Fade the Butcher
04-03-2006, 09:29 AM
An interview with Charles Murray, author of The Bell Curve: Intelligence and Class Structure in American Life (http://www.amazon.com/exec/obidos/tg/detail/-/0684824299/qid=1144056281/sr=1-5/ref=sr_1_5/104-1862417-2826369?v=glance&s=books) and Human Accomplishment: The Pursuit of Excellence in the Arts and Sciences, 800 B.C. to 1950 (http://www.amazon.com/exec/obidos/tg/detail/-/006019247X/qid=1144056281/sr=1-6/ref=sr_1_6/104-1862417-2826369?v=glance&s=books), about his new book In Our Hands: A Plan to Reduce the Welfare State (http://www.amazon.com/gp/product/0844742236/104-1862417-2826369?v=glance&n=283155).
Podcast MP3 (http://www.tcsdaily.com/Multimedia/audio/TCS%20Daily%20Spotlight%20Interview%20Charles%20Murray.mp3)
Transcript: TCS Daily (http://www.tcsdaily.com/article.aspx?id=032806A)
Max Borders: Joining us today we have Charles Murray, author of the new book, "In Our Hands: A Plan to Replace the Welfare State." Welcome, Charles.
Charles Murray: Good morning.
Borders: You've studied social safety nets for most of your career. What has the welfare entitlement state done to this country?
Murray: Well you have effects on two levels. One involves the effects of social programs intended to help the poor and the disadvantaged. And that was the topic of a book I wrote 20 odd years ago called Losing Ground, which said essentially we made things worse for the very people we were trying to help.
There is, however, another whole set of effects of the welfare state in the form of Social Security and Medicaid and other kinds of programs which take money from one American and give it to another American (whom the government has decided needs the money more). Whether it's taking it from a young person to give to a retiree, or whether it's taking it from a secretary in Alabama to give to a corporation that is getting a special favor from the government, all of these transfers -- and that's what they are: money from individual Americans to other individuals or to corporations -- seem to me to be a classic example of shipping money to Washington, seeing large amounts of it be wasted and go down the drain, and then it gets shipped out of Washington in much reduced form for dubious purposes.
And what "In Our Hands" is all about, ultimately, is saying: stop that. Just, if you're going to collect all this money, give it back to people as money and let them run their lives as they see fit.
Borders: And at the same time you eliminate the considerable degree of bureaucratic interference and, for that matter, the bureaucracy itself.
Murray: Yes, that's a topic I actually don't even mention in the book. I have not calculated the number of government officials who would be put out of work by my plan, but I'm sure it numbers in the hundreds of thousands.
Now the reason I didn't put it in the book is very simple: that's not the main point. It would be very nice to have these people engaged in productive lives instead of unproductive ones, but it's not the real purpose.
The real purpose could be perhaps summarized like this:
We start with a country that is the richest country in the world, with most of its people having lots of money (compared to any historical standard), ample money to provide for their own retirements, medical care, and the rest of it. On top of this national wealth, we then add more than $1 trillion to help people provide for comfortable retirement and medical care, and so forth. And guess what? We still have millions of people without comfortable retirements, without adequate medical care. And only a government can spend that much money that ineffectually.
The alternative I suggest is give every adult American, age 21 and older, $10,000 a year. And let them run with it.
Borders: So $10,000 for every single American? As soon as you turn 21 you start getting this money?
Murray: That's right. And there are a couple of key points to be made here because some folks will be thinking of past attempts at negative income taxes which provided a floor under income and certain experimental programs. And this is different. This is not a floor. This is not a case of, "if you make less than $10,000 a year we will top up your income to $10,000." This is $10,000 period. And so if you're making $10,000 a year, your net is $20,000. If you're making $20,000 a year, your net is $30,000.
There are some complications down the road, but they aren't very important. I'll just mention them real quickly.
At $25,000 of earned income you start to pay a surtax on the grant, and that reaches a maximum of half the grant. So at $50,000 you only have a net of $5,000 from the grant. The reason for that is pretty simple -- that you want to give upper income people something for all the money they're putting into taxes right now to provide for their own medical care and retirement, and they get that net of $5,000. And I argue it's a better deal than what they're getting now.
But the other main point is that the surtax doesn't kick in until $25,000 of earned income. So the negative work incentives are pretty small. . . .
Podcast MP3 (http://www.tcsdaily.com/Multimedia/audio/TCS%20Daily%20Spotlight%20Interview%20Charles%20Murray.mp3)
Transcript: TCS Daily (http://www.tcsdaily.com/article.aspx?id=032806A)
Max Borders: Joining us today we have Charles Murray, author of the new book, "In Our Hands: A Plan to Replace the Welfare State." Welcome, Charles.
Charles Murray: Good morning.
Borders: You've studied social safety nets for most of your career. What has the welfare entitlement state done to this country?
Murray: Well you have effects on two levels. One involves the effects of social programs intended to help the poor and the disadvantaged. And that was the topic of a book I wrote 20 odd years ago called Losing Ground, which said essentially we made things worse for the very people we were trying to help.
There is, however, another whole set of effects of the welfare state in the form of Social Security and Medicaid and other kinds of programs which take money from one American and give it to another American (whom the government has decided needs the money more). Whether it's taking it from a young person to give to a retiree, or whether it's taking it from a secretary in Alabama to give to a corporation that is getting a special favor from the government, all of these transfers -- and that's what they are: money from individual Americans to other individuals or to corporations -- seem to me to be a classic example of shipping money to Washington, seeing large amounts of it be wasted and go down the drain, and then it gets shipped out of Washington in much reduced form for dubious purposes.
And what "In Our Hands" is all about, ultimately, is saying: stop that. Just, if you're going to collect all this money, give it back to people as money and let them run their lives as they see fit.
Borders: And at the same time you eliminate the considerable degree of bureaucratic interference and, for that matter, the bureaucracy itself.
Murray: Yes, that's a topic I actually don't even mention in the book. I have not calculated the number of government officials who would be put out of work by my plan, but I'm sure it numbers in the hundreds of thousands.
Now the reason I didn't put it in the book is very simple: that's not the main point. It would be very nice to have these people engaged in productive lives instead of unproductive ones, but it's not the real purpose.
The real purpose could be perhaps summarized like this:
We start with a country that is the richest country in the world, with most of its people having lots of money (compared to any historical standard), ample money to provide for their own retirements, medical care, and the rest of it. On top of this national wealth, we then add more than $1 trillion to help people provide for comfortable retirement and medical care, and so forth. And guess what? We still have millions of people without comfortable retirements, without adequate medical care. And only a government can spend that much money that ineffectually.
The alternative I suggest is give every adult American, age 21 and older, $10,000 a year. And let them run with it.
Borders: So $10,000 for every single American? As soon as you turn 21 you start getting this money?
Murray: That's right. And there are a couple of key points to be made here because some folks will be thinking of past attempts at negative income taxes which provided a floor under income and certain experimental programs. And this is different. This is not a floor. This is not a case of, "if you make less than $10,000 a year we will top up your income to $10,000." This is $10,000 period. And so if you're making $10,000 a year, your net is $20,000. If you're making $20,000 a year, your net is $30,000.
There are some complications down the road, but they aren't very important. I'll just mention them real quickly.
At $25,000 of earned income you start to pay a surtax on the grant, and that reaches a maximum of half the grant. So at $50,000 you only have a net of $5,000 from the grant. The reason for that is pretty simple -- that you want to give upper income people something for all the money they're putting into taxes right now to provide for their own medical care and retirement, and they get that net of $5,000. And I argue it's a better deal than what they're getting now.
But the other main point is that the surtax doesn't kick in until $25,000 of earned income. So the negative work incentives are pretty small. . . .