“Give the money to the people,” Charles Murray argues in his new book, In Our Hands : A Plan To Replace The Welfare State. His plan would give a $10,000 yearly grant to all Americans, once 21, who are not in jail.
Murray, W.H. Brady Scholar at the American Enterprise Institute, recently took questions about “The Plan” from National Review Online editor Kathryn Lopez.
Kathryn Jean Lopez: First things first. $10,000? Who’s getting and when? And can I use it on my credit-card debt?
Charles Murray: If you’ve reached your 21st birthday, are a United States citizen, are not incarcerated, and have a pulse, you get the grant, electronically deposited in monthly installments in an American bank of your choice with an ABA routing number. If you make more than $25,000, you pay part of it back in graduated amounts. At $50,000, the surtax maxes out at $5,000. I also, reluctantly but with good reason, specify that $3,000 has to be devoted to health care. Apart from that, you can use the grant for whatever you want. Enjoy.
Lopez: You write that your plan “does not require much in the way of bureaucratic apparatus.” Come on, Charles. This is America. Is that realistic?
Murray: I said “require.” If we start defining “require” as “how the government would prefer to behave,” all hope is gone. We start with a high-tech identity card, which these days can be within a fraction of unfakeable, for each U.S. citizen. The citizen approaching age 21 presents it to a bank. The bank opens the account and electronically notifies the government of the account holder and account number (no bank account, no grant). The bureaucratic requirements for distributing the money is a computer with decent software and a lot of capacity, with a couple of minders to dust it occasionally. All right, a few more people than that, but not many. The significant personnel requirement is for a fraud detection and prevention division. But that division is given a pretty easy job: being a citizen of the U.S. is a yes-no proposition with simple definitions. Birth record-keeping systems and naturalization records are already in place, requiring just some tweaking to make them precise enough. The main cheating problem would be the same one the IRS faces, and would involve underpayment of the surtax for people making more than $25,000, but that would be minor in the grand panorama of government waste and fraud.
Lopez: How can even low-income folks have a “comfortable retirement” under your plan? Is that foolproof?
Murray: Someone turning 21 has about 45 years before retirement. The lowest average real return for the U.S. stock market for any 45-year period since 1801 is 4.3 percent. Round that down to 4 percent and work the magic of compound interest. Just a $2,000 contribution a year amounts to about $253,000 at retirement. A low-income couple that has followed that strategy retires with more than half a million dollars in the bank plus $20,000 continuing annual income from the grant. Sounds comfortable to me. As for “foolproof,” think of it this way: All of the government’s guarantees for Social Security depend on the U.S. economy growing at a rate that, at the very least, is associated with an historically worst average return of 4 percent in the stock market (actually, it needs a much stronger economy than that). Absent economic growth, no plan is foolproof. With economic growth, mine is.
Lopez: Where are the safety nets? Drug-addicted single mother blows her money on drugs; what happens to the kids? These questions will be endless. Aren’t they legitimate concerns?
Murray: Start with cases involving children, and distinguish between two types: neglect and abuse as defined by the criminal code, and people who don’t treat their children as well as we think they should. Neglect and abuse are treated exactly the same under the Plan as under the current system. A legal system is obligated to provide for the enforcement of its decisions, and that means financing and providing services to children of convicted parents. Children in the second category don’t get rescued by the current system anyway. Inferior parenting does not qualify you for welfare and doesn’t bring squads of child-development advisers to your door either. Thankfully.
Suppose instead we’re talking about safety nets more generally, for someone who fritters away his check. The safety net is very simple: Next month he gets another check, and has another chance to make other choices. If the fritterer is a mother, she gets another check too. So do her parents. So do her friends. So do her neighbors. So does everyone around her. And that, I will say very briefly (I’ve got to leave something for the book), is one of the key points in thinking about the dynamics of the Plan–not that individuals get their checks, but that everyone gets a check, and everyone knows that everyone else is getting a check. A lot of expectations and demands to do better can be put on people who have income streams than on people who don’t.
One other point here: The children of these parents also have a better safety net. It’s not just the mother who has $10,000 to replace her current welfare benefits. The father also has $10,000 going into a known bank account. It makes no difference if he’s jobless or wants to disappear. The only way he can disappear is to forfeit his grant. Under the Plan, child support enforcement suddenly nears 100 percent–a reality that will not be lost on single males who watch their buddies suddenly having to pay a substantial portion of their grant to their former girlfriends.
Lopez: At one point you talk about possibly increasing the grant size if you estimate on health-care-cost needs turned out to be off? What’s to say that in implementation the grant size doesn’t skyrocket?
Murray: The passage you’re talking about was intended to anticipate critics who present elaborate data to prove that my $3,000 allocated annually to health care is not precisely right. I’m close, but I don’t want to spend the next year arguing about whether the right number is $3,300 or $3,500 instead of $3,000. In effect, I’m saying to the reader: “Okay, for purposes of reading the other chapters in the book, assume that the grant size is their number for health care plus $7,000.” The debate about the Plan shouldn’t get sidetracked over a few hundred dollars, because small dollar differences are irrelevant to the main argument. Suppose, for example, that the right figure for the annual health care allocation is as high as $3,8000 instead of $3,000. All that means is that the projected costs of the Plan cross those of the current system in 2015 instead of 2011.
Lopez: Under your plan, recent college grads would have incentive to bum around, wouldn’t they? The government would give them money to do nothing. Get a couple of bums with some guaranteed income and you’ve got a government disincentive to be productive, don’t you?
Murray: I think it would be a great boon to the maturity of our new college grads, and save many innocent people from going to law school, if more of them took a few years after college and did something besides heading straight to grad school or throwing themselves into their careers. I’m not worried about this particular form of work disincentive in the Plan. Playing gets old awfully fast. So does living on $10,000 a year.
Lopez: Not to be stuck on stupid here, but I’m watching the French students rioting now. Is there any danger that under your plan we’d be raising a generation of French kids? People who think they are entitled for money for nothing?
Murray: Au contraire. The problem with the French kids isn’t that they think they are entitled to money for nothing, but entitled to guaranteed jobs with high salaries and benefits plus all the goodies of the welfare state. People living under the Plan get the $10,000, but they have to make all the decisions about how to run their lives. To put it another way, the Plan provides the raw material for a safety net, but people have to weave it for themselves. The Plan puts responsibility for people’s lives back in their hands–precisely what seems to terrify French youth.
Lopez: Under your plan, the government spends more first, but saves money in the long run, right? But is there any guarantee folks in the future abide by the plan? Can’t a few pols wanting to restore an entitlement here or there ruin things?
Murray: I leave the size of the grant to the political process, but there is a built-in brake. Congress can pass hundreds of billions of dollars in favors for special groups, because no single allocation is large enough to mobilize the opposition of a powerful coalition opposing it. A change in the size of the grant directly effects everyone over the age of 21. Every time Congress talks about changing the size of the grant, it will be the biggest story in the country.
The one thing that can’t be left to the political process is the requirement that the grant replace all other transfers. That has to be a constitutional requirement, written in language that even Supreme Court justices can’t ignore. Assuming such a thing is possible.
Lopez: They couldn’t even reform Social Security. What politician is going to dismantle the welfare state? Who’s suicidal?
Murray: When I published Losing Ground in 1984, who would have thought that anything remotely like the Welfare Reform Act of 1996 was possible? All you can do, if you’re in my line of work, is write books and hope that something happens. If I were forced to write about politically practical reforms, I’d be face down on my keyboard, fast asleep.
Lopez: Are there any lawmakers you have your eye on for this plan? A Paul Ryan or someone?
Murray: Who’s Paul Ryan?
Lopez: You expect single motherhood to decline but abortion to increase? Our Ramesh Ponnuru in his review of your book in the latest issue of National Review says, “I’m not sure this would happen, both because illegitimacy and abortion rates have moved in tandem over the last several decades and because Murray’s reforms might have a conservatizing effect on voters . If the proportion of the electorate that is married increases–let alone the proportion of one-income marriages–one would expect the country to become more welcoming of new life.” Could you see that being true?
Murray: I think Ramesh is probably right, and I thought about making a similar argument in the text. But part of writing a book like In Our Hands is to make a conscious effort not to be too Pollyanna-ish. The most direct causal logic says that some women will be more likely to have abortions under the Plan than under the current system, and I feel I have to acknowledge that.
Lopez: Are you aiming for too much? Why not fix the bureaucracies? Isn’t that more practical?
Murray: I’m contemplating that sentence, “Why not fix the bureaucracies?” You’re asking me to be practical? Bureaucracies are not fixable. They are inescapably, inherently driven by their internal dynamics to maximize their budgets and the size of their staffs, not to accomplish their putative tasks.
Lopez: What does this statement mean? “The welfare state drains too much of the life from life.”
Murray: A meaningful friendship does not consist of sharing backyard barbecues; a satisfying marriage does not consist of two people living together; a vibrant community is not created by yard sales. All of these relationships are given weight and consequence by the elemental events of life–birth, death, raising children, paying the rent, comforting the sad, joining together to do things that need getting done and (crucial point here) having responsibility for getting those things done. The welfare state says of too many important functions in life, “We’ll take care of that.” The natural human response is to say, “Okay, you do it.” And in this transfer of responsibility the welfare state has drained too much of the life from life.
Lopez: You say that your plan will transform civil life. Might you be too optimistic about how generous and wise and cooperative Americans are?
Murray: I’m just being a student of American history. My projection of what would happen is a straight extrapolation of behaviors that have emerged whenever Americans were given responsibility for their own lives and the freedom to deal with the problems they faced. I don’t think that is a romantic vision of American history, but dead-on accurate.
Lopez: Is there anything in your book you included with great hesitancy? Thinking, “nah, that’s a bit too much” or “no, no one will buy that”?
Murray: When I write, I worry about losing readers by introducing issues that I don’t have to deal with. Thus I didn’t use In Our Hands to take on the question of privatizing education, or of shifting to a consumption tax, even though I think both of those steps would complement the good things that the Plan accomplishes. Both of those proposals would lose too many of the readers I want to attract. I also try to write in a style that invites people who disagree with me into the conversation. For example, I don’t think you’ll find a nasty comment about liberals in anything I’ve written–critical, yes, but no name-calling and, to the best of my ability, no cheap shots. But aside from those self-imposed guidelines, I work on the assumption that if I believe something to be true, there must be a way to convince other people to believe it with me, and I go ahead and try. Is there anything in the book that I don’t believe myself? Asking that a constitutional amendment be written so that it cannot be reinterpreted by the courts comes close.
Lopez: “At some point in this century” the “limited competence of government is inherent” will become “consensus understanding”? This century?! That gives you some cover, doesn’t it?
Murray: And saying it at age 63 gives me even more cover. It will be up to my children to own up that Daddy was wrong, if I’m wrong. But I’m not.