Just give them the money (the argument for basic income)

[XT]

I know this has been discussed before on this board, but I was reading this CNN article in favor of a basic living income and thought it might make a good discussion. Here are some of the highlights from the article:

(CNN)Earlier this year, I visited a town where residents are cut a check just for being alive. It’s not some Scandinavian utopia. It’s not part of some holdout communist state. It’s Cherokee, North Carolina, a town of 8,000 hidden away in the particularly misty stretch of the Great Smoky Mountains.

I went to Cherokee to explore the idea of a “universal basic income,” which is a fancy way of saying something that’s really quite simple: Give everyone cash, just for existing. The goal, according to proponents of such a policy, is to alleviate, if not eliminate, the scourge of poverty. And, more importantly, to reduce the social ills – poor health, poor educational attainment, poor job prospects and higher odds of ending up in jail – associated with kids who grow up poor.

The difference between the poor and the non-poor, according to basic income supporters (and basic logic), is just money. Give poor people more of it, and they’ll be better off.

‘Where do we go from here’

For a problem so massive – and so costly – a wholesale fix like the basic income seems appropriate. Before my trip to the North Carolina mountains, I read up on the basic income and its history. The more I learned, the more encouraged I became.

For starters: This tidy, egalitarian concept isn’t new, and its support isn’t limited to the radical political left. Dig through the Rev. Martin Luther King Jr.'s little discussed book, “Where Do We Go From Here: Chaos or Community,” published in 1967, the year before his assassination, and you’ll find an endorsement: “I am now convinced that the simplest approach will prove to be the most effective. The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” Milton Friedman, the Nobel-prize winning economist who was an adviser to conservatives Ronald Reagan and Margaret Thatcher, also supported a variation of the idea.

I am now convinced that the simplest approach will prove to be the most effective. The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.

The Rev. Martin Luther King Jr.

The basic income continues to have a diverse set of supporters – left, right and libertarian. They like the concept for different reasons, said Matt Bruenig, a writer and policy analyst for Demos. Those on the left tend to like it because it’s egalitarian. It helps give everyone an equal (or more equal) shot at success in our capitalist society. Some libertarians and right-wingers support the concept, meanwhile, because they see it as a way to whittle away at government bureaucracy. Some would have the basic income replace many existing social safety net programs. There’s also a conservative philosophy underlying all of this: Give people money and they, not the government, know best how to spend it. They know what they need. The feds do not.

How much would it cost?

Bruenig, a basic income proponent who has written about this topic for The Atlantic and other publications, told me implementing a basic income easily could halve the poverty rate in the United States. He developed an online “basic income calculator” to evaluate the costs and benefits. Using his math, based on 2012 figures, we could pay every man, woman and child in the United States $1,610 per year, reducing the overall poverty rate from 15% to 10.8%, for about $500 billion. That’s what child poverty, alone, costs the United States each year.

Bruenig suggests paying more – $3,000 per year – to cut the overall poverty rate in half. I’m less concerned with who would be paid how much than the financial ballpark: Considering how much poverty costs, this out-there solution can be seen as affordable. It could be paid for with a progressive tax system and distributed much in the way Social Security is today, Bruenig suggests. The payments might go to everyone, but because the rich would be paying more in taxes they would not be getting as much benefit from the program as low-income people who need the help. Less expensive, still, would be targeting families with children, specifically. In a way, the concept also builds upon – and makes more meaningful – tax credits that this country already gives to low-income people and families with children.

The United States won the war on poverty among older Americans, Bruenig told me, by investing in Social Security. Consider this Social Security for the young – or for all of us.

‘Just give them the money’

The way Cherokee collects and distributes money to residents is particular to the town, and could not be replicated nationwide. But that doesn’t seem to bother Costello. She’s interested in what happens when poor families get money for free. And, based on what she’s seen in Cherokee, she’s convinced these families use the money to buffer their kids from the worst of poverty.

Stop trying to micromanage the poor and dividing up the 'deserving poor' from the 'undeserving poor.' Just give them the money.

Jane Costello, Duke University

She told me the work has made her more convinced of an argument certain political thinkers have been making for 100 years: “Stop trying to micromanage the poor and dividing up the ‘deserving poor’ from the ‘undeserving poor.’ Just give them the money.”

There’s something simple, charming and fair about this approach.

So, for this discussion I’d like to focus on the last part of this to avoid getting bogged down in the costs and how we’d pay for it. For the purposes of this discussion let’s all just assume we can pay for it and not on how we’d do that. Is this a good idea? Would it work? Would it help? How much would it help, in the end? My own knee jerk reaction is to oppose something like this (mainly on the grounds that we won’t be discussing in this thread), but I want to TRY and look at this with as open a mind as I can. Seemingly other countries do this or are looking into it, so how does it work there?

[Crane]

‘Just giving money’ simply creates a population that relies on that income - and an industry that will game the system

A partial solution is a government program, perhaps similar to the CCC, that pays a sub-standard wage, but always provides employment.

Crane

[bump]

The biggest question I have is what would be done with/about knuckleheads who will still manage to be destitute despite getting this basic income?

I mean, my inclination is to tell them tough luck; you blew your basic income on stupid stuff, and it’s too bad that your house is cold in the winter now, or that your kids have holey shoes. Maybe that massive TV you bought will keep your house warm.

[Crane]

That is why money should be provided only as sub standard wages for employment.

Crane

[Revenant_Threshold]

@bump

The biggest question I have is what would be done with/about knuckleheads who will still manage to be destitute despite getting this basic income?

I mean, my inclination is to tell them tough luck; you blew your basic income on stupid stuff, and it’s too bad that your house is cold in the winter now, or that your kids have holey shoes. Maybe that massive TV you bought will keep your house warm.

I’m not sure I really understand sometimes the “stupidity exemption” to sympathy. If someone is literally too much of a knucklehead to understand keeping to a budget with a reasonable income, I think my response would be “Well, shit, this poor person; how can we help them to understand?” rather than “Tough luck, too bad your house is freezing and you can’t take care of your kids!”

[Human_Action]

Make it a negative income tax, where the benefit is reduced as earnings go up, at a ratio of $1 of benefit for 50 cents of income. That way, employment (and getting a better job, more hours, etc) will result in more take-home pay, and the incentive for work is retained.

@bump

The biggest question I have is what would be done with/about knuckleheads who will still manage to be destitute despite getting this basic income?

I mean, my inclination is to tell them tough luck; you blew your basic income on stupid stuff, and it’s too bad that your house is cold in the winter now, or that your kids have holey shoes. Maybe that massive TV you bought will keep your house warm.

Couple it with universal health care, and no one need die from blowing their money. And, naturally, pay it out in biweekly or monthly installments, not a lump some at the first of the year.

[Chronos]

The OP starts by mentioning a city that’s already doing this. So the obvious question is, how’s it working out there? We can ponder and debate and guess all day, but what do the data actually say?

[septimus]

A key point – and why “gaming the system” becomes a non sequitur – is that the basic income would be available to all without qualification. An unemployed person finding a job that pays $2000 would keep the whole $2000 (minus any payroll tax) without loss of benefits. This avoids the undesirable disincentive to work that comes with most welfare systems.

A variation that might be better would be not to provide basic cash income, but instead to provide free housing, free childcare, and free food (or food stamps).

Obviously taxes to cover this would be huge, so debating this at SDMB will lead to much silliness. Some will argue that such a program would be “affordable” only if a matching set of cuts are made elsewhere in government budgets.

[Cheesesteak]

@Crane

‘Just giving money’ simply creates a population that relies on that income - and an industry that will game the system

Clearly people would rely on the system, to some extent. But how would you game a system where you give everyone exactly the same amount of money?

You don’t have to pretend to be poor, pretend to be unemployed, pretend to look for a job, you simply get your check, just like everybody else.

That’s the trick with trying to separate the deserving from the undeserving, it’s a lot of work, and lots of people will try to fool you.

[Robert163]

@Chronos

The OP starts by mentioning a city that’s already doing this. So the obvious question is, how’s it working out there? We can ponder and debate and guess all day, but what do the data actually say?

it’s a Native American reservation

[kanicbird]

Alaska does this in some form from revenue from it’s oil sales.

Cherokee NC has a casino, and I do wonder if that is part of the deal that some of that money would go to this program.

It would seem to work if there is a source of income for a area.

[XT]

@kanicbird

Cherokee NC has a casino, and I do wonder if that is part of the deal that some of that money would go to this program.

If you read the whole article that’s exactly where the money is coming from. I don’t know how sustainable it is, but that’s where it comes from.

Alaska does this in some form from revenue from it’s oil sales

Yup, I was going to say the same thing in response to Chronos query. IIRC, residents (who, from memory have been residents for like 5 years) get an annual check for something like $2k from the oil companies operating in Alaska.

[Velocity]

I would support this as long as one does not forfeit the income by working a job.
In other words, let’s say the basic income is $20,000 a year. Now let’s say you get a job in fast food paying $23,000 a year. You should get your $20k **and **$23k for $43k.
You shouldn’t get $23k *instead *of $20k. That destroys a lot of work incentive, particularly if the work is unpleasant or laborious.

[sweeteviljesus]

Well, assuming we have the money per the OP (that’s a huge assumption IMHO), we may as well try it and see if it works. Of course, there are opportunity costs.

One issue that I do see is that that basic income is going to go a lot further in some places than others. $1500 might kick someone above the poverty line, but not by a lot.

For what that’s worth,
Rob

[Velocity]

@kanicbird

Alaska does this in some form from revenue from it’s oil sales.

Cherokee NC has a casino, and I do wonder if that is part of the deal that some of that money would go to this program.

It would seem to work if there is a source of income for a area.

True, but Alaska badly needs people and has plentiful resources.

[XT]

@Velocity

I would support this as long as one does not forfeit the income by working a job.
In other words, let’s say the basic income is $20,000 a year. Now let’s say you get a job in fast food paying $23,000 a year. You should get your $20k **and **$23k for $43k.
You shouldn’t get $23k *instead *of $20k. That destroys a lot of work incentive, particularly if the work is unpleasant or laborious.

Well, I doubt even the US could afford to give everyone $20k a year (I know we aren’t talking about costs, but that would be like $8 trillion dollars, unless I dropped a zero somewhere), but yes…if you said it would be (like in the article) $3,000.00 per year per person then everyone would get that, regardless of what they made, and they could do what they like with the money.

[Velocity]

One unintentional effect of such a program would be that many people would migrate to low-cost areas - i.e., away from expensive San Francisco towards rural California, etc., to make their guaranteed income go further. This might be a good thing.

[Crane]

Cheesesteak,

I’m not sure how you would game the system, but I know there are lot’s of folks out there making a career out of it today.

Work is of value. A salary system that is available to everyone provides both income and dignity. This was done in Switzerland when I was there years ago. If you did not have money you went to the government employment office and they gave you a job. That establishes a small income base without means testing or charity.

The amount should be a sub-standard wage. Living wages and opportunity are the provided by the private sector. The government should only provide a base of security.

Crane

[Kobal2]

@Chronos

The OP starts by mentioning a city that’s already doing this. So the obvious question is, how’s it working out there? We can ponder and debate and guess all day, but what do the data actually say?

Not indicative or representative, because while the system still exists within a general framework isn’t that system, then that framework generates pressures and influence that distort the end result in either direction - e.g. loads of people moving in to take advantage of “Free Money City”, businesses gaming the system by abusing the relative advantages of both, etc…

I’m not stating “it’s what’s happening”, but that’s the kind of thing that would completely distort any evidentiary value of one town (or State even) implementing basic income.

As for the notion : I’m all for it, and have been for it going on 20 years now.

[Shodan]

The conclusions of the famous Seattle Income Maintenance/Denver Income Maintenance Project (known as SIME/DIME) were that it causes people to work less, go to school (for non-work training) more, and has a deleterious effect on marriage.

The difference between a program like the OP’s and casino/oil revenue distribution is that it is an income transfer from those who earn the money.

Is this meant to be instead of other welfare programs, or in addition to them?

Regards,
Shodan