The $25,000 Solution

As I’ve made annoyingly clear to most of my friends and acquaintances–the people who stand still long enough to hear me say a full sentence before looking for a safe exit–I have a simple, elegant answer to many of the intractable ills that plague America: poverty, a failing educational system, crime, the illicit drug trade, stagnant inner-city economies, the obesity epidemic.

Here it is: Let’s give $25,000 in cash, no strings attached, to each and every American who lives below the federally set poverty line (and no, I don’t care what your papers say: if you’re here, you’re an American). It’s a yearly payment until you don’t qualify anymore (and no, the payment does not count as income and wouldn’t disqualify you; only earnings independent of the poverty stipend count to get you out of poverty and off the program. We’re talking about cold, hard cash here: no bureaucrats wanted, no social engineers need apply for a grant.

I can hear the peals of outrage: You mean, just give all those poor people all that money? Just GIVE it to them? That’s crazy! They’ll spend it all on crack!

I answer unruffled: It may be nuts. And some of that nicely redesigned cash may be spent unwisely. But what we’re administering is the only weapon that’s proof against all the problems mentioned above. When confronted with difficulty, doubt or obstacles of any sort, the affluent in America utter slogans about values and steadfastness. As their words die on the wind, they wheel in their trusty artillery: the credit accounts and cash reserves. Meantime, we bleed little dribbles of cash into the lives of the poor, and all it does is keep them poor. Their poverty and all that accompanies it, from lousy health care to crappy schools, is tolerated with a wink of concern and a nod to reform, and little, very little, changes. It’s not that we don’t mean to do better. We do. Millions of people far better than me have dedicated their lives to improving life for others. I just think it’s time the rest of us, through our gigantic government ATM machine, got into the act.

Don’t think about the downside for the moment–where in the world will we get all that money?–think about the upside: First of all, an economic stimulus that would have groceries and big-box stores and banks and other services the rest of us take for granted fighting to get into neighborhoods they’ve shunned for generations; that stimulus would also have a far-reaching impact in creating new government revenue. Second, removing the principal motive and driver for most inner-city crime. Third, giving the have-nots some real clout about where they send their kids to school. Fourth, providing resources for community self-improvement projects.

Now about the cash. Spending that kind of dough should give us pause. Some recent statistics show that 37 million Americans live below the federal “poverty line.” Let’s round up to 40 million, since things haven’t gotten any easier in the year and a half since those numbers came out. Now if we gave each of our less fortunate fellow citizens 25 grand apiece–everyone in the family gets a payment, even the kids and the ex-cons who never graduated eighth grade–that comes to $1 trillion.

But where there’s a will, there’s a way. Over the last five or six years, we’ve been reminded of that repeatedly, especially when it comes to the government and money. Iraq: $550 billion and counting (that amounts to a $25,000 payment to every Iraqi–even the ones who don’t love us). The negative economic impact over the next generation is forecast to be as much as $3 trillion. Bush tax cuts: the total number is so high it will make your nose bleed, but the yearly cost if they’re made permanent is expected to be $400 billion. Then there’s the Year of the Bailout. It’s getting hard to keep track, but off the top of my head: $30 billion for Bear Stearns; Fannie Mae/Freddie Mac: $200 billion; Great Bailout of Ought-Eight: at least $700 billion. I feel like I’m forgetting a couple hundred billion somewhere.

Now, the architects of our tax cuts, wars, and financial mega-rescues say roughly the same thing in defending their handiwork: it’s all necessary for our prosperity, well-being, and national survival. I’ll make the same claim for my $25,000 Solution: It’s a prescription for the economic and social ailments that beset not only the 40 million people who live in poverty, but for the entire society that has failed in its efforts to address those ailments.

And really, after the Bush years, what could it hurt to try?

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4 Replies to “The $25,000 Solution”

  1. A while back I heard some loon on a street corner offering this same plan.
    Wait! That was you!
    OK, my only issue is with money going to kids. This provides a huge incentive for people to have babies. And while the $25,000/year would doubtless go a long way toward those kids being properly cared for, I just don’t think we need a lot more people. I know this proposed legislation needs to remain “clean” if it is to sail through Congress (you’ve let anyone know it needs to be wrapped up by the end of the week, right?), and any messing with its elegant simplicity only opens the door for endless tinkering, but I think this is an issue that needs to be addressed. If people want to have kids, that’s fine. But we don’t need to encourage it.

  2. This idea is no worse then handing out dough to the Wall Street crowd. When they (Wall Street) need 700 Billion dollars to buy out their debts…well, there must be some fraud in there somewhere. And it’s not that I don’t like Iraqis but why should our grand-kids be paying (50 years from now) for Operation Mission Accomplished? All the money tossed at Wall Street and Iraq is panning out to be money tossed down a rathole. Can’t do any worse by handing money out to citizens. At the very worst it would stimulate the economy in this country…from the bottom up. Kind of the trickle-up effect.

  3. This has the same problems as other programs which has sharp qualification boundaries. You create incentives for people to stay under the boundary, since earning slightly more will actually entail a significant cost. That’s why Milton Friedman favored a negative income tax, which maintains marginal incentives across all incomes.

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