Another Idiotic "Free Money" Proposal, This One From Chicago Mayor Rahm Emanuel

-edited

The economic lunatics are out in force, each upping the scheme previously proposed.

The Chicago Resilient Families Initiative Task Force, sponsored by Mayor Rahm Emanuel has an asinine proposal on the books.

I picked this one up from ZeroHedge. My analysis follows.

The report is 50 pages long and you have to wade through 37 pages of sob stories, anecdotes and other sheer garbage, to get to the bottom line.

GUARANTEED INCOME PILOT

  • Sample: The "sample" will be 1,000 low-income Chicagoans.
  • Amount: Participants will receive $1,000 per month.
  • Use of Funds: Use of the funds would be unconditional. Recipients can decide how the income can best meet their unique needs and goals.
  • Duration: Participants will receive the disbursements for 1.5 years.
  • Benefits: We want to ensure that the pilot does not make people who are most vulnerable worse off by preserving eligibility for existing benefits such as SNAP, child care assistance, and Medicaid.
  • Cost: A minimum $12 million per year will be needed for the cash disbursements. An additional stipend for participation in interviews, ethnographic studies, and surveys can be provided to those who give consent. Operations cost to be determined.

Pilot 100% Guaranteed Success

The pilot will undoubtedly a success. How can it not be? If you give 1,000 poor people an additional $12,000 a year their lives are 100% sure to improve.

The Problem

It's easy to improve the lives of 1,000 people by giving the free money no strings attached. The obvious problem is that it cannot possibly scale.

The population of Chicago is roughly 2.716 million. Give everyone 1,000 a month and that comes to $26.1 billion a year.

OK So let's not give the money to everyone. It will no longer be "universal" income as discussed in the report, but something less.

Demographics

The Census dept has Chicago Demographics.

If we exclude those under the age of 18 and throw those over the age of 65 under the bus, then we can lop off 33.2% of the bill.

If we further restrict the "free money" handout to those at the poverty rate then only 12.4% of the population gets free money.

But we are seriously getting away from the concept of "universal" aren't we?

Nonetheless, let's start there. The cost would be a mere $3.2 billion.

Chicago Budget

The Chicago Tribune reports "The $8.9 billion 2019 package included no vote on new tax or fee hikes, music to the ears of the council members who will be up for re-election in February and don’t want to give opponents that cudgel as they try to defend their seats."

Bottom Line

Even if we only give money to those at the poverty level, 12.4% of the population, light-years away from "universal income" the Chicago city budget would go up by a mere 36%.

Scalability

One of the goals of the "study" was to prove the plan is scalable.

Scrap the study as nonsensical.

Mike "Mish" Shedlock

Comments
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Carl_R
Carl_R

I'll offer a radical alternative. First, eliminate the minimum wage, so that everyone can get a job, regardless of their skill level or ability. Second, supplement their income, but in order to receive the supplement, they have to have a job. This way everyone can find work, and everyone can benefit from the boost to self-esteem that having a job gives.

Carlos_
Carlos_

So free money to the poor for a change. Billionaires have been getting access to unlimited amounts at no cost for years and years. Good to see the democratization of free money

RonJ
RonJ

"Chicago's Bold Path to Fiscal Insanity"

They arrived at their destination some time ago. How long have city pensions been over generous and under funded?

AWC
AWC

Hell, give each Chicago taxpayer $75k, then, tax it back to pay off the cities debt. Why stop a $1k for a few "connected" people?

Knuckleheads.

stillCJ
stillCJ

Editor

A report was just issued on results of the Finnish experiment with universal income. For some reason they hoped it would result in more people willing to go to work. Surprise, surprise, that was not the result. The report I read did not make it clear if they are ready to abandon the idea, but at least they're not going to expand it.

ksdude
ksdude

Problem is there's a lot of people in the US that want free stuff. They can also vote. I don't really think they're going to debate rather it works or not. If you have zilch and someone offers you money and food every month it's pretty clear who's going to get the votes. $1000 a month might be the magic number to put down the bong and xbox controller and someone drag their ass to the polling station and install an entire legion of AOC candidates. The current environment will also help their cause. Trillions for wars, billionaires in the news constantly, a bunch of filthy rich politicians,i'd suggest AOC is much more of a threat than you realize. That could be a reason she's in the news everyday .

thimk
thimk

Chicagoans "come on down" the price is right.

Dsgn
Dsgn

"Nonsensical"? Didn't they used to call it "nonsense on stilts"?

Sudo
Sudo

Cost: A minimum $12 million per year - That is probably true. Most likely it will be something like: Cash disbursement ------- 12 million Stipends -------------------------- 3 million Administrative Cost ------- 100 million (Salary, Medical, Retirement and so on) Salaried board of Directors ---- 100 million Lawyers to handle the resultant legal issues ---- Only God knows

ReadyKilowatt
ReadyKilowatt

So what's changed? Buying votes is a tradition in Chicago politics. I guess now they don't have to use campaign funds.

JonSellers
JonSellers

Hayek was a fan of a guaranteed income in order order to insure a non-coercive relationship between job-seekers and job-providers. However, I'm not sure that folks in danger of losing their SNAP benefits qualify as job-seekers.

Chris P
Chris P

If this goes through, it will open up some great investment opportunities. The drug trade in Chicago will go through the roof. Not sure if you want to stand on the street corner to capitalize in it?

MrGrumpy
MrGrumpy

That $8.9 billion could help fund Chicago's public pensions. Perhaps that problem has already been solved. Strange, I haven't heard of it lately.

Murdo McSponge
Murdo McSponge

Somebody has to do something about the ever increasing wealth gap. Chuck in AI, and the need to do something to rescue Society from some sort of explosion will becomeever more pressing, and ultimately unavoidable.

Chicago isn't the first place to try this. I think the Finns have had a go too, but stopped the experiment. I'm not sure why they stopped it or how successful or unsuccessful their experiment was - perhaps we should find out.

However, the fact that administrations in different places and at different levels are trying this out is indicative of the underlying need to solve poverty gaps everywhere. I have often thought that quantitive easing was wrongly directed; money shouldn't have been doled out to the banks, it should have been given to the general public - from lowest poverty level upwards. The banks would have go it all in the end. - They always do!!!

BigGringo
BigGringo

Without obsessing over the economic merits of this solution to a possible not current problem (Do these particular people need the $1000 at this time? Do they need it more than someone else?), the bigger picture is certainly worth looking at.

As with everything economic, issues happen at inflection points, the margins so to speak. So, with this entire issue, you have the old school capitalists saying the same thing they've always said. If you are poor, get off your ass and get a job, be productive, etc. And, at this moment in time (low unemployment), maybe they are correct. BUT, at other times, and, in the future, quite possibly more, there simply will not be a job to be had. Then comes the question.

When free market capitalism does not provide enough jobs to employ those in society that want/need them, what do you do? Does society tell those without employment, pull yourself up? but, there are no jobs. Does society tell them, "lower your price, until you get employed!", but, there are no jobs. Does government sit on it's hands and say, "We can't help, let the free market rule!". Hmmm, what happens then. With all of the AI automation about to get revved up, the idea of our free market capitalist system not providing enough jobs for our society is completely possible. And, governments better start thinking about solutions to this problem, before it get's out of hand, or there will be revolution in the streets.

abend237-04
abend237-04

The low water mark of my three year tenure in Chicago was arriving at the Palatine Northwest train station one bitterly cold winter morning to discover the railroad workers had gone on a surprise strike. It's been 40 years now and I've never missed a chance to express my hatred and disgust with every thing Chicago because of that strike. It epitomizes Chicago and it's politics to this day: hurray for me and screw you, sucker. Chicago is a dead horse...finally, and smart Illinois Indians are getting off in increasing numbers. Rahm's latest antics to fund the deadbeats should accelerate the emmigration.

jivefive99
jivefive99

The difficulty that the millenials had in the 1990s finding jobs of any real kind may have been the turning point where we finally say: the machines have become smart enough and competent enough to start taking lots of jobs away from humans (kiosks in McDonalds, semi trucks driving themselves, etc). IF that is indeed true, we better start finding some way to pacify the adult population by giving them $1000/month or whatever so they can at least get basic housing and food. Not doing this could result in REAL civic unrest. The basic income model also reduces disability, food stamps, housing assistance, etc., as well as has universal health care, etc. There may have been a time when the rich could have said "we're just not THAT rich enough to pay for this." That is no longer true. We have the money for interstellar vacations, Mars colonies, Teslas, $150 million condos ... please.

Stuki
Stuki

If you only give money to those "at the poverty level" (another exercise in abject arbitrariness, which is all any progressive has ever been capable of indulging in....), the number of people "at the poverty level" will continue to increase until it includes almost everyone shy of the filthy rich.

Those of us with the aptitude (rare and getting rarer, apparently) to reason with number systems more complicated than 1-2-many, quickly realize there is no "poverty level." Just as there is no "unemployment rate." No "the poor." No "the workers" nor "the capitalists." Nor anything else, of the sort of mindless and brain dead arbitrary classifications than underpins all of progressivism. Specifically no "the experts," "authorities" nor "the scientists."

Instead, all there is in the real world, is gradations, and continuous, marginal relations. If being "poor" gains an additional advantage compared to yesterday, more people will, at the margin, become "poor." Tell enough dumb and uncritical people that something called "science" is "better" than something else called "religion,; because, like, Galileo was less wrong about something highly visible than the Pope way back when; and you end up with every idiot (or almost all, everything being gradations and all....) on creation claiming their inevitably dumb nonsense is "based on science." Tell the yahoos that Googlers are smart, and that much of Google's algos are more deeply "data driven" than what was previously common, and every idiot out there is falling over themselves claiming their dumb utterings are now "data driven." Etc, etc.

flubber
flubber

The news is getting weirder by the day. I need to stick my head in the sand.