Yes, that was Dr. Friedman’s proposal, and we do have the “negative income tax,” as he called it, Earned Income Tax Credit, basically a taxpayer cash handout.
The theory, in my opinion, is okay. Give each person or each household $XXX. Let them spend it how they choose. No other government “help,” period, so a zillion Federal, state, county, and local helpifying bureaucrats need to go find a real job.
Unfortunately, the obvious outcome is that as soon as children are starving in the street because the parents spent all their income on drugs or gambling or a trip to Thailand, the government “help” machine cranks up again, muscling out whatever aid private charities may attempt.
In the U.S. example, all the other “benefits” remained unchanged, and all those government employees remained on the payroll. For EITC recipients, it’s often more or less a wash, since their incomes may result in their not qualifying for other handouts.
I’m not up on the exact figures, but I suspect that for every $1 in welfare benefits you hand out we are spending at least $7 in bureaucrat salaries.