The
idea springs from the fact that the government spends more than $1 trillion
each year helping the poor, yet one in eight Americans lives in poverty.
Present government welfare programs are not working! Many people are thinking
that just giving free money to everyone would lift the poor out of poverty by
giving them a start-up fund on which to begin establishing businesses and going
to work.
The
idea sounds like a beefed-up version of a huge new entitlement program.
However, thinkers from both sides of the Conservative/Progressive divide are
considering it. Stockton, California has even instituted such a program; that
city has decided to supplement 500 of its citizens with such a give-away
program! (This is apparently a pilot/experimental program in Stockton.)
This
program is even being promoted by such prominent Conservatives as Charles
Murray, the author of In Our Hands: A
Plan to Replace the Welfare State and Coming
Apart: The State of White America. Murray proposes giving everyone over the
age of 21 years an annual income of $13,000 and compel them to spend $3,000 of
it to buy catastrophic health insurance. The recipient would be allowed (but
not compelled) to work and earn more money on top of the $13,000. The payment
would be tax free up to $30,000/year and taxed above that amount. Government
payments for Social Security, Medicare, Medicaid, and other welfare payments
would cease, and everyone could spend the money any way they pleased. This
money would be given to everyone regardless of his or her wealth or
poverty situation.
The
government presently spends $2.2 trillion in annual entitlement benefits; and
his program would spend $2.6 trillion in 2014 dollars. Entitlements are
projected to grow faster than the projections of this plan, so in time it would
save money.
Backers
of such a plan believe that this money would stimulate the poor to go to work
and to establish businesses. More people would get married, as it becomes
possible to live a middle-class life-style by sharing distributions and
combining them with a little bit of income. Women in bad relationships would
have financial independence from ne’er-do-well boyfriends. The middle class
would be able to save for retirement. Workers would not be tied to
soul-crushing jobs.
This
whole idea is the craziest idea I have heard lately. For one thing, nobody is
incentivized to work by giving them money. I believe that nobody who has lived
in one of America’s rust belt cities would ever endorse such a wild idea. Nancy
and I worked and went to church in the heart of Detroit’s warehouse district
for 10 years. At that time, the state of Michigan had a program called General Assistance, in which thousands
of able-bodied young men received cash money from the state government because
they had no source of income. It seemed to us that all those young men rested on
their laurels and did no work whatsoever. They had a bonanza of money income
without doing a lick of work. Finally, a Republican governor came into the
state house; and the General Assistance
money disappeared. As a result, many of those men went back to work.
Social
programs often do not accomplish what they were intended to accomplish; often,
they accomplish something else; the unexpected side-effects are the predominant
thing accomplished. The most blatant example of this is what happened to the
money of Medicaid, a program that was initially designed to take care of
medical expenses for the poor. However, Medicaid money now goes predominantly
to nursing home financing for any American with less than $3000 in the bank;
there is no means test for relatives of people in nursing homes.
The
idea of requiring all recipients of basic income money to buy catastrophic
health care coverage is ludicrous. In the first place, poor people will never
have enough money saved up in the bank to pay the up-front money before
insurance money becomes available to them. They will still need Medicaid money
for health care. For this reason, Medicaid funding as we know it, today will
still be required. And…the whole idea of not covering people under 21 years of
age will require government money in the form of continuing Medicaid insurance.
It is interesting
to me that Senator Bernie Sanders does not endorse such a plan. And…if a Socialist
such as he does not endorse the plan, there must be something egregiously wrong
with it.
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