The Baseline Scenario: James Kwak: Friedrich Hayek Supported a Guaranteed Minimum Income

Source:The New Democrat

Friedrich Hayek, supported the Guaranteed Minimum Income and Milton Friedman supported the Negative Income Tax. Good for them and the libertarian movement, because it shows that perhaps the least politically diverse political movement in America even has some diversity with some competing ideas in it. The Negative Income Tax by the way, would replace all public assistance programs for the poor and give people in poverty one check every month that would have all of their public assistance benefits every month in one check. Bill Buckley, a Conservative Libertarian was against that.

Now here are my issues with what is called the Guaranteed Minimum Income, or the Guaranteed Basic Income, however you want to put it. As a Liberal, I want everyone to be incentivized to do as well as they can in America so they don’t have to live in poverty. The best way to move people out of poverty is to supply quality education, job training and infrastructure in communities that come up short in these areas. So kids from these communities can get themselves a good education and so their parents can finish and further their education and get themselves a good job and get out of poverty all together. That is how you beat poverty. Education, job training, infrastructure and good jobs.

Once you take away the incentive like with a Guaranteed Basic Income for Americans to do well in life and do as well as they can so they and their kids don’t have to live in poverty, because whatever job they have, or if they choose not work, because their income is now guaranteed no matter how productive they are, you’ll see a major drop in productivity in America. And as a result a major drop in economic growth. Because companies are no longer producing the quality of products their customers are accustomed to. And as a result people aren’t spending the money they normally do. Which is a big part of our economic growth, consumer spending. Why? Because no matter what we are all guaranteed a minimum income that keeps us out of poverty.