03 Apr A Universal Basic Income*

In February, Stockton California began America’s first experiment with a universal basic income (UBI) – sometimes referred to as “free money” – when it sent debit cards loaded with $500 to a group of preselected residents. In doing so, Stockton has begun an experiment to determine whether a long-term basic income is a worthwhile program. In its broadest terms, the goal of a UBI is to lift people out of poverty by substituting a single payment program for certain existing entitlement programs. The means are simple: give money to every individual (generally varying by age), regardless of income level or employment, with no restrictions on what they do with it.

UBI is hugely controversial and inspires an emotional reaction in many people. Concerns range from creating a culture of indolence to giving handouts to the wealthy.

In all fairness, my first reaction was absolute horror. Give money away for no reason? Doing so would undercut the work ethic, the most basic of Judeo-Christian principles and the foundation of capitalism upon which America was built!

Not so fast.

The UBI question is complex. Emotional preconceptions do not advance the analysis.

If the question is simply “How should America reduce poverty among its citizens?”, the focus will be on increasing the breadth, depth and delivery of aid. That’s how many have approached the problem. If so, additional entitlement programs will do so and, in some sense, UBI may provide a viable answer.

But that oversimplifies.

The question should be “How should America reduce poverty among its citizens in the most efficient manner available?” That requires balancing the costs against the benefits … and would require an examination of America’s overall approach to providing assistance to underprivileged Americans.

Congress has been incredibly responsive to problems brought to its attention by voters concerned citizens. In legislating remedies, it invariably has thrown money allocated monies and added administrative resources. The U.S. currently supports disadvantaged children, the elderly, the disabled and those living below the poverty line with a complex series of entitlement programs. At the Federal level, these include Social Security, Medicare, Medicaid, Food Stamps, housing subsidies, household welfare payments, and farm and corporate subsidies. Each program in itself has been well-targeted and effective. In doing so, however, each has generated its own bureaucracy and, because each program was designed to address a specific constituency problem, there has been a fair amount of unintended overlap with a limited ability to monitor duplicative services and payments. This is a problem that Congress has been aware of for some time. If the goal of UBI were solely to simplify America’s entitlement programs and eliminate their vast overlapping bureaucracies, that in itself therefore would be worthwhile. That should be the goal.

The Stockton UBI scheme gives $12,000 per year to each adult ($12,000 is the current national adult poverty level). If that scheme were to be extended to every U.S. resident over the age of 18, the cost would be approximately $3 trillion per year. If a scaled amount were to be added for children, the total annual outlay would approach $4 trillion. With the U.S. budget already in a ~$1 trillion annual deficit, such an additional outlay is unsupportable.

In response, some have argued that funding for a UBI should come from additional taxes, others have urged funding for UBI through cuts in defense spending, and still others have argued for taking money from existing entitlement programs – and it is this third alternative that provides the only viable approach. That is, if Congress were to focus on entitlement simplification with the goal of bringing the maximum financial safety net to the greatest number of needy Americans, UBI could be made to work. This might be the appropriate time for this sort of simplification given Democrats’ support for the concept of UBI and Republicans’ support for reducing the number of entitlement programs. As every history student knows, effective government requires compromise. Unfortunately, Congress does not have a recent record of addressing America’s problems in a coherent, bipartisan manner. When it acts, it generally does so only in response to special interests and single-minded voting blocs. Were it to attempt comprehensive entitlement reform – the “third rail of American politics” – entrenched government bureaucracies would fight to retain their jobs; Americans who currently receive in excess of $12,000 per year in Federal entitlements would fight to maintain their benefits; the host of service providers who rely on existing entitlement complexities would lobby to prevent simplification;

Republicans would recognize that anything they do would alienate an important constituency because it would be perceived by some voters as giving away Federal dollars to the indolent; and Democrats would recognize that anything they do would alienate an important constituency because it would be perceived by some voters as giving away Federal dollars to the wealthy.

Which brings us back once again to a remark attributed to Winston Churchill: “American can always be trusted to do the right thing once all other possibilities have been exhausted.” In the case of entitlement reform, by the time all other possibilities are exhausted, the U.S. is likely to be bankrupt.

Which brings to mind another remark: “Nothing ventured, nothing gained.” Are there influential American politicians, Republican and Democrat, brave enough to touch the “third rail”?

A Reader’s take on “A Simple Take-away from the Mueller Investigation”

A reader made the following comment:

“’[Your] ÔÇÿ9/11-like moment’ comments are nonsense. Russia interfered in the 1960 U.S. election [and] Obama/Clinton openly interfered in Putin’s last real election in Russia [as well as] a major Israeli election and Ukraine’s election.”

Without getting into a definition of interference, the U.S. system is not the same as those of Russia,

Israel or the Ukraine. Moreover, the U.S.-as-global-hegemon cannot allow itself to be judged by standards applied to other countries. Nevertheless, even assuming that the named countries have democratic electoral structures comparable to those in the U.S. (which they don’t), the U.S. government has the responsibility to investigate and, to the extent necessary to ensure the continued viability of the American electoral system, defend it. That this should be a wake-up call was the message of a “9/11like moment.”

Finally (from a good friend)

Do you suffer from shyness?

Do you sometimes wish you were more assertive?

Do you sometimes feel stressed?

If you answered “yes” to any of these questions, ask your doctor or pharmacist about Cabernet Sauvignon.

Cabernet Sauvignon is the safe, natural way to feel better and more confident. It can help ease you out of your shyness and let you tell the world that you are ready and willing to do just about anything.

You will notice the benefits of Cabernet Sauvignon almost immediately, and, with a regimen of regular doses, you will overcome obstacles that prevent you from living the life you want.

Shyness and awkwardness will be a thing of the past.

You will discover talents you never knew you had.

Cabernet Sauvignon may not be right for everyone.

Women who are pregnant or nursing should not use it, but women who would not mind nursing, or becoming pregnant, are encouraged to try it.

Side effects may include dizziness, nausea, vomiting, incarceration, loss of motor control, loss of clothing, loss of money, delusions of grandeur, table dancing, headache, dehydration, dry mouth and a desire to sing Karaoke and play all-night Strip Poker, Truth Or Dare and Naked Twister.

Warnings:

The consumption of Cabernet Sauvignon may make you think you are whispering when you are not. The consumption of Cabernet Sauvignon may cause you to tell your friends over and over again that you love them.

The consumption of Cabernet Sauvignon may cause you to think you can sing.

The consumption of Cabernet Sauvignon may create the illusion that you are tougher, smarter, faster and better looking than most people.

Please feel free to share this important medical information! and remember, LIFE IS A CABERNET OLD CHUM.

*┬® Copyright 2019 by William Natbony. All rights reserved.