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A National Assured Basic Income Will Poison the Well

When everyone sees riding in the cart as being preferable to pushing it, the cart stops.

by
Jazz Shaw

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April 16, 2014 - 11:58 pm
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On a steamy night in Tampa, Florida, during the 2012 Republican National Convention, a few of us were having drinks with some of the conventioneers at a local watering hole when a rather odd topic came up. Some Democrat complaints about Mitt Romney were blaring on the television – I don’t recall the specific issue – and the idea of additional federal entitlement programs came up as a way of “leveling the playing field” against the super duper rich fat cats, as represented by the nascent GOP nominee. One of our ad hoc drinking buddies scoffed in a gruff tone and, with tongue planted in cheek said, “Why don’t we just pay everyone to stay home and watch television all day?”

This may sound like the makings of a good joke in conservative circles, but it’s not entirely unheard of. I first noted real world suggestions of this last year when Switzerland was toying with the idea of providing a $2,800 per month assured income to all of its citizens, whether they worked or not.  This is not an unknown theory, particularly in nations with nationalized oil companies and rich mineral resources.

The other place you run into a parallel to this sort of utopian concept is probably best exemplified in the movie Star Trek: First Contact.  In one scene, Captain Jean-Luc Picard has traveled to the past and is explaining to a lost and confused local woman that the crew does not get paid because, in the future, there is no money. No money? No, he explains. In the future, people work cooperatively to better themselves and the world, not for personal gain.

It’s a wonderful idea, isn’t it? But clearly one destined to remain on the fiction shelves for those of us who reside in a 21st century capitalist society. Or is it? CNN recently published an op-ed from David Wheeler who’s gotten a whiff of this idea and, having smelled what the Swiss are cooking, seems to think this is just the recipe for what’s ailing America as it faces the bugaboo of “income inequality.”

A monthly cash payment to every American, no questions asked, would solve several of our most daunting challenges. It’s called a basic income, and it’s cheaper and much more effective than our current malfunctioning safety net, which costs nearly $1 trillion per year.

The United States is already experimenting with a variation of basic income, even though most people don’t realize it. Alaska has a small version, called a Permanent Fund Dividend, which is incredibly popular and made the state one of the most economically equal places in America. Importantly, Alaskans don’t consider it “redistribution,” but rather “joint ownership.”

Of course, all government programs have imperfections, and the basic income idea has an obvious one: There will still be people incapable of functioning in daily life—people who will spend their money before paying for basic necessities. What should be done about these “moochers”?

It’s in some ways admirable that Wheeler takes time out in the course of his ponderings on a more perfect union to wonder if there might be some flaws with this plan. But looking at this from the capitalist perspective, he seems to be ignoring a few of the truly massive flies in this particular ointment. The first of these comes with the attempt to somehow conflate Alaska’s Permanent Fund Dividend with the idea of a socialist state handing out paychecks for free.

Alaska and certain Nordic socialist interests have a few things in common here, but not what the author supposes. First, much like some European North Sea entities, Alaska is dealing with a miniscule population when compared to other large states. More to the point, the state government enjoys a peculiar benefit similar in nature. No, Alaska is not a socialist state, but they do control vast natural resources which outside companies extract and process. These entrepreneurs pay a fee directly to the state for mineral exploration rights and it adds up to a tidy sum. What Alaska is doing is not offering any form of guaranteed basic wage. They are more in line with a very prosperous company engaged in a practice known as profit sharing. (As an aside, I don’t know if any American companies actually do that anymore. Those of you casting about with a confused look on your faces can either Google the term or ask your parents.)

Comments are closed.

Top Rated Comments   
Perhaps it's not called "profit sharing" but the company that I work for is employee-owned, via an ESOP (Employee Stock Ownership Plan). I don't get the stock until I retire, but it's turning out to be a rather nice little sum. ESOP's are fairly popular, and do rather well.
22 weeks ago
22 weeks ago Link To Comment
It's funny you mentioned Star Trek as an example. That society is, at base, one vast lie, an abomination. If you pay close attention, every ill we have today, they still have as well - alcoholism and drug abuse, mental illness, poverty, war, theft, violence, terrorism. It's just shuffled off to behind the scenes, alluded to once in a while, but never quite shown.

If none of that existed, why do they still have police, jails, mental health lockups, warships, etc.?

Worse, they're all arrogant meddlers, sure that theirs is the only proper way for a society to work. Listening to a Picard moralize is similar to eating a tablespoon of Splenda. Sickeningly sweet.

Yes, I know...Heresy.

Consider what they're really like, when push comes to shove...a region on their borders is occupied by descendants of Native Americans. The Federation just up and decides that it is in THEIR interest to give that region to the Cardassians. No hearing, no appeal, just up and move people from their homes, because we say so. Even up to an including conducting a small war against them to force them from their lands, all chock-full of self-righteousness about the "Common Good."

Star Trek is precisely the world I would not care to live in.
22 weeks ago
22 weeks ago Link To Comment
Set the minimum wage at $1000 per hour and we'll all get rich.
22 weeks ago
22 weeks ago Link To Comment
All Comments   (34)
All Comments   (34)
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my co-worker's sister-in-law makes $77 an hour on the laptop . She has been laid off for 7 months but last month her check was $21190 just working on the laptop for a few hours. visit this site right here >>>>>>>>>>>>>>

www.Jobs60.com
=============================================
21 weeks ago
21 weeks ago Link To Comment
Some how I just find it really depressing to realize that I'm spending not that much more than, apparently, Switzerland thinks is the bare minimum for an acceptable lifestyle. The only reason I spend as much as I do is because I eat out way more often than I should, and i have a lot of frozen dinners, but if I wasn't working, I could bake my own bread, and fix my own meals for a whole heck of a lot less.
21 weeks ago
21 weeks ago Link To Comment
It's somewhat amusing to think that Democrats are proposing an idea that they shot down in the early 70s when Nixon proposed it.

Regardless of who is proposing it, it's a dumb idea.
22 weeks ago
22 weeks ago Link To Comment
how about this

If the Feds, through constitutional amendment, abolished all programs that are transfer payments of any kind AND outlawed the income tax, medicare tax and social security tax and instead implemented a flat 14% rate on everyone OR a national sales tax, with language that prohibits both AND stopped taxing businesses, dividends and capital gains, then:

Guarantee everyone $2500 per month "living wage" which everyone would receive, even Bill Gates and others in his income/wealth bracket.

Here's how to fix the getting in the wagon problem. For everyone who is gainfully employed and earning up to $50K per year, their "living wage" dividend would remain at $2500 per month. If you earn between 50K and 100K, it GOES UP to $3500 per month and if you earn more than $100K it goes to $4500 per month.

I haven't done the math, but if the government eliminated all of the transfer payments and tax structure as outlined above, I bet it would MORE than pay for this program.

The structure of the program would encourage people to continually work and improve their skills to earn more as the reward goes up.

Some "moochers" will always exist, but this should limit them to roughly the same numbers we saw before Obummer took office.

(I'm not actually advocating this, simply pointing out a way to implement it that might actually work, but has many elements that are so antithetical to the prog-left that it would NEVER be implemented!)
22 weeks ago
22 weeks ago Link To Comment
Milton Friedman, John Locke, and F.A. Hyack would have disagreed with you vehemently. You've just proposed (I know it's for drama) a very complicated income scheme, which in the hands of government, would be rife with innumerable, unintended failures. Just step back and let the citizens take care of themselves.
21 weeks ago
21 weeks ago Link To Comment
A year after the first guaranteed income has been passed out, the
recipients will cry that they cannot live on it and will screech for more.

Don't economists learn about human behavior?
22 weeks ago
22 weeks ago Link To Comment
"Of course, all government programs have imperfections, and the basic income idea has an obvious one: There will still be people incapable of functioning in daily life—people who will spend their money before paying for basic necessities. What should be done about these “moochers”?

Moochers? That's what we created the death panels for, right? When the drug abusers overdose, or the chronically depressed try to kill themselves, we just let them die. And maybe hire some more addicts to bury them, like some futuristic Sonderkommando...

There's probably someone in the Obamacare bureaucracy working on that now.
22 weeks ago
22 weeks ago Link To Comment
Interesting thought piece. Where is the support for a guaranteed minimum income in the US? A few lefties, maybe, otherwise zero. Much ado about nothing.
22 weeks ago
22 weeks ago Link To Comment
Apparently you have not read Obama's book, "The Audacity of Hope". In it he talks about is gardener, who may only work a few hours a week for part of the year, should receive a living wage. He never says it should come from him (the gardener's employer). The only way to get to this position is with a guaranteed minimum wage. It is more mainstream than you think, but goes under many different names (e.g. welfare, safety net, unemployment insurance, living wage, fair wage, etc.). It is only the far left that does not hide their intent.
22 weeks ago
22 weeks ago Link To Comment
The left is generally ignorant about this fundamental problem with broad government give-aways. However some, like public service union leadership, do understand and would not support such a program because they realize that their sweet deals would not be so valuable if everybody got them.

Imagine if everyone in the private sector all of a sudden received 28% higher pay, were given lax work rules, could not be fired no matter how poor their performance and then got an early lavish retirement worth millions. Imagine if every private business was run like academia with layer upon layer or administrators in all kinds of frivolous non-productive roles and key people only asked to produce for an hour per day. The inevitable result would be shortages and sky high prices - making those $8,000 per month (average public sector) retirement checks worth a whole lot less.

We should be so lucky that this government stumbles into some massive social program like this. At least it would expose the fallacies once and for all - and put the private sector middle class on a more equal - if miserable - footing with the public sector.
22 weeks ago
22 weeks ago Link To Comment
For what it's worth, Marx was against this type of welfare as it simply propped up capitalism rather than getting rid of it.

It's also funny to not hear any mention of Cloward Piven because for all the times it's mentioned here as some sort of conspiracy bull this is the one time it's appropriate.

The whole point of overloading the existing welfare system was to push for a scrapping of existing welfare programs in favor of a Guaranteed Minimum Income. This IS Cloward Piven.
22 weeks ago
22 weeks ago Link To Comment
When 'Money' is FREE.
It becomes Worthless.
That is the purpose of money to store portable value. Even the FIAT stuff we call Dollars today. But make it free...Then the old saw about 'Not worth the paper it's printed on' suddenly comes true.
22 weeks ago
22 weeks ago Link To Comment
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