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Thoughts on a guaranteed income
By - - Viewpoint
Estimated median income per household in 2017 in the US is $58,000.

The national poverty line (PL) is about $24,000; 110% is $26,400. Numbers rounded up to thousands for ease of interpretation. Of course these values vary from city to city and state to state.

E.g., 1: Given a minimum wage of $15/hr x 40 x 50, worker income is $30,000. PL - 30,000 < 0, so the subsidy would be zero. This family can manage on its own income.

E.g., 2: Given a single earner making $10/hr or $20,000/yr. PL - 20000 > zero, so subsidy is $7,000 or $583/mo. This family is in a world of hurt anywhere in America. If this were a family earning the median, and one relative had to provide support, that person would bear the whole $7,000 burden, which is about 12% of donor’s income.

But there are 200,000,000 working Americans. Which means that each such subsidized family costs the median household only $0.000035 per month (three ten-thousandths of a cent or essentially NOTHING!).

The number of households below the poverty line is about 11 million. Assuming they all qualify in this simple scenario for a $7,000 subsidy, what would that cost the median household? The answer is $385 per year or $32 per month or about a dollar a day or seven tenths of one percent of income.

The total cost of such a program would be about $77 billion per year. What would the recipients do with the money? They would spend it. Given standard estimates of the “multiplier effect” we would expect that outlay to generate about $400 billion in economic activity, most of which would be local. Some part of the money, or the funds liberated by the subsidy, would be taxable, so the donor class could even get some of it back in the form of lower taxes in a “trickle up” benefit that would drive supply siders berserk.

Of course this is an overly simplified scenario, but seems more productive that all 300 million of us put our minds to work improving it, not to reject the whole idea out of hand in a reactionary reflex. Several other countries are experimenting with such income guarantees, and preliminary results are positive.

I contend there is no family in America that has not within the past year made an impulse purchase of $385 that they later regretted. So why are so many so opposed to small income transfers, many even wanting to abolish Social Security?

I believe the reason is closely connected to Lyndon Johnson’s evaluation of racism, but applied to social status instead of ethnic origin. As long as A can keep B’s income low, B must come to A for help, meaning A will enjoy higher social status, based not on intrinsic worth or achievement but on an arbitrary allocation of that love of which is the root of all evil.

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