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mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Fri Nov 19, 2010 3:52 pm Post subject: To end poverty, guarantee everyone in $20,000 a year? |
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http://www.theglobeandmail.com/news/national/to-end-poverty-guarantee-everyone-in-canada-20000-a-year-but-are-you-willing-to-trust-the-poor/article1806809/singlepage/#articlecontent
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But what if we gave Ms. Gray and other poor Canadians something to count on: cash directly in their pockets, with no conditions, trusting people to do what's right for them? It's a bold idea, and it runs counter to the paternal approach to poverty that polices what is done with �our� money and tries to strong-arm the poor into better lives.
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The idea of giving money to the poor without strings is not new. It melds altruism and libertarianism, saying both that the best way to fight poverty is to put cash in poor people's pockets and that people can make their own choices better than bureaucrats can. As a result, it can find support in theory from both left and right.
It has been tested with success in other countries, and now it has re-entered the Canadian political conversation.
This week, a House of Commons committee on poverty released a report proposing a guaranteed basic income for Canadians with disabilities, on the model already available to seniors. The Senate released a similar report this spring calling for a study of how it would work for all low-income Canadians.
In Quebec, a government task force went further, recommending a minimum guaranteed income starting at $12,000 for everyone in the province.
Economists continue to bounce the idea around. Two years ago, Canadian researchers started their own chapter of the Basic Income Earth Network (a group founded in Belgium in 1986) to co-ordinate an ongoing discussion. Some say it might actually accomplish what political rhetoric has been promising for years: the eradication of poverty.
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In the past decade, the number of poor households in the world receiving direct financial transfers has grown rapidly. European nations such as France and Austria, which spend slightly less than one-fifth of their gross domestic products on cash transfers to low-income citizens, have had far more success reducing poverty than Canada has.
But the shift has largely been led by developing nations. These programs � now in at least 45 countries, helping 110 million families � range from social pensions and education stipends in South Africa to Brazil's Bosla Familia guaranteed grant to families. Some come with conditions, such as sending children to school or the doctor, but many do not. Studies have shown significant benefits, in particular that kids get healthier.
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In a controlled study conducted by the World Bank, researchers found that giving cash transfers to families in Malawi increased school attendance of girls and young women by the same amount whether or not a condition was attached.
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The idea of a guaranteed annual income has been tested before in Canada � in the mid-1970s, in Dauphin, Man., a farming town with then about 10,000 residents.
In the only experiment of its kind in North America, every household in Dauphin was given access to a guaranteed annual budget, subject to their income level. For a family of five, payments equalled about $18,000 a year in today's dollars.
Politicians primarily wanted to see if people would stop working. While the project was pre-empted by a change in government, a second look by researchers has found that there was only a slight decline in work � mostly among mothers, who chose to stay home with their children, and teenaged boys, who stayed in school longer.
Evelyn Forget, a researcher in medicine at the University of Manitoba, reports that Dauphin also experienced a 10-per-cent drop in hospital admissions and fewer doctor visits, especially for mental-health issues.
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But a guaranteed-annual-income program would be expensive. In developing nations, a small amount of money can bring about big changes. In a country like Canada, the basic income needed to pull everyone out of poverty would have to be larger, balanced against higher taxes.
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Conservative Senator Hugh Segal, one of the more vocal proponents of no-strings-attached aid for the poor, points out that the guaranteed-income program for seniors has greatly reduced poverty, especially among women.
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The article is long but worthy of a read.
I am very fiscally conservative politically. I think this is a great idea. I don't think it would be as expensive as some of the people in the article suggest. With a minimum income much of the existing welfare apparatus (which is huge and expensive) could be done away with. There would be less demand for government assistance on balance. |
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recessiontime
Joined: 21 Jun 2010
Location: Got avatar privileges nyahahaha
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| Posted: Fri Nov 19, 2010 4:44 pm Post subject: |
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| When I look at it, all I can think of is a bazillion ways to abuse the crap out of it. If I was a non-Canadian, this is just more of a reason to immigrate there for that sole reason. |
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jvalmer
Joined: 06 Jun 2003
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| Posted: Fri Nov 19, 2010 4:51 pm Post subject: |
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http://en.wikipedia.org/wiki/Basic_income_guarantee
http://www.basicincome.org/bien/
I say to avoid a stigma being attached to it, the money should be unconditional to every citizen, even if you live overseas. Maybe for every citizen over the age of 14 or 16 or 18 to make it cheaper. Non-citizens would not be eligible. Or limit it to only natural born citizens that spent at least x-number of years living in Canada. But I find funding it to be a big issue, but I think if eliminate OAS, welfare, unemployment and some education subsidies it could fund a large chunk of it.
Canada's population roughly 35 million
35 million x $20,000 = $700 billion
Lets say 33 million are citizens
33 million x $20,000 = $660 billion
Say 25% are under 18
33 million x 0.75 x $20,000 = $495 billion
Just limit it to natural born citizens 18 and over say, I'll say 90% are natural born citizens.
33 million x 0.75 x 0.90 x $20,000 = $445.5 billion |
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jvalmer
Joined: 06 Jun 2003
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| Posted: Fri Nov 19, 2010 4:53 pm Post subject: |
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| recessiontime wrote: |
| When I look at it, all I can think of is a bazillion ways to abuse the crap out of it. If I was a non-Canadian, this is just more of a reason to immigrate there for that sole reason. |
I think you would have to limit it to either citizens or natural born citizens that spent at least 10 consecutive years in Canada. |
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JMO
Joined: 18 Jul 2006
Location: Daegu
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| Posted: Fri Nov 19, 2010 5:35 pm Post subject: |
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| I think its a good idea. Even if it abused by the minority, most people just want to get themselves out of poverty. The example of a mother wanting to go back to school if she can afford to feed and clothe her kids is a great one. It could really help people make something of themselves. |
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recessiontime
Joined: 21 Jun 2010
Location: Got avatar privileges nyahahaha
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| Posted: Fri Nov 19, 2010 5:46 pm Post subject: |
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| jvalmer wrote: |
| recessiontime wrote: |
| When I look at it, all I can think of is a bazillion ways to abuse the crap out of it. If I was a non-Canadian, this is just more of a reason to immigrate there for that sole reason. |
I think you would have to limit it to either citizens or natural born citizens that spent at least 10 consecutive years in Canada. |
you'll most likely see identity theft, people collecting money on behalf of already dead people. Either way, people like me that overseas with citizenship in at least 2 other countries would stand to benefit tremendously for doing nothing. |
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Fox
Joined: 04 Mar 2009
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| Posted: Fri Nov 19, 2010 6:00 pm Post subject: |
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| recessiontime wrote: |
| When I look at it, all I can think of is a bazillion ways to abuse the crap out of it. If I was a non-Canadian, this is just more of a reason to immigrate there for that sole reason. |
A policy like this would clearly mandate immigration reform, especially in a country like Canada.
Saying something like this is open to abuse to some extent misses the point. I think more people are waking up to the fact that the entire population simply isn't required to labor to meet the needs and wants of the entire population. Unemployment (and underemployment) is going to keep going up over time no matter what, especially if globalization is embraced, but to a fair extent even if its not; as I think Kuros pointed out some time ago, efficiency gains from automation and computers also reduce the amount of human labor required to produce things, and that's going to keep increasing. Our choices are either to condemn people to poverty, or to adopt social programs to create a minimum standard of living for all citizens.
Anyone who wants more than that minimum standard of living and has the capability to add something to society is going to do it. Yes, there will likely be a segment of society whose income consists of nothing more than these handouts -- just like there's a segment of British society "perpetually on the dole" -- but I think that's a coming reality that countries are simply going to have to embrace.
I think it's a good idea, though admittedly that's because it's proposing something I've all ready declared myself a proponent of. I also think it's only a first step; as the labor of fewer and fewer people are required to meet society's needs, governmental involvement is going to be further necessitated.
| recessiontime wrote: |
you'll most likely see identity theft, people collecting money on behalf of already dead people. Either way, people like me that overseas with citizenship in at least 2 other countries would stand to benefit tremendously for doing nothing. |
Identity theft isn't immensely hard to stop in this kind of situation, especially if you take a systematic approach built from the start to stop it, instead of trying to cobble together half-assed solutions as you go. It's a concern, but one that can -- and would need to be -- dealt with.
Jvalmer's "money for overseas citizens" idea would clearly have to go, though; paying out to someone who essentially jumps ship doesn't make any sense at all. Limiting it to natural born citizens over the age of 18 sounds like a good idea. |
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recessiontime
Joined: 21 Jun 2010
Location: Got avatar privileges nyahahaha
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| Posted: Fri Nov 19, 2010 6:22 pm Post subject: |
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okay Foxman, let's say everyone is guaranteed 20k income for doing nothing:
Wouldn't prices also inflate since people will presumably be making more money?
Won't you have to keep giving out more and more money to keep up with inflation?
Won't the government have to tax people more and more just to keep up with this? |
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Louis VI
Joined: 05 Jul 2010
Location: In my Kingdom
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| Posted: Fri Nov 19, 2010 6:22 pm Post subject: |
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| It would certainly cut out expensive administration, requiring less government bureaucracy. |
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jvalmer
Joined: 06 Jun 2003
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| Posted: Fri Nov 19, 2010 6:24 pm Post subject: |
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| Fox wrote: |
| Jvalmer's "money for overseas citizens" idea would clearly have to go, though; paying out to someone who essentially jumps ship doesn't make any sense at all. Limiting it to natural born citizens over the age of 18 sounds like a good idea. |
I think you will have to include citizens overseas if they maintain ties to Canada, like a bank account, driver's license, etc. This would be to encourage Canadians to take up paying opportunities where ever they may be.
But it would have to be limited to natural born citizens that spend x-number of consecutive years living in Canada. Maybe make it natural born citizens born in Canada that lived in Canada from birth-to-<whatever age> consecutively, to be eligible for the money. This would take out a large portion of people that are born in Canada for only the passport. Actually I would be more in favor making it at the same age that it is legal for a kid to take employment, like 14 or 16. But 18 is a good age to start the program off at first. |
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jvalmer
Joined: 06 Jun 2003
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| Posted: Fri Nov 19, 2010 6:27 pm Post subject: |
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| recessiontime wrote: |
okay Foxman, let's say everyone is guaranteed 20k income for doing nothing:
Wouldn't prices also inflate since people will presumably be making more money?
Won't you have to keep giving out more and more money to keep up with inflation?
Won't the government have to tax people more and more just to keep up with this? |
Many households will have more than 1 person receiving this money. If you had a married couple with a couple of kids over the required age, then you would have potentially 3 (or more) times the money. That would be more than enough to cover factors like inflation. Plus on top of that whatever job they have would more than supplement costs. |
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recessiontime
Joined: 21 Jun 2010
Location: Got avatar privileges nyahahaha
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| Posted: Fri Nov 19, 2010 6:34 pm Post subject: |
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| jvalmer wrote: |
| Fox wrote: |
| Jvalmer's "money for overseas citizens" idea would clearly have to go, though; paying out to someone who essentially jumps ship doesn't make any sense at all. Limiting it to natural born citizens over the age of 18 sounds like a good idea. |
I think you will have to include citizens overseas if they maintain ties to Canada, like a bank account, driver's license, etc. This would be to encourage Canadians to take up paying opportunities where ever they may be.
But it would have to be limited to natural born citizens that spend x-number of consecutive years living in Canada. Maybe make it natural born citizens born in Canada that lived in Canada from birth-to-<whatever age> consecutively, to be eligible for the money. This would take out a large portion of people that are born in Canada for only the passport. Actually I would be more in favor making it at the same age that it is legal for a kid to take employment, like 14 or 16. But 18 is a good age to start the program off at first. |
It would supposedly be no questions asked so I'd just do the paper work in Canada and leave. Seeing how I've missed out on 10 years of 20k payments, I might ask for lump sum from the government too. 
It would be interesting if this happened though and who knows it might. There is a lot of under and unemployment in Canada with low birth rate and the population is only kept up to par with the large number of immigrants they bring in. At some point, they might. I just don't see it becoming a reality in this decade. |
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recessiontime
Joined: 21 Jun 2010
Location: Got avatar privileges nyahahaha
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| Posted: Fri Nov 19, 2010 6:37 pm Post subject: |
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| jvalmer wrote: |
| recessiontime wrote: |
okay Foxman, let's say everyone is guaranteed 20k income for doing nothing:
Wouldn't prices also inflate since people will presumably be making more money?
Won't you have to keep giving out more and more money to keep up with inflation?
Won't the government have to tax people more and more just to keep up with this? |
Many households will have more than 1 person receiving this money. If you had a married couple with a couple of kids over the required age, then you would have potentially 3 (or more) times the money. That would be more than enough to cover factors like inflation. Plus on top of that whatever job they have would more than supplement costs. |
I understand you are salivating over your keyboards with excitement but you haven't address many of the questions I have posed. |
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Fox
Joined: 04 Mar 2009
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| Posted: Fri Nov 19, 2010 6:41 pm Post subject: |
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| recessiontime wrote: |
okay Foxman, let's say everyone is guaranteed 20k income for doing nothing:
Wouldn't prices also inflate since people will presumably be making more money? |
It depends on what that money gets used on, and what it would otherwise be used on. My suspicion is that the net inflation in prices would be pretty minimal and targeted on specific products. Cheap housing would probably get a bit more expensive, and "low class luxuries" like junk food might get a bit more costly, with both leveling off after an initial small adjustment. After all, they're not printing off money, they're redistributing it; it shouldn't be much more inflationary than any other type of redistribution. I'm about as afraid of the inflationary impact of this as I am of the inflationary impact of Social Security.
| recessiontime wrote: |
| Won't you have to keep giving out more and more money to keep up with inflation? |
Not necessarily; the goal of this project is to create a minimum standard of living. So long as you aren't printing money out of nowhere, I don't think there will be enough inflation for that goal to be interfered with. They'll only have to give more money if the pool of total money swells substantially, and if the pool swells substantially they'd still be giving the same "purchasing power", even if they were giving a greater total number of Canadian dollars. Inflation should be no more of a problem for this than for anything else; so long as it's handled intelligently, it's fine.
| recessiontime wrote: |
| Won't the government have to tax people more and more just to keep up with this? |
I don't think so, as long as they fix their immigration policy, manage to keep their population steady through internal measures, and educate their citizen base sufficiently to remain productive. I think it's possible, but there's obviously plenty of ways one could screw it up. I don't think risk of failure means one shouldn't try to do something good. |
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jvalmer
Joined: 06 Jun 2003
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| Posted: Fri Nov 19, 2010 6:50 pm Post subject: |
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| Fox wrote: |
| recessiontime wrote: |
| Won't the government have to tax people more and more just to keep up with this? |
I don't think so, as long as they fix their immigration policy, manage to keep their population steady through internal measures, and educate their citizen base sufficiently to remain productive. I think it's possible, but there's obviously plenty of ways one could screw it up. I don't think risk of failure means one shouldn't try to do something good. |
The poor don't pay taxes anyways, and the rich who get the money will be giving it back in taxes too. You can pretty much eliminate welfare payments, unemployment insurance, cpp and old age security, and the administration costs that goes with it. You can even go further and reduce university tuition subsidies, or even eliminate them all together.
People would be more willing to take risks and start businesses, or go to school, or volunteer, or take that minimum wage job that they wouldn't have considered. Granted, some will do nothing, but most people between the ages 18-50 will work somewhere to be able to afford that new TV, or buy a nicer car. |
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