tv In Our Hands CSPAN October 2, 2016 11:00pm-12:01am EDT
the humanity needs to be seen in terms of during slavery, owning one as a status symbol and then having the domestics as a measure of one's worth in society. having your humanity denied this but the concept of visibility is trying to get at. >> you can watch this and other programs online. >> charles murray proposes his plan to replace the current welfare system by setting up a universal basic income. he is in conversation with the former chief economic adviser to vice president joe biden.
1980s. saying we couldn't afford it right now with the same budget we had a code by 2011. i was actually off by a couple of years back w that we past bae break even point past 2009. it's going to get worse if we think of it over the next several years because we do have rising entitlement costs and we can look in the future and see the budget deficits that are extremely serious.
we can go back and forth on the things we do disagree on the. if it were an add-on to the current system it would be a disaster for the reasons a lot of people say that it would be and if it replaces everything else that could financially becomes feasible and a variety of things would have been otherwise. so we would replace all transfers with the universal basic income and by all transfers i include in that social security, you care, medicaid, welfare programs, all agricultural subsidies, corporate welfare and anything that constitutes a transfer.
you need to have an electronic deposit. in the monthly installments now here is a stipulation we have $3,000 of that that must be used for health insurance. that is a very complicated subject. i'm going to leave it out of this initial presentation and say one way or another carve $3,000 of that out and let's say we are talking in terms of money, disposable income $10,000 a year. you can't live on $10,000 a year, you're right without
reference to anybody else that's true and if you don't want to work at all that's true. if everybody else has $10,000 a year in you are willing to cooperate. if you can get together with a boyfriend or girlfriend or relative or friend or anybody else, just the two of you that's $20,000 a year. if you hold down a minimum-wage job let's say $7.50 and you work for $15,000, that's 25,000. if you are living with someone else that is 35,000. you can go through a love. -- a lot of permutations and
it's easy for people doing ordinary things to live well above the poverty line. it makes it easy to get into the middle class. if you have a 20,000-dollar increment your getting into the middle-class incomes and with that comes progress against poverty that has eluded us with the last 40 years. it has all sorts of ways of making the retired and easier than it is under social security for low income earners. a lot of these things are issues to make the case. a couple features in the plan that are really important but me pause for a moment, i know that this plan could never be enacted as i specify a.
what i say is whatever version this might be considered need to be taken into account. one is you need a high api complained. i start to fall back part of the grant of $30,000 of earned income and at that point you pay a 10% tax on every thousand dollardollars there is a graduax schedule between 30 to $60,000. the point is current programs have terrible marginal tax rat rates. it can be very dicey because you lose those. if you are on disability and i think the people in this room are aware of the disability program that includes lots of people that may have a real disability for certain kinds of
jobs that could easily fool other kinds of jobs the kind oft go to work without jeopardizing that they had as he guaranteed income and quite naturally not all people want to do that. so if you have the high payback point, you sidestep all of those and lure people into working until they can't afford to quit so if somebody has been working at a job and got raises they have a net of 40 in at that point i don't think very many of them will quit working because they have to pay a small amount of the grant back and go for a $40,000 a year lifestyles of a 10,000 year lifestyles. let me move on to a brief outline of why i say that they offer the advanced revitalized american civil society. it's a complicated argument in a
lot of ways. one of the things brought up is the way you don't want to do it. people do drink up their money before the end of the month and if you take it away all the government programs deal with this thing to happen to these people and. they have to talk to the boyfriend from derivatives friends and salvation army. we have changed the dynamic. there is a history of not letting people die in the streets in france don't have a history of lettin of letting fre
in the streets, so here's the kind of response i envisioned which i do not think it's naïve i think it is entirely practical, but you are going to have two say i'm not going to let you starve, so don't tell me that there's nothing you can do a. it's time you got your act together. what i'm saying is dealing with those human beings are going to be pushed down to the level you have the best chance of getting an effect. we have a helping hand of sympathy and other people need a kick in the pants.
the people that are closest to them, the people that are most effectual addend letting the got bureaucracies and they must be run by rules that are not very easily adapted to the complexities of human needs a. people have lots of problems and need to have those problems addressed. in terms of their eye isp came e in the 19th century and said we've never seen anything quite like this and that is the extent to which american communities especially in the north and west dealt with their problems in forming associations as they
described. there are very few if any societies around the world that did it as needed. i have sometimes made the case and tried to document it with numbers that if you took the philanthropic efforts in new york city i'm willing to say the amount we spend on those who are far more than the tax base new york city could have ever matched in terms of government services if they decided to do the government programs. a lot of that has gone away and i would like to see that come back because that is the stuff of life of communities. that's what makes it rewarding in the same way that you worry about what makes a vocation rewording and a family rewordi
rewording. the title of the book comes from the concept of putting life back in our hands as individuals and families and as communities. so i will stop there and turn it over. >> thank you, charles. it is a pleasure to hear you talk about civil discourse because i consider you a master of that for one of the reasons i enjoy interacting with you. charles wrote a book called coming apart and i liked a lot of what i read and i didn't realize at the time a lot of the dynamics in th the current viewd if you haven't read that you should go back and look at it. what i would like to do is talk
about why i think the idea for the universal basic income is misguided in the sense that it would compound some of the problems we have in our economy and get rid of a lot of important programs that have evolved in ways that which they are having their intended effect and extremely effectively and efficiently. in addition to what we have not broken, don't fix it.
charles is part of a larger movement where many social and economic commentators are very much concerned about the future of work from the perspective of charles and thinking i'm going to disagree with that but if i end and this will take ten minutes tops on the notice of agreement in areas in which i think charles as he always does its something with elevating and perhaps agreeing upon. so this may be but i will assert based on extensive evidence that social security, medicare, medicaid are all working very well having their intended effects there are certainly
aspects of those programs that need work as charles suggested and they must be resolved for the social insurance program but in the very first page of the book it says suspend political disbelief which is a very reasonable thing because you're going to read about a very large game changed. the social insolvency of the program is a less heavy lift and getting to any of these kind of changes. so let me start with social security and work my way through that list quickly. social security in the absence of elderly poverty would be about 44%, social security takes it down to about 9% of.
it's 5% of the benefits paid. social security risk adjustment provides the same return as the kind of stock market investments charles have. it's the risk of putting the retirement account in the stock market and we have the account with gw bush and one of the reasons it went away was in part because the market kind of tank around the debates that reminded people of the importance of the accounting for risk talking about the pension program.
medicare not only is a deeply beloved program but i think he would have some real headaches to deal with that aspect. but again it's a very highly efficient program and if you look at the cost of the cost increases and of course if you want to ask where are the fiscal pressures coming from they are from the cost pressures of health care in particular you will find that consistently year in and year out it grows more slowly than the private health coverage even controlling people's medical conditions.
get yourself a favor it isn't hard to find. look at a plot of the uninsurance rate, the share of the population that lacks insurance and all a line where it comes into place. if you do this for them on children and adults you will see particularly what i mean by the way getting rid of the child insurance as well. drawing the line where it comes into play you will see that for the year in and year out on insurance rate drop off the cliff was going to go down because of the rate of people that were uninsured with 50% in 2012010 is about 9% today. this also has to do with changes in medicare delivery. if you look at projections of healthcare spending, the kind of delivery measures that are in other things.
it's like $8 billion if you take this out a couple of decades. so, these programs are proving to be the efficient, effective and as we used to say bending the cost curve in ways that are extremely important and i fear are going to the private sector solution that charles advocates. now the safety net. i very much disagree with the assertions about the extent of the safety net. i think that there may have been a time when it was more of a problem. but over the last 20 years, the safety net has become increasingly conditioned if you're a disabled and elderly were working person, the safety net is now tilted towards you than against you and this causes another problem that has a share of households in deep poverty
disconnected from the job market and by the way, here the cash grant would probably be helpful on top of what we are doing as opposed to replacing it. as again we are not doing powerpoint which is fine. it's often cited incorrectly. it's the anti-poverty effectiveness of the earned income tax credit and the expansion of the nutritional support, those aren't in the official race but in the supplemental race it's come down from about 26% in the late 1960s to about 14.5% today about a 45% decline. moreover, look at how it performed in the great recession, the deepes deepest we had since the great depression.
that means that counter cyclical impact of the safety net is more effective than it has ever been before. two more planes and then we will turn things back over to charles. it is simple math that if you are going to take a system of transfers that is disproportionately tilted to thosthose at the lower end of te pay scale, for simple arithmetic that if you are going to take a transfer system that is disproportionately targeted at poor and low-income people in this debate among everyone, you are going to dilute the distributional impact of the transfer system that is you will be pushing back on the equity or the equality inducing aspects of the safety net. so as i mentioned at all facets of equality that we have seen in
the market incomes and they take that away and push back the other way by taking a set of programs that are targeted at the low end and diluting the low-income effectiveness by distributing them broadly. the kind of robots are coming for our jobs crowd i want to stipulate that and charles doesn't say things lately, so i want to defer to certainly the possibility that future will be different i than the past. however, it is true in the idea that the future technology will be inducing in the future has never been correct. but here is why i am so specifically doubtful about this claim in at least the near-term
believe that you would want to take apart a system that i think is working extremely well and replace it with one that is inequality inducing and less effective. i will save my areas of agreement. >> so we have these efficient programs. in the transfer payments we have millions of people in the poverty. we have an intransigent set of people that are not able to live in the decent distances in spite all of these programs.
under the current system but can they get? you know these numbers better than i do, they can get food stamps or some other type inference of what it can do and the entry into not just escaping from poverty but entry into a more comfortable life is pretty much shut off to him in lots of ways. there's a lot more than those things for the low skilled work. now, think about marriage which has been declining rapidly in the working class. marriage which is one of the best ways for all sorts of good things to occur. all at once if you get married and yo your low income.
the safety net shouldn't be viewed simply in terms of lining up dollars and things more but i still think i would come out on top of. it's suggesting the bottom fifth gets on average about 15,000 a year. that's before social security and that's important as i wasn't just a minute. to defuse a bunch of transfers at the income scale even given the marginal tax rate on the higher income people you would still be distribution only, it would be not equalizing.
we have a very nice paper that came out recently from the center that makes this point in a way that we want to be explicit about it. if you take them on with a couple of kids, she is working half-time at the minimum wage she ends up with an income based on the benefits of her food stamps over $6,000 the child tax credit is close to 700. she doubles her effort and is working full time. $7.25 is too low we might even agree on that. so it's a very low minimum wage and double the work gets to the point of the work disincentives. does she end up with less? she ends up with 1.5000 in food
stamps and more than makes up without into eit c. in the child tax credit it goes from 18,000 to about 26,000. that's the work incentive currently built into the system. recognized as that is going on, she is contributing to social security and paying people taxes. getting rid of social security is the part of the plan that i dislike the most because he says everybody should invest in the stock market. there is no rule that they have to do that and i would agree with his admonishment that is what you should do. a lot of people won't do that because they can't afford to do it. they might not because they have the hyperbolic great meaning
they are not giving a crap about the future, a different way of saying the same thing. and the solution in this case isn't a guaranteed pension mike social security so again this is that private account i'm happy to have once again although we did this very thoroughly. >> here i have an issue to move the topics along the. >> a lot of people don't get so scared. you could be 65-years-old with a variety of conditions you either get very little social security or none at all if they had been all their lives they didn' didny that pennsavethe penny and got n grand. let me just make a blanket
statement and say it is to be continued. i think about putting money in the pockets of low income people i think i can come out looking very good. i'm going to put that aside and bring up another topic i want to get to and that is the future of work and where we stand right now. labor force participation has been dropping especially notoriously even more among white males. they are out of the labor force and that has been increasing. in addition to that, we have the question of jobs. i absolutely grant you that they have been wrong.
this time is different. it is a dicey proposition to make. i would argue that with the previous transitions you could have a rational person who could have seen things were not going to be so bad. what are you going to do with millions of white-collar -- here is generated. i've got to do this quickly. i know the morass into which i'm stepping.
it's the matching numbers of the jobs that are going to disappear into there are examples i could give to you. let me put it this way. can i prove to you that this time is different? i would have a hard time doing it if we spent three hours. it's something that i think all of us ought to be thinking carefully about. >> one final comment about this. the decline on social capital that was made famous, and a lot of the reasons that it has continued had to do with the fact other good things occurred such as going into the labor
force in having the opportunity to go into the labor force i think that was a good thing. good things can have collateral effects and one of those is an awful lot were huge among social capital in the form of making the community's work. they would make it for the women that want to be possible to be at home taking and raising children and being deeply engaged in the community.
i'm getting stuff where i lived that is valued and if i were not doing it i would be missed if. one of the things w the things e universal income is that it does allow people not to take lousy jobs they don't want. it's the lack of bargaining power. there is common ground and it was interesting to hear charles say i left out defense because these are expenditures that don't count as transfers and i agree with that.
it's one that i think i share with most americans and that's the idea of investments such that the as a nation have agreed since the 1930s that we are going to have a guaranteed pension from the elderly that could be improved but the idea of the variable here's a couple thousand dollars and i hope you invested in the market truthfully, no we are going to have healthcare securities. we are going to have a safety net the dissident just the food stamp program or head start. these programs over generations
have been found to work like investments. they lead to less obesity, better educational outcomes and employment outcomes, better educational outcomes and earnings outcomes. so the kids that grew up getting these benefits did better than those that didn't get them when they were in adults so the investments are in areas that market failures will not lead to excessive elderly poverty so that's my signature objects into the plan. nick was reading a book on this and i guess in the industry now they are disciplined because -- disagreeing with the next
diagnosis but the evidence is extremely well put together, so i will check that out. the problem we have which is how i spend my working day, it's one of demand. it's the potential for gdp. if we were fully employed we would be generating more output. we have been in full employment in the job market only 30% of the time. there's nothing devilish about it and until we establish that
we have all we can get used to cyclical benefits of the strong demand economy to pull people back into the market one of the points i made about the work is that the employment population ratio that so during the great recession has climbed two thirds of the way back. it's a very cyclical variable. it's not that people are running away from work, it's that there's not enough jobs. so if we have the absence of the full employment demand to sign off on a technological unemployment peace is the program that i fear will increase in equality and so here's the thing i agree i'm. >> but if we had a guaranteed jobs program i think there's a lot of work to do out there. we may disagree on that the
absence of full employment and macroeconomic deficits instead of guaranteeing income would guarantee jobs and i think that's politically that is a less heavy lift because there are people in the institute where it's more consistent with even your work if you go back to the welfare work. >> the government allow the employer private-sector jobs. >> here is what you hear when you go to employers. these are employers trying to run their businesses and they say all i want is somebody who will show up on time every day,
it's the conversations in the barbershop scene where they are now somebody is going to walk into the bar and they have this great get rich scheme where they are going to buy tulips and yes there will be people who do that and people around the bar rolling their eyes saying they diversified portfolio and it is going to be a lot more and it's part where everybody has ten grand the dynamics change within the communities and the assumptions they make about each other. >> that is an objection i have
as well i tried to suggest in my comments. people will underinvest or especially i can't imagine why it would break a system that guarantees the pension now. i think social security is an extremely pervasive program. it is a catastrophic plan where you have to take $3,000 off the top of the grant and by this catastrophic health care in the market and so this is basically just the high deductible plan and hear the psychology comes
into play because what we have found is especially for the low and middle income people that have a high deductible plan it doesn't make them more price conscious or shop more. what it does is they don't go to the doctor until they are sick and they don't get preventive care. >> i will go here and then back there. >> [inaudible] until you get to the 17% there are a few anomalies and second
how well your plans, what will your plans do come and will that help increase marriage were decrease? >> there are different outcomes for different people. i will tell you a couple things where the incentives will become and one of those has to do with children. from the woman's point of view today having a baby creates an income stream. not making any collateral statements, i'm saying having a baby creates an income stream. having a baby is strain on the
income stream. we know what is going to cost a lot of money but we really want to do this. for the guys, it is much more blunt and brutal. you cannot enforce child support he comes back and has no income or whatever well, he has a known bank account with electronic deposits and it's easy to establish beyond a shadow of a doubt all the judge has to do is say you will never se see it ant goes directly you think maybe it creates a drain on their income stream in the incentive but the issues of marriage and pride and work i recommend people look at
it and i think there are lots of ways which you are going to create the value of places where people are functioning in their communities in ways that game then respect and give them a status for what they are doing. [inaudible] >> thank you very much both of you. going back to the civil society what would be the reason we had a federal welfare state and to sort of suspended the political disbelief if they said this is it for the next term would they
be first in line to say no way josé -- >> i will be quick with my response to that. the first programs done were the objects of sympathy mainly widows with children. that's where h we got the first and national welfare program at the second thing is that it seemed simple at the time and that was true also in the 1960s and incrementally acid .-full-stop. people don't have jobs, give them jobs, they don't have skills, send them to job training and mothers don't know how to take care of their children, teach them parenting coming and it was only after they began to get these build up that it became obvious you get
all sorts of implementation problems but by that time a great deal was the responsibility of the families and communities in this is the governments job. .. >> impact it is better to provide a low income moms with kids with the resources they need to raise their child as opposed to deprive them of some kind of punitive measu