George McGovern's $500.00 Plan

I work for the Department of Social Services (Welfare) in Humboldt County, California. We’re up in the northern half of the state, and we’re one of the economincally depressed counties in all of CA, mostly due to the loss of fishing and lumber jobs in recent years. Needless to say, we have ample job security.

I remember several years back when George McGovern was running for office, he proposed we eliminate the current welfare program and institute a simpler alternative in which each household recieves a check for $500.00 a month from the government, no strings attached. That means every household, millionaire and dirt farmer alike. The cash is theirs to spend any way they choose, and no household will recieve over the allotted $500.00 under any circumstances. If you want more, you must work for it.

This plan would actually cost the federal government LESS than what is spent annually on welfare. How many working class families do you know that could actually make it with that money coming in?

I’d lose my job, as would thousands of other employees of the welfare system. But I’d get the $500.00, and I’d still be able to find another job relatively easy.

Of course, there are disadvantages. Certain people would use the money unwisely (drugs and alcohol come to mind), but the same is true of the welfare check needy families currently recieve.

Can anyone on this board (and there are some mighty intelligent folks out there) prove to me why this plan should not be initiated immediately?

McGovern was running in 1972. If we convert 1972 dollars to 1999 dollars we get somewhere between $1600-2000, depending on how we do it. There are various net sites around that give tables based on inflation, CPI and other means. If I could kill off my debts, I could live on that. Of course, I’m the kind of person who would be doing something else as well. And I don’t know if I could finance a heroin habit on that.

The idea begs the question of what that would do to the economy. Would it be a shot in inflation’s arm? Would it be a temporary shot in inflation’s arm that would stabilize soon enough. Would we pay tax on it?

Good topic for Great Debates.
Bad idea, though.
Let’s give Bill Gates & family $1600 of tax money?

I think a dose of reality is in order here.

If we use beatle’s $1600 figure and the U.S. Census Bureau’s number of 102,528,000 households in 1998 we get a total of almost $2 trillion dollars per year in total entitlements.

Clearly preposterous.

“Some people are worried about the difference between right and wrong. I’m worried about the difference between wrong and fun.”
~P.J. O’Rourke~

Just looking at it superficially, and taking the best figures I can get from various government websites:

The US Federal government is spending a bit over 100 billion dollars annually in Medicaid and various ACF programs. As far as I can tell, these are exclusive of federal administrative costs. So if you eliminate those programs (this does NOT eliminate Medicare, does NOT affect Social Security, and does NOT count Head Start, payments for foster care, and several other specialized ACF programs that aren’t really directed at “reducing poverty” in general, all of which would continue to operate in exactly the same way they do now) you could give every household about a thousand bucks a year assuming UncleBeer’s census figure is correct.

This is a LONG way from $500/month. Even slashing the programs that I excluded couldn’t bring it up to $500/month; the entire Health and Human Services budget (which includes CDC, NIH, and FDA… though admittedly these are poor stepchildren whose budgets amount to maybe $20 billion/year combined) is under $400 billion/year. At best you could get it up to $3500/year or so.

Including food stamps and other programs from the USDA (WIC, CAP, Child Nutrition programs) would add another $40 billion. We’re pushing $4000/year now, but we’ve completely eliminated Medicare, Medicaid, food stamps, and welfare. Medicaid alone estimates that it spends $3700 per year on each eligible person.

I don’t think you’re going to find much support for this. I’m staunchly Republican and the idea horrifies ME.

“mostly due to the loss of fishing and lumber jobs in recent years.”
—J. Alora

Let’s not forget the loss of agriculture revenues. (Pot) :slight_smile:

Work like you don’t need the money…
Love like you’ve never been hurt…
Dance like nobody’s watching! …(Paraphrased)

Besides what everyone else said, I think it’d be a bit too difficult for the government to keep up on who’s a family. I turn 18, move out from my mom’s and get my own pad, am I now a “family”? I rack up a huge Visa bill and move back into my mom’s basement and start eating out of her fridge again, am I still a “family” or am I part of my mother’s again? What if she’s making me pay rent? It would be way too easy to exploit a system like this, even easier than in welfare. Plus, if you have mother (A) on welfare and she has three children and one of them turns 18 and moves out, you pay mother (A) less money now. If you have mother (B) and her son turns 18 and moves out under the $500 system, you now have to pay $500 to mother (B) and another $500 to her son so he can afford ramen noodles.

“I guess one person can make a difference, although most of the time they probably shouldn’t.”

Oh, yeah, everybody knows that Humboldt bud is the best.

Sounds like a good idea on paper, but it’s totally bogus in the real world for multiple reasons. First, as has been mentioned previously, the dollar amounts that are quoted would never work out. The per capita GDP for the US is about $25,000. This comes to about $2,000/month. There is no way we could afford to give out 1/4 of the GDP every year.

Second, the real reason this would never work is that prices would simply readjust to cancel the handout. Prices are driven by supply and demand and what people are willing to pay. If everyone has more money, then everyone will be willing to pay more.

This solution is akin to solving the cash flow problem by printing more money. It just leads to higher inflation and no real benefits.