Thursday, October 9, 2014

Travis Gettys — Occupy organizer calls for guaranteed income: Cost of poverty greater than eliminating it

It costs more to keep poverty than it would cost to eliminate it, says author and Occupy Wall Street organizer David DeGraw.
The writer told Acronym TV in a recent interview that his own research had convinced him that guaranteed income was the most effective way to fix wealth inequality.
DeGraw told host Dennis Trainor Jr. that it would cost just 0.5 percent of the wealth currently held by the top 1 percent “to eliminate poverty nationwide.”…
Analysis wanting.

The Raw Story
Occupy organizer calls for guaranteed income: Cost of poverty greater than eliminating it
Travis Gettys

1 comment:

Dan Lynch said...

He seems to be calling for a UBI, not a means-tested BIG.

“We have a $2 trillion social safety net in this country right now. With that $2 trillion, you could give $20,000 to every non-millionaire household.

I dunno what he is counting in that $2 trillion safety net, but prolly Medicaid/Medicare/SS. We sure as hell don't spend $2 trillion on food stamps!

My back of the envelope cost estimate is $250 billion for a means-tested $250/week BIG, or $2.5 trillion for a $250/week UBI.

DeGraw said negative effects of poverty, such as increased health care costs and costs associated with crime, already cost more than it would to simply pay $40,000 a year to every non-millionaire household

The Mincome experiment suggests that a BIG might indeed improve health slightly and reduce crime slightly, but only slightly. People would still get cancer, still have heart attacks, still need nursing homes, etc..

About half of crime is drug related so the simplest way to reduce the cost of crime would be to de-criminalize drugs.

I'm glad people are talking about a BIG but unfortunately it's hard to take most of the UBI crowd seriously because they don't do the math and/or they don't understand functional finance budgeting.

The questions we need to ask regarding funding a BIG are 1) what is the optimal size budget deficit in the current economy? 2) what other things should we be adding to the budget? (green energy, free daycare-Phd, free national heath care, etc.) and 3) do you really want to handicap your BIG proposal by linking it to a tax increase?

By the time you budget green energy, infrastructure, health care, and education, we would be at full employment, with not much wiggle room in the budget.

So then adding a UBI would require either raising taxes or else cutting other programs.