On Thu, 29 Jun 2000, Damien Broderick wrote:
> This is one of the main motives for supporting a guaranteed income
> floor, or negative income tax, or some such measure (in so far as one
> continues to live in a community with taxing and redistributive powers).
> According to analyses I've read, this is cheaper than more bureaucratic
> interventions, less offensive to the recipient, more likely to lead to
> small local efforts. In the short term, anyway, before pre-Singularity
> earthquakes screw *everything* up. (Robin Hanson has indicated that he
> disagrees with this, which does give me pause.)
While the idea is nice (and doable with an enormous "if"), there are a
couple tough problems with it. First of all, you need to start with an
enormous positive cash balance to make the system economically viable; a
Ponzi scheme would quickly collapse and the taxation required would
destroy the economy. Accruing a real surplus this large is virtually
unheard of for any government of significance -- "easier for a camel to
pass through the eye of a needle...". Second, there are a couple obvious
opportunities for abuse. For one, how would differences in cost of living
be accounted for? The poverty line in the greater Silicon Valley area
would put one in the upper middle class in North Dakota. There are
enormous deltas in costs of living for areas that are geographically
proximal, allowing one to live a middle-class existence on any minimum
income that is large enough to be really useful. Second, it would have
difficulty accounting for groups of single adults that effectively act as
a family group. This is quite common in Silicon Valley, mostly as a
response to the high costs of living, and is how I've always lived in
Silicon Valley. If you have 5-7 adults living in the same house for many
years (and I usually have), maximizing the economies of scale, one could
lead a very easy existence if guaranteed poverty line income. Heck,
that's how we survived just fine when I was earning well below the poverty
line. A minimum income in that situation would have allowed me and all my
friends to live a lifestyle that probably is a good bit better than you
envision.
These are serious problems, and I don't know that they could be "solved"
without setting up a bureaucracy that is as bad or worse as the current
ones.
> > Another statistic that should bother the more-or-less pro-welfare
> > crowd: Over the long-term in the US, as the amount spent per person on
> > welfare has increased, the number of eligible recipients also has
> > increased.
>
> Your implication is that leeches breed leeches, or encourage would-be
> leeches. But a confounding factor you've apparently ignored, of course, is
> that the entire economic base has skewed enormously in that period.
Actually, that wasn't my point. My point was that there is something
very bad economically about "taxation-for-welfare" systems. The government
has not figured out a way to support the non-productive without causing
adverse economic impacts on the individuals they are taxing. It is quite
possible that the system is dragging more people down through taxation
(both direct and indirect -- business taxes are a killer) than it is
lifting up through welfare.
Overall, the U.S. welfare situation actually looks a lot better than most
western countries. The U.S. welfare rate is currently around
2.5% of the population, and it rarely tops 4.5%. In comparison, I believe
virtually all the more aggressively socialist states are into the double
digits and have been for a long time, many getting worse.
> The glory of late-industrial/postindustrial civilisation is that so much of
> the horrendous toil of the world's work has been replaced by machines; the
> corollary is the devastating loss of work and earned income by those
> displaced and untrainable for the new jobs. If some leeches crawl into that
> category, it's still cheaper to let them scam the system minimally than to
> police and hound them out (or so I gather).
Looking at the various statistics for the U.S. it would appear that we
don't have more than maybe 1% of the population that I would classify
as real "leeches". Most people will work if there is an
opportunity and very few blatantly abuse the system. However, supporting
the "leeches" puts a strain on the economy and on the productive class
that is disproportionate to their numbers. In fact, from the best I can
tell, the leeches take more from the economy when they are not working,
than they are likely to add when they are. Quite frankly, these people
are a social evil and should be tossed to the curb unless some individual
values them enough to compensate society by supporting the leech. On some
levels, from the perspective of society, there is no difference between a
leech and a garden variety thief. I think a more selective filter (and
lower taxes) would allow charity to do as good a job as government
welfare, but cheaper.
-James Rogers
jamesr@best.com
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