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.

Things I’d Like to See a New Chief Executive Do

See page for author [Public domain], via Wikimedia Commons

In February of 2016, I posted the following tweet:

Eliminate:
HHS
HUD
Ed
Energy
Transpo
Labor
Commerce
Ag
Interior

— ScottO30 (@gscottoliver) February 18, 2016

Since these are all departments of the Executive Branch, it seems to me a Chief Executive could eliminate them whenever he or she wished to do so. To create a new department, as George W. Bush did in 2002, the President must go to Congress to get money appropriated for it. But to terminate one? It would simply mean that any unused budget it had would remain unspent, and that’s a good thing, isn’t it?

In reverse order of their creation, I believe we should eliminate the following U. S. government cabinet departments:

• Education
• Energy
• Transportation
• Housing and Urban Development
• Health and Human Services
• Labor
• Commerce
• Agriculture
• Interior

Any legitimate Federal functions can be moved to an appropriate Department that is left: State, Treasury, Defense, or Justice.

I would leave the Veterans Administration separate from Defense, as the latter’s responsibility is active defense of the nation, while the former is charged with taking care of the people who have served the nation in that capacity.

I would even suggest that the Department of Homeland Security is redundant, and its important functions should be moved to Defense or to Justice, as appropriate.

Finally, the White House lists the Environmental Protection Agency, the Small Business Administration, and the United Nations Mission as separate entities. I submit that neither of the first two have any place at a Federal level. If the Federal government didn’t confiscate resources at such a high rate, States and Localities would have plenty to deal with any violations of their citizens’ right to life. And in my opinion, the United Nations does more harm than good, and the U. S. should withdraw from it (and maybe raise its rent).

Yet Another Reason to Dump the IRS

From a congratulatory email to me upon reaching an employment milestone:

In the United States, service awards are considered tax exempt and therefore can only be used for tangible awards. They cannot be redeemed for certain gift cards  or travel and tickets due to IRS restrictions.…

So if I win one of our contests, or get an award for performance, I can get a VISA® or Walmart* gift card (which is taxable), but as a reward for years of hard work, I get a golf bag†. And I don't even play golf!

Thanks, IRS!

†For example.

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.

In which I call ’em like I see ’em

 Over at Castle Gormogon, the Czar of Muscovy presented a fine example of this administration’s coherence and competence. It inspired me to write this letter to him in response.

Your Excellent Majesty,

That was a marvelous piece of Mr. Carney’s work you selected. I had thoughts on the question from which it sprang. Were I in the position of answering that question, it would go something like this:

“Well, the difference is, you see, that when the companies Bain invested in went under, it was Bain and its rich, white, fat-cat investors who lost the money. When Solyndra went belly-up, the people who got soaked were, well, you. And me. And all the poor saps who read your paper or see me on the tee-vee. That’s the difference that really matters, right there.”

Which is likely why they didn’t call me when Gibbsy called it quits.

Your minion,
ScottO

Only Half the Story

A thought struck me this morning as I was reading some discussion about whether the individual mandate provision of PPACA is a tax (it isn't). I started thinking about the Constitutional requirement that “[a]ll bills for raising revenue shall originate in the House” rather than the Senate (Article I, Section 7, Paragraph 1). I briefly wondered whether PPACA was first introduced in the House (and I've seen other speculation along that line). But that isn't what this post is about.

The point of this post is that the Constitution established earlier in that Article (Secs. 2 & 3) that members of the House were to be elected by the people, but Senators would be chosen by the states. The idea, it seems, was to ensure that any taxes levied, that would ultimately be paid by the people–because corporations don't pay taxes–must be the people's idea (through their Representatives). The Senators had the responsibility of determining how any proposed tax would affect their respective states, and support or oppose it accordingly.

It is no coincidence that Amendment XVII, transferring the election of Senators to the people, was proposed after Amendment XVI, establishing the power to tax income. It was a progressive plan to undermine the states' check on how increases in tax rates would affect their businesses. Among other things, I'm sure.