MCViewPoint

Opinion from a Libertarian ViewPoint

Forget Guaranteed Income — Governments Should Stop Destroying Income First | Mises Wire

Posted by M. C. on March 23, 2019

https://mises.org/wire/forget-guaranteed-income-%E2%80%94-governments-should-stop-destroying-income-first

…Therefore, if UBI proponents are genuinely concerned about those on the lower rungs of the income ladder, they should abandon their minimum income crusade and instead pressure the government to do two things. First, immediately abolish all regulations which prohibit people from earning income. Second, announce that all welfare programs will be abolished in six months. In this environment, special interest groups (the 1%) lose the regulatory benefits they lobbied for, while the level of prosperity rises considerably for the former welfare recipients and other members of the 99%.

What are these regulations? And if they are abolished, how much higher can the level of prosperity be for the 99%?

Regulations

…When a special interest group (e.g. a corporation or group of corporations) lobbies the government to enact a new regulation, they are the intended beneficiaries, and they often write the regulation themselves. Politicians promoting a new regulation also act out of self interest, collecting rewards from the regulatory beneficiaries, such as political campaign contributions, corporate jobs after departure from political office etc. The propaganda used to justify regulations is that the government must protect consumers 

Prohibited Income

In 2013, John Dawson (Appalachian State University) and John Seater (North Carolina State University) published a long-term study (see here or here ) of the effects of U.S. Federal Regulations on economic growth. They estimate that “annual output by 2005 is about 28 percent of what it would have been had regulation remained at its 1949 level.” Their sample period ends in 2005, but under the assumption that the ratio of 28 percent carries forward to 2011, they say that nominal GDP in 2011 would have been $53.9 trillion instead of $15.1 trillion, and “an annual loss of $38.8 trillion converts to about $277,100 per household and $129,300 per person.”

Remember, they are estimating the amount of economic output which has been prohibited by all U.S. Federal Regulations implemented since 1949. So, in 2011, each U.S. household was legally denied the opportunity to increase their income by an average of $277,100…

Conclusion

As Senator Elizabeth Warren officially launched her 2020 presidential campaign, she expressed concern about “a rigged system that props up the rich and powerful and kicks dirt on everyone else.” She is correct, but this is nothing more than a sound bite designed to resonate with the general public. As with most political speeches, Warren’s comments are vague, providing no details about how the system is rigged with thousands of regulations. Instead of accurately describing the problem, we get hypocrisy: “She wants large companies to be more tightly regulated.” Beware of people like Elizabeth Warren. There are many like her. They are wolves in sheep’s clothing.

Welfare programs and wealth taxes: the government’s pretense of transferring a little bit of wealth from the rich to the poor is a smokescreen for the massive amount of wealth surreptitiously flowing in the opposite direction. So, when Ocasio-Cortez, Harris, Sanders, or anyone else proposes any type of guaranteed minimum income scheme, tell them “No, my preference is to liberate all prohibited income.”

Be seeing you

Faux

Identity Politics

 

 

 

 

 

 

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