From: cmk@athena.mit.edu (Charles M Kozierok)
Subject: Re: Negative Income Tax (Was: Social programs)
Organization: Massachusetts Institute of Technology
Date: Sat, 2 Jan 1993 19:36:24 GMT

In article <1993Jan2.013912.12749@ee.ubc.ca> jmorriso@ee.ubc.ca (John Paul Morrison) writes:
>Well, then let's hack at the problem, with some specifics if we can.
>A few dozen articles on politcal philosphy have gone by (fine and dandy)
>but we haven't got much further on Negative income 'tax', (if we have,
>I'm sure we've forgotten :-)

true. we have gotten off topic.

>First, some negatives of negative income tax (does that make it positive ;-)
>
>1. Doesn't change the motivation (or lack of) for working vs. starving
>2. Could fail as splendidly as any other government program 
>3. could be worse, if old system is retained, even if only partially

there are others too.

>Some positives:
>1. Could simplify things, by sacking a lot of civil servants
>   (eliminate the social ministries, and let Revenue Canada collect
>   taxes and print cheques...seems simpler(?))
>2. could let private sector, free enterprise expand:
>   Ie, if Governments withdraws from running social services, and instead
>   merely hands out money, letting recipients spend it, and letting
>   the private sector compete to provide cheaper, better services.
>3. payments could be deindexed, letting inflation reduce costs to government
>    :-) :-)

please tell me how any of the positives above are anything more than
wishful thinking, things the gov't *always* promises but *never* delivers.

>OK, that ought to be a start.
>PLease, let's keep on topic....

sure. i am still waiting for some proponent of this system to tell me:

1. what, other than socialistic desire to fulfill "need", they have
   to justify the existence of a guaranteed income;

2. what, other than blind faith or wishful thinking, they have to to
   make them think NIT will be successful or better than the current
   monstrosity, or that existing systems will be disassembled;

3. how they expect to prevent industry from driving even faster to
   the US border to get away when it is faced with competing with
   the government for labor;

4. why, if this system will not *drastically* reduce costs, we are
   considering it, when the country is being bankrupted and we must
   act *now* to stop the red ink. even those who believe in 
   "streamlining savings" can't possible think they will make a major
   dent in the deficit and debt problem.

>OK, what is your system. Details. 'Social costs'? How will you get the
>socialists to bend over and say 'harder!'?

i don't think i will get them to. i never claimed that those who have
in their best interests to promote institutionalized theft will willingly
give it up. that doesn't make it right though. probably our only hope
is that when things get *really* bad, people may finally wake up and
just *maybe* figure out what got them in this mess.

>>>>how can it be otherwise? the NIT is not going to solve the enormous
>>>>deficit problems due to social spending. so what kind of solution
>>>>is it?
>
>Perhaps by streamlining. Cutting a lot of departments. By targeting
>funds to where they can be better used, or eliminated, since some people
>don't need them anyway. Universality has been a failure, and already
>there have been good steps to cut payments (Family allowance) to people
>who don't need it.
>
>And why do we hanve so many different levels of subsidies, payments, handouts
>etc.? At least if we are going to stay with handouts, just give individuals
>one big lump sum. Surely the administrative costs would go down?

*maybe*. or maybe it will be worse. whenever i prod for details on this system,
inevitably up pop special circumstances, special "needs", etc.
the fact of the matter is that even if you pay a lump sum, whoever "runs
out", even if it is their own fault, will claim "not enough", and we'll
be back to the races. how do you think we got where we are now?
these social progams weren't put in at once.

one more thing. targetting "administrative costs" is the easy thing
for the government to talk about because it is hard to argue with. but it
is a ruse. Reagan did the same thing before he spent the US into oblivion.
he commissioned a panel to "find government waste", spent millions on it,
and ignored its recommendations.

in 1990, the Canadian government spent 16.7% of its non-interest expenditures
on *all* administration (excluding defence). it also spent *69.4%* of 
expenditures on social programs and transfers. does that not make it clear
why "streamlining" is a convenient distraction from the real problem?
i think it does.

>And if people are given MONEY, and they have to shop for their services,
>at least the free market can be allowed to operate in places where it can't
>now.

*that*, i can't disagree with.
but note that how they get the money is not an issue for that point.

>Governmnet is held ransom by powerful teachers, administrative, health
>and other unions. let's see how long the unions can force ever increasing
>government spending (above the inflation rate even), if they have to
>cater to individual clients, instead of bullying government. The unions
>have been successful at increasing costs of services, because they have only
>one big fat purse to attack: government's.

if you believe this, you probably also realize how nearly impossible
it will be to de-institutionalize this system with anything less than
a full-scale citizen's revolt. which is not likely to happen.

>[ Christopher ]
>>>It makes the price much more explicit.
>>>It shows to the people who is paying, and who is recieving in much
>>>clearer terms than the current system where the bills get hidden very
>>>well.
> I agree.

me too. but it is a very secondary benefit. not worth the price.

>>first of all, i have yet to see evidence that this system will really
>>fix very much. second, it is to be implemented by an organization with
>>a pretty poor track record for efficiency and fairness. third,
>>the price is too high. choosing between two systems that are both
>>doomed to failure is like drawing lots for sequence at an execution.
>>what does it matter? we need to *reduce* the price, not just make it
>>more explicit. i think that should be the priority: making sure we don't
>>end up like other socialist countries which have spent beyond their means.
>>NOT replacing one antiquated, unfair, costly system with another which
>>may or may not be slightly better.
>
>Is it doomed to failure? TOugh call.

is it that really that tough? how long can *anyone* spend beyond his means
every single year, and also fight compounding interest? it's simple
common sense, no more complicated to see than a continually misbalanced
chequebook.

>I think it can reduce the costs of services, while improving quality.

see above.

>We have one of the world's most expensive education systems. We have a
>very expensive health system (although not as expensive as in the USA).
>Why? I think because of having a single payer: government. A government
>composed of fools is a weak link for all the special interests to attack,
>and demand excessive spending. The government doesn't have the resolve to
>stand up to the special interests, and can't ask the voters for more, 
>so it borrows. Removing government's ability to decide how much is
>spent (borrowed) and letting it reside with the people is a better first
>step.

what you said. which also means not playing "musical terrible welfare
systems" both implemented by this government.

>Whether or not it will fails is what we're trying to hash out. 
>I'll put my faith in letting a free market settle out the costs and
>distribution of services. Tax-and-tranfer (NIT) let's you do that,
>while preserving some of the warm & fuzzy parts.

you're now talking about removing government services only though,
and my failure is based on deficit spending to support the NIT
or another welfare system itself.

>Maybe we can talk tax
>opt out for die-hard Objectivists...

yeah, the mob'd love that. :^)

>Maybe we can analyze this as an 'investment' where we risk a bit of
>capital in a person. Perhaps they need a push to get going, then
>they can pay things back, in clear terms; not the vague 'it's good
>for society kind of argument'. Let's think of ways performance
>of this investment can be measured, and risks evaluated, and when
>we decide to WRITE OFF that investment; yes: this guy is a bum;
>we've tried to help him to help himself, but he won't, so no
>more support (or less) for him. Now run this with a profit motive:
>do your best to get people on their feet, so they can pay you
>back with interest. Then you can cover the bad apples, and have enough
>to continue. (btw, I'm trying not to abuse the word investment, as
>others are trying to. Investments have returns; they aren't just
>excuses to blow wads of money).

sounds a bit better, but it is still largely wishful thinking. if you
are willing to cut off the welfare at some point, that is better
than an endless black hole. but then you lose the administrative
savings, see? because you have to do all this assessing. there's
no way to hide the ugliness of this system.

the concept of interest and a profit motive is neat. but only if
the investment is voluntary. so why not let charities handle it?
or private lending institutions?

>>i don't think it will work. if you disagree, *prove* to me that it will
>>work. because i am sick of hearing about government-supported programs
>>which are backed up by nothing but faith and hope. and this one seems
>>to fall into the same category. the onus is on the one supporting the
>>program so similar to others that have been shown to be failures.
>
>Prove your do-nothing (that's what it appears to amount to) idea will
>work.

sorry, i don't play bait-and-switch. bury the NIT idea, then we can
discuss alternatives. remember, NIT is claiming to be better than the
current system, which is already horrible. it must therefore prove
that it is better.

>A little faith and hope may be necessary...but I have enough faith
>(and evidence) in free markets that I think a solution so structured will
>work.

privatization of services is free market. but that could be done with
the current welfare system. so why hasn't it been?

NIT is not free market. it is governmental expropriation and transfer
of wealth. do you have faith in that? why? it doesn't work now...

--
charles
Newsgroups: soc.culture.canada,can.politics