and empirical than that.
- rsynnott 13y ago
  In conventional basic income systems, the basic income is _on top of_ anything you might be earning from a job, so work is incentivised from the start. In practice, for high earners, a lot of it would be clawed back in tax, of course. Certainly there would be people happy to live on it without working (assuming it was a reasonable figure), and that's fine, as long as _most_ people aren't in that group. To an extent it will depend on what you set the figure at, but history has shown that most people don't like not working, even if they don't need to to survive. An example; Ireland has a relatively generous social welfare system; an adult currently gets 188 euro a week plus housing benefit etc, and this lasts indefinitely. During the 90s-00s economic boom, unemployment fell below 4%, which is normally considered functional full employment. Clearly, when jobs were available, people wanted to do them. Now, maybe if you double or triple the figure it'll work out differently, but I'd be surprised if it would be that different. And that's a social welfare payment, which disincentivises working more than basic income (the social welfare payment goes away when you start working, the basic income doesn't).
- kiba 13y ago
  It would only begin incentivizing work after you make 25k? And what about people like me that took 28 years to get to that point? Incentive to work is only one issue. Another is that people don't want to lose their job because it would mean that they die. That mean technological improvements are more likely to be opposed by workers. With basic income, programmers and other job destroyers will be able to automate at will, and everyone will benefit. I would have never worked as hard as I did to finish college if I didn't have the threat of perpetual poverty and possibly homelessness hanging over my head. Then find a way to incentivize yourself to work. I never finished college, but now I am pretty active as a self taught learner and actually care more about learning than most college students. It has been a while since I didn't study and learn something new everyday. The threat of perpetual poverty is like the threat of dying in wars. Yes, it propel you forward, but it was not a good incentive.
  - saosebastiao 13y ago
    I'm not saying people should have looming threats of poverty in order to work. I'm saying that having too much too soon is a disincentive to self improvement. I've wanted to do what I currently do for a very long time, but there was no entrance to it without college, which was something I struggled with immensely. A $10k income with some pell grants would have meant food and health care while working my way through college (which I achieved by being a truck driver on weekends), but a $25k income would have meant "fuck it, I'm just gonna do nothing". Solutions like "Then find a way to incentivize yourself to work" might be good advice, but not a good policy.
ataggart 13y ago
Whatever the economic effect, I have a hard time imagining the political class giving up the power that comes from being the middle men between dispersed costs and concentrated benefits.
- ams6110 13y ago
  I have two concerns: the first is basically the one you identified: welfare and similar programs are less about helping people and more about keeping a large voting block in a state of dependency. I'm not sure the alternative of basic income changes that, it might actually increase it since more people would be getting basic income than are currently getting welfare and other forms of assistance. Any program which encourages people to be dependent on government rather than themselves is problematic in my view (obviously with exceptions for those with disabilites that make this impossible). My other concern is that it's simply inflationary. Giving every adult a $34,000 basic income (the amount proposed here) would mean a married couple would be bringing in $68,000 a year doing NOTHING AT ALL productive. There's no getting around economics: money is an abstraction of productivity. To the extent you introduce money into the economy that was not created by productivity, you simply reduce its value. So what would happen is that the basic income would become the new zero line. It represents the value of zero productive work. Wages and prices would simply inflate so that a person having only basic income would be as impoverished as someone having zero income is today.
  - jrs99 13y ago
    $34,000 is foolish when you can do a pilot program for $12K per year, or even $6 K per year to simply see what happens. There's no other way around it. You need to give people money in a more automatized world. wages and prices may increase, but money will still be more evenly distributed than it was before. As in the person that had nothing will now be able to get something even if prices increase. That is what's important. We simply can't leave these people behind because a robot will eventually do what they can do 24 hours per day without getting tired and more accurately than any human on earth.
  - icebraining 13y ago
3pt14159 13y ago
As robots and AI replace humans a Basic Income combined with geolibertarian style'd property and resource taxes are the only sane way to have humans compete with machines in the marketplace. Otherwise we're just born landless. Slaves to the land and robot owners who came before us bequeathed with immortality and inheritance of the former economy. Private property was necessary for a time. It ensured long term investment, but if we don't switch models soon social unrest will be the limiting factor on scientific advancement and growth.
drcube 13y ago
I've been saying this for years now. Give people the freedom to make their own economic decisions without the fate of crushing poverty over their heads. Give them the financial breathing room to learn a new skill, start a business, or simply find a better job than the one they currently have. Basically, the freedom to take risks. Rich people have been telling us for decades that is what they bring to the table. Risk. That's how jobs, innovation, progress and wealth are created. Let's see how it works when everyone has that opportunity. And if it decreases crime, disease, teen pregnancy, and the dropout rate, that's just icing on the cake.
- peterdundi 13y ago
  "Give people the freedom to make their own economic decisions" Why should they be free to make their own decision about how they spend MY money?
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  - tghw 13y ago
    Because the alternative is telling people how to spend it, which will be a less efficient use of that money. We already see this with food stamps and housing vouchers. There are many cases where someone has food stamps, but doesn't have trouble buying food, and so has left over food stamps at the end of the month. Yet they can't afford housing, because you can't pay rent with food stamps.
    - drcube 13y ago
      When I was a kid, my mom's poor friends would buy us groceries with their surplus food stamps, and my mom would pay them back in cash so they could actually pay their bills. Does anybody know if this is still possible/prevalent these days with EBT/Link cards?
peterdundi 13y ago
This is unpopular here, but I really believe that if you can't provide for yourself financially there is something seriously wrong with you, and I don't think treating you like a child is unreasonable. Beyond washing and feeding yourself, getting an income is pretty much adulthood 101.
- sp332 13y ago
  Then why does unemployment fluctuate so much? Do you think the population just forgets how to make money occasionally?
  - peterdundi 13y ago
    When unemployment fluctuates the bar for earning money is fluctuating. If you're the kind of person who is near that bar you need to take a good hard look at yourself.
    - sp332 13y ago
      Something external changed, and suddenly there's a problem with me? I need to look at myself, because someone else raised a bar? I think your point is bullshit. It's not like people are capable of making money when the mill shuts down. There is literally no money left in the town then.
      - simplemath 13y ago
        His point IS bullshit - if there is one to be gleaned at all. Its a classic cautionary tale in myopic argumentation - He's doing OK, so everyone else should be too, and if they aren't they aren't trying hard enough. Externality-free projection.
- swalkergibson 13y ago
  If someone has something seriously wrong with them, do you believe that degrading them further by "treating them like children" is going to effect the outcome you desire?
carbocation 13y ago
How would minimum basic income free us from a welfare state? What happens when your $50,000 in medical bills is greater than your $27,000 in annual income (or whatever it happens to be), and you elected not to purchase insurance with your money? Serious question, not meant at a dig against this proposal, because I am genuinely curious as to how it would be handled.
- jusben1369 13y ago
  I think they highlighted in there that $3000 of the $10,000 must be spent on healthcare coverage. Sounds like they're deliberately setting out to remove the chance to let people have a healthcare cost sink them.
- octo_t 13y ago
  obvious answer: universal healthcare.
  - carbocation 13y ago
    That implies that they're not talking about scrapping the welfare state. That's fine, but it implies that they are not speaking plainly, and it also eliminates the basis for my question.
    - maaku 13y ago
      Most people in the world don't count universal healthcare as part of the welfare state.
      - carbocation 13y ago
        Healthcare is one of the most universally agreed upon components of the welfare state. Or are you are using "welfare state" as a pejorative? Because it is a real phrase with a non-pejorative meaning.
- rwl 13y ago
  Yes, I have a similar question. One of the major reasons to have social programs that buy things like health insurance is that governments have a lot more bargaining power than individuals (up to and including the legal authority to set price caps). In the case of healthcare, governments can get the same coverage and care much cheaper per capita than individuals could if they purchased it on their own. Giving individuals a basic income does not give them this bargaining power, so doesn't that mean that either (a) there will still be a need for social welfare programs for things like healthcare, even with the basic income; or (b) the basic income level must be much higher per capita than what the government would spend on these programs? I think I am probably missing something here, so I'd appreciate it if someone would explain this.
Kiro 13y ago
Can someone tell me why basic income won't just lead to inflation? Everyone gets more money which drives up the prices until the gain is negligible.
- jrs99 13y ago
  the gain will never be negligible for a guy that had nothing at all. That's who this is for.
- gnaritas 13y ago
  Everyone doesn't get more money, the money is just distributed differently. The rich would be paying in much more than they get back in basic income. This doesn't change the money supply, just the distribution.
  - Domenic_S 13y ago
    Right, but cost of basics would increase. If you sell bread, and you know that everyone now has $xxK basic income, why would you not increase the price of bread?
    - dragonwriter 13y ago
      > If you sell bread, and you know that everyone now has $xxK basic income, why would you not increase the price of bread? If you are a monopoly, of course you would. That's called a monopoly rent -- and why, in a supply monopoly, the demand curve effectively sets prices. If you aren't a monopoly, you won't because competitors (either existing or new entrants) will undercut your prices until the prices are dropped to the economic cost of production.
      - Domenic_S 13y ago
        That isn't how pricing works. Your competitors would raise prices, not lower them. Either way there are only like 3 players in the "basics" market anyway so we're closer to a monopoly as it is.
prostoalex 13y ago
Do the "welfare state" programs include Medicare and Medicaid? Otherwise $3 trillion spend ($10,000 x 30,000,000 people) is pretty close to US budget expenditures today, but that figure includes all healthcare, defense and bond interest payments. http://www.heritage.org/research/reports/2013/08/federal-spending-by-the-numbers-2013 http://www.heritage.org/research/reports/2013/08/federal-spe... It's probably an affordable program at $1,000 a year, but at that level, is it going to make a difference?
- ctdonath 13y ago
  The article references $10,000/yr BGI for all over 21. Thats some $2,400,000,000,000 which is 15% of USA GDP.
  - prostoalex 13y ago
    From that same link the federal budget revenues for 2012 were at $2,501,000,000,000. Unless there's a plan to drastically increase those revenues, cutting a billion of overhead costs here and a few billion there won't help.
pinaceae 13y ago
As a European we are bit further down that path than the US. I assume most of the readers here are "wealthy", would not need basic guaranteed income. So let me explain why this is a good idea from a rich man's perspective. You give poor people a basic sum of money so they don't climb over the fence and kill you in your sleep. That's it. Behind all the nice language this is what it boils down to. It is paying off poor people to stop pestering you. Chump change for security. Europe learned it the hard way through numerous revolutions and war - keep the lower classes happy and everyone benefits. Social housing, healthcare, the lower rungs of Maslow's pyramid. The Romans called it panem et circenses. Not a new idea. Focus on the panem. Hungry people do desperate things. Want to see how society looks like that does not get that? Brazil. Mexico. Have a nice house in Sao Paulo or Mexico City? Then enjoy your 3m high wall with barbed wire around it. Sharing a bit of wealth means personal security for you. You don't get robbed. You don't get infected by shit because no one gets shots (yes, you want basic healthcare for all). You have a nice large market to sell shit to, so job security (the basic Henry Ford insight). So there you have it, even if you hate poor people there is good reason to give them some money.
- carbocation 13y ago
  From the optimist's view, think how many people whose lives are being spent working at Walmart or McDonald's who could instead be at home developing skills they are actually interested in (which school does a poor job of teaching), such as programming or sculpture, etc. Imagine the entrepreneurs who might feel freed to give business a chance, rather than feeling that they can't quit their day jobs? It would be a grand experiment with potentially huge benefits (and, as always, risks).
  - jasonlfunk 13y ago
    From the pessimistic point of view, why would anyone choose to work a crappy job at Walmart or McDonalds when the government would give them the same money without having to do anything. Walmart and McDonalds (and everyone else) would therefore either go out of business or raise their wages. Raising their wages would increase the price of their goods. Increasing prices of goods would increase the cost of living which would increase the poverty level which would increase the minimum guaranteed income. It's an inflationary cycle that would be very hard to avoid.
hga 13y ago
George McGovern lost to Richard Nixon in the 1972 presidential election in part due to his "demogrant" proposal to give $1,000, $5,600 in 2013 dollars, to every US citizen. In my memory, the political ads against it were only exceeded in impact with the ones about his proposed gutting of our military (had toy soldiers, ships, etc. on maps with a hand sweeping away the percentage he proposed to cut; this did not do well in a period when Cold War was very hot).
deleted 13y ago
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consonants 13y ago
It's cute that Reason is choosing to co-opt the narrative so as to define it within the narrow scope of their ideology. Whose interest is it to publish articles like "Shaming Non-Voters Has No Place In a Free Society," and this?
3am 13y ago
And when they spend their money stupidly and don't have enough money for health care or food, we let them die on the street, right? Or we let private charities cover the gap. But when they don't, we let them die on the street? And if we don't let them die on the street, we find ourselves back where we started, in need of a social insurance safety net for basic necessities.
- intopieces 13y ago
  I don't think single payer health care and this proposal are mutually exclusive. Additionally, the proposal behind this link stipulates that $3k be spent on healthcare, which could easily be implemented by a voucher system.
- streptomycin 13y ago
  We have the same problem today. For instance, food stamps can be sold/wasted, and not everyone who needs them signs up.
  - Domenic_S 13y ago
    Right, so why bother incurring more cost for the same outcome? It's like refactoring your code for speed and ignoring the DDoS that's bringing your app down in the first place.
    - streptomycin 13y ago
      Because basic income isn't just "keep everything exactly the same, but it's more expensive". There's more to it than that. Nobody has ever argued for basic income by saying it'll fix only the problem you stated (irresponsible people dying on the street).
protomyth 13y ago
I guess I'm cool with it but I really wish it was scaled with income (like every $2 earned decrease payment by $1) and paid daily M-F. I do worry about politicians buying votes by promising more money each election. There are some fairly hard solutions, but they go against our current political tradition. I've heard a means testing for voting saying that if you take more money than you pay, you are ineligible to vote or sit on a jury. [edit] I assume that all the other programs would be removed including student loans, unemployment, minimum wage, welfare, etc.
brockers 13y ago
The author is a little confused about the history of Libertarian thought on this issue. A minimum basic income (MBI) is NOT a social progressive concept first thought up by western social democrats but was originally a fundamental tenant of a flat tax system. Something Libertarian's have been arguing in favor of for a long time. The basic design is simple. You give every person a single dollar amount as a MBI and then ALL income (besides the MBI) is taxed at a flat rate of X percent. For example (and just using simple numbers for maths sake) pretend that the MBI is $10,000 and the tax rate is 10%. Everyone making LESS than $100,000 would actually receive a subsidy because their overall paid tax would be less than the $10,000 they received from the MBI. Everyone over $100,000 would pay a progressively higher tax approaching 20%. The results are: 1) A tax rate that is perfectly progressive providing a MBI and fully scaled real tax rate for everyone. 2) Increased income has no tax disincentives (your tax rate doesn't change because you move into a higher income.) 3) Simplifies that tax code dramatically (which would also increase revenue.) 4) Doesn't artificially encourage capital gains manipulation by large income holders. 5) Removes government manipulation of social policy by giving them ONLY two number to play with... MBI and tax rate! 6) Finally, it provides a real mechanism for everybody to feel the effects of tax rate changes. Making it MORE responsive to economic factors like income inequality. For example, if 90% of people would get more money in their pocket by increasing the MBI to $15,000 while also increasing the tax rate to 30%... the likelihood of that change actually passing through Congress is dramatically higher that it currently is because such a system is transparent to your own pocketbook. ALL of these effects without negatively affecting market freedom. Again, we see Libertarian thought is both MORE "fair" AND more compassionate.
- Symmetry 13y ago
  Another effect that's probably more relevant for Hacker News readers, it doesn't dis-incentivize having your income be higher some years and lower on others. Very important for people considering founding startups, but also for people thinking about pursuing more education.
  - dragonwriter 13y ago
    > Another effect that's probably more relevant for Hacker News readers, it doesn't dis-incentivize having your income be higher some years and lower on others. A progressive tax system that enabled either (a) recognize income for tax purposes in advance receiving it, or (b) deferring recieved in year t+1 that is much greater than in year t for tax purposes would do the same thing, without being a massive tax break (compared to existing progressive systems) to those who make large incomes year-after-year consistently.
maaku 13y ago
"Give people enough that they could do anything. But not so much that they can do nothing."
pkulak 13y ago
Related: http://www.npr.org/blogs/money/2013/10/25/240590433/what-happens-when-you-just-give-money-to-poor-people http://www.npr.org/blogs/money/2013/10/25/240590433/what-hap...
Roboprog 13y ago
How about the idea of actually hiring people, rather than handing out money? As in, the employer of last resort hires people to clean and fix roads and parks, etc. Or perhaps in some cases, being paid to go to school or doing basic research in fields deemed to be relevant at the time? (even if it means you do research for a couple of years for low pay, then bail out) There are enough things in the commons that need doing, I can't see just giving the money away to the able bodied/minded. What's wrong with using tax money to approach 100% employment, and if you want a larger salary, get a private job? (as for the more grungy private jobs, if they can't find people to do them for $MIN wage, maybe they should up the automation or fold, in some cases) Note that I am NOT advocating government ownership / communism, just basic Keynesian spending directed at useful activity, with the goal to keep unemployment near 0%. I suppose that in itself could be a nightmare for some corporations, but screw 'em. Treat people w/ dignity, or they can/will work elsewhere. (at least in the fantasy world in my head :-)) Recapping some other comments in this thread: "Money for nothing" is very likely to cause inflation. So would full employment, but perhaps actually having something of value produced by the employed would offset that some? Not many people would be satisfied sitting around doing nothing all day. Even in high school, most people got a bit bored after the end of summer break.
- venomsnake 13y ago
  Be careful. You are moving into Keynes heresy territory. The imperial inquisition (aka the very serious people) may want to have a word with you.
  - Roboprog 13y ago
    Am I the only one who caught the part about the regressive tax on the middle class ($25 - $50 K income range) to pay for the hand out??? Gotta love uncle Milty (Friedman) and his boys.
    - streptomycin 13y ago
      Probably. Friedman's negative income tax proposal was the opposite of regressive.
ALee 13y ago
Three interesting pieces of data that help this discussion: 1) To combat extreme poverty, a lot of great studies show that giving direct cash is better than giving non-profit services. http://www.economist.com/news/international/21588385-giving-money-directly-poor-people-works-surprisingly-well-it-cannot-deal http://www.economist.com/news/international/21588385-giving-... 2) Instead of expanding the welfare state, it's probably better that we expand the Earned Income Tax Credit (EITC) which has HUGE support on both sides of the aisle. It was first created by Milton Friedman and is one of the only things that is a policy that we predicted would be successful and became hugely successful. The issue is that each party in the United States has found that public opinion polling finds that "SNAP" or other parts of the federal government are hugely popular compared to the wonky sounding EITC. 3) Some studies also show that despite poverty, human beings will also forgo basic necessities (as determined by the state) and buy things like smartphones, text messaging plans, etc. All in all, really, what we should be doing is likely cash infusions to the extremely poor, expanding EITC (which somewhat supports the article), and keeping the important parts of the state alive, e.g. healthy food, early childhood pre-school, etc.
nraynaud 13y ago
There is something I would like to point out: the State is the only institution that can work at scale without having to extract benefits. It's the only thing that can get the economies of scale without having to pay the shareholders, it just has to break even. A State insurance is a quite different beast from a private insurance on this aspect for example. So giving money for people to buy a private insurance, or having the state running the insurance is very different.
wallawe 13y ago
Until the point where we decide that <$1000 a month is inhumane. "Who could live off of that?" says the next politician in line. "If I'm elected, you get $2,000 a month." Why not provide everyone with $5k a month. I think that is a reasonable amount to lift anyone out of poverty. That seems fair, right? The problem is, in essence, all you are doing is disincentivizing one person to work by paying them with another person who has chosen to work. Money is the ultimate incentive. Not to mentioned the effects on the overall economy. What do you think happens when everyone has more money to spend? Prices go up, and your 5k/month becomes worth what 2k was a few years ago.
- rprospero 13y ago
  Not everyone will have more money to spend. The proposal isn't based on printing more money, but shifting it around through taxes. In fact, it can lead to deflation. Assume that Alice has a million dollars and Bob has nothing. Eve sells pumpkins. She's currently charging $1000 per pumpkin, which cost her $100 to grow. She makes $900 profit. Now, we add the minimum income proposal. Alice is taxed $900 and this $900 is given to Bob. Even would then lower her price to $900. Bob is better offer, since he now has a pumpkin. Eve is better off, as she made $1600 in profit, as opposed to her old 900. Alice is out $800 dollars compared to the old system, but that's less than the $900 she was taxed. Of course, this was just an example and there's no guarantee that it would go down this way. On the other hand, there's no evidence that it must head down the inflation road, either.
nova 13y ago
Although I am not entirely convinced (what to do with immigrants, in particular) I believe this could be a good idea. We should judge this from a pragmatic, not ideological, viewpoint. It may not be the ideal libertarian society, but it could easily be better than the current one, where we are already paying an insanely high amount of taxes which are in great part wasted. But I don't see its application without some huge political change, as politicians would be most unwilling to give up the power they now yield. Let me share a well known Spanish saying: http://en.wiktionary.org/wiki/quien_parte_y_reparte_se_lleva_la_mejor_parte http://en.wiktionary.org/wiki/quien_parte_y_reparte_se_lleva...
phamilton 13y ago
As someone who lived on $800/month (rent was $235 for my share), I'm wondering what would have happened if all of us had 3x that amount to live on each month. I imagine rent would have gone up substantially as would other expenses if it was understood that we could afford double or triple that amount. My guess is that the people barely making ends meet on a minimum wage job would barely make ends meet on a basic income + minimum wage job, regardless of actual amounts. Is anyone familiar enough with the economists arguments to explain this?
philwelch 13y ago
One question: has anyone else ever done the math on this? Let's suppose we have a basic income of $1,000 per month per citizen. This is barely enough to get by in someplace like eastern Washington and not enough to get by in someplace like Seattle but it's a nice round number so let's go with it. The US population is about 300 million. But let's assume only adult citizens receive basic income. If you want children you have to provide for them yourself. How many adult US citizens are there? Well, Barack Obama won 51.1% of the popular vote in 2012 with about 66 million votes with 58% turnout. By my calculations that's a voting-eligible population of about 220 million. 220 million people receiving 12,000 a year is around 2.6 trillion dollars. Total federal tax revenue is around 2.8 trillion dollars, and total expenditures are around 3.5 trillion. You think you can make up the difference by eliminating other entitlements? You can't. Look it up. Basic income + defense + transportation already exceeds the current budget, with nothing left over for courts, embassies, Medicare, the space program, or the Coast Guard. And that's with a particularly low basic income that isn't really enough. So you're left with having to raise taxes. Fine, you might say, just tax the rich--except even if you subtract out a lot of entitlements to close the budget gap, including social security, you still have to raise maybe an extra trillion dollars in tax revenue just to keep a comparable deficit. The only way to really make basic income work is if it's effectively means tested. One way of doing this might be to say: if you get paid 72,000 a year, your salary drops to 60,000 and the government taxes your employer for the 12,000 that you receive in basic income; either that or you just don't receive basic income anymore, it's mathematically equivalent. But that is more of a guaranteed minimum income than a basic income anymore, and it's politically that much more difficult.
- wildwood 13y ago
  I completely agree, it's interesting how many people love to jump to economic theorizing about how people will act, and how few people look at the actual cost to implement. I read through a breakdown in one of the Basic Income books, of what it would cost just to get a $10,000/year basic income. Here's just some of the changes that would be needed: * cut military spending by a third; * get rid of ethanol subsidies; * get rid of mortgage interest tax breaks; * get rid of "married filing jointly/separately" filing status, make everyone file just for themselves And that's just the ones that jumped out at me. Virtually all tax loopholes would have to be gotten rid of, and more. All for just the $10K/year basic income level. So, just as a question of the political cost to implement, Basic Income seems like a laughable non-starter.
motters 13y ago
Having been in the welfare system at various points in my life I can easily imagine that the bureaucracy must be expensive to upkeep. There are numerous complex rules, all of which need to be checked and double checked at regular intervals. A basic minimum income would at a stroke sweep a way a large army of box-ticking officials and end the pernicious moralising and absurd punishments for not adhering precisely to whimsical rules.
beat 13y ago
It's nice to see Reason, the voice of mainstream American libertarianism, getting behind this idea. I think it's possible to win over significant elements of the left as well (although you'd probably have to fight labor and others that benefit from the current political structure). I've thought for a while that a libertarian/liberal alliance makes far more sense and could shake the American political system far more effectively than the current structure where the libertarians are unhappy puppets of the Republicans. This is the issue that could make it work.
strlen 13y ago
I see a lot of comments here talking about unfairness of this system, about how it would mean less motivation, etc... and general comments about wealth redistribution. First, this program would not create additional welfare dependants. Instead, it would transfer SNAP recepients, able individuals living on social security disability payments (http://thelastpsychiatrist.com/2011/09/how_to_be_mean_to_your_kids.html http://thelastpsychiatrist.com/2011/09/how_to_be_mean_to_you...), to a system that is market-based, less expensive, and (relative to the current system) creates incentives to join and/or stay in the labour force (you don't lose eligibility for this system the moment you get a job). Second, overall welfare programs for the poor do not cost Americans nearly as much as entitlements for the middle classes (medicare, ACA, social security, etc...). So if you're a doctrinaire libertarian/conservative who is unhappy that any taxation/wealth transfer exist, then you should work towards eliminating these programs before going after SNAP, ACA, or opposing reform like this. There's been multiple structural shifts over the last century: the second industrial revolution, de-industrialization, and now job-less recoveries (see Tyler Cowen's "The Average is Over" and "Great Stagnation" for discussion of the later). As nearly all jobs work becomes knowledge work (as many have -- e.g., move to CNC for metal and wood working), each technology change means a bulk of technical knowledge becomes obsolete. This leads to a bimodal employment structure: those with the right technological knowledge (as well as those at/perceived to be at the top of the talent curve) are rewarded extraordinarily (driving up housing prices), while those without the appropriate knowledge and who are unable to re-adjust fast enough (e.g., currently there's a resurgence of C/C++ programming, but yet we've got a generation of programmers who have never bothered to learn manual memory management) have to settle for lower wages until they're at a point where the salary they will need to convince them to (again) take up full-time employment will not be a salary any employer will pay. As a result you'll see many workers working just enough to get by (remote freelance/consulting work) and then eventually drop out of the labour pool altogether. A wise welfare state policy should then be designed not to punish those with volatile incomes and encourage continuous labour pool participation (until the workers gained the technical skills needed for higher wage jobs, or perhaps the skills they've already had have suddenly become in-demand). Eventually, I think this work itself out: settlement of inland west, cheaper housing construction techniques, a general socialization of the values of an entrepreneurial workplace (vs. workplace of "company-men"/"company-women") means there will once again be a middle class. However, I am very much scared of the many stupid things an electorate desperate "to do something" coupled with rent-seeking businesses might end up doing (that will cause serious long-term damage to this country) in the meantime. Any move from a system that is a mess of regulation (navigable best by those with "pull") to one that is more market-based would help.
Aloha 13y ago
We're doing this now one way or another, I mean in terms of dollars spent. The problem is, its 14+ different programs doing it - if we make ONE program, we've just cut how many administrators and bureaucrats out of the loop saving however many dollars in overhead - plus all sorts of different infrastructure systems to administer and pay it all. It's logical common sense this program would work more cheaply (and possibly better) just thru overhead savings. Means tested welfare is wasteful.
walshemj 13y ago
no your replacing one type of welfare state with another arguably "fairer" one - most welfare sates discriminate against childless single people.
jl6 13y ago
We talk about the disincentive to work. But do we actually need that much work doing? Are there actually jobs for everyone? Seems like the main problem a basic income scheme might cause is simply overpopulation.
amerika_blog 13y ago
If you start giving out "free money," more people will show up to claim it.
dreamdu5t 13y ago
So, how do you propose to do this without having me pay more than the 25% of my income I already pay in taxes? As it is I'd rather spend my tax bill on my sick mother, rather than to some person I've never met to do whatever he wishes with. Let the people proposing the basic income be the first to pay into it - to the maximum extent possible. The napkin math doesn't add up even for measly amounts of income.
goggles99 13y ago
>Many welfare recipients are required to undergo drug tests, despite the fact that many Americans take illegal drugs while still being good parents and holding down a job. Had to stop here and evaluate if I should read any further. The author is suggesting that we give people money to directly break the law with it? Even more importantly though, the percentage of welfare recipients who use illegal drugs and are good parents and holding down a job is less than 5%. Thus the requirement seems common sense since we do not wish to merely reinforce and enable bad/illegal behavior.
goggles99 13y ago
From what I remember reading about the Swiss giveaway, some thought that it would actually save money overall because people would get this money, but the plan was to cut away welfare and other social services at the same time. The reduction of administrative costs and govt inefficiencies would be saved. That is an interesting notion, but it seems that there is no plan for those who will inevitably blow all their free money on possessions, drugs, gambling ETC. and still need to eat, be clothed, housed, buy cable TV (like most welfare recipients do) ETC. I hope that they actually pass this new law because it is very interesting. Assuming enough people don't just waste the money and still need the govt cheese this could actually transform a society.
JJ216 13y ago
This is Switzerland subtly dumping money into their economy in an effort to devalue the CHF; they're pretty damn desperate, not hypers progressive. And it would never work in the US because we have a strong belief in paternalism as state policy in regard to welfare...the government simply knows better how to spend money than a poor person ever could...

143 points by thejteam 13y ago

I think a basic income is a decent idea but 583$ a month aka 10k - 3k for heath insurance seems rather low to replace things like disability checks especially if your removing all benefits for children. It's also not goig to satisfy people on social security who are getting checks for as much as 3,000$ a month.

megaman821 13y ago
I think this would have to be combined with universal healthcare. If basic income is enough to live on barring any medical issues, then universal healthcare would take care of the medical issues part. As for social security, it would have to be slowly phased out. The people on it now and the still working have been paying into the system, and should at least get there money back plus interest.
- jrs99 13y ago
  universal health care is coming no matter what. The best governments will figure out a way to provide that, and if we want to stay competitive, that's what we'll have to do.
salient 13y ago
It definitely needs to be combined with a huge overhaul of the healthcare system (no, I don't think ACA is quite enough), and another huge overhaul of the education system (stop giving unlimited guaranteed money from the government to universities for starters).

saosebastiao 13y ago

Some libertarians may not be fans of a guaranteed or basic income because such a system would, they argue, disincentivize work. Murray believes that his surtax scheme would incentivize work after someone began earning over $25,000. I'm fairly libertarian and also agree with the concept of a basic income or negative income tax, but phrases like this are very dangerous. It would only begin incentivizing work after you make 25k? And what about people like me that took 28 years to get to that point? I would have never worked as hard as I did to finish college if I didn't have the threat of perpetual poverty and possibly homelessness hanging over my head. When I was 22, a $25k income with no work attached would have been the party of a lifetime, and I would have never tried going to college, let alone struggle (albeit mostly with ADHD, not college itself) to finish. There is a reason people get a little squeamish about proposals to just give poor people money...we all know what it does to us. You can't just go proposing something like this and throw out a magic number ($25k) and an assertion of how people will react to the incentive. You have to be much more careful and empirical than that.

rsynnott 13y ago
In conventional basic income systems, the basic income is _on top of_ anything you might be earning from a job, so work is incentivised from the start. In practice, for high earners, a lot of it would be clawed back in tax, of course. Certainly there would be people happy to live on it without working (assuming it was a reasonable figure), and that's fine, as long as _most_ people aren't in that group. To an extent it will depend on what you set the figure at, but history has shown that most people don't like not working, even if they don't need to to survive. An example; Ireland has a relatively generous social welfare system; an adult currently gets 188 euro a week plus housing benefit etc, and this lasts indefinitely. During the 90s-00s economic boom, unemployment fell below 4%, which is normally considered functional full employment. Clearly, when jobs were available, people wanted to do them. Now, maybe if you double or triple the figure it'll work out differently, but I'd be surprised if it would be that different. And that's a social welfare payment, which disincentivises working more than basic income (the social welfare payment goes away when you start working, the basic income doesn't).
kiba 13y ago
It would only begin incentivizing work after you make 25k? And what about people like me that took 28 years to get to that point? Incentive to work is only one issue. Another is that people don't want to lose their job because it would mean that they die. That mean technological improvements are more likely to be opposed by workers. With basic income, programmers and other job destroyers will be able to automate at will, and everyone will benefit. I would have never worked as hard as I did to finish college if I didn't have the threat of perpetual poverty and possibly homelessness hanging over my head. Then find a way to incentivize yourself to work. I never finished college, but now I am pretty active as a self taught learner and actually care more about learning than most college students. It has been a while since I didn't study and learn something new everyday. The threat of perpetual poverty is like the threat of dying in wars. Yes, it propel you forward, but it was not a good incentive.
- saosebastiao 13y ago
  I'm not saying people should have looming threats of poverty in order to work. I'm saying that having too much too soon is a disincentive to self improvement. I've wanted to do what I currently do for a very long time, but there was no entrance to it without college, which was something I struggled with immensely. A $10k income with some pell grants would have meant food and health care while working my way through college (which I achieved by being a truck driver on weekends), but a $25k income would have meant "fuck it, I'm just gonna do nothing". Solutions like "Then find a way to incentivize yourself to work" might be good advice, but not a good policy.

ataggart 13y ago

Whatever the economic effect, I have a hard time imagining the political class giving up the power that comes from being the middle men between dispersed costs and concentrated benefits.

ams6110 13y ago
I have two concerns: the first is basically the one you identified: welfare and similar programs are less about helping people and more about keeping a large voting block in a state of dependency. I'm not sure the alternative of basic income changes that, it might actually increase it since more people would be getting basic income than are currently getting welfare and other forms of assistance. Any program which encourages people to be dependent on government rather than themselves is problematic in my view (obviously with exceptions for those with disabilites that make this impossible). My other concern is that it's simply inflationary. Giving every adult a $34,000 basic income (the amount proposed here) would mean a married couple would be bringing in $68,000 a year doing NOTHING AT ALL productive. There's no getting around economics: money is an abstraction of productivity. To the extent you introduce money into the economy that was not created by productivity, you simply reduce its value. So what would happen is that the basic income would become the new zero line. It represents the value of zero productive work. Wages and prices would simply inflate so that a person having only basic income would be as impoverished as someone having zero income is today.
- jrs99 13y ago
  $34,000 is foolish when you can do a pilot program for $12K per year, or even $6 K per year to simply see what happens. There's no other way around it. You need to give people money in a more automatized world. wages and prices may increase, but money will still be more evenly distributed than it was before. As in the person that had nothing will now be able to get something even if prices increase. That is what's important. We simply can't leave these people behind because a robot will eventually do what they can do 24 hours per day without getting tired and more accurately than any human on earth.
- icebraining 13y ago

3pt14159 13y ago

As robots and AI replace humans a Basic Income combined with geolibertarian style'd property and resource taxes are the only sane way to have humans compete with machines in the marketplace. Otherwise we're just born landless. Slaves to the land and robot owners who came before us bequeathed with immortality and inheritance of the former economy. Private property was necessary for a time. It ensured long term investment, but if we don't switch models soon social unrest will be the limiting factor on scientific advancement and growth.

drcube 13y ago

I've been saying this for years now. Give people the freedom to make their own economic decisions without the fate of crushing poverty over their heads. Give them the financial breathing room to learn a new skill, start a business, or simply find a better job than the one they currently have. Basically, the freedom to take risks. Rich people have been telling us for decades that is what they bring to the table. Risk. That's how jobs, innovation, progress and wealth are created. Let's see how it works when everyone has that opportunity. And if it decreases crime, disease, teen pregnancy, and the dropout rate, that's just icing on the cake.

peterdundi 13y ago
"Give people the freedom to make their own economic decisions" Why should they be free to make their own decision about how they spend MY money?
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- tghw 13y ago
  Because the alternative is telling people how to spend it, which will be a less efficient use of that money. We already see this with food stamps and housing vouchers. There are many cases where someone has food stamps, but doesn't have trouble buying food, and so has left over food stamps at the end of the month. Yet they can't afford housing, because you can't pay rent with food stamps.
  - drcube 13y ago
    When I was a kid, my mom's poor friends would buy us groceries with their surplus food stamps, and my mom would pay them back in cash so they could actually pay their bills. Does anybody know if this is still possible/prevalent these days with EBT/Link cards?

peterdundi 13y ago

This is unpopular here, but I really believe that if you can't provide for yourself financially there is something seriously wrong with you, and I don't think treating you like a child is unreasonable. Beyond washing and feeding yourself, getting an income is pretty much adulthood 101.

sp332 13y ago
Then why does unemployment fluctuate so much? Do you think the population just forgets how to make money occasionally?
- peterdundi 13y ago
  When unemployment fluctuates the bar for earning money is fluctuating. If you're the kind of person who is near that bar you need to take a good hard look at yourself.
  - sp332 13y ago
    Something external changed, and suddenly there's a problem with me? I need to look at myself, because someone else raised a bar? I think your point is bullshit. It's not like people are capable of making money when the mill shuts down. There is literally no money left in the town then.
    - simplemath 13y ago
      His point IS bullshit - if there is one to be gleaned at all. Its a classic cautionary tale in myopic argumentation - He's doing OK, so everyone else should be too, and if they aren't they aren't trying hard enough. Externality-free projection.
swalkergibson 13y ago
If someone has something seriously wrong with them, do you believe that degrading them further by "treating them like children" is going to effect the outcome you desire?

carbocation 13y ago

How would minimum basic income free us from a welfare state? What happens when your $50,000 in medical bills is greater than your $27,000 in annual income (or whatever it happens to be), and you elected not to purchase insurance with your money? Serious question, not meant at a dig against this proposal, because I am genuinely curious as to how it would be handled.

jusben1369 13y ago
I think they highlighted in there that $3000 of the $10,000 must be spent on healthcare coverage. Sounds like they're deliberately setting out to remove the chance to let people have a healthcare cost sink them.
octo_t 13y ago
obvious answer: universal healthcare.
- carbocation 13y ago
  That implies that they're not talking about scrapping the welfare state. That's fine, but it implies that they are not speaking plainly, and it also eliminates the basis for my question.
  - maaku 13y ago
    Most people in the world don't count universal healthcare as part of the welfare state.
    - carbocation 13y ago
      Healthcare is one of the most universally agreed upon components of the welfare state. Or are you are using "welfare state" as a pejorative? Because it is a real phrase with a non-pejorative meaning.
rwl 13y ago
Yes, I have a similar question. One of the major reasons to have social programs that buy things like health insurance is that governments have a lot more bargaining power than individuals (up to and including the legal authority to set price caps). In the case of healthcare, governments can get the same coverage and care much cheaper per capita than individuals could if they purchased it on their own. Giving individuals a basic income does not give them this bargaining power, so doesn't that mean that either (a) there will still be a need for social welfare programs for things like healthcare, even with the basic income; or (b) the basic income level must be much higher per capita than what the government would spend on these programs? I think I am probably missing something here, so I'd appreciate it if someone would explain this.

Kiro 13y ago

Can someone tell me why basic income won't just lead to inflation? Everyone gets more money which drives up the prices until the gain is negligible.

jrs99 13y ago
the gain will never be negligible for a guy that had nothing at all. That's who this is for.
gnaritas 13y ago
Everyone doesn't get more money, the money is just distributed differently. The rich would be paying in much more than they get back in basic income. This doesn't change the money supply, just the distribution.
- Domenic_S 13y ago
  Right, but cost of basics would increase. If you sell bread, and you know that everyone now has $xxK basic income, why would you not increase the price of bread?
  - dragonwriter 13y ago
    > If you sell bread, and you know that everyone now has $xxK basic income, why would you not increase the price of bread? If you are a monopoly, of course you would. That's called a monopoly rent -- and why, in a supply monopoly, the demand curve effectively sets prices. If you aren't a monopoly, you won't because competitors (either existing or new entrants) will undercut your prices until the prices are dropped to the economic cost of production.
    - Domenic_S 13y ago
      That isn't how pricing works. Your competitors would raise prices, not lower them. Either way there are only like 3 players in the "basics" market anyway so we're closer to a monopoly as it is.

prostoalex 13y ago

Do the "welfare state" programs include Medicare and Medicaid? Otherwise $3 trillion spend ($10,000 x 30,000,000 people) is pretty close to US budget expenditures today, but that figure includes all healthcare, defense and bond interest payments. http://www.heritage.org/research/reports/2013/08/federal-spending-by-the-numbers-2013 http://www.heritage.org/research/reports/2013/08/federal-spe... It's probably an affordable program at $1,000 a year, but at that level, is it going to make a difference?

ctdonath 13y ago
The article references $10,000/yr BGI for all over 21. Thats some $2,400,000,000,000 which is 15% of USA GDP.
- prostoalex 13y ago
  From that same link the federal budget revenues for 2012 were at $2,501,000,000,000. Unless there's a plan to drastically increase those revenues, cutting a billion of overhead costs here and a few billion there won't help.

pinaceae 13y ago

As a European we are bit further down that path than the US. I assume most of the readers here are "wealthy", would not need basic guaranteed income. So let me explain why this is a good idea from a rich man's perspective. You give poor people a basic sum of money so they don't climb over the fence and kill you in your sleep. That's it. Behind all the nice language this is what it boils down to. It is paying off poor people to stop pestering you. Chump change for security. Europe learned it the hard way through numerous revolutions and war - keep the lower classes happy and everyone benefits. Social housing, healthcare, the lower rungs of Maslow's pyramid. The Romans called it panem et circenses. Not a new idea. Focus on the panem. Hungry people do desperate things. Want to see how society looks like that does not get that? Brazil. Mexico. Have a nice house in Sao Paulo or Mexico City? Then enjoy your 3m high wall with barbed wire around it. Sharing a bit of wealth means personal security for you. You don't get robbed. You don't get infected by shit because no one gets shots (yes, you want basic healthcare for all). You have a nice large market to sell shit to, so job security (the basic Henry Ford insight). So there you have it, even if you hate poor people there is good reason to give them some money.

carbocation 13y ago
From the optimist's view, think how many people whose lives are being spent working at Walmart or McDonald's who could instead be at home developing skills they are actually interested in (which school does a poor job of teaching), such as programming or sculpture, etc. Imagine the entrepreneurs who might feel freed to give business a chance, rather than feeling that they can't quit their day jobs? It would be a grand experiment with potentially huge benefits (and, as always, risks).
- jasonlfunk 13y ago
  From the pessimistic point of view, why would anyone choose to work a crappy job at Walmart or McDonalds when the government would give them the same money without having to do anything. Walmart and McDonalds (and everyone else) would therefore either go out of business or raise their wages. Raising their wages would increase the price of their goods. Increasing prices of goods would increase the cost of living which would increase the poverty level which would increase the minimum guaranteed income. It's an inflationary cycle that would be very hard to avoid.

hga 13y ago

George McGovern lost to Richard Nixon in the 1972 presidential election in part due to his "demogrant" proposal to give $1,000, $5,600 in 2013 dollars, to every US citizen. In my memory, the political ads against it were only exceeded in impact with the ones about his proposed gutting of our military (had toy soldiers, ships, etc. on maps with a hand sweeping away the percentage he proposed to cut; this did not do well in a period when Cold War was very hot).

deleted 13y ago

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consonants 13y ago

It's cute that Reason is choosing to co-opt the narrative so as to define it within the narrow scope of their ideology. Whose interest is it to publish articles like "Shaming Non-Voters Has No Place In a Free Society," and this?

3am 13y ago

And when they spend their money stupidly and don't have enough money for health care or food, we let them die on the street, right? Or we let private charities cover the gap. But when they don't, we let them die on the street? And if we don't let them die on the street, we find ourselves back where we started, in need of a social insurance safety net for basic necessities.

intopieces 13y ago
I don't think single payer health care and this proposal are mutually exclusive. Additionally, the proposal behind this link stipulates that $3k be spent on healthcare, which could easily be implemented by a voucher system.
streptomycin 13y ago
We have the same problem today. For instance, food stamps can be sold/wasted, and not everyone who needs them signs up.
- Domenic_S 13y ago
  Right, so why bother incurring more cost for the same outcome? It's like refactoring your code for speed and ignoring the DDoS that's bringing your app down in the first place.
  - streptomycin 13y ago
    Because basic income isn't just "keep everything exactly the same, but it's more expensive". There's more to it than that. Nobody has ever argued for basic income by saying it'll fix only the problem you stated (irresponsible people dying on the street).

protomyth 13y ago

I guess I'm cool with it but I really wish it was scaled with income (like every $2 earned decrease payment by $1) and paid daily M-F. I do worry about politicians buying votes by promising more money each election. There are some fairly hard solutions, but they go against our current political tradition. I've heard a means testing for voting saying that if you take more money than you pay, you are ineligible to vote or sit on a jury. [edit] I assume that all the other programs would be removed including student loans, unemployment, minimum wage, welfare, etc.

brockers 13y ago

The author is a little confused about the history of Libertarian thought on this issue. A minimum basic income (MBI) is NOT a social progressive concept first thought up by western social democrats but was originally a fundamental tenant of a flat tax system. Something Libertarian's have been arguing in favor of for a long time. The basic design is simple. You give every person a single dollar amount as a MBI and then ALL income (besides the MBI) is taxed at a flat rate of X percent. For example (and just using simple numbers for maths sake) pretend that the MBI is $10,000 and the tax rate is 10%. Everyone making LESS than $100,000 would actually receive a subsidy because their overall paid tax would be less than the $10,000 they received from the MBI. Everyone over $100,000 would pay a progressively higher tax approaching 20%. The results are: 1) A tax rate that is perfectly progressive providing a MBI and fully scaled real tax rate for everyone. 2) Increased income has no tax disincentives (your tax rate doesn't change because you move into a higher income.) 3) Simplifies that tax code dramatically (which would also increase revenue.) 4) Doesn't artificially encourage capital gains manipulation by large income holders. 5) Removes government manipulation of social policy by giving them ONLY two number to play with... MBI and tax rate! 6) Finally, it provides a real mechanism for everybody to feel the effects of tax rate changes. Making it MORE responsive to economic factors like income inequality. For example, if 90% of people would get more money in their pocket by increasing the MBI to $15,000 while also increasing the tax rate to 30%... the likelihood of that change actually passing through Congress is dramatically higher that it currently is because such a system is transparent to your own pocketbook. ALL of these effects without negatively affecting market freedom. Again, we see Libertarian thought is both MORE "fair" AND more compassionate.

Symmetry 13y ago
Another effect that's probably more relevant for Hacker News readers, it doesn't dis-incentivize having your income be higher some years and lower on others. Very important for people considering founding startups, but also for people thinking about pursuing more education.
- dragonwriter 13y ago
  > Another effect that's probably more relevant for Hacker News readers, it doesn't dis-incentivize having your income be higher some years and lower on others. A progressive tax system that enabled either (a) recognize income for tax purposes in advance receiving it, or (b) deferring recieved in year t+1 that is much greater than in year t for tax purposes would do the same thing, without being a massive tax break (compared to existing progressive systems) to those who make large incomes year-after-year consistently.

maaku 13y ago

"Give people enough that they could do anything. But not so much that they can do nothing."

pkulak 13y ago

Related: http://www.npr.org/blogs/money/2013/10/25/240590433/what-happens-when-you-just-give-money-to-poor-people http://www.npr.org/blogs/money/2013/10/25/240590433/what-hap...

Roboprog 13y ago

How about the idea of actually hiring people, rather than handing out money? As in, the employer of last resort hires people to clean and fix roads and parks, etc. Or perhaps in some cases, being paid to go to school or doing basic research in fields deemed to be relevant at the time? (even if it means you do research for a couple of years for low pay, then bail out) There are enough things in the commons that need doing, I can't see just giving the money away to the able bodied/minded. What's wrong with using tax money to approach 100% employment, and if you want a larger salary, get a private job? (as for the more grungy private jobs, if they can't find people to do them for $MIN wage, maybe they should up the automation or fold, in some cases) Note that I am NOT advocating government ownership / communism, just basic Keynesian spending directed at useful activity, with the goal to keep unemployment near 0%. I suppose that in itself could be a nightmare for some corporations, but screw 'em. Treat people w/ dignity, or they can/will work elsewhere. (at least in the fantasy world in my head :-)) Recapping some other comments in this thread: "Money for nothing" is very likely to cause inflation. So would full employment, but perhaps actually having something of value produced by the employed would offset that some? Not many people would be satisfied sitting around doing nothing all day. Even in high school, most people got a bit bored after the end of summer break.

venomsnake 13y ago
Be careful. You are moving into Keynes heresy territory. The imperial inquisition (aka the very serious people) may want to have a word with you.
- Roboprog 13y ago
  Am I the only one who caught the part about the regressive tax on the middle class ($25 - $50 K income range) to pay for the hand out??? Gotta love uncle Milty (Friedman) and his boys.
  - streptomycin 13y ago
    Probably. Friedman's negative income tax proposal was the opposite of regressive.

ALee 13y ago

Three interesting pieces of data that help this discussion: 1) To combat extreme poverty, a lot of great studies show that giving direct cash is better than giving non-profit services. http://www.economist.com/news/international/21588385-giving-money-directly-poor-people-works-surprisingly-well-it-cannot-deal http://www.economist.com/news/international/21588385-giving-... 2) Instead of expanding the welfare state, it's probably better that we expand the Earned Income Tax Credit (EITC) which has HUGE support on both sides of the aisle. It was first created by Milton Friedman and is one of the only things that is a policy that we predicted would be successful and became hugely successful. The issue is that each party in the United States has found that public opinion polling finds that "SNAP" or other parts of the federal government are hugely popular compared to the wonky sounding EITC. 3) Some studies also show that despite poverty, human beings will also forgo basic necessities (as determined by the state) and buy things like smartphones, text messaging plans, etc. All in all, really, what we should be doing is likely cash infusions to the extremely poor, expanding EITC (which somewhat supports the article), and keeping the important parts of the state alive, e.g. healthy food, early childhood pre-school, etc.

nraynaud 13y ago

There is something I would like to point out: the State is the only institution that can work at scale without having to extract benefits. It's the only thing that can get the economies of scale without having to pay the shareholders, it just has to break even. A State insurance is a quite different beast from a private insurance on this aspect for example. So giving money for people to buy a private insurance, or having the state running the insurance is very different.

wallawe 13y ago

Until the point where we decide that <$1000 a month is inhumane. "Who could live off of that?" says the next politician in line. "If I'm elected, you get $2,000 a month." Why not provide everyone with $5k a month. I think that is a reasonable amount to lift anyone out of poverty. That seems fair, right? The problem is, in essence, all you are doing is disincentivizing one person to work by paying them with another person who has chosen to work. Money is the ultimate incentive. Not to mentioned the effects on the overall economy. What do you think happens when everyone has more money to spend? Prices go up, and your 5k/month becomes worth what 2k was a few years ago.

rprospero 13y ago
Not everyone will have more money to spend. The proposal isn't based on printing more money, but shifting it around through taxes. In fact, it can lead to deflation. Assume that Alice has a million dollars and Bob has nothing. Eve sells pumpkins. She's currently charging $1000 per pumpkin, which cost her $100 to grow. She makes $900 profit. Now, we add the minimum income proposal. Alice is taxed $900 and this $900 is given to Bob. Even would then lower her price to $900. Bob is better offer, since he now has a pumpkin. Eve is better off, as she made $1600 in profit, as opposed to her old 900. Alice is out $800 dollars compared to the old system, but that's less than the $900 she was taxed. Of course, this was just an example and there's no guarantee that it would go down this way. On the other hand, there's no evidence that it must head down the inflation road, either.

nova 13y ago

Although I am not entirely convinced (what to do with immigrants, in particular) I believe this could be a good idea. We should judge this from a pragmatic, not ideological, viewpoint. It may not be the ideal libertarian society, but it could easily be better than the current one, where we are already paying an insanely high amount of taxes which are in great part wasted. But I don't see its application without some huge political change, as politicians would be most unwilling to give up the power they now yield. Let me share a well known Spanish saying: http://en.wiktionary.org/wiki/quien_parte_y_reparte_se_lleva_la_mejor_parte http://en.wiktionary.org/wiki/quien_parte_y_reparte_se_lleva...

phamilton 13y ago

As someone who lived on $800/month (rent was $235 for my share), I'm wondering what would have happened if all of us had 3x that amount to live on each month. I imagine rent would have gone up substantially as would other expenses if it was understood that we could afford double or triple that amount. My guess is that the people barely making ends meet on a minimum wage job would barely make ends meet on a basic income + minimum wage job, regardless of actual amounts. Is anyone familiar enough with the economists arguments to explain this?

philwelch 13y ago

One question: has anyone else ever done the math on this? Let's suppose we have a basic income of $1,000 per month per citizen. This is barely enough to get by in someplace like eastern Washington and not enough to get by in someplace like Seattle but it's a nice round number so let's go with it. The US population is about 300 million. But let's assume only adult citizens receive basic income. If you want children you have to provide for them yourself. How many adult US citizens are there? Well, Barack Obama won 51.1% of the popular vote in 2012 with about 66 million votes with 58% turnout. By my calculations that's a voting-eligible population of about 220 million. 220 million people receiving 12,000 a year is around 2.6 trillion dollars. Total federal tax revenue is around 2.8 trillion dollars, and total expenditures are around 3.5 trillion. You think you can make up the difference by eliminating other entitlements? You can't. Look it up. Basic income + defense + transportation already exceeds the current budget, with nothing left over for courts, embassies, Medicare, the space program, or the Coast Guard. And that's with a particularly low basic income that isn't really enough. So you're left with having to raise taxes. Fine, you might say, just tax the rich--except even if you subtract out a lot of entitlements to close the budget gap, including social security, you still have to raise maybe an extra trillion dollars in tax revenue just to keep a comparable deficit. The only way to really make basic income work is if it's effectively means tested. One way of doing this might be to say: if you get paid 72,000 a year, your salary drops to 60,000 and the government taxes your employer for the 12,000 that you receive in basic income; either that or you just don't receive basic income anymore, it's mathematically equivalent. But that is more of a guaranteed minimum income than a basic income anymore, and it's politically that much more difficult.

wildwood 13y ago
I completely agree, it's interesting how many people love to jump to economic theorizing about how people will act, and how few people look at the actual cost to implement. I read through a breakdown in one of the Basic Income books, of what it would cost just to get a $10,000/year basic income. Here's just some of the changes that would be needed: * cut military spending by a third; * get rid of ethanol subsidies; * get rid of mortgage interest tax breaks; * get rid of "married filing jointly/separately" filing status, make everyone file just for themselves And that's just the ones that jumped out at me. Virtually all tax loopholes would have to be gotten rid of, and more. All for just the $10K/year basic income level. So, just as a question of the political cost to implement, Basic Income seems like a laughable non-starter.

motters 13y ago

Having been in the welfare system at various points in my life I can easily imagine that the bureaucracy must be expensive to upkeep. There are numerous complex rules, all of which need to be checked and double checked at regular intervals. A basic minimum income would at a stroke sweep a way a large army of box-ticking officials and end the pernicious moralising and absurd punishments for not adhering precisely to whimsical rules.

beat 13y ago

It's nice to see Reason, the voice of mainstream American libertarianism, getting behind this idea. I think it's possible to win over significant elements of the left as well (although you'd probably have to fight labor and others that benefit from the current political structure). I've thought for a while that a libertarian/liberal alliance makes far more sense and could shake the American political system far more effectively than the current structure where the libertarians are unhappy puppets of the Republicans. This is the issue that could make it work.

strlen 13y ago

I see a lot of comments here talking about unfairness of this system, about how it would mean less motivation, etc... and general comments about wealth redistribution. First, this program would not create additional welfare dependants. Instead, it would transfer SNAP recepients, able individuals living on social security disability payments (http://thelastpsychiatrist.com/2011/09/how_to_be_mean_to_your_kids.html http://thelastpsychiatrist.com/2011/09/how_to_be_mean_to_you...), to a system that is market-based, less expensive, and (relative to the current system) creates incentives to join and/or stay in the labour force (you don't lose eligibility for this system the moment you get a job). Second, overall welfare programs for the poor do not cost Americans nearly as much as entitlements for the middle classes (medicare, ACA, social security, etc...). So if you're a doctrinaire libertarian/conservative who is unhappy that any taxation/wealth transfer exist, then you should work towards eliminating these programs before going after SNAP, ACA, or opposing reform like this. There's been multiple structural shifts over the last century: the second industrial revolution, de-industrialization, and now job-less recoveries (see Tyler Cowen's "The Average is Over" and "Great Stagnation" for discussion of the later). As nearly all jobs work becomes knowledge work (as many have -- e.g., move to CNC for metal and wood working), each technology change means a bulk of technical knowledge becomes obsolete. This leads to a bimodal employment structure: those with the right technological knowledge (as well as those at/perceived to be at the top of the talent curve) are rewarded extraordinarily (driving up housing prices), while those without the appropriate knowledge and who are unable to re-adjust fast enough (e.g., currently there's a resurgence of C/C++ programming, but yet we've got a generation of programmers who have never bothered to learn manual memory management) have to settle for lower wages until they're at a point where the salary they will need to convince them to (again) take up full-time employment will not be a salary any employer will pay. As a result you'll see many workers working just enough to get by (remote freelance/consulting work) and then eventually drop out of the labour pool altogether. A wise welfare state policy should then be designed not to punish those with volatile incomes and encourage continuous labour pool participation (until the workers gained the technical skills needed for higher wage jobs, or perhaps the skills they've already had have suddenly become in-demand). Eventually, I think this work itself out: settlement of inland west, cheaper housing construction techniques, a general socialization of the values of an entrepreneurial workplace (vs. workplace of "company-men"/"company-women") means there will once again be a middle class. However, I am very much scared of the many stupid things an electorate desperate "to do something" coupled with rent-seeking businesses might end up doing (that will cause serious long-term damage to this country) in the meantime. Any move from a system that is a mess of regulation (navigable best by those with "pull") to one that is more market-based would help.

Aloha 13y ago

We're doing this now one way or another, I mean in terms of dollars spent. The problem is, its 14+ different programs doing it - if we make ONE program, we've just cut how many administrators and bureaucrats out of the loop saving however many dollars in overhead - plus all sorts of different infrastructure systems to administer and pay it all. It's logical common sense this program would work more cheaply (and possibly better) just thru overhead savings. Means tested welfare is wasteful.

walshemj 13y ago

no your replacing one type of welfare state with another arguably "fairer" one - most welfare sates discriminate against childless single people.

jl6 13y ago

We talk about the disincentive to work. But do we actually need that much work doing? Are there actually jobs for everyone? Seems like the main problem a basic income scheme might cause is simply overpopulation.

amerika_blog 13y ago

If you start giving out "free money," more people will show up to claim it.

dreamdu5t 13y ago

So, how do you propose to do this without having me pay more than the 25% of my income I already pay in taxes? As it is I'd rather spend my tax bill on my sick mother, rather than to some person I've never met to do whatever he wishes with. Let the people proposing the basic income be the first to pay into it - to the maximum extent possible. The napkin math doesn't add up even for measly amounts of income.

goggles99 13y ago

>Many welfare recipients are required to undergo drug tests, despite the fact that many Americans take illegal drugs while still being good parents and holding down a job. Had to stop here and evaluate if I should read any further. The author is suggesting that we give people money to directly break the law with it? Even more importantly though, the percentage of welfare recipients who use illegal drugs and are good parents and holding down a job is less than 5%. Thus the requirement seems common sense since we do not wish to merely reinforce and enable bad/illegal behavior.

goggles99 13y ago

From what I remember reading about the Swiss giveaway, some thought that it would actually save money overall because people would get this money, but the plan was to cut away welfare and other social services at the same time. The reduction of administrative costs and govt inefficiencies would be saved. That is an interesting notion, but it seems that there is no plan for those who will inevitably blow all their free money on possessions, drugs, gambling ETC. and still need to eat, be clothed, housed, buy cable TV (like most welfare recipients do) ETC. I hope that they actually pass this new law because it is very interesting. Assuming enough people don't just waste the money and still need the govt cheese this could actually transform a society.

JJ216 13y ago

This is Switzerland subtly dumping money into their economy in an effort to devalue the CHF; they're pretty damn desperate, not hypers progressive. And it would never work in the US because we have a strong belief in paternalism as state policy in regard to welfare...the government simply knows better how to spend money than a poor person ever could...