As coarse as it may sound to those immersed in high-minded thought, the simple truth is that the United States doesn't have a poverty problem.
Maybe someday we can even put to bed once and for all minimum wage hikes too.
Posted on 05/10/2016 4:16:53 AM PDT by expat_panama
New York Magazine's Annie Lowrey excitedly writes "that there's a welfare-policy idea that is very in vogue. That idea is just giving everybody enough money to live on, rich or poor, old or young, working or not working. It is called a universal basic income." She adds that the idea has captured the imagination of Silicon Valley technologists, European socialists, U.S. policymakers on the left and right, and seemingly everyone in between.
And while Lowrey is hedging herself as to whether a universal basic income or guaranteed income will succeed, it doesn't take much casual analysis to see that what has those very deep in thought starry eyed is actually quite silly. In addition to being silly, it would quickly fail as a poverty cure.
One reason the notion of guaranteed income appeals to certain members of the right is that it would allegedly reduce government bloat. Rather than the feds hatching all manner of wasteful programs meant to reduce want, why not have the government cut a check each year to everyone regardless of income? Yet right there the idea quickly dies of its many contradictions.
While a guaranteed income would theoretically reduce governmental waste, a very basic understanding of public choice theory reminds us that "giving everybody enough money to live on" would very much be a moving dollar target. Indeed, it would be a target put in play by politicians driven every bit as much by self-interest as their "greedy" benefactors in the private sector. Soon enough ambitious politicians allocating the wealth of others would compete for votes by virtue of dangling more income in front of voters. It's also folly to assume an income guarantee would cause other anti-poverty programs in government to sunset themselves. Lots of luck there. Again, government workers are driven by self-interest every bit as much the profit-motivated are in the real world.
All of which brings us to the morality of this confused idea. While it's apparently no longer acceptable to point out that there's no government guarantee of anything without the fleecing of the proverbial forgotten man, can we at least question the morality of giving citizens the right to vote themselves higher income on the backs of their fellow man?
And then there's the economics of it. Somewhere lost in this supposedly high-minded idea is the notion of reducing poverty. Lowrey and others might disagree, but economic growth has the best track record of all when it comes to freeing people from lives of misery. In that case the obvious problem with a guaranteed income is that there's no production (as in economic growth) to speak of. As the word "guaranteed" indicates fairly clearly, income will be a sure thing whether we work twelve hours a day, or spend the daylight hours asleep. What this truth about the guaranteed income reveals rather plainly is that subsidized indolence would show up in slower growth. How much slower is hard to tell.
To the above more than a few guaranteed income advocates will reply that the word "guaranteed" actually ensures abundant economic dynamism. Strongly of the belief that consumption represents actual economic growth, they'll remind we shallow skeptics that guaranteed income means much more spending, and by extension higher rates of growth. Sorry, but production is always and everywhere the source of real economic advance. As a rule, production must take place first so that consumption can follow.
Applied to this monumentally silly idea, alleged mass consumption wrought by an income guarantee will only take place insofar as those who produce a little or a lot are able to consume less. There will be no increase in consumption thanks to income guarantees, but there once again will be a decline in production thanks to people once again being paid whether they're working or not. Unless the supporters of this laughably bad idea truly believe guaranteed income won't drive some or many workers to the sidelines, there will be a decline in economic output, and by extension a decline in consumption. By definition.
Taking the absurdity of the consumption argument to its logically dim conclusion, why don't we leave the governmental middle man out altogether and legalize theft? If so, even the unproductive will have more money to spend on the way to supposedly reduced poverty. Of course, if we go this route those who support what is comedy would have to admit that taxation at least has similarities to theft. Guaranteed income religionists don't want the latter given their desire to make everyone dignified and equal through an income guarantee. Apparently it's dignified to take from others so long as government is the entity separating us from our hard-earned wealth.
To all this the proponents of guaranteed income might respond that absent this faux anti-poverty program, those who have means might hoard their income? In reply, those who are even mildly sentient will offer a one word response: exactly. Too easily forgotten by the guaranteed income flock is that no act of saving ever subtracts from demand. Unless those who are productive literally stuff their wealth under a mattress, their savings will immediately flow to borrowers, entrepreneurs and businesses eager to pay for the right to access the economic resources (we borrow money for what it will procure) necessary to fulfill their consumptive and commercial needs. In short, money not taken away from the enterprising will logically flow toward economically stimulative ideas most likely to create work opportunities for those eager to escape economically desperate conditions.
Importantly, the banking of money further explains why guaranteed income is such a comically foolish idea. Unless the advocates of this alleged poverty fix are eager to police the recipients of guaranteed income, odds are many will choose to have their guaranteed money deposited in their U.S. bank accounts only to access it in countries not the U.S. So while it may render the U.S. economy better off if some of the free-riders depart altogether, this consumption of wealth outside the U.S. will further weaken an already backwards argument about government income guarantees fueling a consumption boom.
All of which brings us to the main reason a guaranteed national income not only won't work, but also isn't necessary in the United States. As coarse as it may sound to those immersed in high-minded thought, the simple truth is that the United States doesn't have a poverty problem. Evidence supporting the previous claim is the happy annual reality of intensely poor immigrants risking everything (including their lives) in order to get to the United States. The world's poorest aren't coming to the U.S. because poverty is impossible to overcome; rather they migrate here because the U.S. is where poverty is regularly cured.
Painful as all this may sound to the advocates of coerced charity, poverty in a country as abundant as the United States is not about a lack of money. If it were, it would have long ago been fixed thanks to the trillions spent by government in attempts to eradicate it. Sorry, but in a country such as this in which the world's poorest would give anything for the chance to simply work here, the driver of poverty is plainly something other than a lack of money. Some individuals disabled of the body and mind surely can't help themselves, but for the rest poverty is a lot more of a choice - or a series of bad choices - than most would care to admit.
Lowrey concludes that "in a few years, we will know a whole lot more about whether [a guaranteed income] is the right" solution to poverty. It's a nice hedge by a surely well-meaning Lowrey, but wholly unnecessary. The alleged solution won't work simply because poverty in the U.S. once again has nothing to do with a lack of money. What a shame that America's forgotten men and women will have to pay for yet another solution crafted by the U.S.'s do-gooders so that those so eager to spend the money of others can perhaps come to understand (finally?) what is already so obvious.
As coarse as it may sound to those immersed in high-minded thought, the simple truth is that the United States doesn't have a poverty problem.
Maybe someday we can even put to bed once and for all minimum wage hikes too.
The difference is we worked for it vs. having it handed to us - makes the ability to buy a car w/o a loan and eat at the occasional 'fine restaurant" sweeter somehow when we could have sat on our asses and then complained about how cheap the government (tax payers) is when it comes to satisfying our wants beyond our needs......
When approached wth “Would you like to give to the poor?” I always say ‘F the poor. Let their own governments help them.’ The rejoinder usually is “No, here in the US”. Me, walking away: ‘We have no poor.’
Good morning! Yesterday's trades brought surprise endings w/ stocks up a bit w/ slightly higher volume while gold and silver sagged a bit --now at $1,266.10 and $17.12. IOW, we may not be getting anywhere but at least it's at a measured pace! This morning's futures outlook sees more today w/ stocks +0.2% and metals -0.02%.
A half hour after opening bell: JOLTS - Job Openings and Wholesale Inventories.
fwiw:
Dissected The S&P 500, This Is What I Found - Rob Isbitts, MarketWatch
Looters Target Multinat'l Corporations - Richard Rahn, Washington Times
Gender Gap: Men/Women Plan Retirement Differently - Paul Katzeff,IBD
Life Is Unfair, Learn How to Deal With It - Karol Markowicz, New York Post
This is the casino indian model. Or, the Alaskan oil model.
The shocker too many avoid is the fact that it can never be "handed to us". All living beings must go out and get their own food and breath their own air. The fact that this is not a widely accepted notion these days does not make it any less true.
Hmmm. Maybe someday people will also say that America does not have a race problem either.
I’ve looked at this before, imagine getting rid of every bureaucracy and social justice program and replacing it with this? Imagine the savings, and every citizen gets the same check, so there is no cost to administer or police it other than mailing a check.
There will still be poor people, the currency will inflate over the course of a few years and the check will be worth zero at some point but we would finally be rid of the obamaphone, welfare, food stamp, section 8 and the hundred other massive trillion dollar programs.
How about guaranteed billionaire?
Like for instance, the folks in Zimbabwe ...
The “Earned Income Tax Credit” in which a person filing a tax return, ending up with a gross annual income of less than the “official” poverty rate, is given a sum of money which it to restore them to some point near or just above the “official” poverty line. With this provision in place, there is no need, ever, for any “minimum wage rate”.
Either the EITC or the minimum wage. NOT both.
I hate the idea that hardworking people like you might see their life’s work go down the drain. So I feel forced to make a Cassandra-like warning.
Brother, the petrodollar is likely to end soon.
When/if it happens, this means a lot of foreign-held dollars are going to come home.
The Fed cannot, cannot use its printing magic to buy these dollars, because they would just be swapping dollars for dollars.
All of this is just a roundabout way of saying: please make sure you’re ready for a large dollar devaluation. Protection of principal is not the same as protection of purchasing power.
Hope this proves helpful.
It also does not address a pressing US problem the profoundly mentally ill and retareded whose needs cost way more than a basic income, even if they are provided only three hots and a cot. Medicatins costs and caretaker costs, even if it is state mental health facilities, would be important.
The thugettes who get the checks will give them to Jamal, spend them on drugs, alcohol or designer sunglasses, and the little thuglets will be back into foster care.
This was part of the platform of McGovern’s campaign back in 1972—I know, I was part of the campaign, when I was 18, naïve, idealistic, and believing in the inherent goodness of humankind. 44 years later, I am less naïve, just as idealistic, and believe in the inherent sinfulness of humankind, which is why I am here rather than on DU. McGovern never outgrew his liberalism, but at least one of his supporters did.
Maybe if we cleaned up that global statement.....
"We have very few people who are legitimately poor due to no fault of their own. Injury, for instance, that disallows physical laber; However, the great bulk of our "poor" are able-bodied, indolent laggards whose main defect is a poverty of values...and I say F 'em!
with all due respect to those who have been forced into receiving welfare benefits,IMO, welfare benefits should only be to sustain a basic lifestyle. Not to enhance it.
You are wise.
What is your advice to prepare for the coming hard times?
I see the end also, and constantly harangue folks to buy staple dry foods and meds. Am I off base? What if the end does not come in the predicted 3 years? Because then I am stuck with these enormous cans of dried blueberries.
All that would happen is that every year they’d whine that it wasn’t enough and needs to be raised.
I have been wary of petrodollar and Eurodollars for some time now. There are what? Trillions of dollars out there beyond the control of the United States. They have a life of their own. If the world loses faith in the dollar, and starts dumping them, the Fed will have to severely raise interest rates to slow it down. (who knows if that would even work). This would probably push us into a depression. It is a scary scenario.
In addition to supposedly eliminating vast government bureaucracies, the guaranteed minimum has one key advantage: Ignoring payroll taxes, the guaranteed minimum income would make the marginal tax rate for poor people 0 per cent, or at least very low. This is in contradistinction to current welfare policies which, by subtracting benefits as income rises, can make the marginal income tax for poor people as much as 50 per cent or greater.
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