Instead of being forced to denounce Trump’s attack on Judge Curiel, Paul Ryan would have rather been talking about his plan to fight poverty. It’s not a grand battle scheme, precisely because some 50 years since LBJ’s Grand Society, relative poverty in America is about the same. And if there was a grand battle scheme against poverty, it was the Grand Society.

But Ryan’s proposed devolution back to state and local governments of welfare programs – as well as consolidating some federal welfare programs – is merely trimming the edges of a dense underbrush of regulation and entrenched bureaucratic power. And even that trimming will be attacked by Democrat lawmakers.

So it’s interesting, in this context, to consider two takes on Universal Basic Income or UBI – also called a Negative Income Tax – schemes. It essentially involves giving every member of the adult population a guaranteed income stream that is only partially (if at all) clawed back at reasonably high income levels. But it also involves dismantling every other welfare program you can possibly think of: from housing to Medicare and Medicaid. All of it gone. To be replaced by your UBI cheque every month in the mail.

In one corner we have Charles Murray, who favors UBI. Yes, that Charles Murray: the co-author of the Bell Curve. And not a fan of current educational policies either. So, no, he’s not liberal. And yes, he’s controversial.

In the other corner we have Robert Tracisnki, a Randian Objectivist. As in Ayn Rand. He attacks Murray’s advocacy of UBI not principally from an economic perspective – how can it be paid for? how do you replace the welfare state with such a simple scheme which wil be opposed by entrenched interests? etc. – but rather from a moral perspective.

Leisure is an aristocratic entitlement built on the backs of a subjugated peasantry, to put it dramatically. And any attempt to justify a UBI scheme – like the one voted down in a Swiss referendum recently – in terms of the added leisure time it would produce is wrong morally. By the sweat of your brow … etc. But also, UBI falls apart because unlike ye olde days there is not a subjugated peasantry to pay for the scheme. Not in democratic, developed nations at least. Which is precisely where the UBI scheme is being evaluated.

As Kevin Milligan has pointed out, you have a three-legged stool where only two legs are possible at a time. A tough balancing act. It goes like this: if you have a generous payment (say $15,000 – $20,000 a year) you have to choose between really frickin’ high taxes to pay for it, or have a clawback which penalizes work. The working poor paradox that keeps people on the welfare rolls because of the marginal disincentive to go back to work.

In other words, you either disincentivize work in a big way, or you raise taxes in a big way to pay for the scheme. Which, umm, also disincentivizes work. No welfare benefit should be seen as guaranteed but rather as something conditional and temporary, is what Tracinski is getting at.

As a follower of Ayn Rand, Tracinski should just come out and say it (he surely has somewhere in his writings): relative poverty is a moral necessity in a virtuous society. Ouch.

And even Ryan’s cautious and doable reforms are likely doomed by partisan politics and gridlock.

Comments