Thursday, June 29, 2017

Is It Time For Us To Guarantee An Income?

My answer to that is yes.  A qualified one.  Because I would go much further than guaranteeing an income.

Let me explain.

I have felt for a long time, and have written here about those feelings several times, that the so-called "welfare reform" law from the 1990s was a perfect example of cutting off our economic nose to spite the political face of traditional liberal politics.  Indeed, from my side of the political fence, the only real reason for doing it in the first place was political.  A moderate-to-liberal Democratic President, threatened with the prospect of being investigated into impeachment proceedings, needed to throw a bone to the first all-Republican Congress in 40 years.  He admitted that he didn't like the bill he was signing.  But he decided that he liked being re-elected more than he disliked the bill.  So he signed it.  (And got impeached anyway, for the constitutional equivalent of jaywalking.  I mean, it's not like he sold his office to fill his hotels, if you know what I mean.)

A bit more than a decade later, under an all-Republican government, and after a cornucopia of tax cuts and deregulation, the nation almost drowned in another Depression, despite a record level of military spending that should have helped guarantee full employment.  Why?

Well, the aforementioned cornucopia had a little something to do with it.  The American financial system was seduced by it into a casino of fraud and debt, one that collapsed when the frauds were exposed and the debts could no longer be paid.  But make no mistake:  there was something else going on.

Consumers, the real drivers of our economy--the real "job creators," if you will--had less money to spend.  And that is in no small part because we forgot, in our overeagerness to punish "welfare frauds" that did not exist to the extent many people believed, we forgot that welfare recipients were also job-creators.  They spent their money.  They kept businesses in poor neighborhoods afloat. They generated tax revenues, and helped cities and states balance budgets, giving other businesses the confidence to expand and create even more jobs.

As the Nobel Prize-wining economist Paul Krugman is fond of saying, my spending is your income, and your spending is my income.  (Thereby proving that he knows more about economics than Ayn Rand, to say nothing of your typical conservative economist.)

But a guaranteed income offers a way of fixing this problem in a way that might be politically palatable.  Even to conservatives.

First of all, by definition, it would not be means-tested.  It would go to billionaires as well as zero-aires.  And it would not be subject to taxation.  This slays two conservative objections:  excessive taxation, and the creation of a class completely dependent on government.

Second, it would not be restricted in use.  An individual could treat it as either disposable or as investment income.  As the former, it offers a way of lifting people out of poverty without the creation of a bureaucracy dependent on the existence of that way--again, overcoming a potential conservative objection.  And as the latter, it would enable money to be invested in a wider variety of ways than is currently possible with so much of the money in existence being controlled by a handful of people.  This is what is meant by the motility of money:  money has a greater impact on the economy when it moves from one individual to another.

Third, and what should be most important from a conservative perspective, it has been shown to be practical.  I remember when I first got into political debates in high school, conservatives would identify themselves to me as people who believe in things that work.  Well, if this is still the case (and, in this day and age, I sometimes wonder), they should all be in favor of a guaranteed income for all:  it has been shown, again and again, to be extremely practical.

But there's one more thing to consider:  American exceptionalism.

Americans, and American conservatives in particular, don't like the idea of handouts.  And, from a certain perspective, that's what a guaranteed income essentially is.  It runs against the grain of the American soul, which emphasizes the moral as well as the financial value of employment

Well, in that case, why not supplement the income, or perhaps even replace it, with a guarantee of a job for everyone who needs it?  That's something that could be financed in a number of ways, including tax credits.  And not everyone would need to look for such a guarantee; they would already have other means of supporting themselves.  As for financing the guaranteed income, it doesn't necessarily require a new income stream.  I suspect that it could be financed in a number of ways, through the elimination of wasteful defense spending as well as closing corporate loopholes.

And it might also be financed from existing block grants for welfare under the reform law, which many conservative states have redirected toward purposes other than helping people find work, like balancing budgets and paying off political patrons.

Sounds too good to be true?  Why not give it a chance and find out?  Last time I looked, that approach was called "the American Way."  Perhaps it still is.

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