Thursday, November 14, 2013

Ok, I Don't Get It

Maybe I'm misunderstanding the minimum guaranteed income, but I don't get Tyler Cowen's "problems" at all.  All of them stem from:
Must a guaranteed income truly be unconditional?  Might there be circumstances when we would want to pay some individuals more than others?
and my answers are simple: "yes" and "no".  My understanding is that the minimum income is just paid out to everyone [who files a tax return].  So everyone gets, say $1000/month check to do with as they please, and that doesn't go down if they happen to work so work = more money!  Depending on the level it was set at it may be able to replace food stamps and/or cash welfare and/or housing assistance but there is no good reason to drop medicare/medicaid/social security, as those are highly efficient, targeted programs that both do good and are very popular.

(Yes, I suspect that "getting Republicans to go along with this" would probably mean cutting or eliminating those programs, but that certainly shouldn't be considered a problem with min income itself, rather a politics problem.)

I would think a bigger issue is that it would likely push up inflation at the bottom end of things (particularly low end rents and eating out would be likely to go up), though that means an even greater incentive to work for low income individuals.  In the middle it would serve as extra savings or allow a bit of extra extravagance, and at the top it would be pretty much useless, particularly as it would be way more than offset with the higher taxes required to afford it.

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