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English

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Imagine that the United States were to scrap all its income transfer programs—including Social Security, Medicare, and all forms of welfare—and give every American age twenty-one and older $10,000 a year for life.This is the Plan, a radical new approach to social policy that defies any partisan label. First laid out by Charles Murray a decade ago, the updated edition reflects economic developments since that time. Murray, who previous books include Losing Ground and The Bell Curve, demonstrates that the Plan is financially feasible and the uses detailed analysis to argue that many goals of the welfare state—elimination of poverty, comfortable retirement for everyone, universal access to healthcare—would be better served under the Plan than under the current system. Murray’s goal, shared by Left and Right, is a society in which everyone, including the unluckiest among us, has the opportunity and means to construct a satisfying life. In Our Hands offers a rich and startling new way to think about how that goal

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Political Science

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Publié par	AEI Press
Date de parution	02 juin 2016
Nombre de lectures	0
EAN13	9781442260726
Langue	English

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In Our Hands
In Our Hands
A Plan to Replace the Welfare State
Charles Murray
REVISED AND UPDATED EDITION
T HE AEI P RESS
Publisher for the American Enterprise Institute
WASHINGTON, DC
Distributed to the Trade by National Book Network, 15200 NBN Way, Blue Ridge Summit, PA 17214. To order call toll free 1-800-462-6420 or 1-717-794-3800. For all other inquiries please contact the AEI Press, 1789 Massachusetts Ave., NW, Washington, DC 20036 or call 1-800-862-5801.
ISBN-13: 978-1-4422-6071-9 (paperback)
ISBN-10: 1-4422-6071-8 (paperback)
ISBN-13: 978-1-4422-6072-6 (ebook)
ISBN-10: 1-4422-6072-6 (ebook)
© 2016 by the American Enterprise Institute for Public Policy Research, Washington, DC. All rights reserved. No part of this publication may be used or reproduced in any manner whatsoever without permission in writing from the American Enterprise Institute except in the case of brief quotations embodied in news articles, critical articles, or reviews. The views expressed in the publications of the American Enterprise Institute are those of the authors and do not necessarily reflect the views of the staff, advisory panels, officers, or trustees of AEI.
Printed in the United States of America
Contents
L IST OF I LLUSTRATIONS
G ROUND R ULES
P REFACE TO THE 2016 E DITION
I NTRODUCTION
P ART I. F RAMEWORK
1. T HE P LAN
2. B ASIC F INANCES
P ART II. I MMEDIATE E FFECTS
3. H EALTH C ARE
4. R ETIREMENT
5. P OVERTY
6. T HE U NDERCLASS
7. W ORK D ISINCENTIVES
P ART III. T HE L ARGER P URPOSE
8. T HE P URSUIT OF H APPINESS IN A DVANCED S OCIETIES
9. W ORK
10. F AMILY
11. C OMMUNITY
12. C ONCLUSION
A CKNOWLEDGMENTS
A PPENDIXES
A. T HE P ROGRAMS TO B E E LIMINATED
B. T HE UBI’ S C OST C OMPARED WITH THE C OST OF THE C URRENT S YSTEM
C. P RELIMINARY T HOUGHTS A BOUT P OLITICAL F EASIBILITY AND T RANSITION I SSUES
B IBLIOGRAPHY
N OTES
A BOUT THE A UTHOR
List of Illustrations
F IGURES

2-1 Costs of the UBI and the Current System, 2000–2020
2-2 The Persistence of the Underlying Trend in Transfers to Individuals
4-1 45-Year Compound Average Growth Rate for the Stock Market, 1871–2014
12-1 Per Capita GD Pin 2014 Dollars
A-1 State and Local Transfer Payments, 2000–2013
B-1 State and Local Transfer Payments, 2000–2013
T ABLES

A-1 Federal Transfer Payments to Be Eliminated
A-2 Federal Transfer Payments to Favored Groups
Ground Rules
An old joke has three men stuck at the bottom of a hole, each presenting his plan to escape. I have forgotten who the first two are, but the third is an economist. When his turn comes he begins by saying, “First, we assume a ladder.”
This book puts me in the position of the economist. The ladder I will be describing to you would work if it existed, but today’s American politicians will not build it. I must ask you to suspend disbelief and play along.
My part of the bargain is to be realistic about everything else, presenting evidence that the policy is financially feasible and would produce the desirable results I claim—not in a utopia, but in the United States of the twenty-first century.
Preface to the 2016 Edition
The original version of In Our Hands published in 2006 predicted that the costs of the existing system and my plan for a universal basic income would cross in 2011. I was two years off, thanks to the Great Recession and the stimulus spending that followed. By 2015, the crossover point had been passed for six years. Discarding the welfare state in favor of a universal basic income is no longer something that would be economically feasible in America’s future. It is economically feasible right now.
Three other considerations prompted me to restate In Our Hands ’ case. First, the rising costs of entitlement programs require that something be done—not in the distant future, but within the next few administrations—to prevent a fiscal crisis. This reality makes my solution more politically feasible now than it was a decade ago. Second, the increasing breakdown of the American working class that I described a few years ago in Coming Apart adds new urgency to changes in policy that would resuscitate America’s civic culture. I believe a universal basic income has unique potential for doing so. The third reason was on the distant horizon when I wrote In Our Hands but is now looming: Advances in technology are not just automating millions of manual jobs, but will soon be displacing millions of white-collar workers. 1 In the decades ahead, a life well-lived will often have to be one that does not involve a job traditionally defined. A universal basic income will be an essential part of the transition to a world unlike any in the history of our species.
Initially, I intended to do no more than replace the old numbers with new ones. But doing so wasn’t possible. Since 2006, the way that the federal government reports budget figures has changed, trend lines for budget projections have changed, and inflation required me to increase the size of the guaranteed grant. The arithmetic for In Our Hands had to be redone from scratch.
The text of In Our Hands also changed far more than I anticipated. Apparently there is no such thing as prose a decade old that I don’t want to fiddle with. Most obviously, I have discarded “The Plan” as the label for my solution—a label I was never happy with—and replaced it with “UBI,” standing for “universal basic income.” In some cases, intervening events required changes in the presentation—the Affordable Care Act’s effect on the chapter on health care is an example. Other changes are cosmetic ones intended to make the text more accessible or engaging. In a few instances, I hope that 10 years of mulling over these issues enabled me to elaborate or tighten an argument. But my guiding principles in 2006 remain unchanged, and so does In Our Hands ’ message.
Charles Murray
Burkittsville, Maryland
March 19, 2016
Introduction
A Short Statement of the Argument
America is wealthy beyond the imagining of earlier generations. Every year, the American government redistributes more than $2 trillion of that wealth to provide for retirement, health care, and the alleviation of poverty. We still have millions of people without comfortable retirements, without adequate health care, and living in poverty. Only a government can spend so much money so ineffectually. The solution is to give the money to the people.
A Longer Statement of the Argument
The European and American welfare states evolved under the twin assumptions that resources were scarce and that government could allocate them effectively.
The first assumption was true during the first half of the twentieth century, in this sense: No country had ever been so rich that its wealth, divided evenly among everyone, would provide everyone with a comfortable living. After World War II, in a few countries, wealth increased so much that there was enough money to go around—a landmark event in human history. It was technically possible for no one to be poor. Much of the energy behind the social turmoil of the 1960s was fueled by this revolutionary change.
Enter the second of the assumptions, that governments could allocate resources effectively. During the early decades of the welfare state, it seemed simple. The indigent elderly depend on charity, so let the government provide everyone with a guaranteed pension. The unemployed husband and father cannot find a job, so let the government give him useful work to do and pay him for it. Some people who are sick cannot afford to go to a private physician, so let the government pay for health care.
It turned out not to be simple after all. The act of giving pensions increased the probability that people reached old age needing them. Governments had a hard time finding useful work for unemployed people and were ineffectual employers even when they did. The demand for medical care outstripped the supply. But, despite the complications, these were the easy tasks. Scandinavia and the Netherlands—small, ethnically homogeneous societies, with traditions of work, thrift, neighborliness, and social consensus—did them best.
Traditions decay when the reality facing the new generation changes. The habit of thrift decays if there is no penalty for not saving. The work ethic decays if there is no penalty for not working. Neighborliness decays when neighbors are no longer needed. Social consensus decays with immigration. Even the easy tasks became hard as time went on.
During the second half of the twentieth century, the welfare state confronted accelerating increases in the number of people who were not just poor, but who behaved in destructive ways that ensured they would remain poor, sometimes living off their fellow citizens, sometimes preying on them. As their numbers grew, they acquired a new name: the underclass. The under-class grew first in the nation that was the largest and ethnically most heterogeneous: the United States. As the years passed, poor young men increasingly reached adulthood unprepared to work even when jobs were available. They were more disposed to commit crimes. Poor young women more often bore children without a husband. Poor children more often were born to parents who were incompetent to nurture them. When it came to solving these problems, it was obvious by the 1980s that government had failed. Then the evidence grew that government had exacerbated the problems it was trying to solve. As the Americans were making these discoveries, an underclass also began to emerge in the European welfare states.
That the easy tasks of the welfare state became hard and that under-classes are growing throughout the Western world are neither coincidences nor inevitable byproducts of modernity. The welfare state produces its own destruction. The process takes decades to play out, but it is inexorable. First, the welfare state degrades the traditions of work, thrift, and neighborliness that enabled a s