Tyler Cowen on basic income ("guaranteed income", as he calls it):
Must a guaranteed income truly be unconditional? Might there be circumstances when we would want to pay some individuals more than others? Many critics for instance worry that a guaranteed income would excessively reduce the incentive to work.
So it might be proposed that the payment be somewhat higher if low income individuals go get a job. That also will make the system more financially sustainable. But wait — that’s the Earned Income Tax Credit, albeit with modifications.
Might we also wish to pay more to some individuals with disabilities, perhaps say to help them afford expensive wheelchairs? Maybe so. But wait — that’s called disability insurance (modified, again) and it is run through the Social Security Administration.
As long as we are moving toward more cash transfers, why don’t we substitute cash transfers for some or all of Medicare and Medicaid health insurance coverage benefits, especially for lower-value ailments? But then we are paying more cash to the sick individuals. That doesn’t have to be a mistake, but it does mean that an initially simple, “dogmatic” payment scheme now has multiplied into a rather complex form of social welfare assistance, contingent on just about every relevant factor one might care to cite.
You can see the issue. Whether on grounds of justice, practicality, or just public choice considerations (“you can keep your current welfare payments if you like them”), we should not expect everyone to be paid the same under a guaranteed annual income. And with enough tweaks, this version of the guaranteed income suddenly starts resembling…the welfare state, albeit the welfare state plus. Unemployment insurance benefits wouldn’t end. More people could get on disability, and without those pesky judges asking so many questions.
He's right, as far as this goes. The Basic Income idea is a bit like the Fair Tax idea: both try to smuggle in reforms that would actually solve lots of problems, but only if we can assume that the "clean" proposal is implemented. Fair Tax-ers assume that the Congress really, really will accept getting rid of the Income Tax. (Implausible). Basic Incomers assume that the Congress really, really will accept losing all discretion over who gets extra cash and benefits. (Very Implausible).
But there are other advantages of consolidation and transparency. If the system were equal, and unconditional, it would get rid of a lot of incentive problems. Sure, Congress might not pass that, probably wouldn't. That's a problem, but it's also a problem with the current system. Any large-scale reform would at least break up the existing coalitional structure. That's not bad.
Must a guaranteed income truly be unconditional? Might there be circumstances when we would want to pay some individuals more than others? Many critics for instance worry that a guaranteed income would excessively reduce the incentive to work.
So it might be proposed that the payment be somewhat higher if low income individuals go get a job. That also will make the system more financially sustainable. But wait — that’s the Earned Income Tax Credit, albeit with modifications.
Might we also wish to pay more to some individuals with disabilities, perhaps say to help them afford expensive wheelchairs? Maybe so. But wait — that’s called disability insurance (modified, again) and it is run through the Social Security Administration.
As long as we are moving toward more cash transfers, why don’t we substitute cash transfers for some or all of Medicare and Medicaid health insurance coverage benefits, especially for lower-value ailments? But then we are paying more cash to the sick individuals. That doesn’t have to be a mistake, but it does mean that an initially simple, “dogmatic” payment scheme now has multiplied into a rather complex form of social welfare assistance, contingent on just about every relevant factor one might care to cite.
You can see the issue. Whether on grounds of justice, practicality, or just public choice considerations (“you can keep your current welfare payments if you like them”), we should not expect everyone to be paid the same under a guaranteed annual income. And with enough tweaks, this version of the guaranteed income suddenly starts resembling…the welfare state, albeit the welfare state plus. Unemployment insurance benefits wouldn’t end. More people could get on disability, and without those pesky judges asking so many questions.
He's right, as far as this goes. The Basic Income idea is a bit like the Fair Tax idea: both try to smuggle in reforms that would actually solve lots of problems, but only if we can assume that the "clean" proposal is implemented. Fair Tax-ers assume that the Congress really, really will accept getting rid of the Income Tax. (Implausible). Basic Incomers assume that the Congress really, really will accept losing all discretion over who gets extra cash and benefits. (Very Implausible).
But there are other advantages of consolidation and transparency. If the system were equal, and unconditional, it would get rid of a lot of incentive problems. Sure, Congress might not pass that, probably wouldn't. That's a problem, but it's also a problem with the current system. Any large-scale reform would at least break up the existing coalitional structure. That's not bad.
