Monday, January 16, 2017

Free Money, or Social Engineering?

     I've read about two different approaches to two different but related issues, and they seem to be at odds with each other. No wonder we find the world confusing . . . or at least I do. Maybe you don't.

     The first is about the Universal Basic Income. It's an idea that has gained some currency lately, but goes back at least to the 1930s and has been endorsed by conservatives and liberals alike -- from economist Milton Friedman to the person we're celebrating today, Martin Luther King.

     The idea is that the federal government would pay every citizen a monthly stipend, kind of like Social Security, without any conditions, restrictions or requirements. Some proponents have suggested $5,000 a year; others have argued for up to $20,000. Of course, the program would be expensive, but it might not be all that expensive if it replaced other forms of welfare which can be complicated, unfair, demeaning and subject to cheating.

     The basic income removes the threatening and sometimes demeaning condition to seek and take employment. And according to some, it actually increases the incentive to take a low-wage job because, unlike welfare, the payment is not phased out as a person's income rises.

     The Universal Basic Income treats citizens like adults, rather than children. They can accept the money and retain their pride and self-worth. There's no stigma attached. It would help a lot of Americans, and not just the poor. Think of the people who have a decent job, but like most of us, live paycheck to paycheck. They want to go back to school to get more training, to get a better job. But how do they support themselves for the year or two that it takes to get the new degree? A basic income would allow them to do that.

     I see the problem at my community college. In New York, the governor is proposing free tuition for community college. That's nice. But what I see are young people who are already working one or two jobs, maybe also taking care of children, and then they're trying to find the time to attend class and also do their homework. It's too much, which is why the community college dropout rate is so high. A universal basic income would help these students complete their degrees and go on to get better jobs as nurses or medical technicians or computer programmers.

     But then I saw a story in Saturday's New York Times called In the Shopping Cart of a Food Stamp Household: Lots of Soda. To me, it highlights the problem.

     The article reported on research by the U. S. Department of Agriculture that found soft drinks are the number one item purchased by the 43 million relatively poor Americans who use the Supplemental Nutrition Assistance Program (SNAP). Sodas and sweetened drinks account for almost 10% of their food purchases, while the broader category of junk food, including candy and salty snacks, makes up fully 20% of their budget. “In this sense, SNAP is a multibillion-dollar taxpayer subsidy of the soda industry,” said Marion Nestle, a professor of nutrition at New York University.

     There have been efforts by medical groups and local government officials, such as Mayor Michael Bloomberg of New York, to restrict the use of food stamps, so they cannot be used to buy junk food. Researchers from Stanford University suggested that banning sugary drinks from SNAP could "significantly reduce obesity prevalence and Type 2 diabetes, particularly among ages 18 to 65 and some racial and ethnic minorities.” But food and beverage interests -- including Pepsi, Coca Cola and Kraft -- have fought these proposals, saying they would be unfair to food-stamp users.

     Other services, such as the school lunch program, do have nutrition standards. Plus, some people argue that plenty of other government programs have restrictions. For example, Medicare will pay for necessary medical procedures, but it does not reimburse for ones it considers harmful, ineffective or unnecessary.

     But do the junk food companies have a point? Would restricting SNAP to healthy foods be a form of social engineering that essentially treats recipients like children? After all, the USDA report also revealed that while SNAP users do buy more junk food than non-SNAP users, and less fresh produce, it's not that much more. Soft drinks are the second biggest purchase, behind milk, for non-SNAP grocery buyers.

     Still, does it make sense for a massive taxpayer program to subsidize people consuming unhealthy products? And if we can't trust SNAP recipients to spend their money wisely, why would we think Universal Basic Income recipients would prove any different?

18 comments: said...

I suggest you read 'Evicted.' Poor people often buy foods that are not good for them because they view them as comfort foods.
As for subsidizing some industry you disappreove of, what goes around comes around. The income for the subsidized company is used to pay TAXES (that subsidize food stamps, SNAP, etc.), as well as pay its workers and other bills, and provide income for share holders (often institutions like colleges). It's called the 'multiplier effect' by economists. Economics is complicated although some members of the Freedom Caucus try to make it seem otherwise.

Terra Hangen said...

Your post raises some interesting ideas and I think it is good to talk about them. One thing that is happening now, and accelerating, is that good jobs are being replaced by robots and people whose jobs are lost might deserve a government stipend. One company is using robots instead of fork lifts and operators to load and unload trucks. Another is using a robot instead of pharmacists to fill prescriptions. Those are just two examples and that will lead to many talented people losing their jobs.

Anonymous said...

According to, "Today's American farmer feeds about 155 people worldwide. In 1960, that number was 25.8. Raising beef cattle is the single largest segment of American agriculture. One pound of wool can make 10 miles of yarn."

Full employment is a pipe dream in modern times. We don't need/can't use that much "stuff". If all of the unemployed could be put to work doing basic scientific research or medical research, the unemployed might at least be useful. Failing that, what can we expect all of those people to do? And...if there's nothing useful for them to do, shall we euthanize them or figure out some way for them to live in dignity?

I hate to see people load up on the soft drinks, etc. In my college days, when my budget was the tightest in my life, I never ever bought soft drinks. My luxury was that each Sunday morning I would buy a cup of tea and a newspaper, spending an hour going through each.

However, I don't expect my luxury to coincide with everyone else's. If sugary sodas give someone comfort, I'll try not to hold it against 'em. Yes...I think that universal income's time has come.
Cop Car

Stephen Hayes said...

A universal income would be shot down as socialism, which most Americans confuse with communism, so I doubt the idea will ever fly.

Anonymous said...

My Alaska relatives get an annual state payment from the "permanent fund" from oil revenues - typically 1-2000 per person ( including children) a test case?

still the lucky few said...

We are just seeing the very beginning of an era in which robots will do most of the work. Massive unemployment is inevitable, and the basic income will have to be implemented...eventually people will see the sanity of it. But no 'sugar' police, please. When people are hopeful, and receive a better education, better decisions will be made. Perhaps the sugar monopolies, not consumers, should be policed!

DJan said...

It's hard for me to think of people who haven't got the ability to buy fresh veggies to use their food stamps for soda, but there are many food deserts that show people don't even have access to fresh foods. :-(

Olga Hebert said...

I just heard the term "food desert" for the first time yesterday, but I certainly understand the concept. I seem to remember a theory that the body would crave what it needs so when given access to varieties of food, there is a natural tendency to gravitate to what sustains life. I don't know if that is true, but it is certainly true that there are areas of either imposed cultural or physical limitations that really prevent access to healthy foods. And the poor and hungry may lack the motivation to spend time washing and peeling fresh fruits and vegetables, then cooking a balanced meal when it is easier to grab a soda and fast food burger and have a pressing need satisfied quickly. I don't want to make judgements until I have been there, and I don't want to be there.

Morgan said...

Several notes: To complain that 'robots' are now driving forklifts and thus putting men out of work only highlights that forklifts, which are robots, put men carrying bags of grain out of work. Freezing the progression of technology in order to preserve current employment conditions is unrealistic and not very pleasant. Most of us do not WANT to go back to killing our backs and schlepping things about by hand.

A Universal Income, though I prefer the term Heritage Account, is not necessarily socialism. Socialism is 'to each, according to their needs; from each, according to their ability'. In other words, forcing production from those who can, and giving the results of that labor to those who do not. Like the few other government programs most of us agree on such as Fire Stations, Libraries, etc, this would be provided equally to each individual. You would get a check, I would get a check, Trump would get a check, Gates would get a check, the homeless man would get a check. It would be 'To each, a share of production; From each, as they choose to produce.'

I'm a very conservative... conservative, and financially I suspect that we will need to do a variety of thing in order to keep consumption rising in order to keep up with production, which is the only way to keep someone employed. Some of this will likely pair with lowering the fulltime bar, heavily increasing income taxes, etc.

Good post, as always.

MaryAnn said...

The LA schools banned chocolate milk because it had too much sugar. They are going to probably put it back on the menu to stem the tide of full regular milk cartons in the trash. People make choices, education and opportunities help people to learn to make better choices.

Gabbygeezer said...

Interesting thoughts. The fundamental problem with universal income schemes is that they do treat people as children--giving them an allowance simply for existing. Much better governmental approaches to unemployment due to technology advances are those for some form of universal public service. For example, draft all young people for two years with minimum wage pay. Offer more substantial pay for those who agree to fill military service needs. Everyone involved would have useful jobs such as teaching assistants, medical care helpers, forestry aides, and other occupations that would not displace conventional workers. A big part of the compensation would be GI Bill type educational benefits following service.

Anonymous said...


I am an American man, and I have decided to boycott American women. In a nutshell, American women are the most likely to cheat on you, to divorce you, to get fat, to steal half of your money in the divorce courts, don't know how to cook or clean, don't want to have children, etc. Therefore, what intelligent man would want to get involved with American women?

American women are generally immature, selfish, extremely arrogant and self-centered, mentally unstable, irresponsible, and highly unchaste. The behavior of most American women is utterly disgusting, to say the least.

This blog is my attempt to explain why I feel American women are inferior to foreign women (non-American women), and why American men should boycott American women, and date/marry only foreign (non-American) women.

Janette said...

My old state did the sugar thing several years ago. I was teaching in a 70% low income, 60% minority school. They took sugar treats and soda out of the vending machines. For two years, the machines stood unused. Then, slowly, they were being used again- with healthy stuff. Chocolate milk is offered twice a month- as is pizza. The result has been a staff slimming down and discussions about healthy foods-in every class.

It has been two years for me since I had a Dorito. I still do sneak a Pepsi on a very bad day. I am highly educated and way overweight. The sugar industry had me convinced that these are comfort foods- when I actually know they do everything but cause comfort. I'd love to sue the diet soda industry.
You may have to "force" the choice for a bit---but, in the end, it may catch on. Heck- how much do cigarettes cost these days? Those are comfort items....

Anonymous said...

To deny people food because a few buy pop or soda or whatever you call it is absurd..In Washington state women get cards to buy cheese, milk and foods for the little ones, without it they would starve, I shop at Safeway and the immigrants who actually work and have so little money for food get this card, they buy cheeses, milk etc. it is WIC women infants and children, they also buy with cash fruits, veggies and little protein they are saving for the toilet paper and diapers they desperately need and cannot get..I have volunteered at a food pantry for many years now, the people who come in for a breakfast, lunch or dinner are on their ways to their 2nd or 3rd job and need some sustenance, no one is denied..Elderly people get to the place by Van and volunteers, we even pack backpacks for food for the people to take for their weekends, hunger is not pretty whatsoever! In this the greatest country in all of the world hunger is for real I pray that the hullabaloo over D.J. Trump subsides and that people remember that a big segment of our population is hungry daily...The money spent on that inauguration is absolutely ridiculous, I would never give any money to attend anything with the new president not one dadblasted dime, I give my time and money to starving people!!!!!!!!!!!!!!!!!!!!!!!!

retirementreflections said...

This is a very insightful post, with many thought-provoking comments. I only wish that I had the answer...or at least that someone did.

Kathy @ SMART Living said...

Hi Tom! Great post and surely one to get us all thinking. And while I tend to believe that people are basically good at heart, I don't necessarily think they are capable of managing their own money responsibly on their own. I'd bet money that even with a steady stream of income people would overspend and get themselves deeply in trouble within a few years. It's a consciousness thing. A maturity thing. Look at the number of Americans want (or needing to) retire soon that have -0- savings. It's not like they didn't know it was coming. I also would support the idea of not allowing sugary drinks of all sorts (that includes energy drinks and now even fruit juice) as a part of food support. After all, there is ample evidence about how bad it is for us and it is only the lobby of the soft drink companies that are keeping that in line. It is the same with cigarettes...we surely don't let them use the food program to buy those so why should it be any different to say no to the sugar?? Okay, that's just my two cents. Instead of money, I'd rather offer universal health care, mental health care, child care and free education. The rest I think people would figure out for themselves. ~Kathy

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