A Keynesian Case for a Basic Income

The Roosevelt Institute has a new policy paper out calling for a Universal Basic Income. I have not read the full paper. I did read the summary. It claims using Keynesian Macroeconomics that a UBI funded by deficit spending would grow the economy.

Methinks this is the Left’s version of Voodoo Economics. We don’t need more deficits. There are better ways of funding free money. I can be part of a flat tax/welfare reform.

Free Money in the Age of Trump

Donald Trump is on the way to the White House, and Republicans will hold both houses of Congress. Seems like grim times for those who want free money from the government — unless you are a military contractor. Right?

Maybe not!

For all his bluster and political incorrectness, The Donald is far to the left of recent Republican offerings. His platform resembles that of a Democrat prior to the rise of the McGovernites. His nativism is labor unionism with a veneer of nationalism. To build a wall is to enforce a national picket line. Ditto for his talk on tariffs.

(Sidenote: I did not vote for Mr. Trump. He said way too many unacceptable things, and his campaign had an authoritarian vibe that I find chilling. Just trying to look at the bright side here.)

Trump’s plan for this country’s working-age poor is to raise the market minimum wage, so you don’t need the free money — maybe.

But there are logistical problems. Expelling millions of illegal workers will require police state tactics. “Your papers please” must become the rule of the land. The militia types would go nuts if a Democrat tried such a plan. The government could appease the militia types by using profiling — asking for papers for those who look foreign. This, of course, would violate the rights of millions of legal citizens.

Free money for all provides a human rights compatible solution. If you make the tax code flat at the bottom and provide a dividend check to all adult citizens, you make it difficult for visitors to tap into the U.S. welfare state without resorting to ugly police state tactics. Foreigners who are net taxpayers can stay. No need for quotas.

Instead of bureaucratic quotas to determine who can work here, we get:

  • Those who have skills we really need here, and thus get paid enough to justify paying the higher tax rate.
  • Those who are willing to do jobs that citizens truly don’t want to do, and thus get paid enough that after tax income is still worth coming here.
  • True refugees who would rather be poor here than persecuted there.
  • Those who have family here that are willing to provide enough support that no dividend is needed.

So, if you want to avoid a human rights nightmare, or simply want free money, pass along the idea to your nearest Trump supporters.

 

 

Approximating Reparations

In the spirit of Martin Luther King Day, I recommend that all who have not already done so read Ta-Hehisi Coates The Case for Reparations. It is grim reading at times, but a must read for those in denial.

What I find particularly appealing about the article is that his case is fundamentally conservative. He opens his article with quotations from Deuteronomy and John Locke’s “Second Treatise.” These are hardly socialist works to say the least. A by-the-letter Constitutionalist conservative who finds parts of the Civil Rights Act to be unconstitutional should still be moved.  Whereas forcing private businesses to abide by the 14th Amendment is technically unconstitutional, having the government provide reparations for violations of the 14th Amendment is not.

And for the libertarians in the audience, I would note that egregious rights violations without compensation is a greater violation of the Zero Aggression Principle than collecting the taxes required to provide reparations.

There are some reasonable objections. One could claim that the statute of limitations has run out, that the generations that committed the crimes are now in nursing homes. One could argue that reparations payments today would be paid by the innocent. There is the very real worry that instead of promoting a national healing, debating the issue of reparations openly would stir up old grievances. Given the ongoing grievance industry on college campuses today, this objection has the most merit.

In theory, reparations done right should kill the grievance industry. Reparations should be a lump sum — or a fixed set of divided payments. Once paid, the issue should be officially closed.

But trusting the political process to do the right thing is a dangerous gambit. Having the government officially verify people’s racial categories  in order to divide out the reparations can lead to future troubles.

If you wish to proceed anyway, you have my blessing, but my support is likely to remain passive.

Instead, allow me to recommend a less politically dangerous, albeit imperfect, alternative: free money for everyone. The case for reparations has an economic component as well as a justice component. Many people are still trapped in poverty due to past injustice. When an entire community is poor, there is no place other than government or charities to look for a hand up. Free money for everyone provides a substitute for the inheritance missing due to past injustice. It is capital to start a business, have a down payment for a home, or simply start up one’s career without undue debt. It is a bouncy safety net that allows one to take financial and career risks which are potentially profitable.

It is not welfare. Welfare requires proof of need. This motivates the wrong actions, and the wrong mentality.

Nor is it a narrow benefit. As Mr. Coates observed, supposedly progressive policies in the past were designed to bypass the negro population. FHA loans and the home mortgage deduction were benefits aimed at the white population. As libertarians point out, when the Agricultural Adjustment Act of 1933 paid farmers not to plant, it paid farm owners. Sharecroppers lost their livelihoods.

A citizen dividend is property, it is a share of the gigantic corporation known as the United States of America. I don’t know how big we can make this dividend. Suppose we go pessimistic and limit it to $500/month. That is $6000/year. Assuming a 4% return on investment in the stock market, this is the equivalent of $150,000 in wealth. If we succeed in doing something in the higher end, say $1000/month, we are now talking the equivalent of $300,000 in wealth. Adequate compensation? You decide.

For those who have prospered despite past injustices, the windfall will be less. The free money comes at the expense of tax breaks. For those people, U.S. citizenship has proven valuable despite past injustices. Free money for all makes U.S. citizenship valuable for all citizens.

Finally.

Before You Consider a For-Profit College

For profit college is conceivably a good idea. The non-profit colleges have expensive emphasis on fancy architecture, student life, political correctness, research, and maintaining traditions that go back to the Middle Ages. Strip away the cruft and focus on teaching motivated students who want to learn career skills, and you should be able to provide a practical education at a lower cost and still make a tidy profit.

But MBA types are driven to maximize profits, and sometimes this leads to taking moral shortcuts. Read carefully this article before considering a for-profit school.

http://www.republicreport.org/2014/back-to-the-future-for-career-colleges-what-we-have-to-do-to-regain-credibility/

Then, if a for-profit school still looks promising, be sure to do some research:

  • Have you verified with potential employers that they do indeed hire from the college you are considering?
  • Have you investigated their graduation rate? Are they recruiting students who aren’t up to the task?
  • Are you truly prepared for the degree program you are considering?
  • Do you have adequate study time? A career and/or kids can do bad things to your GPA.

If you need to takes some remedial coursework first, seriously consider your local community college or the many free online courses available. (And for some of you, your local community college is a better value, period.)

Shop carefully.

Benefits

I’ve talked about the importance of free money to various groups: seniors, college students, the unemployed, etc. But what about the benefits to those paying out the money, the net taxpayers? We need to get some of them on board, if this idea is going to take off.

So on the main site, I have added a Benefits area to the top menu bar. So far, I have documented to two benefits which may be of interest: family values and lower crime. Read them and point them out to your tight-fisted conservative friends.

The Welfare Cliff

The American Enterprise has a great short article with graphic showing the huge penalties a working single mother can experience as her income increases. According to the article/graphic, this single mother is better off making $29000 in gross income than $57,000(!) See entire article here.

Note this article is for a woman making use of all available government programs, including housing and childcare.

According to the article, the total value of all the programs for this hypothetical single mom is $45,000! This is more expensive than the Free Money for All proposal. Sorry, we cannot give out that much to everyone and stay solvent. For some people there would need to be benefit cuts — for those people to most effectively work the system. There is not way all the needy are getting the level of benefits shown on the graph. You want to know why there are so many hoops to jump through, look at the numbers.

Happy Fourth of July!

For all the U.S. readers, I hope you are having a happy Independence Day. As you gather in crowds to celebrate, please be kind to any politicians trying to get their message out. Political solicitation is the price we pay for democracy. If you don’t like politicians catering to the big money donors, then you have to let them take advantage of cheap outreach — such as bugging citizens in the middle of eating hot dogs, listening to bands, etc.

Of course, you should take bug any politician who is bugging you. If you want free money, election season is the perfect time to ask. Because of the sacrifice of past patriots, you live in a democratic republic. Make use of it. Contact your representatives.