The notion that government should guarantee every citizen an annual stipend of, say, $10,000 – no strings attached, no questions asked – is being studied by politicians, economists and policy experts worldwide.
Think of it as Social Security for all. In the social democracies of Europe, Canada and South America, experiments are planned or underway. In the U.S., it's still little more than a concept – one that appears to have more conservative backers than liberal ones.
Basic-income proposals come in many varieties, and have myriad rationales.
In the 1960s, a basic income was part of the mainstream political discussion. President Richard Nixon even proposed an income floor, based on ideas developed by Daniel Patrick Moynihan, then a domestic-policy adviser. The proposal died in part because of liberal opposition to a work requirement and obstruction by a well-organized welfare lobby, Moynihan would later write.
The U.S. now has 80-plus low-income programs, each with its own eligibility rules and earnings caps.
Yes, the costs of guaranteeing 322 million Americans $10,000 a year would be prohibitive – a whopping $3.2 trillion a year.
But by excluding 45 million retirees who already receive a basic income through Social Security, the cost falls to $2.7 trillion. And if the benefit is phased out for households earning more than $100,000 (that would be 20 percent of the U.S.'s 115 million households, or about 70 million people, assuming three to a household), the cost declines to about $2 trillion. You could confine the program to adults and shrink the price tag even more, possibly to as low as $1.5 trillion.
Now we're getting close to the $1 trillion cost of all those unemployment checks, tax credits, food stamps, housing vouchers and a myriad other means-tested benefits that a basic income could supplant.
As other countries test the idea and seek improvements in their social-welfare systems, will it make sense for the U.S. to maintain an expensive crazy-quilt of programs, many of which have not lifted people out of poverty and dependence? A Social Security-for-all approach might not seem like such a fantasy after all. •
Paula Dwyer writes editorials for Bloomberg View.