America, We Should Talk About a Basic Income

Source: Arif Ali/AFP/Getty Images
Arif Ali/AFP/Getty Images

“Separate an individual from society, and give him an island or a continent to possess, and he cannot acquire personal property. He cannot be rich. So inseparably are the means connected with the end, in all cases, that where the former do not exist the latter cannot be obtained. All accumulation, therefore, of personal property, beyond what a man’s own hands produce, is derived to him by living in society; and he owes on every principle of justice, of gratitude, and of civilization, a part of that accumulation back again to society from whence the whole came.”

Those words were not written by a socialist dictator, or a radical left-wing communist. They were, however, written by a revolutionary by the name of Thomas Paine, as a part of his 1795 essay Agrarian Justice. This is the same guy who wrote Common Sense, Rights of Man and Age of Reason, and who stood tall with the founding fathers during the American revolution and the formation of our country. And the words in that particular passage echo louder today than perhaps ever before.

Many Americans are probably not familiar with the term ‘basic income’, but it’s probable that you already have a working understanding, at least on some level, of what it is. Essentially, a basic income is a guaranteed income of a certain amount for every citizen of a given nation or state. It’s a handout, really, supplied by the government, to everybody — every citizen. No strings attached.

Sounds crazy, right?

The idea is definitely not new. In fact, it has been discussed by economists, philosophers, and business leaders for centuries. The concept may seem completely out of place in our current day and age, but it may be time to actually give basic income some serious consideration, and at the very least bring the concept into the national dialogue. Right now, America is polarized both politically and economically. Poverty rates are high, the inequality gap keeps growing, and virtually all economic gains since the last recession have gone to the wealthiest percentile. One way to combat all three of those issues is through instituting a basic income.


Americans love handouts. They just hate it when they go to other people, typically. That’s exactly what will happen, however, if the basic income idea is to be taken seriously. Many people are hurting, and those who have a lot will not be happy if they are expected to give what they have to those who have very little. Ideas like this have been called an assault on freedom and the individual. While perhaps a bit melodramatic, that does have some merit. But the question is whether or not the nation’s richest are willing to watch their entire nation rot away beneath them just so they can hold on to capital that they, by and large, don’t need.

America has long been considered the wealthiest nation in the world, though it sure doesn’t feel like it for a large portion of the population. The poverty rate actually just declined for the first time since 2006. Poverty rates around the country range from a low of 8.3% in Utah all the way up to 22.5% in Mississippi. Those numbers encapsulate the struggles of millions, most of whom are more than willing to work hard to secure a future for themselves and their families.

“Despite four years of economic recovery in the U.S., far too many Americans are still living in poverty. This is particularly true in my home state of Mississippi, where poverty increased from last year and thousands of people lack health insurance,” Reilly Morse, president of the Mississippi Center for Justice, told The Washington Post.

“Talk of economic recovery masks the reality that many Mississippi families — along with working families in other states — continue to struggle to find work, pay bills and build economic security.”

Source: The Economist
Source: The Economist


The widening inequality gap is one of the major reasons America is still struggling with poverty, despite the large amounts of wealth and prestige held by the nation in the international community. That wealth is largely concentrated in a few areas around the country, not spread throughout the population, and those concentrated pockets are effectively acting like gravity wells at the current time.

As administrations in charge of dictating fiscal and economic policy come and go in four or eight-year terms in the U.S., we get to experiment with different philosophies and methods of running the economy. Some things have worked, others clearly haven’t. All in all, the one thing that has happened is that wealth is being transferred towards those who already have it, and the poor are continually getting the short end of the stick.

A strong belief in certain economic ideologies often doesn’t help either, as people tend to get caught up defending their positions, regardless of whether or not they make sense. This often takes the form of the classic ‘capitalist versus socialist’ argument, which ends up going nowhere. Both systems have their pros and cons, and the best solution is likely found in the middle. By depending on the wealthy and ‘trickle-down’ economic systems, we’re only perpetuating the system. Tax breaks often go to the rich and business owners, with the expectation that that will help free up capital to hire more workers and increase wages. But we’re finding out it’s not as simple as that.

Nick Hanauer, a wealthy entrepreneur and venture capitalist, as well as self-described member of the 1% agrees as well. “Inclusive economies always outperform and outlast plutocracies. That’s why investments in the middle class work, and tax breaks for the rich don’t. The oldest and most important conflict in human societies is the battle over the concentration of wealth and power,” Hanauer wrote in an article for Yes! Magazine.

“Those at the top will forever tell those at the bottom that our respective positions are righteous and good for all. Historically we called that divine right. Today we have trickle-down economics.”

But the data indicate that the opposite is actually happening. According to research by Emmanuel Saez of the University of California, Berkeley, we also have almost all economic gains, about 95% between 2009 and 2012, going to the top 1%.

Source: John Moore/Getty Images
Source: John Moore/Getty Images

How would it work?

While even bringing up the idea of a basic income in today’s legislative houses is sure to go absolutely nowhere, and possibly even inflict political damage, we can look to other countries for examples. Switzerland is the most recent nation to consider it, although it was voted down. But getting the concept to a vote is an incredible feat in itself. Imagine such a thing actually making it to the ballot in America? It may actually inspire people to get down to the polling stations on election day.

The Swiss planned on giving every citizen a yearly lump sum of 30,000 Swiss francs, and they would be free to do with it as they please. As PBS reports, that equals roughly $34,000 in U.S. dollars. If the idea were to come up in America, the thought of handing out $34,000 checks to everyone in the country would be met with fierce resistance, but also have its supporters as well. While the Swiss account is really the only modern example of the basic income idea even becoming a national headline in the international scene, when you break it down, it could make a lot of sense for Americans to embrace it as well.

Danny Vinik from Business Insider does a good job of breaking it down to the fundamentals. Essentially, every U.S. citizen over the age of 21 would receive a check from the government on a monthly basis. In 2012, this would tally up to 179 million people. If these checks, spread out over the course of a year, totaled up to the current defined poverty line of $11,945, it would cost $2.14 trillion.

Not a paltry sum by any stretch, but if it were instituted, we’d also be getting rid of all government benefits. No more food stamps, unemployment benefits, housing assistance or Medicaid. It’s all gone, and now consumers are free to spend that money as they please, and how it’s needed. That does lessen the burden some, but helps put things in perspective. Government revenues would also go up, as people would have income on which they can pay taxes. We could also lessen the amount to, say, $5,000 annually and considerably lessen the cost to below $1 trillion. We currently spend $682 billion on defense alone, so its not entirely unfeasible.

Source: Thinkstock
Source: Thinkstock

Obviously, the biggest issue with the concept of a basic income is that it disincentives people to work. If we handed out checks to everyone, yes, there would probably be some people who chose to spend that money poorly and perhaps not go to work. But it’s more likely that people would simply use it as a place to start, and continue to work to bring in extra money for leisure, retirement, and everything else. After all, $12,000 is really not enough to live how most people in America would like to; it would simply help them food and living costs. For those who are unemployed or can’t find a job, it would help pay for medicine, utilities and anything else they need.

Essentially, we’re taking the decisions of how to spend our tax dollars out of the government’s hand, and putting them back into the taxpayer’s hand. Leave the decision making to the people who know what they need. When you dig a little deeper, the idea can appeal to both the left and right of the political spectrum. Liberals can be happy that people are being lifted out of poverty, and conservatives happy that the government is being downsized, and that decisions are being left up to individuals.

The other big issue with a basic income is that the majority of funding will need to come from the wealthiest segment of the population. This isn’t all that different than we have now, where the majority of income taxes are paid by the upper classes, as so eloquently put by Mitt Romney in his infamous ’47 %’ speech. There are plenty of other issues to work out as well, including how to mesh a basic income with immigration and existing social security programs (if social security is to continue to exist, which it likely wouldn’t).

There are a lot of things to consider, but is basic income ready to be implemented in America? That’s debatable, but without a doubt our politicians, and probably a good portion of their constituents, aren’t ready to talk about it. But it does need to be discussed, and embracing the idea now isn’t a terrible thing. If the economy continues to worsen for the majority of Americans, it’s an idea that could really pick up steam in a decade or two.

The idea has been supported by Milton Friedman, Fredreich Hayek and even Martin Luther King. It’s not as crazy as it seems on the surface, and can be economically feasible if we try. You don’t need to jump on the basic income wagon right now, but giving it some serious thought about how it can help the economically disadvantaged — whose ranks are growing every day — couldn’t hurt.
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