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Income Security


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Tuesday, May 26th 2009

Fixing the economy

Income security for all is the best and fastest way to fix or heal the economy.

But first:

Are you tired of news about “the economy”? When you listen to the people on TV and radio - the reporters, commentators, and authors; the bankers, CEOs, and economists; and the politicians, too - do you sometimes wonder if they even know what they’re talking about?

If you were to ask them a simple direct question, “What is ‘the economy’?”, do you think they could answer it? Most couldn’t, because it’s an abstraction.

Economists and some of the smarter politicians, President Obama, say, would likely define the phrase in terms of the GDP. That’s the total production of goods and services, all the stuff, but GDP is still rather abstract. And it includes lots of stuff that’s never used or shouldn’t be produced, such as weapons, crime, waste, and pollution.

A proposal: Turn off the talkers or tell them to shut up. Don’t be distracted or hypnotized or brainwashed by “the economy.” Let’s focus, instead, more concretely and specifically on our own economies. That’s important because there’s “the economy” of finance and Wall Street and economic analysts, and it’s very different than “the economy” of Main Street and ordinary people.

How is your economy? Do you have enough money? Could you get by if you or your spouse lost your job? What if you, your spouse, your child or a parent became seriously ill?

The way to fix “the economy” is to start with real people and our immediate needs and concerns. The most simple and direct strategy is to enact an idea that more than 1,200 economists endorsed in the 1960s - including economists from the left and the right who later won Nobel Prizes - and that is guaranteed income.

Instead of bailing out banks and subsidizing big corporations, we can and should give the money to ordinary people. Every adult citizen ought to get a basic income of, say, $1,000 a month tax free. Give the same amount to everyone, rich or poor, employed or unemployed, so we can distribute it with minimal bureaucracy and a real increase in equality.

“Citizen Dividends” would promote the general welfare, and we can pay for it by cutting the current programs that serve and subsidize only the special welfare of select individuals, groups, businesses, or industries. The general welfare, not the special interests. Bailout the people, not the banks.

This is a serious policy proposal. A guaranteed income plan passed the House of Representatives in 1970 by two-to-one, but was blocked in the Senate. Martin Luther King called for guaranteed income in his last book, describing it as necessary for real progress on homelessness, racism, and education. “There is nothing except shortsightedness to prevent us from guaranteeing an annual minimum - and livable - income for every American family. The time has come for us to civilize ourselves by the total, direct and immediate abolition of poverty.”

Before that, millions of Americans joined mass movements for income security in the 1930s, and their demands were key to enacting Social Security and other innovations. Similar ideas inspired the political reforms of the 1890s. Earlier proponents included Thomas Jefferson, Thomas Paine, and Abraham Lincoln.

Why don’t we have it? Because we’re not demanding it. We will have it if each of us tells our friends and neighbors about these ideas, and if we then start working together as citizens, as members of the We the People.

To learn more about these ideas, visit the home page and other material on this web site,

You can read the complete plan, the idea and how we can implement it, in Peaceful, Positive Revolution,which is available from Tendril Press.

I hope you’ll also comment on this blog. And please help spread the word.

Steven Shafarman

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4 Responses to “Fixing the economy”

  1. Stacey Derbinshire Says:

    You know, I have to tell you, I really enjoy this blog and the insight from everyone who participates. I find it to be refreshing and very informative. I wish there were more blogs like it. Anyway, I felt it was about time I posted, I

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  4. Loren Says:

    Hello Steven Shafarman,

    The problem I have with your approach is in these two sentences:

    Every adult citizen ought to get a basic income of, say, $1,000 a month tax free. Give the same amount to everyone, rich or poor, employed or unemployed, so we can distribute it with minimal bureaucracy and a real increase in equality.

    First, $1,000/month is not sufficient. In today’s economy, that is poverty.

    I think Martin Luther King was right when he said (in his 8/16/1967 speech in Atlanta entitled “Where do we go from here: Chaos or Community”):

    “Two conditions are indispensable if we are to ensure that the guaranteed income operates as a consistently progressive measure. First, it must be pegged to the median income of society, not the lowest levels of income. To guarantee an income at the floor would simply perpetuate welfare standards and freeze into the society poverty conditions. Second, the guaranteed income must be dynamic; it must automatically increase as the total social income grows. Were it permitted to remain static under growth conditions, the recipients would suffer a relative decline.”

    The amount should be about $2,000 per month. Only in this way can we replace all the existing entitlement programs, including Social Security, Disability Insurance, Welfare, etc, and be certain that none of the recipients of the current programs will do worse under the Guaranteed Income.

    The second problem I have is with your suggestion that everyone should get the Guaranteed Income. This makes no sense, because the wealthy do not need income assistance. Why should a person earning over $100,000/ year receive assistance from the government? The way to insure equality is to make sure that everyone has the same choices. Each year, each adult citizen can CHOOSE which tax-bracket they would like to have applied to themselves: either (1) pay a flat 25% tax on your income (with no deductions or reporting to the govt on how you spend your money), or (2) receive a NEGATIVE INCOME-TAX stipend of $25,000, and pay a flat 50% tax on any other earnings (again with no deductions). [Note that upon reaching the breakeven point of earnings of $100,000 per year, a person would do better to choose the first tax-bracket, of 25% flat tax. Also note that corporations would not be eligible for the second-tax bracket, but would simply pay 25% of their Net Income, and still be required to show detailed income and expense statements ... after all, we have to keep the accountants employed, and the corporations honest!]

    Replacing the existing US Tax Code with such a plan would eliminate most of the bureaucracies, and be completely fair to all. All we have to do is get President Obama to make this change, either by legislation or emergency powers.

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