The BBC reports that with characteristic prudence three-quarters of Swiss voters have rejected a universal basic income for Switzerland:
Swiss voters have overwhelmingly rejected a proposal to introduce a guaranteed basic income for all.
Final results from Sunday’s referendum showed that nearly 77% opposed the plan, with only 23% backing it.
The proposal had called for adults to be paid an unconditional monthly income, whether they worked or not.
The supporters camp had suggested a monthly income of 2,500 Swiss francs (£1,755; $2,555) for adults and also SFr625 for each child.
The reasons given by the Swiss for rejecting the proposal reflected a concern that millions of people would flock into Switzerland, drawn by the subsidy. In the context of a million refugees streaming from the miserable countries of West Asia, the Middle East, and North Africa into Europe in 2015 with 2016 on target to exceed that number and the manifest willingness of the migrants to venue shop for the best package of subsidies, the Swiss’s concerns are well-founded. Add to that a desire to remain Swiss, something that even the Dalai Lama has proclaimed justifiable.
Closer to home when I read Charles Murray’s Wall Street Journal op-ed proposing a universal basic income for the United States, I didn’t know whether to file it under “Business and Economics”, “Politics”, or “Humor”, presumably after the fashion of Jonathan Swift’s A Modest Proposal. This is a plan he’s been pushing for a decade. The gist of the plan is that the U. S. would pay a $13,000 basic income to every American, $3,000 of which would earmarked for healthcare insurance and the plan would be paid for by abolishing the Social Security, Medicare, and Medicaid programs:
First, my big caveat: A UBI will do the good things I claim only if it replaces all other transfer payments and the bureaucracies that oversee them. If the guaranteed income is an add-on to the existing system, it will be as destructive as its critics fear.
Second, the system has to be designed with certain key features. In my version, every American citizen age 21 and older would get a $13,000 annual grant deposited electronically into a bank account in monthly installments. Three thousand dollars must be used for health insurance (a complicated provision I won’t try to explain here), leaving every adult with $10,000 in disposable annual income for the rest of their lives.
It’s hard to know where to start in critiquing such a plan. I’ll start by pointing out that health insurance for a single person costs about $8,000 per year exclusive of subsidies and his plan presupposes no subsidies. The median apartment rental in the cheapest of the 25 largest metropolitan areas (where about half of Americans live) is $1,300 per month.
It isn’t often that you run into a proposal that makes an assumption and its opposite within the same argument but that seems to be the case for Dr. Murray’s plan. His argument is based on the idea that jobs will become increasingly hard to come by but the only way that many people who are presently unemployed will be able to survive under Dr. Murray’s plan is by getting a job.
Roughly a third of those over the age of 65 live almost entirely on Social Security. Without Social Security, Medicare, or Medicaid or any other form of “safety net” program how the heck does he expect them to survive other than by taking a non-existent job that they wouldn’t be hired for anyway? Or does he expect them to hurry up and die so it will decrease the surplus population?
“Or does he expect them to hurry up and die so it will decrease the surplus population?”
Echoes of Alan Grayson. I guess you are coming around to realizing this is the GOP health care plan.
Anyway, I actually think the concept has some merit, but it is not politically feasible and the amounts would need to be adjusted to make it work. The average SS benefit is somewhere around $1200/month right now (from memory so could be a bit off) so his $13,000, if it all went to living expenses, could eliminate Social Security (mostly). It could potentially eliminate a lot of bureaucracy. In most red states it would provide a lot more support than people are currently getting. The more generous of the blue states could continue their largesse if they wanted. (This would actually worsen the transfer of monies from blue states to red states, but I bet Murray knows that.)
The big issue, as you identified, is health care. No one provides health care for so little, excepting plans just for healthy young people. Tell the old people in this country, the demographic with high voter turnout, that you are talking away their Medicare and giving them $3000/year instead and you better make plans for a long vacation after the next election.
Steve
Paraphrase of Charles Dickens, actually.
The Social Security system is incredibly efficient. You don’t get much in the way of efficiencies by eliminating it. What you get to do is liquidate the trust fund.
My view of the UBI is like the punchline to that old joke: “You cahn’t get the-ah from he-ah.” There are so many government programs, each of which has constituencies for whom it’s of, literally, vital importance that enacting such a plan into law would be impossible.
The problem is that the funds will be obtained through borrowing, and through this borrowing, money will be created without the backing of any value. Today’s situation will get worse not better. The hole will be dug deeper.
If any of these plans could work, they would, but they cannot. Or rather, they can for a while. Wealthy countries can sustain their wealth being wasted, and the more wealth there is allows the waste to occur longer. Venezuela was not as wealthy as the US. Hence, it goes to sh*t faster.
Here is something to consider: China is more wealthy than Venezuela, but substantially less than the US or Europe. When China reaches the same level as Venezuela, China has other options. The Chinese military is much larger, and they have some really big bombs, really big.
Consumption based economies can never sustain themselves. The economy must be based upon production, expansion, enslavement, or destruction. Otherwise, it will collapse.
In a hard money world, a guaranteed stipend will not work. It can only exist in the fantasy world of unsound money, and this world is about to collapse.
The problem with relying upon experts rather than yourself is that you are clueless until the end. The Titanic had watertight compartments to segregate each part of the ship, but if enough of the compartments are breached, the ship can list causing water to enter through other non-watertight openings. The passengers did not realize the Titanic was not only sinkable. They did not understand that lifeboats had been removed, and it was more dangerous than it needed to be.
Today, the world economies are headed toward an iceberg, and the problem is not the visible part. The disaster is the 80% under the surface that most people want to pretend does not exist, or if it does exist, it is manageable because there are watertight compartments. We are safe because the experts, who have been wrong about every crisis over the past 10 years (or more), tell us not to worry.
Trading a multitude of bad policies for a single bad policy is better because an expert tells us, and we can be assured he is an expert because he has been published in a newspaper.
Dave- Yup, so it would just replace SS for the elderly. The real savings might be in all of the different welfare programs before SS.
Steve