There's so much to be said on this topic. After all, Charles Murray wrote an entire book on it, titled "The Plan." So if I spend a few posts on it, I won't be showing nearly as much love for the subject as it deserves. The truth is, the citizen's dividend is the only way out of the welfare state. It marries populism with libertarianism, and the result is happiness for the entire country. There is no better answer to the needs of our people than the citizen's dividend. Nor is there any better way to unfetter our productive classes from the endless taxes, regulations, corporate welfare, government interventions, health care mandates, affirmative action, and so on that so undercuts the productivity of our businesses. The citizen's dividend is unique in its ability to help everyone at once. Rather than hurting the rich to help the poor, or the poor to help the rich, or the middle class to help the rich and poor, the citizen's dividend, combined with the fair tax and ending affirmative action, is a net benefit to everyone.
How is this possible? How can it be so easy to improve everyone's lives at once? It's not magic. The truth is, there are certain parasitic institutions that serve no productive use that have been receiving massive amounts of taxpayer money. The only people they benefited were special interests, people who made big money out of government spending and taxation laws, or people whose jobs relied on the current federal budget. These people will lose all of the parasitic bonuses they were receiving from the status quo, but they never deserved those benefits in the first place. Even though it's technically true that the millions of vampires that benefit from the current system can complain the new system makes them suffer as a group, talk about a soft landing! I'm not putting any of them in jail, or out on the street to beg -- I'm just giving them the same deal I give every citizen of the USA: 12,000 a year, no strings attached, deposited straight into their bank accounts, to take care of whatever needs they have. To be spent how they see fit. This is the ultimate of soft landings for the people who have traditionally relied on wasteful government spending for their industries -- they have nothing to complain about, and much to be thankful for.
If they won't accept the new deal of being given the same government largesse as everyone else, that says a lot more about them, than it says about the Plan. You aren't any more deserving, special, or needy than anyone else. Your basic needs are met and in addition, if anyone suffers a misfortune that does make them more needy than the average bloke, I'm prepared to step in and help on that issue as well. ((With the Universal Misfortune Insurance program)). The age of corporate welfare and rewarding bogus business to bogus ends is over. The age of endless bureaucrats collecting fat paychecks for 'administering' the welfare industries is over. They can find a real job, or rely on the same citizen's dividend as the people they used to lord over receive.
Amazingly, studies have shown that for ever dollar in taxes collected, the government ends up with 50 cents of worthwhile money spent. Money that enters the federal government seems to disappear down a black hole, then come back out in a starved out form that never meets the goal it was designed for. With all the trillions of dollars spent on inner city blacks, you'd think they would all be in mansions by now. Instead they are as poor as ever. Where did all the money go? Essentially it all went to fraud. The government wasted it funding more bureaucrats than actual recipients. The money was never designed to aid the poor in the first place, it was designed to feather nice government bureaucrat jobs for paper pushers who feel good about themselves for all the worthy 'work' they do helping the poor.
You know what would really help the poor? Money! It's a miracle, I know, but the government has never thought about it. The idea that poor people could be given money, who can then purchase what they need as they see fit, is impermissible to them. They want to manage, control, and keep their snouts in the trough the whole way through. Helping the poor is simply a means to the true end, of a cushy job and a high self-esteem. And because I am simply giving people money, instead of giving them vouchers, food stamps, section 8 housing, HUD housing, health care, Christmas presents, school lunches, and lord knows what else -- I can deliver the full dollar of tax money received, instead of the wretched 50 cents that trickles down to the poor under the current system. Another enormous advantage to the citizen's dividend is it does not respond to people's behavior. For instance, if you are on drugs, you don't get any extra money from the citizen's dividend. But under our current welfare system, you would get free medical care that would cost far more than 12,000 a year to continuously treat these walking dead. Yet again we see compassion throwing good money after bad, something my system does not do. No one who leads even a halfway decent life falls through the safety net of the citizen's dividend + misfortune insurance programs. Those who still can't afford all their woes, are precisely the degenerates we should want flushed out of the gene pool in the first place. Some people can't be saved -- for everyone else, there's the citizen's dividend.
The same for single mothers. Currently, simply giving birth gives you access to massive amounts of money -- medicaid, temporary assistance for needy families, earned income tax credits, etc, etc. The state is literally encouraging the poorest people in the country to have as many out of wedlock kids as they can. This sort of moral hazard does not exist with the citizen's dividend. You are not rewarded for bad behavior. No matter how many problems you cause for yourself, you receive no more money than anyone else. This is a great check on the bad habits of the poor, who know full well where their bread is buttered and shape up pretty marvelously when incentives to bad behavior are dried up. This is why welfare rolls shrank so precipitously when the laws were changed in 1994. The citizen's dividend does not reward bad behavior, therefore people will be careful not to get into troubles the dividend cannot solve. People will live within their means again, as no government program exists to bail them out.
The poor will benefit by receiving a) more money than ever, in a liberating and respectful way that lets them spend it how they please, and receiving no more than anyone else -- thus being treated equally and not as the scum of the earth that the current welfare state makes people feel like. B) They will no longer be taken advantage of by perverse incentives that maximize illegitimate children, single motherhood, or other self-destructive behavior. Combined with a crackdown on crime, (made more legitimate by the fact that NO ONE in America has any need to do crime to make a living from -- the citizen's dividend ensures everyone's well being. Thus ALL criminals are doing it not because they have to, but simply because they want to. Such people do not deserve any more pity or excuses from the rest of society.) we could return the life of the poor to the respectable, safe, stable lives that used to be the norm, even in black homes, in the 1950's. Right now poor neighborhoods in America are no better off than poor neighborhoods in Nigeria. The crime, AIDS rates, illegitimate children, life expectancy, and so on could simply be transposed from point A to point B. This is ridiculous, given we're a hundred times richer than Nigeria. We can solve this problem, but the status quo never will. The People's Budget can!
Here's another great part about the People's Budget. We no longer have to choose between funding 'prisons or schools.' Suppose a guy does a crime. If it's some minor crime, we could charge him a fine and simply deduct it from his citizen's dividend until the fine is paid in full. Suppose it's a major crime and we throw him in jail for twenty years. Now we can seize his citizen's dividend and use it to defray the cost of jailing him. 1,000 a month probably can't pay the full costs of jailing someone, I'm guessing, but it must be a huge relief to the taxpayer anyway. There are currently 2.3 million people in prison. Each of them are no doubt adults eligible for the citizen's dividend. This means the government could have a ready source to pay for these prisoners' expenses: 28 billion dollars a year! Not bad, not bad at all. We can crack down on crime, remove all need for crime, and fund all the prisons necessary to house our criminals, all with the citizen's dividend.
Currently the middle class receives very little in government aid. They are given a mortgage tax deduction if they buy a house, but all this serves to do is artificially increase the price of housing. Furthermore, the taxes have to be collected from people one way or another, so they'll just raise the income tax or impose a 'carbon' tax on the middle class to offset the difference. Middle class people who own their own business, must face the dreaded estate tax and can't pass their land or business intact to their children. The middle class might see some social security funding, but its doubtful whether it would actually be above 12,000 a year, the steady money coming in from the citizen's dividend. Furthermore, since social security will become insolvent, it's obvious both it and medicare are going to face massive cuts under the current system. The sooner we cut the two impossible to fund social programs, the sooner we can reroute the money to a more productive citizen's dividend -- which people can invest in private markets, start a business with, start a family with, buy a health care plan for their old age, or anything they want. What would you prefer? Two bankrupt old-age programs that are unlikely to ever help you, or a citizen's dividend that we can afford, and is ready to be used immediately to improve the rest of your life? Though I think the citizen's dividend helps the poor and unemployed the most, the middle class also benefit greatly. What if you're a skilled worker in a turbulent job field? You make 100,000 a year on good years, but nothing at all in bad years. So currently, the income tax hits you extremely hard during the good years, because you're supposedly 'rich.' Then in the bad years, you don't qualify for any social assistance because you still have some savings in your bank. In the end, the government will never help you. But let's look at the People's Budget. Now, whether you made 100,000 dollars this year, or 0, you weren't taxed on any of it. The taxes will be fair and equal at the moment you purchase something, it won't punish you for your successful years. Furthermore, you received 12,000 dollars on the good year and the bad, you ALWAYS qualify for government aid. It's a sure thing. This means you can wait longer for a good job to come around, you can go back to college or receive retraining -- your options are greatly expanded. You are no longer in danger of losing your house because you can't make payments -- you'll no longer get in arguments with your wife about money and get a divorce just because one of you lost a job -- that 24,000 dollar dividend will take care of your worries. Is there anything better than peace of mind for the middle class? Unemployment, divorce, unpaid debts, a stroke of misfortune like a sudden disease -- this is what leads the middle class to bankrupty and misery. The dividend takes care of ALL of this. The middle class shouldn't have to go into debt, since they have a ready source of income to call upon. They shouldn't have unpayable medical bills, since the Universal Misfortune Insurance automatically kicks in for them. They shouldn't lose everything when they lose their job -- since their health care is no longer employer connected, they can still afford their mortgage payments, and so on. Do you see how many things a simple steady influx of money solves? Worst case scenario -- neither the husband or wife ever makes a dollar for the rest of their life -- they have to live on 24,000 a year plus misfortune insurance. What can that not pay for? A personal yacht?
Now for the rich. Needless to say, the rich are also receiving 12,000 a year in straight money. They will, however, be paying far more than that in sales taxes, so I won't ask for their gratitude in that matter. The rich will be paying a lot of money in taxes, but LESS than they used to! Combine that with the 12,000 'tax rebate' the dividend essentially becomes for them, and I don't see how they can complain. Not only is their tax burden lighter, there is a horde of added advantages caused by a better business environment. Imagine you're rich, and you want to buy clothes from China. Currently there's a quota preventing American businesses from doing that, because we're afraid it will cause unemployment among American textile workers. Suddenly unemployment in America is no longer an issue, because everyone's basic necessities are being provided for, whether they are employed or not. Now the quota is gone, free trade is allowed, and the business can go about trying to make a profit. Say you're a farmer, but your rivals have massive billion dollar handouts from the government in the form of various subsidies -- now you can enter the market from a fair competition where everyone receives the same thing from the government -- 12,000 a year -- no more, no less. Say your company was full of ridiculous morons who can't write a sentence of intelligible English or add 2 + 2, but you're deathly afraid of the equal employment opportunity laws and can't fire any of them -- now you can. The nincompoops will settle for their citizen's dividend fallback 'wage,' and you can go on with actually getting things done in the office with people who are driven and qualified for their positions.
The citizen's dividend solves the problem of unemployment and the universal misfortune insurance program solves the problem of health care. Your business will no longer have to fund unemployment benefits, pensions, health care, or anything but straight wages to your employees. Not only that, but you no longer have to hide behind various tax loopholes because your wages, your employees' wages, and your corporations' wages, are not taxed. You can pay people as much as you like, make as high profits as you like, and there are no punitive taxes for doing so. The only time the tax man will call upon you, is when you purchase something with all that money. So long as you only intend to make money, no one will get in your way. :).
Capital gains income will no longer be taxed. Like I said, all taxes are being abolished, replaced solely with a sales tax. So long as people want to continuously invest their money and never spend it, they won't lose a dime in taxes the entire time. How will that help businesses? Think about it! Is your company looking for some investment money? How much would it help you if the capital gains taxes were zero and people had a steady influx of cash they were looking to invest at a profit with? Now any business that simply needs capital to start its wonderful new idea, can rely upon the citizen's dividend and the new sales tax system, to be their allies and helpers. In the end, I am hoping these changes generate trillions of dollars in profit for our nation's GDP. I wouldn't be surprised if this was the actual result -- and who will be making all those extra trillions? The rich. The business owners. The people with big ideas. This is the most business friendly environment the USA has had at least since the 1800's. Please don't look down on it!
Now let's look at another group of Americans, the unemployed. Obviously children will be better off in a country that takes care of everyone high and low. However, they're pretty well covered already. How about the elderly? It's possible, I suppose, they are better off under the current plan. In any event, they are taken care of under this system as well. Currently, around 10% of the United States is unemployed. They are surviving off unemployment benefits, welfare, savings, or something. All of this is less thorough and less secure than a citizen's dividend. For these 10%, the citizen's dividend is a life saver. Using the same tax dollars that were inefficiently routed through all these various channels, I can get a much more massive and effective response for the unemployed through the dividend. The idea that the dividend will raise unemployment should be addressed here. Suppose the dividend raises unemployment -- what of it?
Right now in America today, people have little to no safety net if they go unemployed. They even lose their health insurance. Even so, 10% of people are looking for a job, but can't find any. This means we basically have more people than there are jobs to go around. People desperate to find a job, can't find a job. This is largely due to our insane immigration policies in the last 50 years. But putting that aside, it's obvious we now have a surplus of people looking for jobs, versus the productive work they can do. Paying people a citizen's dividend will help relax the ratio of people seeking work, versus jobs that are actually available. This will in turn raise wages as employer's compete with the dividend to get people off their asses and into the workforce -- but only in truly productive jobs that can afford to pay those higher wages. Imagine everyone in productive work being given a massive wage because employers are afraid you'll quit otherwise -- and meanwhile all the people employed in expensive, but ultimately fruitless make work, being fired and told to go home. Doesn't this benefit everyone? If you are earning less than 12,000 a year, and decide to quit and just live off your dividend, who exactly are you hurting? Does anyone think this economy's GDP is due to people working for 20,000 a year or less? No. I'd say not even 10% of the GDP is due to people working for such low wages. They are essentially treading water. Subsistence farmers of the industrial age. Almost all the money made in this economy, is made by people with serious salaries: 60,000 a year, or 100,000 a year, or 20 million a year. People with that sort of money, will not have increased unemployment due to the citizen's dividend, they will simply pocket the money and go on working for much more. Under the current system, we are suffering 10% unemployment, another 1% of people in jail (thus unable to work), plenty of children and retirees not in the workforce, and another segment of people so dispirited they are no longer looking for work. Another 10%? I don't know, maybe. Let's face it, true unemployment is probably something like 30, or 40% in America today. The idea that the citizen's dividend could make the situation worse is rather silly. It's already as bad as it can get, by following the status quo's plan! Combined with all the tax law changes, the increase of free trade, and the boom in consumer spending caused by people having money in their pocket (instead of thrown down bureaucratic black holes that turn every dollar into 50 cents), I actually expect it would increase employment.
There will be a lot of people unemployed when I cut the budget of the military. But these people have highly in demand skills with above average IQ. These people are being rerouted from productive work, into unproductive work -- basically being paid to blow up mud huts half a world away. These same people could become scientists, businessmen, teachers, engineers, accountants, electricians, or commercial jet airline pilots. Or policemen, or border patrol, or anything else. When the veterans returned from WW II, something like 10 million people were suddenly out of a job. The economy quickly reabsorbed them and the 1950's was a period of economic boom. The same will occur when we cut the military this time. Have no fears for them! Or for the unemployment rate. They are a rich asset to this nation and they will always do well, wherever their talents are invested.
So much for unemployment then. There are no bad side effects of the citizen's dividend. It is a pure improvement across the board, for everyone. I challenge anyone to show otherwise.