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Author Topic: The end of equality
Lard Tunderin' Jeezus
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Babbler # 1275

posted 30 November 2003 07:59 AM      Profile for Lard Tunderin' Jeezus   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Inequality is like campaign finance or health insurance — one of those slow, wasting diseases in the body politic that seems to have no cure.
From: ... | Registered: Aug 2001  |  IP: Logged
Stephen Gordon
rabble-rouser
Babbler # 4600

posted 30 November 2003 11:03 AM      Profile for Stephen Gordon        Edit/Delete Post  Reply With Quote 
"But it's in this territory - increasing equal opportunity, not forcing equal results - that the case against the status quo has to be made."

I've always wondered why proposals about guaranteed minimum incomes went nowhere - they make a lot of sense. One problem with social assistance is that it generates all sorts of perverse incentives. In the current setup, a person on welfare who accepts a job ends up getting reduced benefits - an effective marginal income tax rate of %100, and sometimes more. No wonder people talk of the 'welfare trap'.

I suspect that these sorts of proposals would receive a lot a support from mainstream economists. Most criticisms of welfare policies don't involve the actual policy goal - they're criticisms of the distortions they create. It's also been pointed out that with a guaranteed minimum income, there's no reason to insist on setting any sort of minimum wage.

From what I gather, the actual levels of spending required aren't really much different from what is being spent now. High-income earners would get the payments as well, but it would be taxed back again. It's a lot easier to administer - you don't need a lot of people to determine whether or not someone is eligible, and you don't need inspectors to make sure that people on welfare aren't working. Everyone gets it, with no strings. If you accept a job - any kind of job, at whatever wage - the money goes into your pocket and stays there.

I'd never heard of the 'trust fund' idea before, but it makes a lot of sense as well. If there are 350,000 births in Canada every year, and if each gets $10 000, that works out to $3.5b / yr - just over $100 per capita. Really not that a big deal, and the benefits would be enormous. After 18 years of compound interest at 5%, that works out to about $24,000.

My own impression is that much of the opposition to these sorts of proposals comes from the left. Many on the left may be sceptical of a proposal that is based on promoting equality of opportunity, that had been originally proposed by a Republican president, and that would enjoy the support of mainstream economists. Since the left is so used to defending and trying to expand the current income support system, it may be hard for many to suddenly throw it all away.

This may be an example of the 'Only Nixon can go to China' principle. If this had been proposed by the CA, they wouldn't have the credibility to sell it as a programme intended to make poor people better off. This kind of radical change could only come about if it were championed by the left.


From: . | Registered: Oct 2003  |  IP: Logged
Cougyr
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Babbler # 3336

posted 30 November 2003 01:47 PM      Profile for Cougyr     Send New Private Message      Edit/Delete Post  Reply With Quote 
Our various leaders keep dancing around the obvious: we need more jobs. Not just high tech and professional jobs - we have enough lawyers - we need jobs for the unskilled, untalented, unambitious. In short, we need basic labour jobs.

The answer will come when governments see full employment as a goal and transmit that goal to the business sector. Because of the effects of automation, shorter work weeks should become the norm.


From: over the mountain | Registered: Nov 2002  |  IP: Logged

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