Airing a new book which purports to think outside the policy box, Joseph V. Kennedy, author of Ending Poverty, explained his solution to the problem of American poverty at Heritage this December.
“Conservatism does not imply the complete absence of government involvement in the market, nor does it imply that economic interests always are paramount and that raising [Gross Domestic Product] GDP should be the sole goal of public policy,” he argued. “What conservatives do advocate for are the importance of individual freedom, restrictions on the arbitrary powers of government, and a firm belief that properly-structured competitive markets will deliver continuous improvements in quality and price.”
Kennedy said his solutions revolved around three principles:
1. “government policy is more effective when it channels market forces than when it overrides them,”
2. “individuals should be given more control over the resources that government spends on their behalf,” and
3. “access to [a] decent life free of poverty should be acknowledged as a conditional right in American society.”
The centerpiece of his plan: wealth redistribution funded through a carbon tax and “strongly progressive income tax.”
“It is impossible to know just how much money would be available for [a] program but I think a figure of $15,000 to $20,000 is possible, especially if we include state payments,” he said. “That would mean at least $30,000 for a two-worker household—well above the poverty line. In addition I call for separate payments to enable individuals to get education and purchase health insurance.”
In order to receive this guaranteed income, American citizens (non-citizens are excluded) would need to meet Kennedy’s social criteria, including
1. “work full time at a position that adds value to society,”
2. “complete high school and two years of additional education,”
3. “save 15% of your income,”
4. “do not have children before the age of 21,”
5. “do not take drugs,”
6. “do not commit crimes,” and
7. “pay taxes.”
“I would argue that [these requirements] also reflect a moral consensus about what society expects people to do and for the most part they reflect an academic consensus about the root causes of personal poverty,” Kennedy argued.
Liam Julian, a research fellow at Stanford University’s Hoover Institution, criticized the book, writing that Kennedy’s “assumptions are suspect” and he “stumbles on at least two crags. The first: For the government to verify compliance with all the conditions he sets would require building more bureaucracy, spending more money, and flirting with impossibility. And the second: Those who meet his conditions are quite unlikely to be poor in the first place, and they almost surely would not be chronically poor.”
Under Kennedy’s proposal, the government would eliminate a series of entitlement programs, including Medicaid, Medicare, food stamps, housing subsidies, and Social Security in exchange for this (contractually) guaranteed standard of living.
He would give each student a full-tuition school voucher of $12,000 to $15,000 which could be “banked” by each family or spent on the school of their choice.
“Now it is reasonable to question whether a voucher of $500, or $1,000 will really help that many people but what if the voucher was $12,000 or $15,000?” Kennedy asked. “Then everyone could realistically think about finding an alternative school if they wanted to.”
The United States currently expends, on average, approximately $9,769 per public school student, according to the Organization for Economic Cooperation and Development (OECD).
A series of taxes would be abolished as well, including the corporate tax, payroll tax, and the capital gains rate. With Medicare and Social Security gone, these taxes (ostensibly) would go also.
Kennedy did not supply an estimate of the cost of these changes, but the lost tax revenue would be supplemented by a higher marginal income tax rate and a direct carbon tax.
“The one thing, change I do make is that I think we should rely on excise and user taxes more and especially I think we should have a carbon energy tax that rises significantly over time,” he said. “We should commit to something like a $300 barrel of oil in 15 to 20 years.”
“I think if we did that we would break the power of the oil cartel, we would drive incredible investment in innovation in energy markets.”
Stressing his pro-growth policies and the additional “spending power” direct subsidies would grant the poor, Kennedy said that his “hope is that those forces outweigh sort of the negative forces of redistribution.”
“Ending Poverty’s plan is doomed to fail for reasons that have a common ancestor: the supposition that poverty can be substantially decreased through wealth transfers (constructed as either incentive or reward) from financially secure Americans to poor ones,” argues Julian.
“Lack of money is but one facet of poverty,” Liam writes. He later continues,
“Here, he assumes that a workable contract of sorts and incentives to live responsibly are not already in place in America, and that the government is actually capable of establishing an effective contract of its own. Yet America already offers its citizens a bargain, one that is not explicit because it’s so wonderfully flexible and potentially lucrative—that by working hard, seizing opportunities, and eschewing harmful behavior one is likely to be successful, regardless of race, religion, or class…is Ending Poverty really prepared to suggest that a government-run contract with several rigid requirements would better create success than the implicit, responsive, market-based, individualized, flexible American bargain that now exists?”
This didn’t keep Bill Beach, Director of the Center for Data Analysis at Heritage from praising Kennedy’s ideas. “I can’t say I agree with everything in this book, but I agree with a lot of it—ending poverty, changing behavior, guaranteeing income and reforming government—in which he pretty much tears the system apart and rebuilds it from the ground up,” said Beach. He later concluded, “I recommend Ending Poverty: Changing Behavior, Guaranteeing Income, and Reforming Government to everybody in this room because it does raise very challenging questions.”
Bethany Stotts is a staff writer at Accuracy in Academia.