More Support for basic income

This article discusses yet another study supporting the idea of a basic income.  Florida recently discovered each homeless person in the state costs the state about an average of $31,000 a year.  This is enough to keep each of them above (the Federal definition of) the poverty level if it was just handed to them.  It mostly covers wages for law enforcement involvement (according to the article, mostly for trivial crimes like trespassing, public intoxication and sleeping on park benches) and medical costs.  For far less than this, the state has found that it can provide long term homes for these homeless people.  The study estimates annual housing costs could be covered at around $10,000 a person.  This would eliminate nearly all law enforcement costs (since most of the "crimes" are caused by the fact that these people do not have homes to sleep and be drunk in) and it would dramatically reduce the medical costs (if they are not on the streets, they are less likely to get hit by vehicles and they are not going to have many medical emergencies related to exposure to extreme weather).  According to the study, Florida could save $350 million over the next ten years by paying to provide housing for the homeless in the state.  This averages out to $35 million a year in savings.

Evidently, Florida is not the only state to discover that well designed state welfare can actually save substantial amounts of money.  Colorado recently converted a prison into a homeless shelter.  The cost is around $3.9 million, but the cost to the state for caring for the homeless people served is just over a third of the original cost.  It turns out that Utah has been providing free housing to homeless people for almost a decade, to save money.  Some believe that Utah will eliminate long term homelessness in the state entirely within the next year or two.  As the article says, not only is it morally expedient that we end homelessness by providing free housing to the homeless, it is also financially expedient that we do so.

I am sure you can see how this relates to basic income.  Of the states mentioned in the article, two revealed the cost per person of homelessness to the state.  One was around $31,000 a year, and the other was around $43,000 a year.  In both cases, the amount of money spent is enough to take the homeless population entirely out of poverty just by giving them the money with no strings attached.  In fact, Florida could keep $6,000 of the $31,000 and still bring their homeless out of poverty.  Colorado, which spends over $43,000 a year per homeless person (not counting the savings seen from converting the prison), could keep $18,000 per person and still bring them out of poverty (using $25,000 as the required income to eliminate poverty; this is close to the Federal government definition of poverty).  Not only is $25,000 a year enough to pay for a small apartment, in most places it is enough to pay for food, a cell phone subscription, and maybe even internet.  It will not cover a car payment with all of this, but we are talking about people who do not have jobs and thus do not need a car to get to work.  Homeless people typically already "live" near places that sell necessities (otherwise they would starve), so they will probably already be close enough to walk.  And of course, I have already discussed the proven fact that given the resources, many homeless people will get out of poverty on their own (in a previous article).  This means that many homeless people given the money that is normally used reactively to help them would become tax paying citizens, further reducing the cost.

Again, I want to point out that basic income is cheaper than welfare with restrictions.  Every restriction placed on welfare recipients costs more money.  If the state has to check bank accounts and employment records to make sure that welfare recipients really are poor, the state has to pay someone to do it.  The costs can go very deep.  First, the welfare applicant has to spend time filling out and filing the forms.  Second, the welfare worker has to review the forms. Third (assuming no revisions are required), the welfare worker has to contact the banks and employers.  Fourth, the banks and employers have to spend time and effort verifying the validity of the legal information release forms.  Fifth, the banks and employers have to look up the requested information and send it back to the welfare worker.  Sixth, the welfare worker has to do whatever math is necessary to determine whether the applicant qualifies.  Seventh, the welfare worker has to send (or otherwise communicate) either a rejection or acceptance letter.  Eighth, the welfare worker has to communicate the acceptance or rejection to whoever starts the next phase of processing.  Do not forget to add to this the fact that few states require only back account and employment records.  Most states require even more.  This is not the end though.  Most welfare departments in the U.S. require recertification either every month or every sixth months.  When there are tens of thousands of welfare recipients in each state, this becomes a full time job for hundreds or thousands of employees.  Of course, this means that managers are also needed, as well as buildings, which have utility costs, and janitors.  Also, do not forget that all of these employees need office supplies and computers to do their jobs.  The welfare department of nearly every state is the size of a typical large business.  Unlike for-profit businesses though, they do not generate any revenue.  So each state has a large welfare business funded by the state, that only consumes funding, and rather large amounts of it.  An unconditional basic income could dramatically reduce the size and thus cost of state welfare systems.  A basic income that provides enough to avoid poverty would cost significantly less than the cost of living on the street for homeless people.  It is possible that taxes would have to be increased, but it would hardly matter, because for most people, the income increase would pay for most if not all of the tax increase.  In the end, it looks like many states could save money this way, even with little or no tax increase.  Do not worry to much about the welfare workers that would loose their jobs.  The basic income will provide enough to support them while they try to find new jobs.  What is the downside?  So far, every suggested downside of a basic income has either been disproven by research or was based on faulty interpretation of data.  It looks like there is no downside.

I am not going to pass judgement, but I do sometimes wonder about the intelligence of our government officials and those who elected them.  I mean, look at the evidence.  According to the evidence, strong welfare reduces government spending.  All evidence so far has shown that a basic income will result in a larger labor pool, happier family relationships, and cost less than anything we have tried in the past.  It is both morally and economically wise, according to the evidence.  The fact that we have not done it and are still not even considering it leaves me with two conclusions.  Either, the average American is an evil person who wants the poor to suffer, even if it means that it will cost the government huge amounts of money, or the average American is stupid.  Given these two options, if I am to give the benefit of the doubt, I have to assume the average American is stupid.  I hate to make such assumptions (especially out loud), but what alternative is there?

I have mentioned before that I am conservative.  While I register to vote as a Republican, I do not consider myself one.  The Republican party line wants to force everyone to work for their support in an economy where there is not enough work for this to happen.  While this plan seems fair, it is no longer economically feasible.  Sorry, but our economy cannot handle the weight of a large working class anymore.  Businesses cannot afford to hire enough workers to employ the entire population, because they produce so efficiently that the overproduction would cost too much.  It looks to me like the Republican party would have us massively overproduce and then spend huge amounts of money to either store or discard the surplus.  This does not make economic sense, and it could be very damaging to the planet.  A well run business does not overproduce, because overproduction reduces profits, and since the Republican party claims to support the best interest of businesses, it should recognize this and support government action that reduces the need for businesses to provide more work than is necessary.  The only way we will get the massive working class desired by the Republican party is to deliberately make businesses less efficient (see Luddite).  I sincerely hope the Republican party leaders are not so deluded that they think this is an acceptable solution.

Conservative does not mean that a person does not support wisely designed welfare.  In fact, what it technically means that a person supports small incremental changes in government, instead of large unpredictable changes.  I prefer a government that slowly changes, and that considers evidence and consequences carefully before making big decisions.  I do not support large government actions that have poorly understood consequences.  I think that we should consider our decisions in small increments and back up when we find undesirable consequences.  In cases where things cannot be done incrementally, I would like to see a good deal of strong evidence supporting the decision before it is made.  Basic income has plenty of very strong evidence that it will be successful.  All major concerns have been resolved in various experiments and studies on basic income or closely related things.  A great deal of positive side effects of basic income have been discovered in studies that implement very limited versions of the idea, and even more have been found in experiments that have fully implemented a basic income.  As a conservative, I think that we have enough evidence that basic income will improve our society and reduce government spending to justify making this major decision.  To add to this, we need to realize that we can always reverse it if it does not work.  One of the great things about our form of government is that law can be repealed fairly easily.  In my opinion, we have not used this feature often enough, but if we go into this recognizing that this is an option, and if we go into it determined to see the experiment through (instead of bailing at the first sign of difficulty), we can safely test the evidence and ultimately make the best decision for us.  Instead of following outdated and illogical party lines, we need to look at the evidence and use it to make the best decision.