Basic Income: Not All It's Cracked Up to Be

Image obtained from Colorado Peak Politics

After I had published my previous post reacting to an article at FiveThirtyEight extolling some benefits of a Universal Basic Income, Michelle Ray (the same GaltsGirl) tweeted a link to an article at The Bloomberg View, by Paula Dwyer. Interestingly, the tweet for the article shows as something like “Basic Income might be the next big thing”, but the article is actually titled “A Basic Income Should Be the Next Big Thing” (emphasis mine in both cases). But I digress.

Dwyer begins with a short description of the idea of UBI, then talks about trials and studies around the world. She links to an article from Boxing Day, 2015, in the English publication The Guardian, that talks about a pilot program in The Netherlands. That program is limited to 20 municipalities, and will include only “small groups of benefit claimants”, to be qualified by their current income. It is not universal, and the amount is only around $950/month. It is apparently intended to be a supplement to whatever odd jobs they can get, rather than the envisioned substitute for a meaningless job while the citizen pursues education, training, or practice to follow a higher calling.

Dwyer then explains that some see UBI as a way to reduce poverty and inequality. But how can that be? If every citizen gets the same amount from the government, but is still free to have any other career and make any amount of money they can on their own, the same inequality of income will exist. And poverty? It will just be “defined upward”—the poverty level income will go from $12,000 to $25,000 to $40,000 and beyond. People receiving the UBI and nothing else will still be considered poor, and people who find a lucrative market for their skills and work hard to sell themselves will still be considered rich, and people who raise an outcry against this inequality will continue to cry out.

Dwyer also mentions the “about $1 trillion” of current US welfare spending, and admits to the approximate $3 trillion price tag I came up with (even with a US citizen population of only 322 million, rather than the 350 million I presumed). She then attempts to reduce the expense by eliminating segments of the population: Social Security recipients, households earning more than $100,000 annually, children. Now I agree with this last, because a “citizen” must be an adult who is capable of fulfilling the obligations of citizenship in order to partake in its pertinent rights and benefits. But when you start excluding other groups, even high earners, not only is it not universal, it is not equal. It is no longer something that every citizen can enjoy, but once again simply a wealth-transfer program. (Not that it ever was not intended to be.)

Dwyer does write about how a UBI program could be designed to eliminate the multiple, overlapping assistance programs at the federal and state levels, and acknowledges that some totalitarian collectivists—whom she calls “liberals”—object to it because of this. She says they “worry” that the bureaucrats currently administering all those programs could lose their jobs. I say, oh, but then they would be receiving the UBI, and maybe they could get better private sector jobs, or even become artists, writers, and the like! (But they would no longer be dues-paying public-sector union members, and the size of the bureaucracy, and some administrators’ domains, would shrink. I suspect those are bigger worries for some.)

In conclusion, Dwyer expresses hope that perhaps this isn’t so fantastic, this approach she calls “Social-Security-for-all”. Well, all but those evil rich folks.

Universal Basic Income

A Utopian Success Story*

On or around the 24th of April, 2016, a rather long piece about Universal Basic Income (UBI) was posted at FiveThirtyEight (Where did they come up with that name, anyway? And why don’t the articles bear a posted-on date?) by Andrew Flowers. I have just a few comments about it.

One of the big questions throughout the article is, just how much is required to make up a “basic income”? Flowers cites a proposal in Switzerland to pay each citizen a suggested 2,500 Swiss Francs per month, which he explains is about $1,700 “after adjusting for the cost of living.” In real dollars as of this writing, it’s around $2,586, but that doesn’t really matter.

Flowers states that the United States government spends nearly $1 trillion dollars annually on public assistance programs, both direct assistance at the federal level and transfers to state programs. At the bottom, this total is explained and clarified to be a little under $900 billion a year.

So, taking the author’s figure of around $1,700/month, that amounts to about $20,000/year. Multiply that by 350 million citizens^†, and the total is $7 TRILLION. EACH YEAR.

Later in the article, Flowers states that advocates of UBI often propose a starting figure based on the current per capita welfare expense of the nation (or state/province, or city) in question. For the United States, that’s around $700/month. Doing the same math as above, that adds up to nearly $3 trillion. Still a bit higher than current spending.

And this figure is “just a floor.” Some advocates are proposing the UBI be as high as 60% of median income, which was $28,889 per capita in 2014, the latest year for which data are available. That gives us a potential UBI of $17,333/year, or $1,444/month. Obviously from the $700/month figure, the total will be somewhere around $6 trillion per year.

Basic income, indeed. Flowers states that a “huge increase” in revenues to the federal bureaucratic behemoth—oh, wait, that’s supposed to be significantly reduced by the elimination of myriad welfare programs—to the federal government. This naturally implies a “big hike in tax rates” for the admitted redistribution. What are you thinking, Mr. Flowers? Something on the order of 100% of all income over $30,000? Even that would run in the red. Maybe just 100% of everything?

Just a few more minor points—things that made me scratch my virtual head:

• As arguments in favor of UBI, Flowers says that a similar plan was outlined by Thomas Paine, and Dr. Martin Luther King, Jr. advocated something like it to combat poverty. But this does not say that Paine actually advocated this plan, only that he outlined it. And it is implied that Dr. King’s plan was not universal, but targeted at the poor.
• To investigate effects of a government-supplied UBI, a study is being organized in the United States—by a private organization. Nothing wrong with that, of course. If only the private organization could garner the funding to actually implement UBI nationwide.
• A government study was done in a few United States cities, looking at whether receiving a basic income affected people’s work habits. In that study, primary earners reduced their work by “no more than 5 to 7 percent.” Does this mean “no more than 7%”? Or does this mean the data were not clear enough to get an accurate measure?
• A Canadian study that Flowers calls the “closest research” to a true UBI involved only “eligible families”; i.e., the UBI was means-tested. In one municipality that was a “saturation site”, only 30% of all the families qualified to receive it. Other sites had lower participation rates. I would say this isn't nearly close enough to universal.
• Flowers starts one paragraph by stating, “A basic income could be any amount….” Really? It could be $1/year? I don’t think so. That statement is meaningless.
• The Swiss advocate, a gent named Daniel Straub, said, “The market economy is great, but…” and to me, the rest of that sentence may as well be, “it requires hard work to do well, and I’m lazy.”

The basic idea of a career hasn’t changed. The proponents of UBI at the beginning of the article ask, what do you really want to do, or what do you love to do? A career means someone somewhere is willing to pay you to do that. It’s up to you to find them. The internet should make that easier than ever before. Straub says he remembers his great-grandfather working ten hours a day, six days a week. (When I was a small lad, my grandfather was already in a nursing home. His family’s generations must have been awfully close together. But I digress.) I say, if he was doing what he loved to do, was it really a chore? Maybe he would rather have spent his time doing what he was doing than sitting down at the pub drinking beer with the old men.

Many thanks to Michelle Ray—Twitter’s (and Google +’s) +Galts Girl—for sharing the link to this article. As Michelle tweeted, it’s long, but you should read all of it. Also, be sure to check out the Czar of Muscovy’s thoughts on UBI over at the Gormogons blog. (As of this writing, permalinks are not working; it was posted on 06 April 2016 if you need to scroll back to find it.)

†It is true, there aren't 350 million adult citizens in the U.S. Still, even the lowest total here would be more than the current expenditures, even if we only used 175 million, or half.

*Remember that “Utopia” is derived from the Greek for “no place”.

UPDATE as of 2016/06/06, reports are that Swiss citizens have rejected the UBI proposal by a margin of nearly 4 to 1. And yet, when I searched Twitter for an article about that referendum, nearly all the tweets were of the nature, “Well, we lost one battle, but we must keep trying!” I must repeat an observation my DW has made several times: people will put untold effort into avoiding work.

Call me Purist

OK, here’s a random thought spurred by a tweet.

First, the tweet contents. It was a joke: “Do you know the difference between a hunter and a fisherman? A hunter lies in wait. A fisherman waits and lies.”

This got me thinking about something that has bugged me for a while about the modern sport of hunting: blinds and stands. (And associated with those, things like lures and decoys.)

“Hunt” is an active verb. It is defined by my American Heritage Dictionary, as it relates to animals, as the act of pursuing, seeking out, searching for, or searching through (as in “I’ve hunted those woods many times”). It is not defined as “soaking a cloth with doe urine, fixing it to a post or a tree, and climbing the tree to sit on a seat built there and wait for a buck to come to you.”*

A good hunter is not necessarily one who comes home with the biggest set of antlers. A good hunter is one who actively seeks out the area where the game lives, then pursues the game as it moves throughout that area until a clean shot can be made (and is successful).

And I don’t really want to do that, which is probably why I’ve never hunted.



*Now, the taking of game for food with no consideration for sport is a different matter. When one’s survival is at stake, there is nothing wrong with fishing in a barrel, so to speak. As long as the owner of the barrel is OK with it.

Shaking My Head (Part 2)

This was in front of the new fire station as it was being
built at one corner of the road in question.

Not even two weeks ago, the county road leading to our housing area was resurfaced. It took nearly a whole week, as the part of the road that was resurfaced is about 3 miles long. When it was finished, it was really nice; all the largish holes, dips, and bumps were gone.

Today as I left for work, there were flagman signs, and a work crew was busily drilling a hole in the new surface. Well, one guy was busily drilling a hole; four or five others were apparently supervising and standing ready to offer first aid should anything go wrong.

When I came home tonight, there was (thankfully) a sign warning drivers to the presence of “STEEL PLATES IN ROADWAY”. Sure enough, there were at least four spots in the brand new surface that had been removed and covered with metal plates, about 6'x8'.

Now why would a company be paid to do a resurfacing job, then either that same company or another one be paid to tear it up?

I want to scream. SMH

UPDATE: After a couple of days, the steel plates were gone and the road filled in. But now nearly all my old familiar holes that I'd learned to avoid are back. Winter will only make them worse.

It Worked, All Right

The Washington Examiner yesterday published a piece telling us about a campaign fundraising speech that Barack Obama gave in Oakland, CA Monday night.

Notice the jump in 2009†

In that speech, he contrasted George W. Bush’s policies of slower growth of federal spending and bureaucracy to his own. Of Bush’s policies–which he claims Romney would continue–he said, “We tried that and it didn’t work.” He went on to say that “…we tried our plan–and it worked.”

Spending vs. Growth†

The tone of the Examiner article seems to be one of incredulity, of belief that this shows how out of touch the MOOP* and his speechwriters and advisers are. Nearly all the tweets and blog posts I’ve seen referencing this story share this attitude.

The best laid plans…

I think there’s another way to look at this, and the only post I found even hinting at it begins a forum thread at Above Top Secret. It may be that “their plan” (to use the MOOP’s words) has indeed worked.

It may be that the plan that has been followed unfailingly by the Obama administration was intended to stifle the opportunity for individuals to create their own wealth, and encourage more and more Americans to become dependent on the federal bureaucracy for their every need. In that case, the Obama administration’s plan has worked on a scale not seen since the Great Depression.

*Man Occupying the Office of President
†These graphs are from a Mercatus Center white paper.

President of Estonia Slams Paul Krugman

Other bloggers have written about this, but they seemed to pick and choose the tweets they wanted to show. I created a Storify story including all the relevant tweets, excluding only the short replies to specific Twitter users.