In recent months, the idea of giving everyone a guaranteed basic income has garnered increased interest from economists and journalists alike.
The idea is pretty simply: you send all adults a check every month, no conditions attached. It would eliminate the numerous bureaucratic government agencies that currently help low-income Americans.
It also has bipartisan support. The proposal appeals to liberals, because it has the potential to eliminate poverty depending on the size of the check. It appeals to conservatives who want to reduce the size of government.
A perfect example of this is a story in the New York Times today on food stamp fraud and how government officials are trying to crackdown on it. There is a black market of food stamps where people trade their electronic benefit cards (EBTs) for cash. Last year, more than a billion dollars of the $US80 billion program was lost to underground trafficking. More than 100 investigators investigated more than 15,000 stores last year alone.
This is the perfect example of how a guaranteed basic income could solve problems with the food stamp program. Many liberals would support giving people cash instead of food stamps so that they can make the best decisions for themselves. Many food stamp beneficiaries trade their EBT cards for 50 cents or less on the dollar. This transfer of government benefits from low-income Americans to store owners reduces the effectiveness of the program.
A basic income would immediately eliminate this underground market and consolidate the agency into another program, reducing its size. This should have great appeal to conservatives as well.
In addition, the Times piece tells the story of Elbert Eugene Shinholster, who owns a little store in Georgia, and would give patrons cash in return for their food stamps. Shinholster was not simply doing this out of the good of his heart – he took a 30 per cent cut in return. This is a quintessential example of food stamp trafficking. Thanks to their increased focus on fraud, authorities caught Shinholster. He was sentenced to three years in federal prison.
By eliminating the black market for food stamps, a basic income would also stop store owners like Elbert Shinholster from creating the black market. Should we really be locking up Shinholster for allowing his customers to trade their food stamps for cash while he took a cut as the middleman? By restricting what recipients can purchase with food stamps, the government incentivizes storeowners to create this underground market.
This is an opportunity for liberals and conservatives to come together and implement a policy that would solve all of these problems. That policy is a guaranteed basic income.
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