Michael Tanner:
Suppose there was a way to abolish most of the edifice of the modern welfare state, virtually eliminating the bureaucracy that supports it, and still lift people out of poverty. Shouldn’t we jump at it? Maybe. Maybe not.
On June 5, Swiss voters will go to the polls to decide whether to eliminate many of the nation’s social-welfare programs and replace them with a guaranteed national income for all citizens. Not long after the Swiss vote, Finland will embark on a similar though partial experiment, replacing welfare benefits with a guaranteed income for both national and regional sample populations. In the Netherlands, at least four cities, Utrecht, Tilberg, Groningen, and Wageningen, are in the process of designing their own experiments. And in Canada, the latest provincial budget in Ontario promised to work with researchers this year to come up with a design for a pilot program. Great Britain is also actively debating the concept.
Most conservatives and libertarians in the United States would dismiss the idea of a guaranteed national income (GNI) out of hand. Typical European socialism, would be the reaction. The fevered brainchild of Bernie Sanders.
Actually, though, free-market thinkers from F. A. Hayek and Robert Nozick to Milton Friedman and Charles Murray have long been open to some form of GNI.
Instead of tinkering around the edges of the welfare state, trimming a billion dollars here, adding a work requirement there, why not simply abolish the entire thing? Get rid of welfare, food stamps, Medicaid, housing assistance, unemployment insurance, and all the rest. Murray would even throw in Medicare and Social Security. Replace it all with a simple cash grant to every American whose income falls below the stipulated level, and then leave the recipients alone to manage their own lives free from government interference.
Such a program would be simpler and far more transparent than the hodgepodge of existing anti-poverty programs. The federal government alone, for instance, currently funds more than 100 separate anti-poverty programs, overseen by nine different cabinet departments and six independent agencies. With different, often contradictory, eligibility levels, work requirements, and other restrictions, our current welfare system is a nightmare of unaccountability that fails to effectively help people transition out of these programs and escape poverty.
A GNI would also treat poor people as adults, expecting them to budget and manage their money like everyone else. Currently, most welfare programs parcel out payments, not to the poor themselves, but to those who provide services to the poor, such as landlords or health-care providers. But shouldn’t the poor decide for themselves how much of their income should be allocated to rent or food or education or transportation? Perhaps they may even choose to save more or invest in learning new skills that will help them earn more in the future. You can’t expect the poor to behave responsibly if they are never given any responsibility.
Moreover, giving the poor responsibility for managing their own lives will mean more choices and opportunities. That, in turn, will break up geographic concentrations of poverty that can isolate the poor from the rest of society and reinforce the worst aspects of the poverty culture. And, by taking the money away from the special interests that support the welfare industry, it would break up the coalitions that inevitably push for greater spending.
A GNI would also provide far better incentives when it comes to work, marriage, and savings. Because current welfare benefits are phased out as income increases, they in effect create high marginal tax rates that can discourage work or marriage. Studies have shown that a person on welfare who takes a job can lose as much as 95 cents out of every dollar he earns, through taxes and forgone benefits. Poor people, by and large, are not lazy, but they also aren’t stupid. If they can’t earn more through work than from welfare, many will choose to remain on welfare. In contrast, a guaranteed national income would not penalize someone who left welfare for work.
Los Angeles County has a whole lot of homeless people.
http://www.latimes.com/local/lanow/la-me-county-homelessness-spending-20160205-story.html
IF all their gov’t worker-heavy, means tested programs were done away with and all the money now frittered away on gov’t employees went to the homeless directly, EACH homeless individual would get about $33,000 annually!
That more than lifts them out of poverty.
It puts them in the middle class!
So, what are the 70 or so means tested programs doing besides sucking away more than 9/10ths of this cash before the homeless see a dime?
They are a quiet way to hire one’s supporters and give them generous paychecks while they do nothing valuable.
And therein lies the problem (well, one of the many problems) with GNI.
All of those government workers would be on the streets wanting their GNI, too!
One of the other problems with GNI is that it murders incentive.
Who will be the ones working if all of the people can sit under their trees and listen to music all day without starving?
Just noting that the Swiss referendum will not pass – polls show only about 24% support it.
@Nanny G #1:
You might want to rethink your statistics. The median income for a family of three in Los Angeles County happens to be $59,000, well above the $33,000 you calculated. If the “middle class” term you are using means anything, then it means that your $33,000 won’t get you there.
Here’s another example of Curt posting an article full of nonsense. Mr. Tanner suggests that it might be a good idea to replace our present selection of inefficient social safety-net programs with a single, lump-sum cash award per poor person, per year. WOW! What a GREAT IDEA!
Jumping directly to the punch-line, let’s look for a moment at how such a program would work. Drunks would walk/crawl their wad of free cash straight to the nearest liquor store. Crack-heads would drop over to their nearest street-corner dealer and convert their crisp new Benjamins into dime-bags of whatever passes for the fastest route to Zombieland. Gambling addicts would swarm like moths to the bright light of whatever their favorite game-du-jour happens to be.
This illustrious (?) author presupposes the extraordinarily improbable – that poor people are more or less exactly as competent and responsible as their more affluent almost-neighbors. Of course that’s wrong. They aren’t. In the vast majority of cases, they are poor precisely BECAUSE they lack responsibility, they’re stupid, and they have zero motivation.
No infusion of cash has any chance of curing poverty. Poverty isn’t caused by a shortage of funds, and throwing more money at it won’t solve anything. That sort of thinking (thank the author very much) is what got us into this “dependent-class” mess in the first place.
And for the umpteenth time, putting a “cold-turkey” stop to social support programs would leave so many poor people with absolutely nothing that they’d riot. Not just in Baltimore or Detriot or LA. ALL OF THEM. That solution doesn’t fix anything. It blows it up.
Fixing poverty isn’t simple. Pretending that it is, well, that’s down-right crazy.
Welfare should have term limits, also require the recipient get trained for work, or work, and drug testing. All lifetime benefits not to exceed 200K or 5 years.
Take away the unearned check damn straight they would riot, make it very clear they are getting 200K or 5 years and sympathy will fly out the window.
Poverty will always exist, some people just suck with money. War on poverty, war on drugs, both lost causes.
@kitt #5:
You got that right!
Question is: do we just let them starve?
Or do we shoot them dead when they riot?
Just how barbaric are you willing for us to become?
Just a question…
@George Wells: To make them uncomfortable in their poverty. A bit of shame would do them no harm.
Yes I would be brutal let them get cold and hungry, actions or no actions have consequences, those too lazy to work are too lazy to eat as well.
Teachers in Detroit will not get paid, I haven’t heard welfare will be cut.
@kitt #7:
Unfortunately, people who are too lazy to work rarely are also too lazy to riot.
You can pretty much pick and choose how you want your future screwed.
@George Wells: Little tear gas, water cannons, mace, shock grenades, and other various go find a job hints, means dont have to be lethal. I do not advocate cutting them off cold turkey but a weaning process, re-education, forcing them to learn marketable skills.