Author: Will Wilkinson

Vice President for Research at the Niskanen Center

33 thoughts

  1. This is sorta on topic. Why isn’t a minimum income guarantee policy taken seriously? Why do we need to buy stuff for people? I’m sure if we gave them money, they could buy it for themselves (not mention they’d buy what they want). I think one of the liberal blogs described this policy as a non-starter. Why would this be?
    Is there a principled argument against minimum income guarantees or do voters derive utility from acting paternalistically?

    1. Part of the problem with simply guaranteeing a minimum income may be that health-care expenditures are very high variance. For every 10 families that are almost completely fine, there’s 1 family that has to spend tens of thousands of dollars on cancer treatment.
      Theoretically, one could say that the 1 unlucky family should have spent its money on health insurance (which would cover the cancer treatments). And if the family was stupid enough not to have insurance, the person should die.
      This strikes many people as draconian. So, many people are willing to be taxed to pay for certain kinds of health care even for those who were stupid enough not to buy it for themselves.
      So, people get some kinds of health care whether or not they pay for it. Is that really fair? Maybe everyone should just be forced to get health care.
      This is the kind of logic that leads people to say “stuff should be bought for people” instead of “money should be given to people.”
      And it’s not outlandish logic. Think how badly it would pain you to see a family suffering death of one of its members because it was stupid enough not to buy health insurance even though it could’ve afforded it. Can we as a society let that happen, or will we always step in to pay for care? That’s one of the pertinent questions here.

      1. There is such a thing as private charity. If it pains us so much to see a few foolish unfortunates get unlucky, charities will cover that.

    2. Charles Murray (no one’s idea of a left-winger) wanted to get rid of all transfers and just give everyone $10,000 a year, with $3,000 deducted for (mandatory) health insurance, probably for the reasons mk said. I think he said it’d be cheaper than the current system, which I find believable. I have no idea how you’d transition to that from the current system though.

      1. I dunno. Implement a “hey, here’s a couple thousand bucks for you to spend on health care insurance or whatever you like” program instead of whatever Congress is talking about doing now. As other programs, like social security, come under review, just fold them into the “hey…” program.
        Regarding uncertainty, isn’t that what bankruptcy is for?

      2. OK, so I buy inadequate health insurance, and I get cancer. I write a personal check to my oncologist, get a week of chemotherapy, the check bounces, and I declare bankruptcy. Who pays for the next several years of cancer treatments? Bankruptcy doesn’t help here.
        Moreover, I’ve given facts that make me look as irresponsible as possible. In real life, I can’t tell whether my health insurance is adequate, because the insurance company can retroactively cancel my policy years later if I made an error on the enrollment forms.

    3. I think the biggest pushback against guaranteed minimum income comes not from a desire to be paternalistic per se, but instead from a desire that the government not give money to “bad people.” The opposition to the welfare state does not really come from high-minded opposition to redistribution of wealth, but instead from a paranoid fear that lazy welfare queens (or the demonized poor person du jour) is going to be living the high life off your tax dollars. So the welfare state is carefully tiered so that people who are deemed deserving (retirees, those legitimately unable to work, the recently laid off, etc.) get cash payments they can spend as they wish, and those less savory sort get food stamps and Medicaid if they get anything at all. If a guaranteed minimum income was instituted, that would cause the “anti-welfare queen” argument to go absolutely apeshit. There are also principled arguments to be made against a GMI, and certainly some on the left like being paternalistic, but I think that this is really the biggest problem that a GMI would face.
      That said, I don’t think a guaranteed minimum income alone would really solve health care, though. A big problem with health care is that some people are just way the hell more expensive to insure, and that is something that needs to be addressed in order to guarantee affordable health care to all. And dealing with that problem is ultimately what much of what’s in the the bills addresses.

      1. I don’t understand: how is handing someone a good or service worth $x different from handing them a check for $x after means testing?

      2. Two differences. One is the liberty/personal responsibility thing. The other is a basic efficiency argument: they’re only identical if they would’ve spent that $x on that good. But they almost certainly wouldn’t have bought exactly the same thing, so in-kind transfers are almost always less efficient than cash transfers (unless, of course, the gift isn’t actually motivated by literal altruism, e.g., “I’m not giving you this service b/c it’ll make you happier and I’m happier when you’re happier; I’m giving it to you b/c I am happier when you consume this service, whether it makes you happier or not, and I’m kinda doubtful that if I were to give you money you’d spend it on this service”).

      3. My comments are in reply to usergoogol’s comment that cash transfers induce the government to give aid to “bad people” but not when it gives goods/services.

      4. My rationale was that if you give money to bad people, then you’re preventing them from being able to spend it on crack or whatever. Although with fungibility and everything that’s oversimplistic, it stirs the outrage less if “welfare queens” are just getting food instead of having the freedom of having whatever they want.
        Although as other posters have alluded, yeah, there’s a certain argument for taking a paternalistic approach though: poor people often make poor decisions, and if they make poor decisions then paternalism might help. Although perhaps a middle ground of giving people a guaranteed minimum income and then strongly “nudging them” that they spend so much on certain items would be a happy medium.

  2. I thought the food analogy actually severely hurt Ezra’s case. We regulate food distribution dramatically less than the distribution of medicine. A simple safety net of food stamps is most of what the United States does through the government. Ezra seems satisfied with the food distribution system; so why not think a model of cash transfers or something like food stamps would work fine?
    His response will involve pointing to the various disanalogies, but as soon as he does that, the argument that the food distribution system can be used to argue for a more government run distribution of healthcare falls apart because the analogy falls apart.

  3. This is the exactly the puzzling thing. Assuming that we all agree that the free market is good because the price system communicates people’s preferences and avoids arbitrary rationing, but that it is bad because it results in denying people necessary goods, the best policy is to have a minimal safety net in which government gives people goods that it deems necessary, while leaving as many people as possible independent of government.
    A public option basically forces the middle class to subsidize itself; the only thing that changes is the decision-making process. The justification for comprehensive reform of the health care sector really rests on the superiority of politically or technocratically-motivated decision-making to price-based decision-making in that sector.

  4. While getting them is no fun, food stamps are pretty interesting. I have them and I was completely surprised how simple they are. In NY I can buy almost anything I want. I expected paternalism like that I would have to add a carton of milk to my cart, but I can pretty much make my own choices.
    I use my food stamps at Whole Foods and farmer’s markets. Given that it’s a very real option to use them healthfully, it’s very sad that people generally don’t. I am interested in ways to provide people with the tools to make good decisions without taking their freedom away. There is a lot of privately funded work being done out there in this direction. The Greening of Detroit is a great example. It trains well…trainers, people who live in the community who want to spread knowledge about healthy cooking and gardening.

  5. Also, one needs to question the often unstated assumption that because something is government run that it is therefore more egalitarian. That is how it is supposed to work in theory, but in practice its far from reality.
    Whether we are talking about our public school system in the United States or single payer systems in europe, the poor always get the bad end of the stick – often far worse than what they would get in a privatized system.

  6. Let me know when you’ve guaranteed health care for me, food for me, clothing, and housing, and I’m retiring. And don’t for forget the beer and television,

    1. Yup. Why work if you don’t have to? One of my exit strategies is to claim ‘political asylum’ in Sweden and just sit around and play guitar while collecting checks.

    2. Forget the beer and TV, it seems to me that you could really use the time to put the finishing touches on your magnum opus on the virtues of laissez-faire capitalism, an incomprehensible screed entitled “Dumb Jews”. Seriously people, click the link on Mr Lesvic’s name. You’ll find there the aforementioned distillation of 32 years(!) of DG’s considered analysis of Austrian economics.
      Actually, DG, if you really want people to take you less unseriously, I would recommend that you change the part of “Dumb Jews” that says “Copyright 1977-2009” to “Copyright That weekend when I scored some bad mescaline…what can I say?”. As it stands now, it inspires the question: what were you doing before 1977, polishing another multiple-decades-in-the-making turd entitled “Silly Women, Stupid Mexicans, Shiftless Negroes and the Business Cycle: Don’t Even Ask About The Thieving Chinamen”?
      Are you trying to discredit the host of this blog with your “support”?

  7. basing health-care reform around a means-based-eligibility program like medicaid fails to address the issue of employed, middle-income people who have insurance, but who end up bankrupt when something like a catastrophic accident or serious illness that actually requires intensive treatment comes along. there are plenty of people out there who appear financially fine and wouldn’t come anywhere near qualifying for a program like medicaid, but they still get screwed over by medical bills that scummy insurance companies worm their way out of paying.

  8. Monty,
    I would add that, if separation of Church and State, why the merger of Medicine and State? Is the State any less dangerous in the one area of our lives than the other?
    But I would agree that this ought not be called socialism. “The rich entitled to no more medical care than the poor” and “from each according to his abilities and to each according to his needs is not just socialism but out and out communism.
    As for my site, for technical reasons, it’s pretty hard to read now, but I am working on that. Hope it will be more presentable and readable soon.
    As for Dumb Jews, they may be smart or dumb in other ways, as businessmen, scientists, or movie producers, but, as Jews, survival in a hostile world is what defines them as smart or dumb. And since forcing them into a welfare state was the first step to forcing them into gas chambers, only the dumbest would still be rushing down that path. Anyone doing so is a fool, and any Jew, twice a fool.

    1. Now that I think about it, convincing you to stop defending laissez faire is probably not my optimal strategic option here.
      So, by all means, keep digging…er…fighting the good fight! Libertarians really need people like you to stand up and be counted. Works like “Dumb Jews” are a vital part of persuading undecideds that the Austrian school really is all that! Surely no one will associate your pleasant pamphlet for any other Austrian writings about Jewish inferiority, so go for it! Seriously, you had me questioning my liberal values with your opening line: “As a boy Steven Spielberg never read books.” That’s some great stuff!
      For the non-insane: Is it a Godwin violation to bring up Hitler when conversing with someone whose webpage has the phrase “Dumb Jews” in 40 point typeface across the top?

  9. Is medicaid something you supported? Liberals dislike means tested programs because they think means tested programs will be constantly underfunded.

  10. Monty,
    I don’t know what you’re talking about.
    Do you?
    Saying that there are dumb Jews is not saying all Jews are dumb.
    I think anyone on the Left is dumb, but Jews especially so, after what the Left, from the Nazis to the Communists, has done to them, and what the Right has done for them.
    You need to read more carefully.

  11. Proponents of the proposed healthcare reform claim to want a ration, civil debate. John Mackey wrote a thoughtful civil article criticizing the plan and rather than politely debating they viciously attacked him. Many of the opponents of the President’s plan have been acting poorly but it’s not like supporters acting great either.

  12. I’ve thought this myself. Two parts to the answer are that 1) Medicaid ends up being run by the states with (fairly hobbled) federal assistance, so broadly informing people about accessing it is difficult. Certainly that’s fixable. And 2) it doesn’t address the problem of insurance growing more and more unaffordable and less valuable in terms of benefits even for those who earn far more than would ever be considered for Medicaid eligibility, even under the furthest extension of eligibility limits we might contemplate. In actuality, the bill does in fact expand Medicaid, up to smething like 185% percent of poverty. But that gets you up to like $19,000/yr for an individual. Insurance remains a problem for people making 2 and 3 times that.

    1. It’s true that expanding Medicaid doesn’t help curb either the price of health care or expenditures on health care. But then again, neither do the actual bills going through Congress. That doesn’t even seem to be the issue Klein is addressing.

  13. The rich entitled to no more medical care than the poor and from each according to his abilities and to each according to his needs is not just socialism but out and out communism.

  14. AnneCW – I am a prairie woman now living in the western North Carolina mountains. Feel free to join in with comments!
    Anne says:

    Self- insured here – I’ve been an active participant in the health insurance market for a number of years. Seems to me like Will has never needed to purchase health care, though I’m sure he’s needed to purchase food. To point to Medicaid’s existence as a reason why no reform is necessary is wrong.
    Last I checked, food prices did not increase astronomically last year – for no reason. (Though they did increase because of the high cost of gas last year.)
    The cost of my health insurance did increase significantly – for no reason. My family (self-insured!) saw a 25% increase in our premium – with no change at all in health status. In other words, we’re just as healthy this year as we were last year. But for whatever reason, our insurance company jacked up the prices astronomically – I suppose because we’re one year closer to death.
    And I know that as a self-insured family, we’re one diagnosis away from being dumped all together by the insurance sector – a big reason why reform is needed.
    Health care reform needs to address the issue of the cost of health care. That’s not the same as providing “health care stamps” so that poor and/or uninsured people can go to the doctor.
    If we do not control the cost of health care, all of this discussion of health care reform will be for naught, because no one will be able to afford health care. Except maybe the top one percent of the population of the United States….

    1. The magic wand increased prices and your magic wand is going to bring them down.
      Hilarious. You want to know why costs are going up? Because 85 year olds want to live to 88. That is a huge chunk of health care costs and increases.
      How are YOU going to fix that? There is only one way: make them pay for it. You want to live those extra few years? Then pay hundreds of thousands of dollars if you have them. If you don’t have those dollars, then you really don’t want to live those extra years.
      Right now you are paying to keep old people alive longer. Chew on that.

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