Stab me once?

Stab me once?

People who oppose the welfare system may be rational to oppose reforming it.

Imagine you're walking on a sidewalk at night. You turn a corner, and you find yourself confronted by a strange man.  Then you recognize him from the news. He's a madman, notorious for making at least 80 shallow cuts all over each of his victims. He tells you that he's definitely going to stab you, but he's considering changing how he works - he might only stab you once, right in the guts. So, aren't you pleased?

Over time, the U.S. has accumulated more than 80 different federal welfare programs.  These slices into taxpayers' wallets represent welfare distribution of more than $1 trillion per year (roughly a third of federal spending, including Medicaid and Supplemental Security Income). These programs often serve similar purposes, but usually have different requirements and caps.  Some offer cash, others coupons, others subsidies, etc.  Some can be used simultaneously, others can't.  They are managed my many different government offices, spread across multiple departments.  In short, they're a dysfunctional mess.  But there is a proposal to eliminate all those small programs in favor of a single large one.

The proposal is for a "minimum income" (also referred to as an "income guarantee" or a "universal basic income").  This "is a form of social security system in which all citizens or residents of a country regularly receive an unconditional sum of money, either from a government or some other public institution, in addition to any income received from elsewhere." (Wikipedia) Some declare it "should be the next big thing."

As strange as it sounds, there are a number of reasons to favor of a minimum income over our present welfare program circus:

  1. It provides cash, which is the most useful and easily-administered form of assistance.
  2. It has no eligibility requirements to spend time and money enforcing (or pretending to enforce).
  3. It should allow the elimination of a great deal of duplicative and unnecessary bureaucracy.

It sounds like a slam dunk, right? But every story has another side, and a minimum income is not necessarily the win-win proposal it appears to be.

First, it is difficult to believe that more than 80 government programs could be promptly and permanently eliminated.  Right now it's politically unthinkable to unwind even the most dysfunctional instances. There are too many politicians, bureaucrats, and welfare recipients willing to put up a fight.  So there is a serious risk of ending up with a behemoth program ensuring a minimum income, on top of dozens of smaller programs that were supposed to be eliminated.

There is another reason to believe these smaller programs won't be eliminated: compassion.  Jeffrey Dorfman puts it eloquently:

For a universal basic income to work, we have to resist our impulse to help. If a person spends their money badly, society, through the government, has to let that person suffer. If government programs stand ready to house, feed and provide medical care for those who don’t use their basic income wisely, everyone will spend irresponsibly and then ask for another handout. Unfortunately for advocates of a universal basic income, there is no way Americans are hardhearted enough to stand by while people starve or die without medical care. That means, the safety net won’t really be gone, and that means a failure of any universal basic income policy. As soon as it is apparent the safety net still exists, the gig is up.

Even if all the smaller welfare programs were eliminated, the cost of a minimum income is unbelievable. "In 2012, there were 179 million Americans between the ages of 21 and 65 (when Social Security would kick in). The poverty line was $11,945. Thus, giving each working-age American a basic income equal to the poverty line would cost $2.14 trillion." (Business Insider) Assuming the government saved $1 trillion by eliminating all other welfare programs, it would still need to find a way to raise more than $1 trillion per year in additional tax revenue.  One solution would be to raise all taxes by roughly a third - not something most people would accept.  Another option might be doubling down on financial profligacy.

The U.S. government has already racked up $19 trillion in debt, and has no plan to pay.  It's leaving the mess to future generations.  If your friend owed you $19,000, and had no plan to pay but implied his infant children would, then asked for your credit card, what would you do?  Americans taxpayers may not want a massive program that streamlines the spending of their dollars without expectations or accountability.  In fact, sensible Americans probably want such a process to be as inefficient as possible!

Finally, the minimum income doesn't address the biggest problem of all: the fact that seizing money from an honest man is immoral even if you give his money to charity.  In a truly free society, people are charitable as they choose.

Minimum income advocates are talking about creating history's largest government welfare program - a giant, maximum-efficiency money-spending machine. Any welfare program is morally objectionable to those who believe in liberty.  The question is whether a single, large welfare program is less objectionable than scores of small ones.  Theoretically, the answer is clearly yes.  Practically, the answer is probably no.  If we are to choose between being stabbed 80 times and being stabbed once, we must consider which is more likely to be fatal.  Once in the guts is not the right choice if we can choose being pricked in our extremities.