Its time again to discuss the minimum basic income. Inspired to think about this again by Rowan Cota morning post on a similar topic.
According to wikipedia, we currently spend something on the order of a trillion dollars in state and federal means-tested welfare programs (not including social security and medicare). To put that into perspective, there are about 250 million adult Americans, so that's $4,000 per person.
Social Security is another 830+ billion dollars, or about $3,000 per person.
Along these lines, the national poverty line is defined at about $12,000 per person. That is, if you have $12,000 per year, then you are not in American poverty. While there are other issues to poverty than simply money, its a pretty important part.
At the same time, there's less and less respect for federal employees. It costs money to administer these plans, and to police the use of these funds.
So, why not have a minimum basic income of about $1,000 a month for every adult?
You get to eliminate poverty in one swoop. You get to fire a bunch of federal contractors. And -- my favorite part -- you get the federal government out of the business of policing how we spend dollars.
I've talked about this before, and I'm hoping to hear some different views from my own. Would a minimum basic income eliminate poverty? What would be wrong with this model? What problems would be created?
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ReplyDeleteI'm going to reshare this in the afternoon, but I'm interested to see what commentary comes up.
That said, the poverty guidelines are grossly inaccurate because the index measures they use don't account for modern life (seriously, things have changed since the 1950s when the guidelines were established and tracking measures come up with). There's also the issue that we use "absolute" poverty in the US. The problem is that someone making 32k/year in California is on the same footing as someone making 11k/year (I just made those numbers up! NOT ACCURATE! EXAMPLE ONLY!) in Michigan. And it's total BS to say all the poor people should just move to Detroit then, you know?
So the real issue, IMHO, with your plan as currently stands is that while it would alleviate some of the immediate symptoms of poverty, without some pretty strict governmental interference in things like inflation (I don't have a problem with that, many economics students do, take it for what it's worth) that $1000/mo will quickly become a sum incapable of helping anyone again.
Rowan Cota If 40 billion per month of QE hasn't caused inflation (or, nearly $2,000 per person per year), then I'm not sure combining all these programs will, either.
ReplyDeleteAs an aside, another notion is: why not do this for the rest of the world? Take our anti-terrorism budget, and our big brother budget. Give this out to the peoples of the world with one caveat: Any month where there is a terrorist incident, we use this money as bombs rather than cash. We spend something like 600 billion dollars on defense. The populations of Iraq, Iran, Afghanistan, and North Korea are, combined, about 170 million people. We could use a quarter of the budget and provide those folks with $100 American per month to not do things that annoy us.
ReplyDeleteNote: Yes, it'd be a logistical nightmare. I get that. And I'm not talking about giving the regimes money, either. The people.
How do you stop the money from just going to the regime at a checkpoint in the form of bribes?
ReplyDeleteGive Directly has an interesting model for that. A lot of these countries have decent cell towers, and you can use the cell phones to hold currency. This isn't ideal, but it is a place to start thinking.
ReplyDeleteSure, but if the military is saying "transfer me $20 US or I will shoot your wife" that's not going to matter.
ReplyDelete(I have thoughts about that because of micro-lending, but it's an issue with "direct aid" that really does need thinking through.)
Admittedly, sending money to nations without the rule of law is ... difficult. Then again, under this model we're only handing out this cash if there has been no attacks that the US cares about. As such, lining the pockets of dictators is still probably better than what we're doing now.
ReplyDeleteI think it's more that it requires us to invest a LOT more in being babysitters. Sure, we deny the money if there's an attack, but now who's in charge of making sure that they don't just attack people we don't "care" about?
ReplyDelete(Sorry, I know we're on a digression.)
I assume the UK and EU can create their own bad guy-bribing organization.
ReplyDeleteThe thing to note is these arguments are the same for any sort of means-tested assistance. Once there's a rule about who gets the money, there's suddenly incentives to game the system and you have to police it.
If anything, this suggests that the simplicity of not having a means test is worth while.
I am totally down with eliminating means testing. I actually think that would solve a LOT of problems. Like, eff it, you get aid, great!
ReplyDeleteMy totally honest answer to your idea, personally, is that there's no bad idea there as long as we get the right (read ethical, non-partisan, socially conscious people, and not lawyers hired by RJ Reynolds and Kraft) people to draft the program and all of its policies and related laws.
Yeah, the means testing for aid to Americans seems frought with peril. Especially things like SSDI, which has ... problematic ... components.
ReplyDeleteI fully support a basic income for the reasons you mentioned. Additionally, there is some research (though it isn't conclusive due to small sample size) that a basic income actually improves the labor market because people who don't want to work will stop to pursue other activities, giving others who want to work the opportunity to do so. This would really increase the number of entrepreneurs because everyone can fall back on basic income and be willing to accept more risk. I see very little badness in legislating a basic income that is indexed to inflation as well as geographical cost of living.
ReplyDeleteOrion Cooper Good extra point -- and, from my own life, I stopped being an entrepreneur due to, well, failure. Maybe I'd have continued trying if I knew I had a grant incoming every month. Note: My new job is great.
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