Some Democrats call it a “minimum guaranteed income,” others call it a “universal basic income.”
By any name, it means taking money paid to the government by hardworking, taxpaying Americans and giving it to … everyone (although mostly to people who don’t pay any taxes at all — about 47% of Americans, Forbes reported last year).
Congress has already approved spending $2.2 trillion to bail out Americans and businesses after urging all states to shut down businesses in an effort to stem the spread of the coronavirus, which primarily kills the elderly and those in ill health. Reports are circulating in Washington that Congress is mulling another $1 trillion giveaway.
Now, House Speaker Nancy Pelosi (D-CA) is floating the idea of just giving everybody money all the time, with no strings attached.
“As we go forward, let’s see what works,” Pelosi said Tuesday on “MSNBC Live.”
“What is operational, and what needs other attention? Others have suggested a minimum … guaranteed income for people. Is that worthy of attention now? Perhaps so because there are many more people than just in small business and hired by small business as important as that is to the vitality of our economy and other people who are not in the public sector meeting our needs in so many ways that may need some assistance as well,” she said.
“But again, recognize the realities of it all. What is the execution of it? What is working? And … what are we getting our money’s worth on? I think we have to look at that, too. How is the money being spent? With all the best intentions in the world, but nonetheless, we want the money to go where it needs.”
Of course, the federal government would control the handouts — and they would, of course, need to come from taxpayer funds. The cost would be astronomical. To hand out $10,000 to every adult in America would require taxes to be raised by 10%, Nasdaq wrote in April 2017.
And the Heritage Foundation’s Vijay Menon writes that such programs, which have been tried unsuccessfully in Europe, has a detrimental effect on work ethics.
“This has been tried before—and the results weren’t pretty,” Menon wrote, noting that from 1968 to 1980, there were four “random, controlled trials across six states designed to test the negative income tax. Similar to the universal basic income, a negative income tax guarantees a minimum income, which phases out as earnings increase.”
…[T]he experiment’s planners hoped that providing a minimum income would encourage work. But their worst fears were realized when the results showed the opposite.
Evaluations of the experiment found that the negative income tax reduced “desired hours of work by 9 percent for husbands, by 20 percent for wives, and by 25 percent for single female heads of families.”
For single males who were not heads of households throughout the experiment, the reduction in hours worked per week was a staggering 43 percent.
If recipients lost their jobs during the experiment, they experienced significantly longer spells of unemployment compared with non-recipients—more than two months longer for husbands, almost a year longer for wives, and longer still for single mothers.