Cities Use Covid Funds to Run Guaranteed-Income Experiments: There is already plenty of evidence that government handouts are harmful to poor families; Hundreds of Cities Experiment with Giving People Free Money, and other C-Virus related stories

By admin On Dec 11, 2023

WSJ: Cities Use Covid Funds to Run Guaranteed-Income Experiments

There is already plenty of evidence that government handouts are harmful to poor families.

Dozens of cities around the country have launched welfare experiments called guaranteed-income pilots to send monthly checks of up to $1,000 to needy people. The goal is to demonstrate that giving the poor direct cash aid can improve their economic stability, their children’s educational attainment, and even their mental health. Most of the pilots are “no strings attached,” meaning that the cash aid doesn’t come with any restrictions on how it can be spent or any work requirement.

At least eight cities—including Chicago, Newark, N.J., San Diego, and St. Paul, Minn.—are using leftover Covid relief money to finance their experiments. Taxpayers should understand they are funding a failed idea that could push low-income people away from work and marriage.

Last year, Alexandria, Va., began to use federal pandemic money to send $500 a month to 170 people for 24 months, with no requirement that they work. Less than a year in, program managers say they are happy with the results. Julie Mullen, the city’s economic mobility program officer, told local news site ALXnow that she’s excited to see the checks “lightening people’s mental load . . . which is what we wanted.”

These guaranteed-income pilots mimic the Biden administration’s expanded child tax credit. Between July and December 2021, the federal government sent between $250 and $300 a month per child to parents. While the administration wanted to extend this handout indefinitely, at a cost of $1.6 trillion over a decade, Congress let it expire amid legitimate concerns over excess federal spending. Lawmakers also worried that the child tax credit would severely inhibit workforce participation. University of Chicago researchers estimate that if the expanded child tax credit became permanent, 1.5 million people—nearly 3% of all working parents—would stop working.

These concerns notwithstanding, Mayors for a Guaranteed Income, the group that coordinates the pilot projects, has explained that “there is a very real chance to revive” the expanded child tax credit. Yet history is already repeating itself. ALXnow reports that at least one participant in the Alexandria program has cut back his work hours, swapping his paycheck for a government handout. Many likely will make the same choice over time. —>READ MORE HERE

Hundreds of cities experiment with giving people free money:

A massive social experiment is quietly taking place in some 200 American cities — what happens if you give poor people hundreds of dollars a month with no strings attached?

These cities are running pilot programs that typically give randomly selected people $500 a month for a year or two to spend as they please. They collect data on the broad policy initiative, which could replace the current complex patchwork of social welfare programs with a much simpler “guaranteed basic income.”

Researchers at the University of Pennsylvania and elsewhere are analyzing a wealth of evidence from the experiments. When the results are published in the coming year, it will add to a growing national debate over what the social safety net should look like, said Sean Kline, director of the Basic Income Lab at Stanford University.

One city — Cambridge, Massachusetts — found initial results so positive that it has rolled out the program on a large scale. All families with children in the city whose income is less than 250% of the federal poverty level can now get unrestricted monthly payments of $500 for 18 months.

Conservative economist Milton Friedman originally popularized the idea of a guaranteed basic income in the 1960s and President Richard Nixon proposed it in 1969, although it died in Congress. More recently the idea has been championed by a group of Republican senators including Mitt Romney, as well as Democrats such as entrepreneur Andrew Yang, who made it the centerpiece of his 2020 presidential campaign.