Posted on 12/20/2015 6:37:27 AM PST by Kaslin
Some folks think the world owes them a living.
Must we appease them?
Should government hand every man, woman and child a check each month to make sure we're all taken care of?
Finland is looking at this basic idea, which Finns dub an "unconditional basic income" (UBI). One proposal suggests providing every Finn 800-Euros a month without regard to income, or lack thereof. Polling shows the basic idea is quite popular, with 69 percent of Finns endorsing a slightly more generous proposal.
It sounds like Democrat George McGovern's "guaranteed annual income," which was mocked and ridiculed during the 1972 presidential campaign.
But you might be surprised who has supported the UBI: free-market economist Milton Friedman advanced the similar "negative income tax" back in 1962; Martin Luther King liked it; Austrian economist F. A. Hayek endorsed the concept; Charles Murray, author of Losing Ground, has developed a version of the proposal.
The rationale? Save money by consolidating duplicative welfare programs. After all, the U.S. government runs 79 means-tested benefit programs, each with its costly, redundant bureaucracy.
Finland is suffering from high unemployment — 10 percent of adults are without jobs and that increases to 23 percent among younger workers. Counter-intuitively, perhaps, Finland's social engineers think the move toward the UBI will increase employment.
Why? Because welfare benefits can currently be withdrawn when Finns gain employment and the attendant income, which discourages folks from risking their secure base benefits.
"The Finns believe that basic guaranteed income could allow people to take low-paying jobs without incurring personal cost," writes Mikko Arevuo, a senior lecturer in strategic management at Regent's University London. "At the moment, taking a low paying job may result in lower welfare benefits and many temporary jobs go unfilled as the welfare benefits system is not agile enough to cope with temporary employment that reflects the changing nature of work. There can be a lengthy time lag before welfare payments are restored after a temporary contract employment has been terminated."
That's the case here in the U.S., too.
Our current welfare system creates "disincentives to work," argues Matt Zwolinski, a University of San Diego professor and one of the leading advocates of moving our welfare state in the direction of a Basic Income Guarantee (BIG). He notes that, "poor people face, in some cases, an extremely high marginal tax rate, because if they work an additional, say, 10 hours a week, not only are they paying taxes on that additional 10 hours worth of income, but they'’re also, in effect, paying by the lost benefits that they're giving up as a result of their income rising too high."
It would be great to get rid of this huge disincentive. "The idea of replacing benefits and tax credits with UBI has huge intuitive appeal," writes The Guardian's Declan Gaffney. "No means-testing of benefits, and thus no families stuck in poverty traps where benefit withdrawal erodes any increase in earnings. No out-of-work claimants afraid to take up short-term job offers for fear of losing benefit entitlement. No intrusive testing of benefit eligibility, no punitive sanctions regime, no job-centre advisers hassling people to apply for the lowest-paid jobs. No fraud and no gaming the system." And then there's the kicker: "Most of the bureaucracy of the welfare system swept away."
Don't get me wrong: the government passing out money — our money — stinks. Folks should take care of themselves, or depend on charity — not rely on confiscatory taxation. Yet, as I told my Common Sense e-letter readers last week, if this version of a safety net does indeed encourage industry, employment, and good old-fashioned money-making amongst the poor . . . it may very well be a step in the right direction.
But that's only if, by consolidating redundant and costly bureaucracies, we can provide better incentives for poor people to go to work, without hiking up taxes on those already working.
Economist David R. Henderson calculates the cost and argues that providing every citizen this guaranteed income would require a nearly 50 percent tax increase. That's because the benefit of such a system, at least in ending the disincentive for the poor to go to work, requires providing the guarantee universally without means-testing.
Where Zwolinski argues that BIG is "better than doing nothing" to our clunky, counter-productive welfare system, Henderson counters that our choices are not so limited. He argues, "Occupational licensing, whereby local, state, and federal governments insist that people be licensed before they can practice in one of about eight hundred occupations, prevents people, many of them at below-median income, from working . . . Let's end occupational licensing. . . . The web of regulation — at all levels of government in the United States — makes it difficult for people to start or expand businesses."
The best anti-poverty program will do two things: (1) tear down the barriers to work, to market-entry, and (2) stop paying people not to work.
No, the world doesn't owe anyone a living. But we certainly owe each other that apparently excruciating labor of removing obstacles to progress previously thrown up in the name of caring.
I agree with this. Everyone must file their taxes and they get an annual check for say $5,000.00, which will pay for necessities. Eliminate all poverty programs and the minimum-wage.
The key idea is the elimination of means testing. Not taking away the guaranteed income as someone starts to earn a little money provides an incentive for people to work. If everyone pays at least some tax, and no one is in a 0% bracket, this would reduce the problem of half the population not caring how much government costs.
That is by design.
A guaranteed minimum income would be inflationary and is nothing more than wealth redistribution. A minimum income of $800 per month would guarantee that the first $800 of what anyone receives in a month is no more than Monopoly money.
Poverty cannot be eliminated by wealth redistribution. The only way to fight poverty is to address the root causes: broken families, cultures of entitlement, etc. Truly fighting poverty will take some work. The idea of wealth redistribution was born as a perceived easy fix for a complex problem--in that, it is little different than the mentality that someone can take a magic pill and miraculously lose 100 pounds.
“The problem with socialism is that eventually you run out of other people’s money.” - Margaret Thatcher
Well, it is nice of the Finn to experiment with this for us. I hope they have good immigration control, though.
Do that and soon after 800 euros won’t be enough. They will demand 1600, then 10000.
The beginning point needs to be set high enough so this one program replaces ALL existing gibsmedat programs.
Actually this would discourage the hiring of illegal aliens, wouldn’t it?
Another possible benefit is that you put the working poor a little ahead of the professional moocher class which knows how to milk numerous duplicative government programs to maximize their income while the working poor is too busy working at doing something beneficial to learn that skillset.
One thing I've noticed about neighborhoods in Las Vegas and other high illegal alien concentration cities is that you have a lot of strip malls with Mexican restaurants, fast food places and coin laundry places and they are packed with late model cars and trucks.
How is it that someone can't afford a washing machine, but they can afford to eat out and make payments on a $35K crew cab? A friend who works in the business tells me they actually have an easier time borrowing and making payments on a truck than the working poor. The reason is simple: a welfare check is considered a more reliable form of income than someone working a low wage job. Go figure.
This is NOT an "incentive" to work at all.
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