The Finnish government is currently drawing up plans to introduce a national basic income. A final proposal won’t be presented until November 2016, but if all goes to schedule, Finland will scrap all existing benefits and instead hand out €800 ($870) per month—to everyone.
Pointer from Tyler Cowen.
Before the 2016 election turned into a Trumped-up referendum on immigration, I had a vague hope of promoting a roughly similar idea for the U.S. Get rid of food stamps, housing subsidies, Federal payments for Medicaid, etc., and replace with a basic income. Let the states or local governments deal with people who have particular needs, such as people with uninsurable medical conditions.
If I’m not mistaken, Nixon proposed an idea (I think it was called a negative income tax) similar to the Finnish initiative in the early seventies, and it was shot down by the Left, led by Ted Kennedy. A guaranteed basic income program presumably would reduce the need for bureaucrats, hence the Left’s opposition.
A guaranteed income program might be a good idea (although I’m skeptical it would really help the poor, as opposed to saving money for the government), but I’m not sure why you would think it would make for a viable campaign issue in 2016. Most voters are in the working class or middle class and they are preoccupied with their own mounting problems, not those of the underclass. Immigration is an issue for moderate income voters because they see it as adding to their own problems, regardless of whether it is good for the immigrants themselves or the corporations and affluent people who employ them. Perhaps they’re wrong, but most advocates for amnesty and increased immigration seem to think the effect of immigration on the majority of existing citizens and the prospects for their children is not an important consideration.
I like the idea of a Basic Income Guarantee butter but your plan seems like it would be more politically possible.
The big question I have for the US economy is “Why is everybody so pissed off right now with 5% unemployment?”
The other point about Trump immigration is it is not a new issue coming from nowhere. In 2012 Romney beat his best potential competitor in the Republican Primary Rick Perry on the immigration issue. Cantor was burned on immigration in 2014. Living in California our immigration issues are generation ahead and our big immigration blow up happened with Prop. 187 in 1994 when the California economy was ending its Recession. (And Prop. 187 did win. However, it impact was after the 1994 election when the negative ads became legends within the Latino community.)
I agree immigration is not new. It’s the one issue that all Republicans seem to agree on, and nobody including Republican voters is going to take Trump at his word on his literal proposals. So Trump is pushing that issue to the max.
On the economy, I can’t speak for everyone, but I can describe some broad strokes of my discontent.
Labor force participation is significantly down. The reason unemployment doesn’t reflect this is that unemployment is based on the number of people who have had a job in the last year or two. So if you change labor law to permamently disemploy lots of people, you see unemployment go up for about a year and then go back to where it was before.
As well, small company formation isdown. It was weird enough in the 2000s economy that the way to get ahead was to smart a small business that got bought out by a big one. Small business formation is on the decline, though, so now new patterns in the economy have to come from entrenched big companies. This makes me uneasy; the reason for the previous arrangement was that giant companies are fundamentally very conservative and unable to experiment very well.
With both of those two things together, we just have an increasingly ossified economy. It’s unpleasant to live in and it’s questionable for future growth as well. Most disturbing of all is that I don’t even know where else things are better. Everyone used to look to the U.S. for business innovation and then set up welfare states based around mimicing what they saw. If the U.S. does the same thing, then how can there be any economic progress?
Really though I just like the thought of a society where experimentation is encouraged. It sounds like a much nicer place to live, than one where people from Washington are constantly looking over into your bedroom–I mean into your office room.
“The big question I have for the US economy is “Why is everybody so pissed off right now with 5% unemployment?””
Because UE came down with almost no job growth. People care about if they can get a job, not about the measure that economists care about.
And pay. And inflation- which is not zero. And labor participation. I think people aren’t pissed enough.
Do you include Social Security in the “etc.”? I believe Charles Murray’s proposal in this general area (In Our Hands) did so.
Living expenses vary so much over this country that I’m not sure there is a workable amount, at either the state or federal levels. At anything in the $1000/mo range, you aren’t living in coastal California — rent is more than that.
And do you hand this out per person or per family? It’s really going to make a difference if you are a senior who wants to live alone.
Current transfer payments have similar problems. You are not comparing a new flawed system with a current perfect one.
There’s nothing libertarian about a basic income. It’s an enormous redistribution.
As the saying goes, once you admit you are for redistribution we know what you are. Now we’re just haggling over price.
Talk about defining libertarianism downward.
I missed the part of libertarian literature that advocated for government supplying everyone with a permanent wage, and I’ve read a lot of libertarian literature.
Milton Friedman advocated it. His rationale, I believe, was that having no transfer system was unrealistic, and a national basic income, combined with a flat across-the-board tax rate, was the least-distorting solution. Thus, you get $X per month, plus $Y x (1 – taxrate) when you earn $Y. There is no poverty trap that results from taking benefits away as people cross income thresholds, because everyone gets the same $X.
It is arguably the most libertarian of the possible “safety net” systems.
Unfortunately, it’s also quite expensive, i.e., that “taxrate” number is not small if the $X number is to be anywhere near the poverty line.
Have you read Morgan Warstler’s proposal of a modern workfare variant?
https://medium.com/@morganwarstler/guaranteed-income-choose-your-boss-1d068ac5a205#.fo2zlyjvy
It’s fairly libertarian or conservative. It also displays a fairly keen sense of social status signalling which might be more important in the long run if you think of the bourgeois dignity hypothesis of D. Mc Closkey.
In general I think there’s a lot to be optimistic about with this proposal. The swiss referendum scared me because $34,000/year or whatever it was is just an insane amount.
$1,000/month, while still expensive, seems much closer to the “just right” amount.
I’m libertarian, but to be honest I like a BMI for Rawlsian reasons and it seems to be the only one that both sides might have a natural inclination to converge on.
Cash is king!
The longterm political economy of a BMI is disturbing though.