Interesting proposal. As I mentioned in another comment, I think the money in the account should only be withdrawable for certain spending that clearly promotes upward mobility for the individual. Otherwise, many recipients would simply piss away the money and public support for the system would collapse.
The other problem that I see with this type of proposal is that it would take 18 years for newborns to receive any benefits from the taxpayer investment. In general, I think government programs need to show clear short-term payoffs for it to be politically sustainable.
Your proposal, however, would be far superior to our current means-tested programs (assuming your proposal replaces the current system rather than being in addition to it), and would likely be better than either UBI or NIT.
When I think of UBI I think of the Indian reservations all over Arizona where they have UBI. What I see are people surviving. They have basic income, basic housing, and basic healthcare. It's not helping them.
Proceeds from casinos / oil / etc. Most tribes have, effectively, a UBI. They also can't even get their people to work at the Casinos. They can't get them to work hardly at all.
The challenge I always have with letting people administer their own safety net is that some people will absolutely mismanage it. Then they'll have nothing, and the idea is then is that the state to do nothing because they've already invested the maximum amount. They're only one part of the population that uses safety nets, and many other citizens would absolutely benefit from using it themselves. But if the point of the safety net is to ensure no matter your competence, bad breaks, or mistakes, you won't just be on the street, starving to death (ironic given our own drug-induced challenges with homelessness). And I don't think the US at least has the will to say "no more money" at that point or institutionalize anyone that squanders their SWF. That would have to change before there's political will to move away from government-administered services.
I think for a proposal like this to work, a recipient should only be able to withdraw from the account for types of spending that are proven to promote upward mobility. Otherwise, the money can only be used for retirement.
The restrictions might be something like:
Tuition for secondary school or university
Job training and certification programs
Relocation to a city with more economic opportunities
The Economic Democracy Act (formerly called The Capital Homestead Act) is designed to close this growing wealth gap, consistent with free enterprise values of private property, free market competition and minimal government intervention with voluntary choices among producers and consumers. . . . "
The real issue seems to be that that people need to have the wisdom and discipline to take a long term view for investment (rather than the short term hopes of speculation). I am sure the financial industry would love to have access to this big pile of "IRA like" funding, and most of what happens with those funds would need to be legislatively mandated as to controls, amounts, payback periods, etc.
But it should be clear people starting out in their 20's with some level of money capital that they can convert to human and/or physical capital will end up paying more in taxes (net) over their lifetime than the initial "welfare" input given to them at birth.
As always, the devil is in the details required to avoid waste, fraud, abuses, malincentives, etc.
I’d read the sickcare piece as it’s something I’m too familiar with, something I’ve been thinking about, and my company CrowdHealth is addressing. Is there a way to read it without pay $15/month
JK, I'm adding this article to my queue to comment more thoughtfully on in the very near future. I've been trying to get through a good number of other articles etc. on UBI and the "AI Abundance" mind state. Your insights and thinking on these topics would be invaluable to me in my The Long Tomorrow article series, especially in the last eight articles coming out the next two months. Let's talk more please! Steven
There is a potential path towards something near this by building upon some of the more flexible state ESA which have been rolling out.
Unifying with a flexible childcare and human development type account seems like a plausible path forward and k12 spending is already large enough that incentivising new effecient options with rollovers and family choice could be a meaningful lever and funding option if hybrid models work out .
Interesting proposal. As I mentioned in another comment, I think the money in the account should only be withdrawable for certain spending that clearly promotes upward mobility for the individual. Otherwise, many recipients would simply piss away the money and public support for the system would collapse.
The other problem that I see with this type of proposal is that it would take 18 years for newborns to receive any benefits from the taxpayer investment. In general, I think government programs need to show clear short-term payoffs for it to be politically sustainable.
Your proposal, however, would be far superior to our current means-tested programs (assuming your proposal replaces the current system rather than being in addition to it), and would likely be better than either UBI or NIT.
My preferred option is at the following links:
https://frompovertytoprogress.substack.com/p/the-case-for-a-working-family-tax
https://frompovertytoprogress.substack.com/p/the-case-for-upward-bound-accounts
https://frompovertytoprogress.substack.com/p/we-should-phase-out-most-means-tested
Yes, it would be a replacement for most means tested programs.
Thank you for your comment. Will check out these articles.
When I think of UBI I think of the Indian reservations all over Arizona where they have UBI. What I see are people surviving. They have basic income, basic housing, and basic healthcare. It's not helping them.
Maybe not.
There are UBI programs in Indian reservations? I have never heard of that. Or are you talking about proceeds from gambling casinos?
Proceeds from casinos / oil / etc. Most tribes have, effectively, a UBI. They also can't even get their people to work at the Casinos. They can't get them to work hardly at all.
I like the direction... The cost of having children is becoming so prohibitive to a health society. Great work, as always.
The challenge I always have with letting people administer their own safety net is that some people will absolutely mismanage it. Then they'll have nothing, and the idea is then is that the state to do nothing because they've already invested the maximum amount. They're only one part of the population that uses safety nets, and many other citizens would absolutely benefit from using it themselves. But if the point of the safety net is to ensure no matter your competence, bad breaks, or mistakes, you won't just be on the street, starving to death (ironic given our own drug-induced challenges with homelessness). And I don't think the US at least has the will to say "no more money" at that point or institutionalize anyone that squanders their SWF. That would have to change before there's political will to move away from government-administered services.
Yes..there is always that danger. On the flip side, that government almost always mismanaged the existing social safety net.
You tell 'em, JK!
I think for a proposal like this to work, a recipient should only be able to withdraw from the account for types of spending that are proven to promote upward mobility. Otherwise, the money can only be used for retirement.
The restrictions might be something like:
Tuition for secondary school or university
Job training and certification programs
Relocation to a city with more economic opportunities
Purchase of a used car
Down payment on a house.
My proposal includes those restrictions:
https://frompovertytoprogress.substack.com/p/the-case-for-upward-bound-accounts
I came across a similar idea in 2016 or so, called Capital Homesteading [ capitalhomestead.org}.
Now the group pushing this is called the Center for Economic & Social Justice, although I don't know how active they are now.
Perhaps you will want to check this out:
"The Case for an Economic Democracy Act [https://www.cesj.org/learn/economic-democracy-act/case-for-an-economic-democracy-act/ ]
The Economic Democracy Act (formerly called The Capital Homestead Act) is designed to close this growing wealth gap, consistent with free enterprise values of private property, free market competition and minimal government intervention with voluntary choices among producers and consumers. . . . "
The real issue seems to be that that people need to have the wisdom and discipline to take a long term view for investment (rather than the short term hopes of speculation). I am sure the financial industry would love to have access to this big pile of "IRA like" funding, and most of what happens with those funds would need to be legislatively mandated as to controls, amounts, payback periods, etc.
But it should be clear people starting out in their 20's with some level of money capital that they can convert to human and/or physical capital will end up paying more in taxes (net) over their lifetime than the initial "welfare" input given to them at birth.
As always, the devil is in the details required to avoid waste, fraud, abuses, malincentives, etc.
Good post - thanks.
I’d read the sickcare piece as it’s something I’m too familiar with, something I’ve been thinking about, and my company CrowdHealth is addressing. Is there a way to read it without pay $15/month
Hey Chris, shoot me a DM really quick.
Roger that
JK, I'm adding this article to my queue to comment more thoughtfully on in the very near future. I've been trying to get through a good number of other articles etc. on UBI and the "AI Abundance" mind state. Your insights and thinking on these topics would be invaluable to me in my The Long Tomorrow article series, especially in the last eight articles coming out the next two months. Let's talk more please! Steven
https://stevenscesa.substack.com/p/the-long-tomorrow-redefining-retirement
There is a potential path towards something near this by building upon some of the more flexible state ESA which have been rolling out.
Unifying with a flexible childcare and human development type account seems like a plausible path forward and k12 spending is already large enough that incentivising new effecient options with rollovers and family choice could be a meaningful lever and funding option if hybrid models work out .