Thursday, December 17, 2015

The Horrible Economics of the Basic Income Plan

Tom DiLorenzo writes:

You’re right, David (and Bob Wenzel) that Cato’s favorable discussion of welfare statist “basic income” and  (Milton) Friedmanian “negative income tax” proposals as “intriguing” is anti-libertarian.  Let’s not forget that welfare statism, as with all forms of socialism, is a type of slavery or involuntary servitude.  One person is forced by threats, violence, and intimidation to work for the benefit of others.  What else would one call such a situation other than slavery?
The economics of it is also horrible.  In Milton Friedman’s 1980 PBS “Free to Choose” series, modeled after his and his wife Rose’s book of the same title, there is a scene where Milton asks a welfare recipient if she would rather have the social worker who visited her weekly, or the social worker’s salary.  She said “the salary.”  Friedman smirked, and pontificated about the virtues of cash versus in-kind welfare subsidies.  In the lingo of economics, the recipient of the cash subsidy would “be on a higher indifference curve” or have a higher level of “utility.”   But it is well known that welfare subsidies can destroy the work ethic, as they have done for millions of people.  Replacing social workers, food stamps, etc. with cash would increase the value of welfare benefits to the recipients, therefore destroying their work ethic even more.  And Friedman’s scheme of a sliding scale of welfare cash payments (lower payments as a result of more earned income), praised by Cato, is nothing more than a form of socialistic central planning, social engineering,and an invitation for fraud.

4 comments:

  1. If a bunch of people, for a set purpose, join together to achieve a goal, it's ok by you schmuck dishonest worms as long as it's not a union and as long as it is not a majority taxing a rich minority. You lot are such hypocrites.

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  2. What are you talking about Peak? Who are you talking about?

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    1. He's talking about himself. He just doesn't realize it. It's called Psychological Projection or as RW likes to call it, Transference.

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