The Plan?
This article (with a slightly more in-depth alternate article here) by Charles Murray has an interesting proposal to completely scrap the current welfare state in America--regular welfare, social security, medicare/medicaid, everything--and replace it with a flat, all-encompassing payout of $10K per year to every adult American, $3K of which must be spent on health care (either health insurance or actual medical costs). I don't know that I like the plan well enough to defend it in a debate, but neither am I ready to dismiss it.
One of the biggest things the plan has going for it is exemplified by the first sentence of the referenced article: "This much is certain: The welfare state as we know it cannot survive." It is plain economic reality that barring some major reforms, welfare & entitlement spending will eventually go bankrupt, or bankrupt this country. It probably won't happen in the lifetimes of today's Baby Boomer generation, and there's a chance it might not even happen in the lifetimes of the Gen X crowd (my genereation). But beyond 2040 or 2050, all bets are off. On our current course, the Gen Y people are in for some miserable, terrifying retirement years. Younger generations will have it bad years or decades before they can even think of retiring.
And for what? Because Americans today, especially the politicians, don't have the will, the guts or the intellect to do something meaningful about this ass-backwards train wreck we're riding (or which is riding us).
"The plan" would be expensive at first: around $350 billion in its first year above what entitlement spending costs now. (Think Iraq war + Katrina spending.) It would break even with current spending in another 5 years, and beyond that will go on to save this country (and hence us) hundreds of billions of dollars every year, and many trillions over the course of decades, trillions which could be used to pay down the nation's debt or even--I know this may sound radical to some out there--stay in the pockets of those who earned it in the first place.
By greatly simplifying the structure of the entitlement welfare state, it would realize vast efficiencies in administrative costs and general gov't overhead. (Gov't is roughly half as efficient as private charities in terms of the fraction of dollars that ultimately reach the intended recipients.) It would also put more personal responsibility into the hands of recipients, something which some people might object to, but let's face it: if someone's going to blow their welfare handout on drugs, booze or gambling, they're already doing so now.
The effect this plan would have on jobs is mixed. It is pretty hard, though not impossible, to eke out an existence on $10K/year. (Actually $7K, as $3K would be diverted to health care.) This would put strong pressure on those currently unemployed on welfare to get at least a part-time job. On the plus side, with an income floor they would be under less time pressure to get a full-time, higher-paying job, which can be much harder to get than a part-time job if you're unemployed and/or unskilled. Current welfare is significantly reduced or eliminated for people who get part-time jobs, so with the added difficulty in getting a full-time job, it can be hard to get off of welfare.
On the other side of the jobs issue, having a comfy $10K margin to go on could encourage a lot of people to work less, switching from full-time to part-time. To be sure, those who enjoy their current jobs or don't want a reduction in income wouldn't make the move, but others may decide they would rather have more free time. This could have the effect of reducing the tax base necessary to pay for this program. It could just as well, however, create enough of a pull on labor, especially in the part-time job market, to employ many currently-unemployed.
So at this point I'm not sure if this plan would be a net benefit, a negative, or a wash. What I do know, though, is that it is worth looking at by this country's policymakers.
One of the biggest things the plan has going for it is exemplified by the first sentence of the referenced article: "This much is certain: The welfare state as we know it cannot survive." It is plain economic reality that barring some major reforms, welfare & entitlement spending will eventually go bankrupt, or bankrupt this country. It probably won't happen in the lifetimes of today's Baby Boomer generation, and there's a chance it might not even happen in the lifetimes of the Gen X crowd (my genereation). But beyond 2040 or 2050, all bets are off. On our current course, the Gen Y people are in for some miserable, terrifying retirement years. Younger generations will have it bad years or decades before they can even think of retiring.
And for what? Because Americans today, especially the politicians, don't have the will, the guts or the intellect to do something meaningful about this ass-backwards train wreck we're riding (or which is riding us).
"The plan" would be expensive at first: around $350 billion in its first year above what entitlement spending costs now. (Think Iraq war + Katrina spending.) It would break even with current spending in another 5 years, and beyond that will go on to save this country (and hence us) hundreds of billions of dollars every year, and many trillions over the course of decades, trillions which could be used to pay down the nation's debt or even--I know this may sound radical to some out there--stay in the pockets of those who earned it in the first place.
By greatly simplifying the structure of the entitlement welfare state, it would realize vast efficiencies in administrative costs and general gov't overhead. (Gov't is roughly half as efficient as private charities in terms of the fraction of dollars that ultimately reach the intended recipients.) It would also put more personal responsibility into the hands of recipients, something which some people might object to, but let's face it: if someone's going to blow their welfare handout on drugs, booze or gambling, they're already doing so now.
The effect this plan would have on jobs is mixed. It is pretty hard, though not impossible, to eke out an existence on $10K/year. (Actually $7K, as $3K would be diverted to health care.) This would put strong pressure on those currently unemployed on welfare to get at least a part-time job. On the plus side, with an income floor they would be under less time pressure to get a full-time, higher-paying job, which can be much harder to get than a part-time job if you're unemployed and/or unskilled. Current welfare is significantly reduced or eliminated for people who get part-time jobs, so with the added difficulty in getting a full-time job, it can be hard to get off of welfare.
On the other side of the jobs issue, having a comfy $10K margin to go on could encourage a lot of people to work less, switching from full-time to part-time. To be sure, those who enjoy their current jobs or don't want a reduction in income wouldn't make the move, but others may decide they would rather have more free time. This could have the effect of reducing the tax base necessary to pay for this program. It could just as well, however, create enough of a pull on labor, especially in the part-time job market, to employ many currently-unemployed.
So at this point I'm not sure if this plan would be a net benefit, a negative, or a wash. What I do know, though, is that it is worth looking at by this country's policymakers.
posted by Unknown at
3/29/2006 12:31:00 PM
0 Comments:
Post a Comment
<< Home