People have been offering programs to eliminate poverty for 2000 years, yet it persists in the richest country on earth. I claim the reason for poverty is that poor people don’t have enough money, it’s that simple. There are lots of ways to get more money to the poor and some, or all, have been tried at one time or another: tax breaks, reverse taxes (EITC), food stamps and other in-kind handouts, welfare payments and
better wages, among others.
Supposed we tried something that has never been done before,
guaranteeing a minimal standard of living to everyone.
A full proposal after the fold.
(crossposted at dKos)
The
country is certainly wealthy enough to afford this. The most
optimistic poverty programs don’t even approach the amount of
money being spent on Iraq, for example. Well there would be
objections about those people who don’t “deserve” it. There
would, supposedly, be a rise in free loaders. That’s OK too, we
can afford some free loaders as well. This can be kept under
control by social disapprobation. Just like Humvees are falling
out of favor with the rich, because of the visible sight of waste
it presents, those not doing their part could be made to feel
uncomfortable.
What would be the benefits? Higher incomes
would lower crime, improve health care, create a better educated
workforce and produce a reduction in class resentment.
Eliminating the expenses of crime control and remedial health
care could easily exceed the costs of the program.
What is preventing this? A distortion of the
Judeo-Christian precepts of charity. Rather than helping those
less fortunate, a mean-spirited brand of Puritanism underlies much
of political policy, and, implicitly or explicitly, seeks to punish
or blame the victims.
How could this be financed? There are any
number of ways, equalizing tax collections so that the wealthy
pay more, eliminating runaway militarism and using the money for
social programs, or taxing corporate earnings more effectively,
for example. Let’s assume that we provide, on average, $10,000 to
each of the approximately 40 million poor people in the US. This
comes to $400 billion per year. For reference this is slightly
less than the US military budget.
Crime: A recent study puts the direct costs
of crime at $105 billion and when pain and reduced quality of
life are added the number rises to $450 billion. (reference: Cost of Crime). These figures don’t include the savings from needing
a smaller police, judicial and prison system. With no economic
insecurity we can expect that what crime remains will be
motivated by greed. This type of crime is usually white collar or
involved with illicit substances and tends to result in less
violence and damage to property.
Health: For health care the figure for
economic losses due to under insurance (caused by poverty) ranges
from $65-130 billion. Reduced productivity due to health issues
is also estimated at an additional $87-126 billion. The economic
value of a diminished quality of life due to ill health is not
included. (reference:
UN Report).
Conclusion: Just these two factors would almost pay for the
costs estimated above. When the better education and healthier
childhoods of the poor are added in it is easy to see that even
$400 billion is affordable. In addition, the existence of a
minimum standard of living for all would increase the overall
economic activity. The poor are currently under spending compared
to their needs. So the additional funds that they would receive
would be quickly recycled into the economy in terms of purchases
of goods and services.
I have written a short essay on the issues associated with
wealth (re)distribution here:
Wealth Distribution.
