As regular readers of this blog know, I support a UBI–a universal basic income–rather than the current patchwork of social programs that are socially divisive and fiscally inadequate. That support rests on three convictions: first, that no one is truly free who must face a daily struggle just to survive; second, our current government safety-net policies are dividing, rather than unifying, our diverse population; and third, market economies work best when buttressed by a strong safety net.
As I’ve argued before, public policies can either increase or reduce polarization and tensions between groups. Policies intended to help less fortunate citizens can be delivered in ways that stoke resentments, or in ways that encourage national cohesion. Think about widespread public attitudes about welfare programs aimed at poor people, and contrast those attitudes with the overwhelming majorities that approve of Social Security and Medicare. Polling data since 1938 shows growing numbers of Americans who believe poor people are lazy, and that government assistance—what we usually refer to as welfare—breeds dependence. These attitudes about poverty and welfare have remained largely unchanged despite overwhelming evidence that they are untrue.
Social Security and Medicare send a very different message. They are universal programs; virtually everyone contributes to them and everyone who lives long enough participates in their benefits. Just as we don’t generally hear accusations that “those people are driving on roads paid for by my taxes,” or sentiments begrudging a poor neighbor’s garbage pickup, beneficiaries of programs that include everyone are much more likely to escape stigma. In addition to the usual questions of efficacy and cost-effectiveness, policymakers should evaluate proposed programs by considering whether they are likely to unify or further divide Americans. Universal policies are far more likely to unify, an important and often overlooked argument favoring a Universal Basic Income.
There is a growing body of research favoring the approach, and I was interested to read a New York Times column that traced growing support for the proposition that–duh– the best way to combat poverty is with money.
For the past three decades, federal aid for lower-income families has largely consisted of handing out coupons: housing vouchers for families that need housing; food stamps for families that need food; Medicaid cards for health care.
Sometimes, however, what families need most is a little extra money they can spend as they see fit. Researchers have found that even small amounts of cash can make a big difference in the lives of children from lower-income households, improving their grades, their chances of graduating from high school and their income as adults.
In an important shift in poverty policy, some states are starting to provide that kind of financial aid. During the recently concluded spring legislative season, states including Minnesota, Colorado and Connecticut created programs to give people money.
The increased interest in such programs was sparked by the temporary expansion of the federal child tax credit during the pandemic. The credit reduces the amount of federal tax that families with children owe, and in 2021, Congress raised the maximum credit per child to $3,600 from $2,000. Importantly, it also authorized payment of the entire amount in cash to households that didn’t owe enough in taxes to fully benefit. Until then, families that earned less money had received less help.
Unsurprisingly,Republicans refused to extend the program, and their refusal prevailed thanks to Senator Joe Manchin, who agreed with Senate Republicans that only people who work should qualify for help.
But for that one year, the government offered the same assistance for every eligible child.
Since then, Democratic majorities in seven states — often with support from Republican legislators — have created their own “refundable” child tax credits, the technical term for the policy of paying benefits in cash to families that can’t use the full value of a credit because they owe less than that amount in taxes. The only two states that had created refundable child tax credits before the pandemic, New York and California, both significantly increased eligibility.
The states hand out less money than did the federal government. The largest credit, which Minnesota created in May, offers up to $1,750 per child for households with incomes below $35,000 per year — roughly half the lapsed federal credit. But unlike the federal expansion, the state credits are meant to be permanent.
There is now a significant body of research supporting not only cash payments, but also the importance of a robust social safety net to market economies. Will Wilkinson, vice-president of the libertarian Niskanen Center, argues that the Left fails to appreciate the important role of markets in producing abundance, and the Right refuses to acknowledge the indispensable role safety nets play in buffering the socially destructive consequences of insecurity.
It’s slow, but perhaps we’re learning…
It will all work better IF it is a national program. Otherwise, folks will migrate to states with better benefits. Years ago, Chicago aid offices were said to buy clients one way bus tickets to Madison WI as a way to help the client and lower the Chicago burden. I never knew if this often repeated tale was true or not.
Over my life progress has redefined poverty and charity. If we are to be considered world leaders we have to get out in front of the rest of the world.
We can afford to also. We have a wealth redistribution problem to solve. We led the world in progress by solving problems like that.
If we could in the past why not now?
It’s a great idea. It’s also a pipe dream to think our government could accomplish anything this thoughtful. Heck, they have many other important worries: drag queens in libraries, kids reading “suggestive “ literature, and uppity women wanting to control their own health care, to name a few. (Sorry. My sarcasm gene is acting up this AM.)
I think the answer to Pete’s pregnant question is that Republicans don’t want any of that. They and their tiny brains are embedded with the word “communism”. They think that helping the least of us is communism, and our corporate/banking moguls certainly don’t want THEIR money going to help a market economy. Delicious irony if it weren’t so politically fraught.
As Joseph Goebbels said long ago, by repeating the bigger lies, the people will eventually believe them. And Republicans have been lying about social assistance programs since 1933 when they lost to FDR and the New Deal.
For those who remember, the New Deal was predicated on the thesis of modern economics by John Maynard Keynes who offered up the simple logic that when we all do well, we all do well. When people have money – who cares where it comes from – they SPEND it on goods and services. That spending creates jobs and the taxes to pay for such things as Medicare, unemployment, etc.
Then there is the lie about corporate profits… Why on earth would our government of, by and for the people want to allow trillions of dollars to reside in foreign banks earning interest that does not benefit the people of the United States and is couched in tax avoidance schemes? With a close to $40 Trillion bank account, it is logical that a trillion here or a trillion there might fix an entire raft of financial woes among the poor and near poor. They’d spend it all. DUH.
Not holding my breath for this to happen in my lifetime.
Nancy, if you are reading this blog, you are probably right. I doubt many of us are on the near side of middle age.
But, time goes on beyond us all, and my thoughts are for my children and any children they have. It gives me hope that various pilot programs and studies have been completed and are still underway in many parts of the world. People around the world _are_ taking this seriously. I think there will be countries doing it within a shorter time than you might think. I won’t be surprised if the Scandinavians are first.
That said, if I was an American, I don’t think I’d have hope. (Thank goodness I am not. No offense meant.) You guys can’t even do health care, which is bleeding obvious, so how could it be reasonable to expect to take steps beyond that.
This could become a reality if billionaires paid their fair share and we severely reduced our military budget.
I think it is important to make clear that a UBI would not be just another add-on to the federal budget, but would take the place of existing programs, as Sheila explains in her first paragraph. If you ask people whether they would rather apply for and then jump through bureaucratic hoops to get assistance or simply have cash show up in their mailbox, which do you think they would choose?
I’m encouraged that pilot programs are being tested. Ten years ago this idea wasn’t even on most people’s radar. Or if it was, they thought it was too crazy to ever fly.
I love this, Shelia s prompts and the responses of all.
As long as it is determined fairly by something like “living wage” which takes into account real geographic differences and is NOT based on color/ethnicity/”race”, it has a small chance…someday.
You include an extended explanation of one of the reasons for NOT means-testing Social Security and Medicare: as soon as they’re means-tested, they become “programs for poor people”. Once that happens, political support plummets because they’ve become programs for “them” not “us” – whereupon they become vulnerable to all sorts of made-up reasons to separate the “worthy” from the “unworthy”, as well as “moral” justifications for not spending taxpayers’ hard-earned money subsidizing those drains on society (oddly, the money saved never seems to end up back in the pockets of those same taxpayers). Of course an expensive time-consuming bureaucracy still needs to be set up to administer it, which becomes a target in iteslf.
Ultimately one finds oneself in the situation of (IIRC) Georgia: their stated desire was to reduce the number of people who receive public assistance; but instead of lifting people out of poverty, they deliberately put so many roadblocks in the way that few people were willing or able to jump through the hoops to qualify (or to remain qualified). The result: the number of people on public assistance declined. Victory! Until one realizes that the underlying problem wasn’t really addressed because the goal was poorly stated: the goal should have been “reduce the number of people who need public assistance.” Or even better, “reduce the number of people in poverty” – which leads back to UBI.
Until enough people demand it, nothing will happen. How do we demand it? We vote out those who oppose it. How long will we wait? Probably until Hell freezes over! VOTE! VOTE! VOTE!
One massive gap between reds and blues is the size of the national debt. Reds have been told that there is no difference between personal debt (like credit cards) and education loans or corporate debt.
Of course, all debt is predicated on assumptions about the economic future. Will the economies of the nation as a whole, or humanity, or any corporation, or organization or individual rise or fall? How about inflation? (spend now when what can be bought is larger in value than the currency to pay it back?) What will interest rates do in the future vs now?
I’m old. Should I borrow now to leave stuff of value to my progeny or would that not benefit either me or them? (depends on what I spend on).
How about bankruptcy? Spend now and stick others with the payback. (Trump’s modus operandi personally and corporately. What is investing versus filling current needs and wants? (huge difference there.
My parents invested in my education with huge return for both of us.
There are no simple one size fits all situations and times assumptions.
Sharon makes a good point. With adoption of a UBI we could end the patchwork programs for this or that purpose along with their administrative apparatuses and enjoy such cost reductions as a buffer against the price of adoption of a UBI.
As for the propriety of adoption of a UBI, someone tell me why public policy favors tax cuts, overseas hideaways for tax-free trillions, and glorifications of the superrich few, but stigmatizes the poor as lazy and immoral when they are hapless victims not only of poverty but propaganda by rich crooks wed to the status quo, such as one is a communist if he or she favors “redistribution of the wealth, etc.”, a “redistribution” I here note that has already occurred in favor of the superrich who are now warning against another such economic horror.
I think it a false and short-sighted response by terminal capitalists who offer goods and services at a profit in the marketplace since such additional demand perfectly describes the Keynesian view that demand (not corporations, brilliant CEOs et al.) is the measure of economic growth, the holy grail of economists. Based on such facts and logic, adoption of a UBI would make the rich richer and but also serve all the people well with a revamped system of new capitalism, a system I could support.
It has long been demonstrated that when more levels of society do well, the economy booms!
VOTE…VOTE…VOTE!
As always, silver bullets have potential unintended consequences, almost never considered before “firing”…In this case (and shown in many other similar projects), it is most critical to take a 360 view of the problem. Handing out money ONLY will inevitably be to some folks with little/no financial literacy, some with difficult mental health issues, etc. Without assessing/offering/providing parallel help, these people (having been cut loose of social programs) will be left struggling and be prima facie evidence of UBI being a failure by those opposed to it.
Adoption of a UBI will not be the end of all programs for the poor. Social Security and Medicare, for instance, would survive its adoption in my idealized version while others would not. I would expect an omnibus bill establishing UBI as law to state just which would survive and which would not by bill writers. Glitches after some experience with its terms could be cured by amendment and rules and regs as we study how to streamline the act and its administration etc. Unintended consequences follow adoption of bills into law routinely, and we have the means with which to subsequently match them with congressional intent.
Gerald – WADR – the history of oversight and fixing by “congressional intent” just ain’t there. Check out the Covid money history lately and much more before that. And given today’s congress, where does that intent come from???
Administration costs would also be a small fraction of the current system simply because there would be no need to check if someone is “eligible”.