Just yesterday, I was discussing the Basic Income Guarantee (BIG), Full Employment Won’t Reverse Income Inequality. And this morning, Sam Seder interviewed Karl Widerquist about the very same issue on The Majority Report. Widerquist is brilliant, but probably not the best advocate for the BIG. That wasn’t the problem with the show, however. The problem was Seder who remained amazingly resistant to the idea.
His complaint, that he talked about long after Widerquist had left, seems to be that he thinks it sounds too good to be true. Somehow, it must all be complicated and perhaps even a Trojan horse to destroy the welfare state. But that isn’t what it is all about. The BIG would be a way of creating a new welfare state — a more humane welfare state. And the BIG would be the basis of it. The trap that Seder is falling into is that he’s hearing a lot of different ideas for how the BIG could be structured. That’s because a lot of really smart people are working on it. There are lots of ways to implement it.
Think of it like universal healthcare. Pretty much everyone agrees that it would be the most efficient way to structure our healthcare system — even conservatives so long as it isn’t a realistic possibility. There, everyone is covered. It’s simple. That’s the idea with BIG: everyone gets a basic income. Seder seems to think that it would be too expensive to give it to everyone and so it would too have to degenerate into a means tested program. This isn’t true. You could just give people the BIG check every month and tax it back gradually from anyone who makes more than it. There’s no need for an extra bureaucracy — we already have the IRS and this would simply be a change in the tax rules and nothing more.
There are potential problems with the BIG. But these probably just reflect the fact that I have not studied the issue carefully. My biggest concern is the disincentive to work. In particular, I would not want to see low wage workers face very high marginal tax rates because the government chips away from their BIG as much as they are making by working. As I discussed three years ago (!) in, Catch 22 for Poor in America, this is already a problem with people who get assistance. There are solutions to this in the case of healthcare, food, and cash assistance. In fact, Obamacare has already fairly well taken care of the healthcare problem. Regardless, there are solutions to these problems for the current situation and the same solutions would apply to the BIG.
I’m sure that I’ll be writing a lot more in the future about BIG. It’s only been in the last year or so that I’ve realized that a guaranteed income really is critical to our major economic problems. But it bothers me that Sam Seder is so skeptical. And to make matters worse, he took a call from a “left” libertarian who was very positive about the BIG. But he mentioned that the BIG would allow us to get rid of food stamps. I don’t necessarily think that’s true. We may want to provide the BIG only to adults and provide more traditional programs for families. Or to provide benefits to children through the school system. There are a lot of options. And we should be discussing these, because I’m sure there are libertarians who would like to use the BIG to destroy rather than strengthen the safety net.
