“You don’t boost growth by cutting taxes, you do that by giving money to people”

This year’s winner of the Nobel prize for economics says, “You don’t boost growth by cutting taxes, you do that by giving money to people”

Guaranteed Minimum Income, folks. That's how you jump-start an economy. The problem is that wealthier people don't generally trust less wealthy people. And right-wing people especially don't trust poorer people. It ties in with the notion that wealthy people are wealthy because they are morally superior.. It follows, then, in their minds, that poor people must be morally inferior. This is the argument that is put forth again and again against social programs. Those on the right caution that "hand-outs" will make people dependent. Or worse, that these poor people are somehow taking advantage of the wealthier/society. (Think "welfare queens")

Balderdash!

If you put money in the pockets of people who have very little they will spend it in their communities. They have a huge deficit of needed items. The explosion in localised spending leads to job creation. More people move up the income ladder. It's a self-perpetuating economic engine.People who have little or nothing don't want to sit around all day and watch tv and do drugs. They want to live meaningful lives. They may want to further their education, but can't afford either the tuition or the time required because they are working multiple gigs to keep themselves fed and housed. They may have a dream of starting a business, a good idea but no time to do the planning and prototyping.

And some people may be accepting poverty because they have to be a care-giver for a parent, child, or other family member.

The Mincome experiment in Dauphin, Manitoba in the 1970s found that many people went back to school. Mothers took more time to spend with their newborns and young children. Domestic violence and workplace accidents decreased. Suicide rates went down. People started home businesses. It was a very positive outcome.

But, of course we can't have that, because then who would the wealthy look down on? How would they make themselves feel superior and important, if everyone had opportunities to live reasonably well and follow their dreams? All those contented and fulfilled people who used to be poor and desperate... What a nightmare!

It is common sense. If you give people a chance to quit a soul-crushing job and go back to school, or start their own business, they will be much happier, they will contribute more to the economy, they will fight less with their spouse or partner, they will have less need to numb themselves. The economy will grow because people at the lower end of the scale don't hoard their money in tax shelters and off-shore accounts. They spend it locally.

The resistance to this idea comes from those who cannot bear to see the playing field leveled, even slightly. But this is how we combat a culture where now people working 2 or 3 jobs still have trouble paying their rent. Where minimum wage is not a living wage. Where big companies keep employees on part-time hours to avoid paying benefits. Where the working poor is a growing segment. Where people are trapped on a treadmill they can't get off because they have no room to consider what else they might do with their lives.

Guaranteed minimum income offends the sensibilities of those who have more than they could ever need because they don't like to share. It's one thing to make a big flashy donation and get a university faculty building or hospital wing or sporting venue named after you. There's no glory in just paying your fair share of taxes.And, if people are given the opportunity to climb up out of poverty and subsistence living, who can the wealthy compare themselves to to make themselves feel good about their own life choices?

So they say, "How on earth could we afford that? Do you have any idea how much a program like that would cost?" Strangely, these same people never say "How can afford tax cuts for corporations? How can we afford tax cuts to the rich? How can we afford oil & gas subsidies? How can we afford to go to war?" It's not the spending that freaks them out. Do not be fooled. They only start screeching when it's spending money on people who are in the lower socio-economic segments.

Think about it. Talk to your local MP about it. We are starting a new session of Parliament. It's a good time for us all to up our phone-calling, petitioning, and letter-writing game. And here we have Nobel-winning research to back a solid economy-building initiative. We need to make our elected representative take a look.

Read the article here.