...And Economic Justice for All: Welfare Reform for the 21st Century

By Michael L. Murray | Go to book overview
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Charles Murray, Losing Ground.
Where the other Murray and I disagree is on what should be done after it is eliminated. He would have those in poverty rely on private aid and place the children in orphanages. I argue for the guaranteed adequate income.
If the GAI benefit is less than what employers wish to provide as unemployment benefits they could supplement it. This supplementation would be through a private program, however.
Unless it turns out that it provides the best quality housing for the money, in which case recipients will choose to live there. This is a major difference.
I say "purported" benefits because I am not convinced competiton can work in the area of education. As in the case of health care, the consumer is not in a very good position to select the best quality service at the lowest price. Unless the consumer can do so, the major source of regulation of the market is lost. Nonetheless, in both cases I am open to the possibility a mechanism can be developed for aiding consumers in this decision.
According to Lester Thurow, "Why Are We so Reluctant to Redistribute Wealth?", New York Times, printed in Des Moines Register, April 18, 1976, pp. B1-2, "Most of those we normally think of as rich are rich in wealth rather than income." He notes that redistribution of wealth could be accomplished by higher inheritance taxes, higher taxes on capital gains, or perhaps a wealth tax such as that used in Sweden. I recognize the merits of his argument, but am not proposing an overall tax on wealth. In my plan, wealth is only considered to the extent it affects eligibility for the GAI payment.
Granted, they have utilities, insurance, and taxes, but this is generally less costly than rent.
Of course, to the extent these investments are generating an income, that income will be included in the GAI calculation. On the other hand, some investments do not produce current income, but do increase in value (nondividend-paying stocks or idle land, for example).
Unlike our present welfare system which denies eligibility to those with assets above a certain level, wealth causes no loss of eligibility for GAI.
Conceivably, the use of the per capita figure could have an impact on population growth. Might individuals change their procreation decisions knowing an additional child will reduce the overall level of the grant?


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