For lack of social insurance

This is not Matt, it's his avatar. If you can identify it, Matt will let you come into his tree house.

This is not Matt, it’s his avatar. If you can identify him, Matt will let you come into his tree house.

Somebody’s poking their stick into my cage again. Again with the UBI? Really?? Today it’s Matt Bruenig at Demos. Matt & Demos do good work. I’ll probably talk about it some time. Meanwhile, Matt suggests that social insurance needs its own insurance back-up, namely a UBI.

It is quite true that social insurance does not cover every curve that life can throw at you. It isn’t supposed to. It’s mainly insurance against the possible deprivation of labor earnings, which is what most people depend on to live. Loss of earnings in old age, in disability, in death, due to injury on the job. Even from that narrower standpoint, there are still some big holes in it. For one, with no work history you may not qualify for any benefits, even though you are unable to work. As Matt points out in the case of unemployment insurance, even if you fall into the category of nominally eligible, circumstances can conspire against you.

Another big hole that will be dawning on the U.S. before long is the lack of coverage for long-term care. If you don’t know anyone who has gotten very ill, you might not know that health insurance and Medicare only apply to the services of medical providers — doctors, hospitals, drugs, some medical supplies. You could have a chronic condition that prevents you from being able to take basic care of yourself — dress, bathe, go to the bathroom, eat, etc. In insurance lingo, they’re called “activities of daily living.” You might need 24-7 care. You might need somebody to tend to IVs every day, or change bandage dressings. There is scant help for that under health insurance or Medicare. If you don’t mind spending all your money, you could get onto Medicaid and go into a nursing home. Probably not a great nursing home. A nursing home that provides a few skilled nursing services that you may need can be hard to find. I know; I’ve been there. Social Security Disability Insurance can replace some lost wages, for those who qualify, but it isn’t enough to pay for 24-7 nursing care, even unskilled care. Unless you have very good luck with employers providing group coverage, long-term care insurance can be prohibitively expensive.

So there is no question that social insurance is not the end of what an ample welfare state should provide. The question is, is the UBI the most logical supplement to social insurance? I would say no.

Would you say $10,000 is an adequate UBI? If you would, then the cost for the U.S. is upwards of $3 trillion-with-a-T. As I’ve noted in the past, this exceeds the entirety of Federal revenue expected next year. How would any UBI — you tell me for how much — fit together with the rest of the safety net? What would go and what would stay?

I too would like to attack the deprivation remaining after our social insurance programs do all they can. How to do this? I’ll have to repeat myself at this point. My exceptions to the UBI are pragmatic and political. I’m looking for more likely ways to skin that same cat.

One channel is to socialize services that are both central needs of those left behind by social insurance and desired by everyone. So universal pre-K, subsidized child care, community walk-in health clinics, drug treatment, free public transportation. Not all of these are logically national programs. We have over 90,000 local governments with a role to play as well. The key principle is that collective consumption — public goods — can be more economical than individually-purchased services for the same purpose. Make your own list! Dream big. It’s fun.

People will still need cold cash. People want to buy their own damn groceries. Food, clothing, and shelter. So we will need some kind of public assistance too. Why not a UBI?

A politically-acceptable UBI would be too low. (See $3 trillion, above.) It’s true that universal benefits are more popular than targeted ones, but that’s a bit of a circular assertion. You only get universal benefits if the idea is popular in the first place, notwithstanding the inordinate expense. Most people will be able to compare their financial well-being if they receive a UBI but also pay the taxes to finance it. Many will not be enthused by this knowledge.

I agree with Matt that a safety net of some type, but not necessarily a UBI, complements social insurance. I’ve mentioned before that the politics of means-tested or unconditional benefits might be easier with adequate social insurance for everyone else. My political antennae tell me Il Manifesto is the correct line. I’d say the case for a UBI depends on specifying some of the pesky details and then laying out a political scenario wherein the scheme could come to fruition. In a country where thirty percent of the population can’t decide whether Obama is a Muslim or an extra-terrestrial lizard.

If I start arguing with Twitter, my life would be near forfeit, but to the notion that the U.S. could do what Alaska does, I’d note that the total profits of the big five oil companies is reported as $93 billion. Remember trillion-with-a-T? Suppose Michael Moore led a revolutionary uprising and nationalized the oil, with zero compensation to the owners, which includes some of you and your paltry IRA accounts. $93 billion would be one piss-poor UBI.

This is an ancient problem. If it were as simple as a UBI, it would have been solved long ago.




For lack of social insurance — 15 Comments

  1. Question – would UBI be like the Alaska oil fund (given to everyone, regardless of income or wealth) or a minimum guaranteed to anyone falling short? The former would be $3 trillion. The latter would be much less.

  2. Pingback: interfluidity » Links: UBI and hard money

  3. I’ll grant that you may be right about UBI, probably are right, although politics and pragmatism can be a tricky thing. They could conceivably push through a generous UBI after the next crash if it’s really bad. Like FDR and the New Deal.

    But as a far as 3 trillion being a lot, I think this plays into government debt hysteria and the old “sound finance” canard. It may be a nice rhetorical trick to play against the budget-conscious libertarians and Voxsters pushing UBI, but I think it’s a matter of winning a battle and losing the war.

    Borrowing from South Park, the “sound finance” types successfully pulled this on us:

    1. deficit hysteria
    2. Clinton balances budget
    3. …
    4. Bush tax cuts

    It’s the same thing with arguing that the military is too expensive or bailing out the banks is a waste of money. Yes there are better ways to spend money but the government has a long way to go before the bond vigilantes appear and there’s a run on the dollar.

  4. Oh per twitter, my news viewing (often via DVR) is Daily Show/Colbert Mon.-Thur.; Bill Maher Fri.; Saturday Nigh Live News Update Sat.; Last Week with John Oliver Sunday.

    SNL is often the weakest with the other three leaning left, but last Saturday their new announcer Michael Che ended with a joke with some sting. Joking about how Obama’s presidency is almost over, they joked that blacks would always consider him a hero no matter what. He’d have streets named after him and parents would warn their kids not to travel north of Obama Avenue.

    Obama and the Democrats seem fine with tossing the Senate:

  5. (Be careful at work searching Google images for “John Rawls.” Somebody thinks it’s funny to post pictures of nekkid ladies with philosophy book titles.)

  6. Peter K and others:
    You seem relatively unconcerned about the public debt.
    If so, are your feelings similar regarding private debt?
    What are the primary differences between the two types of debt?
    Don Levit

  7. Well look who showed up, Don Levit. Don had been a regular troll-type commenter on Angry Bear for a while. Regardless of how or who answered his tireless and ill conceived comments he would simply and continuously repeat himself in slightly modified form. Above you see Don’s endless effort to equate government and personal debt. He has already been replied to with enough information to fill a philosophical treatise on debt.

  8. Is Brazil’s conditional cash transfer program (Bolsa Familia) somewhat like a UBI?

    “This return to growth, plus the government’s use of increased revenues to boost social spending, has reduced Brazil’s poverty rate by 55 percent and extreme poverty by 65 percent. For those in extreme poverty, the government’s internationally renowned conditional cash transfer program (Bolsa Familia) provided 60 percent of their income in 2011, up from 10 percent in 2003. A hefty increase in the minimum wage – 84 percent since 2003 after adjusting for inflation – also helped quite a bit.

    Unemployment has fallen to a record low of 4.9 percent; it was 12.3 percent when Lula da Silva took office in 2003. The quality of jobs has also increased: the percentage of workers stuck in the informal sector of the economy shrank from 22 to 13 percent.”

  9. Dear Mr. Troll,

    Private debt is bad for the working poor and those with low incomes. If they lose a job they’re in big trouble.

    It’s not so bad for the banks like Lehman Brothers or Bear Stearns. They can be bailed out or snuffed out.

    Now go back to lurking under your bridge.

  10. And that right there is your gigantic straw man. You have defined the problem and solution out of the discussion.

Leave a Reply

Your email address will not be published.