A few days after print publication, Knight's syndicated newspaper column, which moves twice a week, will be posted. The most recent will appear at the top.

Thursday, August 27, 2015

Guaranteed ‘basic income’ idea renewed

Bill Knight column for Mon, Tues., or Wed., Aug. 24, 25 or 26

It may seem foolish or contradictory to “free enterprise” ideals, but the most effective way to eliminate “entitlements” may be to guarantee everyone a minimum income.

(Of course, “entitlement” is increasingly used as a disparaging description rather than something for which people are eligible, like Social Security or veterans benefits. What some really criticize are entitlements that help people other than themselves.)

A “basic income” is a universal, unconditional grant that’s been studied for years in Canada, Switzerland, the World Bank and Uganda. The idea is decades old. Conservative economist Milton Friedman in 1962 proposed a Guaranteed Minimum Income by means of a “negative income tax,” and 46 years ago this month, President Richard Nixon recommended a version of Friedman’s plan, which the Republican named a Family Assistance Plan.

“Family Assistance recognizes a need and establishes a responsibility,” Nixon said. “It provides help to those in need and, in turn, requires that those who receive help work to the extent of their capabilities.”

Elsewhere, adaptations exist. France implemented a minimum income in 1988; Brazil and more than a dozen European nations have versions. Arguably, the United States already has variations, too, including Social Security Disability Insurance, a payroll tax-funded, federal insurance program intended to aid people physically limited in finding work, and Supplemental Security Income for low-income people who are either aged or disabled. (It’s also administered by Social Security, but its money come from the U.S. Treasury, not Social Security revenues).

Now, however, it’s scheduled to be enacted in earnest in a year-long experiment in Utrecht, Netherlands, where welfare payments will be replaced by “living incomes.”

People work more effectively “after they have been lifted out of poverty,” the World Bank reported.

In 2013, a study looked at two groups in Uganda: one had received a no-strings-attached grant equal to the country’s annual income – about $400 – and a second group received nothing. The group receiving the grant worked on average an extra 17 hours in comparison to the other group, and showed a 41-percent increase in earnings years after receiving the grant.

One problem is the negative attitude about victims of poverty.

Just before his 1936 re-election, President Franklin D. Roosevelt talked about the rich and powerful trying to persuade everyday Americans to vote against their own interests through divisive claims.

“It is an old strategy of tyrants to delude their victims into fighting their battles for them,” FDR said.

Instead of “humiliating and patronizing” the jobless, minimum-income grants could empower the needy to volunteer with seniors or kids or help beautify public lands, wrote Rutger Bregman in De Volkskrant.

It’s not just poor countries or European societies that could benefit. After all, many Americans are one crisis – a health emergency, divorce, etc. – away from financial catastrophe.

Nobel laureate Joseph Stiglitz, chief economist with the Roosevelt Institute, recently reported in “Rewriting the Rules of the American Economy” that the economy is dysfunctional, writing, “We pride ourselves on being the land of opportunity and creating the first middle-class society, yet profound and largely overlooked changes have put the middle-class life increasingly out of reach for the majority of Americans.”

Examining policies that over recent decades created the situation where “the benefits of economic growth have disproportionately gone to the top 20 percent of the population while the share of national income going to the bottom 99 percent has fallen,” Stiglitz added, “The American economy no longer works for most Americans.”

Some say that’s no coincidence.

Sasha Abramsky in her book “The American Way of Poverty,” shows that poverty in the United States isn’t an accident, but a result of the nation’s political and economic systems.

A minimum income would turn those systems on their heads – and save money

“The current rules in welfare are bureaucratic and, in a way, based on mistrust,” said Jacqueline Hartogs, a spokeswoman for Utrecht alderman Victor Everhardt.

The Dutch program would more than pay for itself socially, counting “billions saved” on bureaucracy, health care and policing, Bregman said.

It should appeal to conservatives – and it has. Conservatives including U.S. Rep. Paul Ryan (R-Wis.), U.S. Sen. Marco Rubio (R-Fla.) and American Enterprise Institute Fellow Charles Murray all have suggested wrapping up most welfare programs into means-tested minimum incomes.

A minimum income could cut welfare spending and remove its stigma, help the needy advance, and encourage service by and also empathy with the less fortunate.

That doesn’t seem foolish, contradictory or against genuine free enterprise.

[PICTURED: Photo is of Jacqueline Hartogs of Utrecht, Netherlands; illustration from]

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