Currently we have Social Security, which is split into Retirement Income and Disability Income. We also have SSI which provides additional assistance for poor seniors and the disabled. The are various sorts of welfare programs, we have food stamps, housing assistance, along with Medicaid, which is effectively health insurance for the poor. We have unemployment compensation for the unemployed. Who may also be eligible for food stamps. All in all, the total cost of these programs is up in the trillion dollar range. To finance Social Security we have a tax of 12.4% split between employee and employer. This adds to employment costs, raises the cost of the production of goods and services, and likely also creates some reduction in wages and salaries at least in theory. As well as decreasing employment to some extent. Then there is the minimum wage, which has been the subject of some controversy as to whether or not we should increase it over the present $7.25 (federal). In theory it has some effect upon employment, especially among “marginal” workers who are able to produce little value over which they draw in pay. As employers have to cover half of Social Security and Medicare taxes along with paying state and federal employment compensation taxes and workman’s compensation, the true cost of employing someone is close to $9 an hour when everything is taken into consideration.*
* The mandate under Obamacare will add considerably to this figure.
There is a better “solution” to all of the above: The Basic Income. The concept was brought to my attention by the book, “In Our Hands” by Charles Murray. What it does is to provide every American citizen of 21 and over with a basic income based upon the federal poverty level. Currently that is $11,490 a year. Of that $11,490, 10% would go to provide a catastrophic health coverage that would come into play once medical costs exceeded $10,000. As health care costs will be much lower once we have true free market medicine, the number who will need such coverage will not be all that large as it would be now. It is quite likely that a real free market health care system using computer technology, certification instead of licensing, multiple tiers of hospitals, free trade in medical drugs, task specific training (we used such during World War 2) will allow us to bring US health care costs down to levels comparable to about 1/2 or even less of the costs that we now pay for health care services. As it stands, there are doctors, some hospitals who are already willing to give good discounts to those who pay in cash. This will certainly increase once the professional monopolies become “history”. Objectively we are coming closer to the point where the individual who is willing to study, has broadband computer access to the Internet, can already diagnose many of the more simple medical problems to which we are subject. The only problem remaining is access to medicine, which the repeal of prescription laws will accomplish.
The Basic Income will replace Social Security, both the retirement portion and also the portion now used for disability coverage. It will also replace all welfare programs, unemployment compensation. The minimum wage will be repealed as it is completely unnecessary. It is expected that most people will continue to work, and while some will likely be willing to attempt to live on the Basic Income, even they will likely enter the labor force to some degree. There is also a need for volunteers, and with the Basic Income, no doubt many will be willing to volunteer some of their time in charitable activities.
Financing of the Basic Income will exceed to some extent the total now spent on Social Security, welfare, unemployment compensation, and other government programs. The difference appears to be somewhere in the range of about another half trillion dollars. However this cost shouldn’t be a problem since there are savings in closing down those government agencies now responsible for all the various programs that will not longer exist. In any case the difference is small enough given the amount of money available through the Automated Financial Transaction Tax which will replace all other taxing authorities, giving us a savings of tens of billions of dollars right there. Further, the duplication of government agencies (state and federal) will be eliminated. We will also be able to eliminate various sorts of subsidies that now are being covered by the taxpayers. Since everyone is a “taxpayer” under the Automated Financial Transaction Tax, the “leakage” of money now created by the “underground economy” will effectively disappear.
Since there is no longer a minimum wage, payroll tax, unemployment tax for employers to pay, there can be no doubt that anyone who wants a job, perhaps only part time, will be able to find someone willing to employ them at whatever level of pay both find suitable. Too, those who are pursuing further education on their own through public libraries will have the free time needed to study. Thus we will have a more educated and skilled labor force, full employment, which means more people will be paying more taxes through their financial transactions. The ultimate effect will be to effectively “turbo charge” the US economy to a degree that has rarely been seen before. More economic growth means we will be able to do more, enjoy better lives, and being this is going to be a “libertarian” society, one with less restrictions than we now have, most likely more pleasurable to live in. I also think we will become less willing to “meddle” in other people’s affairs, something that apparently we have yet to learn despite the consequences such as 9-11 which was caused by our military occupation in Saudi Arabia. Hopefully when we repeal our prescription laws we will also repeal our drug laws, which will save us hundreds of billions of dollars. And additionally will eliminate the drug cartels causing so much violence in Mexico. These are all policies that libertarians have been supporting now for decades.
Jerome Bigge “muskegonlibertarian,wordpress,com”.