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I like the idea, but I'm not sure this can work. The first thing you should do is try to poke as many holes in this idea as possible, then close them and build the case as to why this would work. One problem I see is that it might hyperfocus demand toward a small number of base consumption items if a larger than anticipated number of recipients do decide to not work. This could inflate the price of these basic items and put the poorest in society back into the same boat of not having quite enough money to sustain themselves (having to pay the higher price for goods that they previously could afford etc). Then, we'd have to revisit raising the basic income level every 3-5 years instead of 8-12 years. Along with ridiculous debt ceiling fights, we'd also have basic income fights. If it's set up to avoid these fights by being indexed to the rate of inflation, people will lose ground over the long haul, since wages tend to rise faster than inflation (and if we index it to wages, it creates a problem currently being discussed with respect to social security) and those pressures from wages might ultimately drive the price of goods out of reach for those who rely on their basic income. You might also see irrational behavior on the part of some recipients, where they buy nonessential items (iphones, hdtvs, etc) and choose to go hungry or even homeless. Econ likes to assume rational behavior, but that's only so it can fit into a nice model. Fact is, plenty of people act irrationally, and while it's easy to ignore them in a model, it's hard to when they're sleeping along the street or in your stairwell. And what would we do with them? Put them in jail? Force them to spend only on essential goods? If we force them to spend on essentials, aren't we just calling it welfare by a different name? The state can't let them just linger, because their loitering has costs of it's own, not limited to growing social unrest (this is partly why privatizing social security is such a horrible idea -- the market might fail and the state will still have to bail out people's private pensions or risk unrest, probably gaining nothing but added uncertainty in the long term). Our system just might function optimally when its set up to let people choose to fail, as some surely will, and to make it just painful enough to encourage moving one's self out of poverty. Playing devil's advocate here. A shift like this would seem to have very little margin for error. |