What Good is a Federal Job Guarantee: Another Basic Income Plug

What good is a Federal job guarantee, when states are putting their entire populations under quarantine?

This article has a dual purpose.  One purpose is to call on Bernie Sanders to drop his Federal Job Guarantee agenda, an ill advised program that can only ever delay but never solve the problem of declining numbers of jobs as more and more jobs are automated, in favor of a Universal Basic Income, which he once believed was a noble long term goal.  Of course, Sanders is never going to read this.  This blog does not have a very large number of followers, and last time I checked, it was not getting a whole lot of traffic.  The other purpose is to review the pros and cons of a basic income once again, with the addition of some things I have not discussed in the past, because no one was ready to listen.


What good is a Federal job guarantee, when states are putting their entire populations under quarantine?  U.S. culture has changed substantially just over the last few weeks as something that was unthinkable only a month ago has actually happened.  As such it is time to discuss Universal Basic Income in a context that people would have laughed at a month ago.  There are a lot of proven benefits a basic income can bring.  One of those is acting as a financial safety net for people who lose their jobs or are otherwise unable to work for more than a week or two.  Financial advisors recommend that people save around six months worth of wages, to cover unexpected situations of this nature, but few people do.  Most middle class and wealthy people, who are actually able to afford to do this, make poor financial decisions that make saving impossible.  Poor people do not get paid enough to afford to save, despite the fact that most of them are forced to make wiser financial decisions by high prices on housing and other things.  Further, how can anyone expect individuals to save significant amounts of money when economists are telling businesses and individuals to spend, spend, spend!  The fact is, the U.S. economy is built on a fundamental assumption that nothing bad can ever happen and the way things are now is how they are always going to be.  Business experts recommend businesses to take on all available debt that they can spend on things that will bring in more profits than the interest on the debt.  Individuals are recommended by financial advisors to go into debt on homes, so long as they can afford the mortgage payments.  Banks and real estate agents conspire to get home buyers to spend the maximum amount they can afford on a home.  The problem with all of this is that the recommendation to businesses is based on the assumption that the profits a business can make in the future will always be equal to or larger than the profits that business can make now.  What happens if profits drop below the cost of interest?  The recommendation to and pressure on individuals to buy homes that are barely within the limits of their budgets assumes that those individuals will continue to have the same or greater income until the debt is paid off.  Again, what happens if a job is lost or an injury makes an income earner unable to bring in wages for even a few months?  What happens if a global pandemic of a fairly mild diseases causes mass panic and most people are quarantined by government mandate, many unable to work, for a few weeks or even months?

Up to now, the impact of poor financial advice to businesses and individuals has been largely ignored, because it is easy to ignore when only a small percentage of the population is affected by these tragic events at a time.  We can deliberately ignore the injustice of people losing jobs when businesses fail due to following incredibly poor financial advice, because it is only a few businesses here and there, and society can pick up the slack.  We can ignore the incredible harm unexpected loss of income brings, because again, it only happens to a very small percentage of the population at a time.  This makes it easy for law makers to ignore the fact that programs like a Federal Job Guarantee cannot help people with major disabilities, people who are not suited to the kind of work the government is offering, and people who's time is more valuable to society as a whole doing domestic work like raising children and caring for old and disabled people.  It is also easy to ignore the fact that the government can never truly guarantee jobs.  Consider a Federal Job Guarantee program now.  Just last week, 3.3 million Americans (that's 10% of the population) filed for unemployment.  How fast could a well funded, very robust Federal Job Guarantee program find work for 3.3 million people?  It would probably take over a year to place everyone, and it would cost far more than the $2 trillion being spent on "economic stimulus" to create enough government projects to employ that many people.  That 3.3 million is just the tip of the iceberg.  In another recent article, the math demonstrates that a Federal Job Guarantee would already cost around $10 trillion, without this additional 3.3 million people.  Another 3.3 million workers would increase the cost by another $500 billion.  What else could we do with $10 trillion a year?  Oh right, give every single American man, woman, and child $30,303 a year, no strings attached!  The cost of a Federal Job Guarantee capable of providing all of the jobs we "need" could instead be used to fund a ludicrous Universal Basic Income, averaging $76,363 per U.S. household (2.52 people per U.S. household, on average).  On top of all of that, most of the government projects the Federal Job Guarantee would provide labor for would be closed down right now, due to stay-at-home orders and quarantines.  A Federal Job Guarantee cannot provide the kind of jobs people need, when they have to stay at home.

A basic income is not bound to people being able to leave their homes.  A simple basic income, providing an average of $2,500 per U.S. household per month ($30,000 per year) would only cost $3.8 trillion.  We can do better though.  A basic income of $1,000 per adult per month and $500 per child per month (the most recent version of Yang's Freedom Dividend plan) would only cost around $3.3 trillion a year.  Perhaps a future article will demonstrate how this can be reduced to less than $500 billion with a simple recovery tax that guarantees everyone gets to keep some of the basic income at the same time as recovering part of it from people who have enough other income that they do not need it.

Universal Basic Income has a lot of serious benefits.  Among them are significantly lower crimes rates, rearrangement of jobs that significantly increases economic productivity, the creation of many new businesses, the creation of new jobs, the potential to lower or eliminate minimum wage for a freer market without oppressively low wages, elimination of poverty, easier access to higher education, lower drug use, economic stimulus, greater economic freedom, and a financial safety net in hard times.  And now, we add to that, an extension of the financial safety net, a financial safety net even during broad reaching events that affect everyone.  A Federal Job Guarantee can provide some of these benefits for a portion of the population, most of the time, but the idea that it is even a guarantee is wrong.  A basic income can serve everyone all of the time.  A Federal Job Guarantee can easily be overwhelmed by a fairly mild but highly contagious disease in less than a week.

What about the cons?  If the government gives people free money, they will just quit working, won't they?  Nope.  Many will quit their current jobs and get new ones.  This will be more like shuffling than anything else though.  A great many U.S. workers are stuck in jobs they do not like and are not good at.  A basic income will allow them to quit those jobs, opening their positions for people who do want them and are good at them.  The result will be a shuffling around of jobs that ultimately makes people happier and more productive.  Some will not return to work, but most of those will either start new businesses or move to more economically valuable unpaid work, like caring for dependents.  The evidence of this is strong, from a number of basic income experiments.  The evidence also shows that currently unemployed people are more likely to work when they have a basic income, if work is available, and if it is not, they are more likely to pursue education to become qualified in work that is available.  The fact is, the biggest con of a basic income is the cost, and in the long run the economic improvement and lower law enforcement and judicial costs associated with less crime will end up covering most or even all of that.  In addition, the cost of a basic income can be easily mitigated with a progressive recovery tax designed to recover most (but not all) of the basic income from those who already have high incomes.  In short, a well designed basic income program can actually provide a net gain in the long run.

The main point here is that basic income is a well tested and proven idea, and our current situation has made it very clear that our current welfare is insufficient and a Federal Job Guarantee would be an equally poor substitute.  With a basic income, the $2 trillion stimulus package would be largely unnecessary.  Yes, a Federal Job Guarantee with as-needed stimulus packages might be able to accomplish the same thing for the majority of those in need, but a system that requires massive government borrowing every time there is some minor global disaster is a poorly designed a system.  A well designed system would have been able to handle the economic and financial issues of the current situation without any additional action from Congress.  The fact that a stimulus package is deemed necessary is evidence of the weakness and fragility of our economy, including the labor portion.  Our current welfare system has utterly failed to handle the situation.  A Federal Job Guarantee would fail just as dramatically if not significantly more dramatically.  A basic income, however, would already be here, helping the people meet their needs, without any additional government intervention.  A basic income is the enlightened solution to our current problem and many future problems we are bound to encounter.  The only true weakness it has is that it cannot be implemented any faster than the recently passed stimulus bill.  Had we concerned ourselves just a little bit more with future, instead of deluding ourselves into believing we were too big and powerful to fall, perhaps we would already have one.  It is not too late to start though.  Yes, we will suffer for our refusal to look beyond the current moment, but we will recover, and with a basic income we will recover faster and be more resilient in the future.

Children Aren't Important?

I keep seeing this come up, and I do not understand why there is not more public outcry over it.  It started with Trump's tax reform.  Now, Trump's tax reform helped a lot of people.  It increased refunds for a lot of lower income working Americans.  Unfortunately, however, it also neglected children.  In a sense, it counted adults as worth more, reducing the total amount of refund for lower income working families with more children than average.  (We saw more than a 10% decrease in our refunds, despite getting a little more back from the EITC.)  After Trump it was Yang, with a Freedom Dividend plan that would have given adults a basic income worth around half of a living wage but just plain did not even count children as people.  Now we have plans for an economic stimulus package with a relief element for individuals, and yet again, children are being treated as unimportant.

Trump suggested an initial relief check for all American adults, with some kind of cutoff to avoid giving a lot of money to people who do not need it.  This is not a bad idea, except for the fact that children are rapidly increasing in value in the U.S. (as fertility rate decreases), and this plan straight up neglects children.  Of course, others immediately pointed this out, and Trump agreed with plans that provide smaller amounts for children.  Now, I am not complaining about the fact that the amount for children is smaller in some of these plans.  Household dynamics work fine this way, as the biggest cost for most families is rent or mortgage payments, and this scales much slower with family size than other necessities.  But now Mitt Romney has proposed a plan to the Senate that has reverted back to this adults-only thing.  Is it just Republicans or wealthy politicians, or do Americans in general consider children to be unimportant?  This is ironic, given how much resources state and Federal governments put into oppressing parents for even the most trivial things that might be disadvantageous for their children.

There are a number of potential excuses for denying children disaster relief when it is being provided to adults, but they are all wrong.  The first is that the relief given to parents will help their children.  This is not untrue, but unless everyone has the same number of children, it is overly simplistic and punishes larger families while rewarding single people and couples without children.  Punishing larger families right now is a really bad idea, and it happens to be the next topic of discussion.

The second excuse is that counting children will reward larger families for having more children.  I have two responses to this.  The first is, that is straight up false.  I heard the same argument when I lived in Alaska.  I once overheard some of my coworkers complaining that certain Russian families had large numbers of children, so they would get more money from the Alaska Permanent Fund Dividend.  The largest payout I have ever seen from that is around $2,000 per person, and it pays out once a year.  (It has hovered around $1,600 the last two years.)  No offense to my coworkers, but anyone who thinks children cost less than $2,000 a year to provide for either has not had to provide for children or is in serious need of remedial math.  Even at the maximum payout, children do not turn a profit from the Alaska PFD.  (Note that I was one of 7 children, in my teens, living there.  My parents made enough to live comfortably but nothing more, and the PFD definitely did not cover all of the costs of 7 children, let alone turn a profit.)  The $500 per child suggested by some is only a quarter of that.  It would take more than $500 a month for most Americans to profit off of children*.  My second response is, is it wrong to reward parents for having more children?  Raising children is expensive, and it takes a lot of work.  If we wanted to be completely fair (especially to women), we would be paying at least $30k a year to stay-at-home moms with one child.  That is the long term babysitter average wage though, which only covers 40 hours a week.  Moms are more like nannies than babysitters, doing household chores, teaching children basic skills, and so on, on top of supervising and caring for children.  If we assume 14 hour days (children are recommended to sleep from 10 to 14 hours a day, depending on age), that comes out to $125k a year (average pay is $19/hr in the U.S.), if we do time and a half for overtime, with overtime being only anything over 40 hours a week.  (No, you can't pay babysitters or nannies salary.  They are non-exempt employees and thus must be paid hourly wages that comply with overtime laws.)  A nanny might be expected to care for one to three children at that pay.  $500 a kid, as a one or two time payment, is not actually a reward.  It is not even fair wages for services rendered!  And even if it somehow was profitable, encouraging people to have more children is not a bad thing right now.  The U.S. fertility rate is currently lower than 1.8 (average children per woman, in a lifetime).  The replacement rate is 2.1.  That means Americans are not having children at a high enough rate to sustain our own population.  Those panicked about overpopulation might see this as a good thing, but people who understand the economic impact of a declining population do not.  To maintain a healthy economy in the long term, it is important to maintain at least the replacement rate, and while immigration can help make up the difference, it is not a good long term solution, especially when Americans want stricter immigration regulation.  Not only is rewarding people for having more children not a bad thing, it is actually something we are going to have to do anyway, if we want to avoid long term economic decline.  The fact is, parents with large families should be treated as heroes for doing their part to slow the long term decline of the U.S. economy.  We should be happy to make children profitable for them, and they at least deserve some help with the costs of raising children, if not fair wages for the work.

(* I say most, because it might work in the lowest cost-of-living regions, for parents who are already covering a lot of needs through government welfare programs.  In this case though, it is not the $500 a month that is turning a profit but the $500 a month combined with the other welfare.  The $500 a month will never cover more than 100% of the costs of a child on its own.)

Now, I have never heard anyone argue that children are not as important as adults, as an excuse for only providing a basic income or disaster relief for adults and not children, but actions speak louder than words.  Clearly, Mitt Romney considers children to be worthless in comparison to adults.  The current House bill being crafted for relief does include children, but it also puts a cap on larger families.  A maximum of four children can be counted.  Families with more than four children, the true heroes, are out of luck.  Their children are counted at a value of four fifths or less of an adult each.  My value, as a teen with six siblings, would have been only 57% that of an adult.  Even a Democratic House somehow cannot manage to consider children as important as adults.  Yes, the House bill does pay out equal amounts for adults and children, but with a maximum family limit, it is still treating children as lower value, second class citizens.  It would be better to give children half the payout of adults, without a family cap.  (And yes, this would actually result in a smaller payout for my own family.  But at least it would treat children as equal, instead of devaluing children in larger families.)

The fact is, children are not just important.  They are critical.  We often hear the cliche that children are our future, a rather blatant statement of the obvious, but we do not seem to understand the extent of it.  Number are important.  Shrinking populations are populations in economic decline.  And immigration is not a long term solution, because they do not contribute significantly to an increase in the percentage of children.  The fact is, children need relief too.  If we cannot value our children enough to ensure their well being during this crisis, perhaps we deserve mass death and economic collapse.

Paid Maternity Leave

Paid maternity leave is a great idea.  Most first world countries are doing it.  The U.S. is not though.  Instead, it mandates unpaid maternity leave, and consequently, at least 40% of Americans don't get any maternity leave, because they cannot afford it.  Among the poor less than 5% can afford it.  This gives them two options.  The first is to have kids, use what little vacation and sick time they get, and then go back to work after around 10 days, compromising the physical, mental, and emotional health of their babies, and seriously risking their own health.  Doctors recommend new mothers to take it easy for 6 weeks.  This is not a vacation.  This is for recovery, because if they don't, they can end up with serious medical complications including death, as well as serious postpartum depression.  Mothers need a break after giving birth, and their babies need them.  When they cannot afford to take this break, it harms them both.  In the U.S. we claim to have a health crisis.  Overall health has been shown to be significantly affected by the health of the mother both before and after giving birth as well as the care the baby gets during the first months of life.  A baby that is not regularly breast fed and close to the mother during this time is far more likely to suffer from serious health problems in the future, including mental health problems.  (What if the cause behind our higher rate of mass shootings than any other first world country is our lack of paid maternal leave?)

I don't want to promote paid maternity leave though.  As a country, we keep getting distracted by trivial things.  We don't need paid maternity leave.  The Republicans are right.  Mandatory paid maternity leave would destroy small businesses, which provide a majority of our jobs.  Currently, there are four states that pay for maternity leave out of the public coffers.  This takes the burden off of small businesses.  It sounds like a good idea.  It is not though.  What happens when a woman who is earning a million dollars a year gives birth?  Now the state is paying some fraction of that salary.  These four states pay between 55% and 67% of the salary for six weeks.  For a woman making a million dollars a year, that is $77,000 total!  The public should not have to pay even a fraction of the salary of someone making that much money.  If a woman is making a million dollars a year, and she is too stupid to live a lifestyle that allows her to save a significant portion of that, there is no reason the public should be required to pay to maintain her lavish lifestyle!  That is downright wrong.  So, it is unethical to make small businesses pay for maternity leave, and it is unethical for the government to pay it.  In theory paid maternity leave is a great idea.  In practice though, it is a terrible idea, as it will either result in economic harm, or it will rip off the middle class (the primary source of tax revenue) to maintain extravagant lifestyles.

The fact is, maternity leave, just like a long list of other things, is a mere distraction from what we really need: Basic income.

A basic income solves the problem of paid maternity leave quite nicely.  Those who are already very well off should have enough money saved to easily handle taking up to 12 weeks of unpaid maternity leave (guaranteed by FMLA).  If they do not have the money saved it is their own fault, and they deserve to be accountable for it.  (After all, the Right is big on personal accountability.  If the Right thinks it is wrong to bail out the poor, because they dug their own hole, this is even more true of those who actually have the means.  It turns out that our poor may be more wise about managing their finances than our middle class and rich.  If a middle class or rich family cannot afford unpaid maternity leave, maybe it is time for them to sell that second car and look for a cheaper house, so they can get rid of the expensive mortgages that they clearly cannot afford.  You can complain to me about the poor being bad at finances when that becomes an option for them!)

Anyhow, a basic income would provide easily for a reasonably frugal family, even with unpaid maternity leave.  In fact, it would allow an expecting mother to start the maternity leave sooner, if necessary, to avoid the health risks to her and the baby, if her job poses such risks.  Once the baby is born, the basic income for the family will increase, further reducing the burden.  This means, for middle class families living close to the edge of their incomes, the added basic income from the baby might be enough to offset the loses, avoiding severe cost cutting measures.

The best part of all of this is that a basic income is far superior to paid maternity leave, because it applies even when there is not a new baby.  Most first world countries already have paid maternity leave of 12 weeks or more.  They also already have decent welfare systems.  If the U.S. was the first modern country to have a decent basic income, we could leap past the rest of the world, reaping the benefits of improved economy, improved health, and greater overall happiness.  A basic income is probably the fastest and most effective way for America to become great again.  And it would also ensure that new mothers have the opportunity to have sufficient recovery time and time to care for their new children.  In short, we don't need paid maternity leave.  We need a Universal Basic Income!

The Solution to the Opioid Epidemic

According to many people, the U.S. is in the middle of an opioid epidemic.  It's debatable whether something that ultimately comes down to a personal choice can really be considered an epidemic, but the fact is, there is an unusually large portion of the population that is addicted to opioids, and opioid overdoses are becoming frequent enough in some places to become a serious financial problem.  This has ultimately lead to opioid use, and especially overdose, to be declared a national healthcare crisis.

Several states have started allocating funds specifically to overdose mitigation.  Some are also focusing on prevention.  Drugs designed to treat opioid overdose are likely to be covered by Medicaid in some states (and may already be in some).  States are even petitioning the Federal government for additional funding for this problem, and some have already diverted significant amounts of state tax income to it.

The plan for these funds is first, to administer drugs to reverse opiate overdoses.  This is a good start.  The costs include the cost of the drug and often transport and hospitalization costs.  Once treatment is complete and doctors are confident that the patient is no longer at risk, the patient is sent home.  At home, some of these patients take another hit and overdose again.  This has happened often enough that some places are considering limiting calls for opiate overdoses to one a day per person.  Of course, this is meeting a lot of resistance, as it would let anyone overdosing twice in a day just die.

There is a problem with this: It does not fix the problem.  Many of these addicts are going to keep overdosing.  The problem is also getting worse, as more people are getting addicted to opiates.  This is not going to help them either.  Supposedly some of the money is going to go to mysterious undefined "prevention" measures, but it is unlikely these are going have much effect.  D.A.R.E. has been used in many schools to discourage kids from trying drugs.  Schools that don't use D.A.R.E. generally have some other drug use prevention program.  The fact is, teaching people about how drugs damage the body is clearly not working well anymore.  Prevention funding could go to trying to catch the dealers, but the War on Drugs tried that with little success.  Throwing addicts in jail certainly won't help, as it will ultimately cost more than the treatment, and it will very quickly fill up our jails with people who's only crime is stupidity.

So far, I don't see anyone asking what the cause is.  We know a lot more people are using opiates.  We know the stigma that heroin once had is largely gone, resulting in a lot more people trying it and getting addicted.  It is becoming the hard street drug of choice.  We know people are overdosing, and treatment is expensive.  What we don't seem to care about is why?  Why is opiate abuse increasing at unprecedented rates?

It's not availability.  Yes, opiates are becoming more accessible online, but that started in the early 2000s.  The dramatic increase in use is fairly recent.  Opiates are becoming more socially acceptable among casual drug users, but this is the result of increasing use, not the cause.  The fact is, more people are using opiates, because more people want to use opiates.  One of the big deterrents to heroin and other opiate use in the past was how incredibly addictive they are.  People generally don't want to get addicted to things.  The exception is that alcohol abuse has traditionally been used to avoid thinking about difficult life circumstances.  It is the traditional anti-depressant (ironically, it is actually a depressant).  Now though, it is becoming clear that people are starting to care less about getting severely addicted to opioids.  This attitude suggests that people who are using opioids start with no intention to ever stop.

Why?  And why aren't we asking why?  The fact is, there are two main reasons so many people are starting to use opioids.  It turns out addiction to prescription pain killers is becoming more common among the rich.  Their social status makes it easier for them to convince doctors to keep writing prescriptions for the drugs.  Eventually they either become tolerant to the drugs or their doctors finally cut them off.  The goto drug for these people is now heroin.  This is not where the "epidemic" is coming from though.  Rich opiate users tend to be careful not to overdose, and there are far fewer of them than poor opiate users.  The source of the epidemic is the poor.  Illegal drug use and addiction have been a problem for the poor ever since these drugs were discovered.  So why do poor people use opiates?  In a sense, opiates are replacing alcohol.  Poor people use drugs because they are miserable.  They use drugs to combat depression.

Why has this only just started to become a problem?  What changed to cause so many more poor people to start using illegal opiates in recent years?  The answer is hope.  In the past, poor people hoped to escape poverty.  They saw occasional friends or family get out of poverty, and they had hope that they could do it too.  During the end of last decade and the beginning of this one though, they stopped seeing that.  Many have lived in poverty for generations.  As the recession hit, instead of seeing people occasionally escaping poverty, they saw more and more people sinking into poverty.  What hope is there to get out of poverty when the net flow is downward?  In addition, they were made more aware of the fact that the situation is getting worse, by movements like Occupy Wallstreet, that initially started out powerful, getting people to start talking about the issues, but then ultimately sunk back into nothing, without any substantial changes being made.  This crushing despair lead to depression, and ultimately a life of opiate addiction started to seem better than having to constantly think about the fact that it is only going to get worse.

The "opiate epidemic" is not about opiates at all.  Rising opiate use is the consequence of poverty.  That is the "why".  The poor are turning to opiates, because they feel like they are under the weight of crushing poverty.  When they have to turn to the government for welfare, they feel robbed of their dignity, in part because it is nearly impossible to use government welfare without everyone from your doctor to your cashier knowing about it, and in part because our culture shames people who don't make enough to support themselves, even when they are working 80 hours a week at two or three jobs.  Our culture treats people who can't earn a living working for someone else as lazy misfits, whether it is true or not.  This attacks the psychological need of people to be accepted, and it predictably results in depression.  There are only two logical ends for people with severe, untreated depression, and those are drug use and suicide.  Really, it should come as no surprise that our mistreated, disrespected poor are turning to opiates in droves, right when the last bit of hope was ripped away from them.

I wonder how our elite would be reacting if every poor person who chose to get addicted to opiates committed suicide instead.  Would they take poverty more seriously, or would they start spending tons of money trying to force people to stay alive when they don't want to?  Sadly, probably the second.  Because right now, we are focusing on how to prevent drug users from accidentally killing themselves, when we should be focusing on how to prevent them from wanting to use drugs in the first place.

If we would focus on the right question, the answer is simple: Eliminate poverty.  This is not impossible.  I have done the math (among many, many other people).  Our existing welfare system, excluding medical welfare, already costs 75% of what we need to eliminate poverty, and there are plenty of places the other 25% could come from.  A marginal decrease in military spending would be enough.  A slight reduction in tax cuts for large businesses would do it.  In fact, eliminating poverty would ultimately cover the cost of that 25% by itself in the form of improved economy, reduced law enforcement costs, and reduced medical welfare costs.  We can already afford the basic income that would eliminate poverty in the U.S.  We have been able to afford a basic income since before Nixon's Presidency, when we almost got one, and then it unfortunately failed due to misinterpreted data from an experiment in basic income in Seattle.

Since the Seattle experiment, there have been many other experiments with basic income and handing out free money in general, and they all agree that a basic income reduces crime, drug use, and other negative things, and it increases productivity and innovation, it improves the economy in general, and it improves overall health, reducing medical spending.  In short, the cure to the opioid epidemic, along with a lot of other things, is a universal basic income.

More Problems a Universal Basic Income Can Solve

I have been writing about basic income for several years now.  I have presented a great deal of evidence that the cost of a basic income is far outweighed by the benefits.  I have presented the numbers showing that we can afford a universal basic income, and the price is only slightly higher than all of our mediocre welfare put together (not counting Medicaid, because even a basic income can't fix healthcare).  The evidence indicates that a basic income would massively improve our economy.  We could reduce to cost of certain parts of government by eliminating minimum wage.  The free market would be more free, because everyone would have a vote (you can't vote with your wallet when it is empty).  This is not all though.  There are more problems a basic income would fix that I have not mentioned, and I want to look at two of them right now.

The first thing basic income would fix is the abortion debate.  A significant number of people think it is wrong to kill unborn children.  A significant number of other people think that personal convenience outweighs the right to life of children that have not yet been born.  The fact, however, is that most abortions are not a matter of convenience.  Some abortions are about convenience.  Some abortions are about health concerns.  Most abortions are about finances though.  Abortions most often occur because someone got pregnant who does not feel confident that she can provide for the child.  According to Guttmacher Institute, 49% of abortion patients are living below the Federal poverty level, which other studies have shown to be barely over half what the real poverty level in the U.S. is.  60% of abortion patients are in their 20s, and 59% of abortion patients already have children.  What is the solution to this, according to researchers?  Better access to contraceptives.  This is tragic.  It is also discriminatory.  The suggestion is that poor women don't deserve to have children.  We tacitly accept that these women shouldn't be having babies, because they are poor.  This is tragic.  This is especially tragic in a nation where birthrates are at 1.9, two points below the sustainable birth rate of 2.1.  Unsustainable birth rates are bad for the economy, but this is trivial compared to how we are treating poor people!  If the right wants to fix the abortion problem, it can dramatically reduce abortions by demanding a basic income!  A universal basic income guarantees that even teen moms can afford to give their children the level of care that they need.  The left benefits too.  It asserts that women should have better control of their bodies.  It suggests that women have the right to get abortions if they want them, but the fact is, they don't!   Elective abortions are a minority.  Most abortions don't happen because the mother wants to kill her unborn child.  They happen because the mother knows that she cannot afford the costs and still care for her other children.  In addition, a basic income would guarantee that women who legitimately don't want to have a child have access to contraceptives!  This would do far far more for guaranteeing that women have control of their bodies than making abortions legally easy to get!  The left and the right can both get what they want when it comes to abortions by pooling all of the money they are currently squandering fighting over whether or not poor women who wouldn't get abortions if they could afford to keep their babies and put it into demanding a universal basic income!

The second thing is racism.  Racism is still a serious problem in the U.S.  All of the legal anti-discrimination measures over the years have only managed to push racism underground.  It has become so integrated into our culture that most people don't even realize that they are doing it.  Studies have even shown that black people are racist against other black people!  Show a black person an image of a white kid wearing stereotypical clothing for white kids (tee shirt and jeans) and an image of a black kid wearing stereotypical clothing for a black kid (hoodie and baggy pants), and the black person will report being more fearful of the black kid.  Black teens have significantly lower graduation rates that while teens.  Black people are more likely to be in poverty than white people.  Black people are paid less on average, for the same jobs, than white people.  Black people are more likely to be on government welfare programs than white people.  Black people are more likely to be involved in crime than white people, and they are even more likely to be convicted of crimes, whether they are innocent or not.  Black people are more likely to be the targets of police brutality or even police framing.  The fact is, while Americans are no longer overtly racist, our culture has become so covertly racist that black people are treated like second class citizens, even by other black people and the government.  The first step in eliminating this deeply embedded racism is to take away the poverty that drives many of these things.  Poverty and crime are strongly correlated, and studies have found that removing poverty reduces crime.  Studies on basic income specifically have shown substantial decreases in crime rates in places with basic income.  A basic income will allow black people to compete for equal pay, because they cannot be coerced by their poverty into taking jobs that don't pay fairly.  As crime decreases, it will be easier to identify racism against black people by law enforcement.  Eventually it will become clear that the old black stereotype is false, and hopefully that will lead to fairer outcomes in court for black people.  Studies have also shown increased graduation rates in places with basic income, which means that black kids will have better opportunities for the future.  Eventually racism will start to look stupid, not because of the social stigma that comes with overt racism, but because discrimination will result in lost opportunities for racist people, harming racist businesses and providing better quality of life for people who choose not to discriminate.  In short, universal basic income is the road to an America that is more fair and equal for everyone.

This second item extends beyond racism though.  It will also improve the situation with respect to gender discrimination.  Women will be able to compete on more level ground for fair pay in the workplace, because single women and women who have to act as providers will not have to accept discriminatory pay just to make a living.  People who discriminate against women will also miss valuable opportunities, giving fair people and businesses a better chance.  Over time, business culture in the U.S. will evolve to be more fair to women, as businesses that are discriminatory are pushed out of the marketplace by businesses that are more fair.  And this won't require legal force either.  It will happen naturally, because fair treatment of women and minorities will give businesses a significant advantage over those that discriminate.  Civil rights won't need to be driven by the government, because it will be driven by natural market forces instead.

Basic income has only one substantial cost: Money.  The cost in money of basic income can easily be covered to over 75% by the funding currently allocated to programs it would replace.  It would allow the elimination of minimum wage, which many businesses would be willing to accept in trade for fewer tax cuts in an amount sufficient to cover the 25% or less remaining.  In exchange for slightly higher business taxes it would provide an enormous number of very substantial benefits, from a significantly improved U.S. economy, to better overall productivity, to solving most of the abortion problem, to reducing and perhaps eventually eliminating discrimination against minorities and women.  It would reduce crime, increase job satisfaction, improve education, eliminate poverty, create more participation in the free market, allow more sustainable birth rates, and prepare for the number of jobs to continue to decrease without mass starvation or economic collapse.  All of this and so much more, and ultimately it will pay for itself just in eliminating minimum wage.

Basic income should be the easiest, most obvious solution to an enormous number of the most important problems the U.S. is facing today.  Instead of spending our time and money lobbying for or against abortion, gay rights, feminism, income equality, and many other trivial problems, we could be pooling all that money into one unified pot to solve our most pressing problems along with many of the more trivial problems in this list.  We are wasting so much on stuff that is only marginally important that we are missing the one thing that could solve more problems and more important problems than anything else.  We need a basic income, and we need it more than any environmental problem, civil rights problem, or class division problem.  I know not everyone agrees on the topic of the government providing support for the people, but if there is one compromise we can and should make, it is one that will solve many other problems to the satisfaction of both major ideologies.

Privatized Socialism

I was discussing our treatment of prisoners in the U.S. with some friends when I got what I think is an ingenious idea.

Part of the Left wants the government to socialize a bunch of things, most notably medicine.  Socialized medicine has some very great benefits.  It is based on the idea that healthcare is a universal need that is often too expensive for a significant portion of the population to afford.  In the U.S., medical debt is not uncommon, but more importantly, many of the lower class don't seek medical care when they need it, because it is too expensive.  A majority of medical care is not related to dangerous or self destructive behavior.  It is the result of disease, genetic disorders, living conditions, working conditions, or accidents that are not easily avoidable.  In short, most harm requiring medical care is not the fault of the person needing it.  Withholding that care for financial reasons is completely unreasonable, especially in such a wealthy society.  At the same time though, who is going to pay for it?  How do we keep things fair by providing necessary medical care without the apparent unfairness of taking wealth from others to pay for it?

This is not the only case where fairness demands both that something expensive be provided to those who cannot afford it and that rights of ownership are respected.  I have said before that death by starvation is not an acceptable punishment for laziness.  We also have mentally ill prisoners who are not entirely responsible for their actions but cannot be allowed their freedom without treatment, so they will no longer be a threat to society.  We have a political movement for abolishing the death penalty, but we also have prisoners who are too dangerous to let out but who's upkeep burden should not be thrust on the public against its will.  These are all very expensive problems.  Some we already charge to the people, even though a significant number see it as completely unfair.  Some we ignore, allowing some people to suffer for the fairness of others.

So, the other day I told a friend that the problem with abolishing the death penalty, aside from the rare prisoner that can still cause significant harm even in prison (for example mob bosses, who can orchestrate murders from their cells), is the cost.  Charging the public for the upkeep of prisoners who are too dangerous to ever release causes economic harm, violating the purpose of the justice system (which is to protect the people).  I suggested, instead of spending millions of dollars lobbying the government to abolish the death penalty, these groups should pay for the upkeep of these prisoners, thereby justifying keeping them alive.  This would retain the death penalty as a means of dealing with people who are literally too dangerous to keep alive, and it would alleviate the economic burden of keeping less dangerous people alive, who cannot be released, by allowing those who can and are willing to afford it to foot the bill.

This idea can, and in my option should, be extended to many other things, it if can be done successfully.  It would require one essential thing: The government would need to be willing to work with non-profits.

If enough people were willing to donate, a non-profit could be created that would provide a basic income to everyone in the U.S.  The best, and probably the only reasonable, distribution system for the money would be the IRS.  So, the IRS would have to work with the NPO, where the NPO provides the money and the IRS distributes it.  This could be done fairly efficiently through the IRS.  Even better though, no one would have to worry above government overreach.  The non-profit and the donors could decide controversial things, such as whether or not the funding should be distributed only to U.S. citizens or to all U.S. residents.  The actual amount distributed would be decided based on available funding.  The only government overhead would be the marginal extra work for the IRS, working the additional funds into its existing distribution.

Perhaps the best part about all of this is that it completely transcends politics.  Congress does not get to vote on whether or not to have a basic income, if it is being provided by a non-profit.  A Republican controlled Congress cannot cut the basic income to balance the budget, and a Democrat controlled Congress cannot increase government spending to raise the basic income.  The government would not have to foot the bill at all, and the only control it would have over it would be the cooperation of the IRS.  If a similar non-profit was created for a single payer medical system, it would get even better though: Medicaid would become entirely obsolete.  The government could easily cut the program (or cut it down to merely a distribution system for the funds raised by the NPO), balance the budget better, and maybe even start reducing its debt, and we would still get a decent medical system!  Add to this the prisoner related things, and our criminal justice system would cost far less.  In the long run, we could expect to see significant tax reductions, at the same time as expanding social programs and improving the fairness and living conditions of our country.

Crowdfunding is supposedly some big new thing invented in the 21st century, but in reality, it has existed for all of recorded human history.  Taxation is the involuntary crowd funding of government.  Charities facilitate the voluntary crowd funding of welfare.  I believe we can bring these things together.  Obviously the core of government and of our justice system needs to be funded, whether people are willing to donate voluntarily or not, but many, perhaps even a majority, of government programs can be crowd funded, and if they can, they should be.

The costs of crowd funding peripheral  government programs include potentially reduced efficiency and less government control over those programs.  The potential benefits include greater overall funding, especially for more popular programs, better distribution channels for charities (the IRS can distribute funds far better than any charity), more direct ability to influence programs for the general public (which means improved democratic process), the ability for people to choose whether or not to support a given program, and a much leaner government, all at the same time as providing the same or better services.

Yes, one potential problem is that some programs just won't get funded.  Not only is that already a problem (do you see a basic income), it is also not a problem with crowdfunding.  The U.S. is supposed to be a democratic nation.  What is more democratic than voting with your wallet?  There are exceptions, but in general it is accurate to say that if the people will not voluntarily fund a program, then the people don't want that program, and in a truly democratic nation, that justifies allowing the program to collapse and disappear.  There are a few programs that need funding regardless, like the military, the FDA, and the FCC.  Critical defensive and regulatory agencies should at least get minimal funding to continue sufficient operation.  Programs for social welfare, highly controversial agencies, scientific research (NASA, perhaps), and broadly socialized services (e.g. a single payer medical system), however, can and should be crowdfunded.

By crowdfunding these things, they become depoliticized.  Crowdfunding basic income and a single payer medical system eliminates the ability of Democratic candidates to essentially buy the votes of the poor by promising these things.  It also eliminates the ability of Republican candidates to buy the votes of the rich by promising to cut taxes by eliminating these programs.  The government can (and again, should) still be involved, as it is uniquely positioned to aid in distribution.  Adding a basic income to tax returns is something trivial for the IRS, because it already has a distribution system in place.  The Medicaid program already has a massive support network throughout the U.S., allowing it to provide coverage nearly everywhere.  Replacing Medicaid's underlying funding and qualification system with a universal single payer system funded by one or more NPOs would be a little more difficult than the basic income, but it would still be significantly easier than one or multiple NPOs trying to cut new deals with a wide enough network of health care providers to actually function as a single payer system.  For death row prisoners, having their support be crowdfunded to indefinitely delay execution, the criminal justice system is an essential element, but again, allowing one or more NPOs to provide that funding would be trivial.  The same applies for prisoners who need treatment for mental illness.  In all cases, the government is an essential element, but it can run leaner and avoid the distraction of controversial issues if the funding and management of these programs are outsourced to NPOs that are funded through voluntary donations.

We do not need the government to initiate this either.  We can do it ourselves.  The movement for abolishing the death penalty has enough money and influence that it could immediately start lobbying state governments to allow them to pay prisoner upkeep to delay execution, and most state governments would be far more amenable to this offer than the demand that the death penalty be abolished entirely.  There are also lobbying groups for medical reform and welfare that could easily shift their focus from trying to convince the government to provide more services to trying to provide those services themselves through a donation model.  Environmentalist groups could work with the EPA to offer better return on carbon credits.  They could work with state governments to offer credits for logging companies to avoid important habitats and replant wherever they go.  In fact, U.S. environmentalist groups could even work with other governments to provide incentives for companies to act more responsibly.  (For example, instead of spending tons of money on boats, helicopters, and other equipment to terrorize Japanese whaling boats, they could work with the Japanese government to offer incentives to whalers to reduce their quotas.)  Of course, I think we need to get things in our own country under control first, but this could eventually expand to the entire world, with international NPOs that help shape policy and behavior by offering to help instead of arguing and fighting.  The government does not have to buy into this before we can start trying to drive change.  All we need is reasonable government cooperation, and we can do the rest ourselves, and we can start now!

I believe crowdfunded peripheral programs is the next evolution of government.  It can reduce government overreach, reduce necessary size of government, reduce government corruption, increase overall freedom and liberty, and produce a better society that better fits the desires and expectations of the people.  I don't know if we are ready enough for it to ensure that it will always be sufficiently funded, but I think now is the time to start moving in that direction.

Work to Live: Death, Divorce, and Crime

The work to live ideology results in 700 deaths per year from freezing.  It is a major contributer to domestic violence as well as high divorce rates in the U.S.  It is highly likely that it also is a major factor in illegal drug use.  Of course, this does not even count the cases of starvation and other shelter related deaths.  Frankly, this work to live thing is imposing what amounts to serious cruel and unusual punishment on around 600,000 people (the government claims that this is how many people are homeless each night on average).

This is a shame, in a country that produces almost five times what it consumes of nearly all basic necessities (shelter may be an exception).  Even during the recent recession, we had a thriving economy, producing enormous amounts of nearly everything, and only a very small portion of that is necessary for survival.  A vast majority of our labor goes into producing things that we do not need.  We have too much of nearly everything (half of the food produced in the U.S. that is not exported gets thrown away), and yet, we are just letting people starve and freeze to death on the streets.  Why?

The problem is "work to live."  At the same time the U.S. is making great strides to abolishing the death penalty.  Last year, there were only 35 executions in the U.S. total.  The grand total since 1976 is 1,407.  Each year, 20 times as many people as were executed last year die from freezing alone.  It only takes two years for enough people to die from freezing to match the total number of executions since 1976.  The death penalty is not a significant source of death in the U.S., and more innocent people die every year in accidents than the grand total of innocent people that have died to the death penalty in all of U.S. history.  Why are we so vocal about the death penalty while huge numbers of people are dying constantly because of some outdated ideology that is based largely on a situation that never actually existed in known history?  We are evidently hypocrites.


Domestic violence, divorce rates, and drug abuse all go together.  These are all problems that are limited primarily to the lower class.  Domestic abuse in middle or upper class households is extremely rare compared to those living in poverty.  The most common cause of divorce is financial disagreements that stem from not having a high enough income.  Drug abuse is far more common among the homeless and poor than any other class.  In fact, crime in general (especially petty theft and violent crime) is most frequently committed by the poor.  The worst part is that a vast majority of poor people are not poor by their own choice, but they are punished for it and treated as if it were.  As with the death penalty, innocent people are being punished for not being able to work to live.  They largely have no choice, and multiple studies have shown that giving them sufficient money, even straight cash with no strings attached (the opposite of work to live), will alleviate most of these problem, and it will give them the means and motivation to permanently escape them.

Work to live has become a toxic ideology on our society.  It was the root cause of the recent recession, because even during the recession, goods were plentiful.  It causes people to keep jobs they hate, preventing other people who want those jobs from getting them.  It causes a great deal of death, far more than the death penalty.  It causes economists to make nonsensical statements revolving around the idea that reducing unnecessary work is bad.  It causes people to oppose valuable economic advances, again based on the idea that reducing necessary work is bad.  It is a major factor in  divorce, drug abuse, and crime.  Eliminating the work to live ideology (with, for example, a basic income) would do far more to reduce unnecessary death than eliminating the death penalty, and it would likely reduce crime far more effectively than the death penalty or any other law enforcement ever has.

Mandatory Benefits Enforce Slavery

Freelance work is becoming a big deal in the U.S. for several reasons.  One reason is that the currently very poor economy (yeah, they claim it is improving, but really it is only getting better for the wealthy but no one else) is still making it extremely difficult to find decent work.  Right, you heard on TV that unemployment is decreasing, but did they bother to mention that most of the new jobs are low paying jobs?  Did they even point out that wages are staying stagnant while inflation is still increasing?  A lot of Americans are finding that freelance work is easier to get than permanent employment.  That is not the big driver of freelancing though.  Over half of freelancers are doing it entirely voluntarily.  They have chosen freelance work over long term full-time work because they like being their own boss.  They like setting their own hours.  They like the ability to choose what work they will do and what work they will leave to someone else.  Many even like the fact that they do not have to work a full 40 hours a week to get by.  Freelancing comes with a cost though: No benefits.

Aside from social pressure, wage slavery is primarily driven by mandatory benefits.  I know many people who would like to start their own businesses, but they cannot, because they cannot afford private health insurance.  Other benefits are a problem as well, but health insurance is, by far, the biggest problem.  I even know a few people who have their own businesses and work a regular job for the health insurance.  Businesses, like Lowe's, that offer these benefits even to part-time employees are a great blessing to business owners who cannot afford private health insurance.  (Years ago I worked at a Lowe's store, and at least two other employees there owned their own businesses, but worked 10 hours a week at Lowe's for the health insurance package.)  This is a problem, because it discourages freelance work and the creation of new businesses.  For the most part, only independently wealthy people can really even afford to start their own business, and I am not just talking about businesses with really expensive startup costs.  I have several computers, I have access to all of the tools I needed, I have all of the necessary knowledge and training, but I still cannot afford to start a software company, because I am stuck spending nearly all of my time working for someone else.  Even most middle class employees are stuck in this situation.

What is the solution?  Get rid of mandatory benefits.  In fact, ideally, all non-monetary compensation should be prohibited.  Someone still has to take responsibility for health insurance, because costs are still too high.  Obamacare made health insurance mandatory, but it did not solve the underlying problem, which is that it just plain costs too much.  At this point, a single payer system seems like the best option, and the retirement of Medicare and Medicaid would go a very long way in funding it (actually, if you add all the costs of the multiple Obamacare failures, it might make up the difference).  Further though, if there was still a deficit, another side effect of this would cover that and then a whole lot more.  The single most abused benefit is stock options.  Eliminate those and tax revenues (especially from CEOs and such) would increase dramatically.

Taking the burden of health insurance off of employment would release millions of Americans from wage slavery.  Of course, they still have to work to survive, but they would have much more control over that work.  Without employer provided health insurance, more people would be motivated to start new businesses, and more people would be willing to work for those businesses.  More people would be able to go the freelance route.  In addition, one more awesome benefit of this is that more people would feel free to choose part-time work instead of feeling compelled to work full-time, making more jobs available for others.  More Americans would be free to choose their own paths than ever before.

Now, I am sure you are aware that I endorse a basic income in addition to this, and a basic income would free Americans to a degree never before seen in all of human history (accepted history, anyhow).  Even without a basic income though, eliminating all non-monetary benefits would go a long way to increasing freedom in the U.S..  Of course, if stock options were eliminated, the increase in tax revenue would likely cover a large chunk of the costs of the basic income.  I just wanted to point that out.

Yet more support for basic income

http://national.deseretnews.com/article/1677/What-if-we-just-gave-poor-people-cash.html

I just read this fairly short article.  It turns out yet another organization has tried giving poor people cash, this time in developing countries, and surprise, the results are the same as nearly every other trial.  Instead of buying more tobacco and alcohol, poor people given cash spend the money on health care, education, and even starting new businesses.  As usual, they found that giving poor people cash, even in one time payouts, raises their income even many years down the road.  Most of the poor people given cash in this experiment actually spent less on tobacco and alcohol, because they had enough money to spend it on better things.

The evidence in favor of giving poor people cash, with no strings attached (nearly every study and article on the subject uses this exact wording) is already overwhelming.  How much evidence do we need before we do something about it?  Over the last few months (ever since I became familiar with the idea of a basic income) I have randomly come across something providing more evidence that it is a good idea at least once every two weeks, and I have not even been looking.

What all of this tells me is that poor people, in nearly every culture, respond positively to cash donations.  Contrary to popular belief, they do not use the money to get drunk or high but rather use it to get out of poverty.  Most Americans, even liberals, think that welfare should be carefully regulated to prevent misuse of the money.  It turns out, they are all wrong.  Instead of food stamps, we should be handing out cash.  Instead of subsidizing housing, we should be handing out cash.  Maybe it would be better to hand out cash instead of providing Medicare/Medicaid benefits as well.  Who knows!  It might even be better to hand out cash instead of funding homeless shelters and soup kitchens.

I wonder how much money we spend on welfare.  Now, I do not just mean government welfare.  I am talking about all of the welfare from any source, including charities.  Sadly, in the U.S., we donate far more to charities helping people outside of the country than people inside the country, but I still suspect that we spend enough on welfare to fund a major cash based reconstruction effort to get U.S. citizens out of poverty.  I have established before that the overhead on government welfare is huge.  We spend absurd amounts of money to make sure that only seriously poor people get welfare money.  Many charities have higher overheads than the U.S. government (successful charities typically spend a lot of money advertising).  Including all overhead, how much are we spending to carefully dole out charity money in forms that are more difficult to abuse, to only the people that we think actually need it?  Added all together, how much money per person per year is that?  I do not have a clue.  I scraped up some rough numbers for just government welfare spending, which I discussed in a previous article on this subject.  They were pretty amazing.  By itself, the government could payout about half what is needed for a complete basic income (complete meaning that it is enough to get everyone in the U.S. out of poverty).  Even though most U.S. charity donations are going to other countries, I think in-country donations could easily make up the difference.  I suspect that added together, all welfare money spent in the U.S. is enough to get the entire population out of poverty.  Given the evidence that most of those in poverty will become productive citizens if this occurs, it is clearly in our best interest to do so.

A basic income is the cheapest form of effective welfare we could have, because the administrative overhead is extremely low.  The evidence indicates that it would also be a major boost to the economy, not just by increasing spending, but also by increasing the number of successful businesses.  The evidence also indicates that it would reduce harmful behaviors like smoking and excessive alcohol consumption.  It is also likely it would substantially reduce drug use.  The evidence indicates it would improve education as well.  This means that a basic income could be the best solution to many of our current problems.  It could help dramatically in the "war on drugs."  It would effectively end poverty in the U.S.  It would help speed up economic recovery, and it might even result in an economy too robust to fail to dramatically again.  It will reduce smoking.  It will reduce drinking, which would also likely reduce alcohol related violence and would certainly reduce harm caused by driving while intoxicated.  This means it would probably substantially reduce crime (which could eliminate the problem of overcrowding in jails).  It could even pull our failing education system out of the dumps.  While a basic income is probably not the perfect solution to all of our most major problems, it seems to be an essential element of such a solution.  In fact, it may be the only viable solution to breaking down the walls preventing progress for all of these problems.

As the evidence in favor of a basic income mounts, the apparent intelligence of those opposed to it shrinks.  Our lawmakers in the '60s who supported a basic income look more and more like geniuses as more data is generated and revealed.  It is a crying shame that the bill never passed.  Problems have arisen between now and then that never would have happened if they had been successful.  It is time to correct their 50 year long failure and make the U.S. truly the Promised Land.

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.

Basic Income

It turns out there is supporting evidence for a lot of the claims I have made in the past.  I write based on a number of things.  One big part of my writing is extensive research.  Another part is observations.  A third part is math and logic.  I have made claims about where our economy is headed, if we keep automating everything.  This claim is based part on observation and part in math and logic.  It is completely illogical to assume that our economy will never change.  It is also illogical to assume that increasing automation will not decrease necessary work.  Thus, we can assume that our economy will change, and we can further assume that as a vast majority of trivial work is automated, that work will no longer be necessary for humans to do.  We can also assume that unless we create as much new work as is automated, that cannot be automated, human labor will become less and less useful and valuable.  Observation has shown this to be true.  Currently, many businesses are dramatically underpaying their employees, and still we have a shortage of work (jobs).  Businesses can automate many processes cheaper than they can hire humans to do the work, so less human labor is necessary.  This results in a surplus of human labor, which drives labor prices (wages) down.  I have argued that the logical progression of this will end where most Americans are forced to live off welfare, and very few will actually work for a living (mostly engineers and other creative workers).  All of this is based strongly in logic, math, and observation.  Now, this is not the case I plan on discussing today, but it is related.

Recently I have argued that we need to improve welfare enough that it will keep people out of poverty.  I showed how the U.S. government's definition of poverty is almost half the actual poverty level, and I showed how the current welfare system seems to take advantage of this to trap people in poverty.  I argued that we need to fix the legal definition of poverty, and I argued that we need to then fix the welfare programs to take the new definition into account.  I also argued that we need to raise minimum wage to reflect the actual poverty level.  I may have also argued that Congress needs to regularly reassess the defined poverty level and change the definition if necessary.  My take on the current situation changed today, and I find that some of my arguments may be obsolete.  I would like to discuss why this is.

Today, I read two things (brought to my attention by a friend).  The first is a letter by a guy who quit his job and started writing for a living (found here).  This man, Chuck Bukowski, compared the current state of the U.S. economy to slavery, and he once said, “Slavery was never abolished, it was only extended to include all the colors.”  If you have read my previous articles, you know that I have the same opinion.  The second is an article by Rutger Bregman, a guy from the Netherlands, who discusses a bunch of research that opened my eyes to another system of welfare (found here).  The first was interesting.  The second was an epiphany.

This idea of a "basic income" has been around for a while.  The idea is that the government pays everyone a small wage that is enough to survive on.  Note that I said, "everyone."  This means rich and poor alike.  Now, I can hear a lot of people asking, "why the rich?"  This is a valid question, with a very good explanation.  The answer is "privacy."  Another answer is cost.  It turns out that running a welfare system that has a lot of restrictions and requirements costs a lot of money.  In May 2009, London did an experiment where the city gave thirteen homeless men 3,000 pounds (around $4,500 in U.S. dollars at the time), with no strings attached.  Now the biggest argument against a government provided basic income in that it will cause a lot of people to quit their jobs and freeload off the state.  Out of these thirteen guys, eleven of them dramatically improved their lives.  They got housing, some took classes to learn useful skills, some got treatment for drug abuse (one quit heroin), and they made plans for the future.  Eleven of thirteen is pretty good odds.  The best part is that the 50,000 pound expense of giving these guys the money (a bit was spent on administrative and research costs) actually saved the city around 350,000 pounds that would have been spent by law enforcement dealing with these guys.  It turns out that this argument that a basic wage will reduce incentive to work is wrong.

This London experiment is neither the only, nor the most recent experiment of this type.  Manitoba, Canada funded an experiment dubbed "Mincome" where an entire town was placed under something like a basic income for four years.  The requirement of the experiment was that it would ensure no one would live below the poverty level.  This resulted in around 1,000 families getting some kind of government pay check.  Evidently the results of the experiment were hidden by the provincial government until 2009.  The research showed that very few people decided to quit working.  Further, it showed that a number of the residents started their own businesses, because the basic income reduced the risk substantially.  Ultimately, it turns out that the experiment was an awesome success.

There are plenty of other instances showing the same results.  In Kenya, a guy was randomly given a year's pay, and used it to buy a taxi motorcycle, so he could increase his income from $2 a day to $6 to $9 a day.  There is also evidence that he used some of the money to help neighbors start their own businesses and fix their houses.  Uganda once gave $400 each to 12,000 youths, which dramatically improved their chances of getting education and a good job.  Uganda also gave $150 each to 1,800 poor women, which ultimately resulted in permanent income increases.  In the last case, it was discovered that while the women who accepted support from aid workers turned out better, the difference would have been even more had the salaries from the aid workers been given to the women, instead of the support.

Another argument against a basic income is that without restrictions, many people would spend the money on things that are not necessities and would still live in poverty conditions.  The London case disproved that pretty effectively.  It turns out that homeless people buy alcohol because they cannot afford anything else.  Give them a large amount of money, and they have a very high probability of spending it wisely (most of the London guys spent only 800 pounds of the money in the first year, saving the rest).  Evidently poor people are poor because they do not have enough money, not because they are too stupid to use it wisely.  If you give them enough money, they will use it to get out of poverty long term.

The last serious argument against a basic income is the massive cost.  One estimation of the U.S. is that a basic income system would cost around $175 billion a year.  Contrast this with our $700 billion a year military, and it does not seem like so much.  It gets better though.  The Mincome experiment showed crime reductions.  This means reduced law enforcement costs and reduced crime recovery costs.  The London experiment showed a dramatic reduction in costs from getting homeless people off the street, to the point where the savings was seven times the cost of the program.  There are also clear economic advantages to providing enough money to everyone.  Economic condition tends to be based on how much money flow there is.  An economy where a large portion of the money goes to CEOs, which then save or invest the money, is weaker than an economy where most of the money continues to circulate back into the economy (and do not try to tell me that investing is the same thing; investing is taking the money at the top, and transferring it one level down, so it can sift back up one level).  Basic income systems have been shown to dramatically improve economies.  The last financial benefit of a basic income system is the cost savings.  A welfare system that has many restrictions and regulations requires a great deal of administration.  This administration is expensive.  Instead of paying a large number of employees well over the poverty level (government employees), get rid of the administration, and just send out checks to everyone.  No more paper work, no more employees doing hours of work to decide who is allowed to have welfare and who is not, no more rent or maintenance costs for government office buildings for the welfare workers, no more expensive forensics to identify welfare fraud, and no more lawyer fees to handle cases that have been identified.  That is a lot of savings.  Getting rid of the huge amount of infrastructure for administering welfare would save a huge amount of money.  Admittedly, the cost will still be a lot, but nothing like opponents claim.

So, here is how this works:  You give a basic income to everyone.  The money comes from businesses and those who have extremely high income (for those with huge incomes, it is more like an extra tax deduction).  The businesses do not suffer from it though, because minimum wage is abolished.  Ok, so here I identify a major conservative upside.  Most conservatives oppose minimum wage, or at least oppose a fair minimum wage.  A basic income makes minimum wage obsolete.  With a basic income, everyone gets enough to survive, without working, so even at $1 a day, they can survive.  This also reduces the need for other workplace regulation.  If I can walk out whenever I want with low risk, my employer had darn well better make sure the workplace is safe.  Also, if my employer makes unwanted advances (ok, I am a guy, so this is far less likely, but the point still stands), I can just quit.  Instead of expensive legal fees, for a case that I may or may not win (and I am almost guaranteed to loose my job despite anti-retribution laws), I can just leave (if I like the job that much, I can still press charges, but if I do still manage to get fired, at least I do not starve).  One of the biggest benefits observed in experiments is the creation of small businesses.  The risk with starting a business is that if it fails, I starve.  A basic income eliminates that risk.  Now, maybe I will have to move to a smaller house, but there is still very low risk.  As I mentioned, this has been observed.  Now, small businesses create jobs (in fact, a majority of U.S. jobs are provided by small businesses).  A basic income even creates more jobs!  Yes, it is true.  A basic income increases the number of small businesses and improves the economy, which ultimately creates more jobs.  Also, a very small percentage of people will quit their jobs if given enough to stay out of poverty.  This will open up a few more jobs.  So yes, there will be more up front costs, but a better economy means more tax revenue.  A basic income could also simplify the tax system, because by not taxing the basic income, people are ensured enough to get by.  Anything over that could be taxed with few deductions, because the government no longer has to worry about anyone getting enough.  Things like the Earned Income Tax Credit and the Child Tax Credit could be eliminated (along with the expensive infrastructure necessary to support them) without hurting anyone.  The basic income does not need to be reported, because the government already knows, and the IRS can ignore it, because it does not make any difference.  The benefits appear to severely outweigh the costs.

Now let us look at privacy.  I may have mentioned this already, but one concern is that a basic income would violate privacy.  First, you already report all of your income to the IRS, where is the privacy right now?  Now, a well implemented basic income system would actually improve privacy.  The requirement is that the basic income is unconditional.  A murderer, child molester, a thief, a gang leader, or anything else, all get the basic income.  The reason is that it would be a very bad idea to give the government the power to control people by restricting their basic income benefits.  Now, here is the privacy: If you are currently on welfare, you will sometimes be asked if there are guns in the home.  This is a way that the government can violate privacy, and it could allow the government to compile a list of poor people that are armed.  A basic income that is unconditional will not do this.  In fact, because it replaces welfare, a basic income removes requirements for government welfare agencies to know your financial state (the IRS still knows).  No one is going to ask how much assets you have that are not in the bank (Food Stamps and Medicaid interviewers are required to record this information).  No government office is going to record how much money you made in the last six months as a qualification for welfare.  An unconditional basic income will dramatically improve personal privacy.

Evidently the U.S. actually almost implemented this idea several decades ago.  Around 80% of U.S. citizens supported it.  The House of Representatives actually passed the bill.  The Senate did not though.  It went back and forth, and as Reagan commented, "In the sixties we waged a war on poverty, and poverty won."  What killed it?  The divorce rate in Seattle allegedly went up by 50%.  The great thing is, years later it was discovered that the numbers were reported wrong, and the divorce rate had not changed at all.  So, what killed it?  Poor reporting.  The U.S. was almost the first large scale experiment with the basic income, an experiment which has never failed on small scales.  Where would we be now, with all of the benefits of this system?

What should we do about this?  Dump the horrible mess that is Obamacare (which still has not born good fruit).  Abolish our current broken welfare system that effectively traps people in poverty.  Lay off the huge number of people employed in rewarding poor people for trying to get jobs that do not exist.  Tear down the unstable infrastructure that is helping businesses keep the American people in bondage.  Finally, once and for all, establish what poverty really is, and define a poverty level that will be regularly reassessed and that is accurate.  Then, take all of the money currently going to welfare, and apply it to the basic income.  According to this, that would covers almost half of it (it covers about $80 billion, of around $170 billion; this does not include administrative costs of Obamacare).  The other half could come from the military (it would be about one eighth of the military budget), until the government reduces the tax exemptions for large businesses.  In fact, even a slight reduction in tax exemptions for large businesses would cover the entire basic income.

We can afford this.  In fact, it is possible that we cannot afford not to do this.  It would eliminate a lot of the problems with our current system.  It would raise our so called civilization to an actual civilization where we do not let anyone starve.  It would give people the opportunity to do the work they want to do, instead of work at a job they hate, but that they are stuck at.  The moral increase would improve productivity.  It would eliminate the huge overhead of our current welfare system, and it would increase our privacy from the government.  (Worried about "big government?"  This will make so much of our current government welfare infrastructure obsolete that it will significantly reduce the size of our government.)  It would improve our economy by a huge amount.  It could even end slavery in the U.S., once and for all.  And, it would not increase the divorce rate by 50% (I hope I am not wrong; I would hate to feel stupid).  A basic income is really the answer to most of our financial and economical problems in the U.S.  And this time, my claim is not just  based on logic and observation, it is also based on a good body of strong evidence.