[mikema63]

i decided to put up a welfare program put forward by Milton Friedman, i noticed that the range of libertarian thought on this forum was not complete and seems to have led some to think all libertarians must oppose all welfare to be a libertarian.

the gist of the program is that the multitude of welfare programs should be totally scraped and replaced, this includes medicaid, medicare, and social security. it would be replace by something like a yearly check of 10,000 dollars or something similar to every adult citizen. the cost would be covered by a 10% income tax (replacing the current income tax). with no tax breaks except for the check up to the full amount (so we aren't just sending in checks to take some back later).

there are a few tweaks that have been suggested, like child credits or an addition for pre-existing conditions or medical stuff, but this is the bare bones. it is usually put forward as a automatic system, as to opposed to applying to a thousand different programs, and as a simplification of the incredibly complex welfare regime. it also doesnt simply turn off if you make one dollar more and working will always result in more overall income, so it wouldn't have the same "welfare trap" qualities that our system has.

there are other problems with this system but its generally seen as a step forward and a compromise.

[Nunt]

Its a step forward from the current system. But ideally I would like to see a completly voluntary welfare system. Not just vertical rich giving to poor, but also horizontal poor helping poor.

[mikema63]

i found a video!

[youtube]ValHdlHd6MU[/youtube]

narrated by Milton Friedman

from my point of view this is not the ideal, but i can compromise to make steps in the right direction.

[Kman]

Milton Friedman was a bad economist and if you understand how democracy works you will understand why creating government charity will lead to disaster eventually, this is more or less what has happened in Greece, their welfare state has killed their economy.

[Eran]

Without disagreeing with Kman, I would join Nunt. Even if the negative income tax model is not practical, I think it is an invaluable mental tool.

Most people confuse between government payment and government provision of certain services. For Socialists, government should do both. For libertarians, it should do neither. So both groups are tempted to group the two functions.

But if you analyse statists' arguments against, say, privatization of schools or healthcare (and to a lesser extent, roads, police and public parks), you will often find objections expressed in terms of inability of poorer people to pay, obscuring the often easier case to make regarding the superior efficiency of private sector provision.

For a mixed system in which government pays, but doesn't provide any services (or provides many fewer services) to work, payment needs to be in a lump-sum, rather than goal-tied form. In the latter case (e.g. with school vouchers), private sector providers will face little incentives to keep prices down, as price inflation coupled with political pressure will merely result in an ongoing increase in payments. This is what we are seeing in both the higher-education and the health markets in the US.

[Soixante-Retard]

If you have your copy of The Constitution of Liberty at hand, as every good libertarian ought to have , have a read through chapters 19 and 20. I'll have a quick re-read of them and post you my thoughts regarding Hayek's views on welfare.

[mikema63]

i...uh...dont

im a bad libertarian

ill hunt it down on the internet.

[Soixante-Retard]

As for Friedman's negative income tax - well first - he did not originate the idea. Henry Hazlitt and others before him had toyed with the idea. However, Hazlitt became highly critical of it in later years.

But I abandoned the proposal when I realized that it leads straight into a dilemma, which is precisely the dilemma of the negative income tax: either it is altogether inadequate at the lower end of the scale of self-earnings, or it is unjustifiably excessive at the higher end. Either it must pay only half an adequate income (by its own definition of "adequate") to a family that earns no income, or it must pay nearly twice an adequate income to a family that already earns an almost adequate income.

[starcraftzzz]

i
the gist of the program is that the multitude of welfare programs should be totally scraped and replaced, this includes medicaid, medicare, and social security. it would be replace by something like a yearly check of 10,000 dollars or something similar to every adult citizen. the cost would be covered by a 10% income tax (replacing the current income tax). with no tax breaks except for the check up to the full amount (so we aren't just sending in checks to take some back later).

The problem with this is that replacing medicare and SS with tax credits results in more wasteful health/retirement spending and a poorer country. Medicare is 40-50% more efficient then private health insurance and SS is 26% more efficient then private retirement accounts

[mikema63]

something must be done with SS and medicare before they completely implode and besides there isn't much private left in the US insurance agencies its a textbook example of corporatism.

as for the negative income tax you could increase the rate that the return increases so that you stop receiving anything at 30,000 (which would also decrease the necessary taxation past that point as well).

[Soixante-Retard]

SS and Medicare won't implode. They (the federal government) will still pay out the annuities that they owe - it's just that the dollar will become absolutely worthless, they'll buy bupkis. The total liabilities that the federal government owes is $118 trillion (and counting) - that's nearly twice the GDP of the world ($63 trillion)... There is no solvency problem, they'll keep the printing presses going to monetize the liabilities.

[mikema63]

^either way things are crap

as for the rest i actually meant this thread for non-libertarians, i was inspired by a comment frenchfried made about libertarians opposing all welfare, i just wanted to put out there that there are proposed compromises. this forum tends to attract the purists and i am pretty out there with my politics, but in the end i doubt what i would like to see will happen within my lifetime, so, baby steps.

[Suska]

Libertarianism doesn't forbid collective welfare systems any more than anarchy forbids governance. If they are voluntary and consist of a discrete service.

DubiousDan was throwing an idea around about a Net-Worth tax scheme that looked interesting.

[Soixante-Retard]

Libertarianism doesn't forbid collective welfare systems...

True.

If they are voluntary...

True for deontological libertarianism.

Consequentialist libertarianism doesn't forbid a coercive welfare system, it is just picky about the degree to which it is coercive.

[Kman]

I would claim that libertarianism actually does forbid coercive charity programs, the classical liberal/pseudo-libertarian position is that the government has a legitimate function to protect people against foreign and domestic criminals/invaders, everything else should be handled by the private sector, charity does not fall under the category of protection from criminals or invaders. I suspect the reason the classical liberals supported government to deal with criminals/invaders is because they did not think it was feasible to operate that kind of protection in the free market, charity however was run on the free market in the US so you cannot make that same claim that it is impossible to run on a voluntary basis.

In my book anyone that supports government charity (otherwise known as theft at the point of a gun) is not a libertarian, I can tolerate people who want the government to run police and the army and courts but charity? No......

[Soixante-Retard]

From re-reading Hayek it appears that he is concerned that due to the incentives of Social Security, less wealth is created than otherwise would and so there is less pie to go around. Thus with SS you haven't combated anything, instead of wealth getting the poorest out of dire conditions - SS makes them leeches (SS recipients aren't creating anything wealth themselves).

It has been well said that, while we used to suffer from social evils, we now suffer from the remedies for them. The difference is that, while in former times the social evils were gradually disappearing with the growth of wealth, the remedies we have introduced are beginning to threaten the continuance of that growth of wealth on which all future improvement depends... Though we may have speeded up a little the conquest of want, disease, ignorance, squalor, and idleness, we may in the future do worse even in that struggle when the chief dangers will come from inflation, paralyzing taxation, coercive labor unions, an ever increasing dominance of government in education, and a social service bureaucracy with far-reaching arbitrary powers — dangers from which the individual cannot escape by his own efforts and which the momentum of the overextended machinery of government is likely to increase rather than mitigate.

[Suska]

I'm not here to argue what exactly is meant by coercive. People should operate on a 'know is when they see it' principle because it depends on how chaotic and dangerous the situation is. But I wasn't suggesting Libertarianism or Anarchy can remain such as a automatic opt-in system, any system you organize between anarchists and libertarians should be optional and clearly effective or they will dismantle the thing.