American Enterprise Institute scholar Charles Murray proposes his plan to replace the current welfare system in a universe basic income. His conversation went jared bernstein, chief economic correspondent to joe biden. [inaudible] the fact we dont have the moderator is an indication that jarod and i generally enjoy talking to each other about issues on which we disagree. I dont even know to the extent to which we disagreed on the topic. It is good that you do because otherwise this would be pretty boring. The topic tonight is the universal basic income, upi. I published a book on this in 2006. Ive been interested in the concept since the 1980s and ive republished a revised version of it this year for a couple of reasons. One is that in 2006 i was saying well, we couldnt afford right now but the same budget we have, but we could afford it by 2011. I was actually off by a couple of years up way past the breakeven point in 2009. But now we are well above the breakeven point. Another words, and we could implement the plan i presented my book, trans man for life money than we have in transfers. That situation is going to get dramatically worse if you want to think of it that way, over the next several years, because we do have rising entitlement costs. We can look out pretty confidently in the future and see budget deficits that are extremely serious. One way or another there has to be a major reform. Congress does not do major reform and less about what we have do and i think it will absolutely have to. That was one reason. A second reason is that much more akin to that said, i am aware of the huge ship thats taking place in the job market and is not 50 years down the road. Its 10, 20 years down the road is the obvious example are things like Truck Drivers and to add them to driverless tracks and Driverless Cars which will be upon us within a decade. But a much scarier aspects in terms of just sheer numbers and the nature of the changes were after decades of being overhyped, Artificial Intelligence is going to carve out very large numbers of jobs that up until now had been held by people with College Degrees about knowledge intelligence, and having to make complex decisions and a lot of those jobs are going to go away. Think travel agents in terms of things. The third reason and by then ill just finish that off as saying i think we are looking forward to a future in which living a satisfying life was so involved location, but it wont necessarily be vocation as a 40 hour week job. The other reason is the same reason i was interested in 2006 and it offers a chance to revitalize Civil Society. I am going to make a very brief statement on what the plan consists of and what i would hope that achieves. Try to hold that within 10 or 11 minutes and then shared by the chance to his on at length and that we will go back and forth about the things we do disagree on envelope disagree on and will open up for questions later. First, the basics of the plan i presented. I will start out by saying that a universal basic income could be a disaster. If there were an addon to the system that would be a shared for other reasons a lot of people say of whidbey. However, it replaces everything out that both financially becomes more feasible and a variety of good things that wouldnt happen otherwise. We replace all transfers with a universal basic income and by all transfers i included Social Security, medicare, medicaid, welfare programs, agricultural subsidies, corporate welfare. Anything that constitutes a transfer from some american taxpayers to other americans to defend as opposed to things like Police Protection and so forth. It is in the amount in the plan of 13,000 per year or every person in the United States, citizen who is 21 years or older. You need to have the elect traumatic deposits into a known bank account to get the plan. There are reasons for that stipulation. Meant installments. Now here is a stipulation. The only stipulation i have in my plan is 3000 of that must be used for health insurance. That is a very complicated set to. Im happy to do it. Im going to leave it out of this initial presentation and say one more another part 3000 of that out and lets say we are talking in terms of money, disposable income 10,000 a year. He cant and im 10,000 a year you are saying. You are brave. If you want to live all by yourself, without reference to anybody else, thats true. If you dont work at all, thats true. You can very easily make a decent living for yourself if everybody else is 10,000 a year and you are willing to cooperate. If you can get together with a boyfriend or girlfriend or relative or friend or anybody else, just two of you still not working, thats 20,000 a year. If you hold down a minimum wage job. Lets say 7. 5 an hour job and you work for 2000 others here, thats 15,000, so that is 25,000. If you are that it was someone else come in 35,000. You can go through a lot of permutations and say that the universal basic income makes it really easy for people doing very ordinary things to the club of the poverty line and forget the poverty line. It makes it easy to get into the middle class if you have a couple where you have a 20,000 increments and some fairly lowpaying jobs. With that comes progress around poverty that has eluded us to the last 40 years. It has all sorts of ways and making retirement a comfortable retirement easier that it is under Social Security, a lot of these things i have to explicate to make my case but i will assert that in move on. A couple of teachers are really gordon i know that this plan could never be enacted exactly as i specify. When mayors really important, whatever version of this might actually be considered the things i am about to say need to be taken into account. One is you need a really high payback point. And my plan, i started to claw back part of the grant at 30,000 of income. At that point, you pay a 10 tax on every thousand dollars but the graduated tax schedule between dirty dozen dollars and 60,000. Current programs had marginal tax rates so that if you have medicaid and in some forms to dance and other forms of this is an ache in the very day see because you lose those. If you are on disability and the people in this room are aware of the Disability Program which includes lots of people who may have a real disability for certain kinds of jobs that could easily hold other kinds of jobs and that they cannot go to work without jeopardizing what they have is a guaranteed lifetime in town and quite naturally people dont want to do that. If you have the high payback point, use id stab all of those traps and lure people into working until they can afford to quit. Somebody has been working a job been working at her job and gotten raises the nuggets up to 30,000, at that point i dont think very many of them will quit working because they have to start paying a small amount of the great back and go from a 40,000 to your lifestyle to a 10,000 a year late. Let me move on from nine to a brief outline of why i say that i think ubi offers a chance to revitalize american double society. Its a complicated argument in a lot of ways. Let me put it in terms of one of the things that is most commonly brought up to me as a reason they dont want to do it is that youre going to have people who drink up their money before the end of the month and if you take it away, all the Government Programs do with this, whats going to happen to these people . Whats going to happen as they are going to have to seek help, but it cant be going down to the bureaucracy downtown just to talk to the girlfriend, boyfriend and say im tapped out. I dont have anywhere to go. Youve got to help me. You had changed the dynamics. The person who is doing that no longer is a big gun who has no resources. Americans not having a history of writing this down and so here is the kind of response i envision which i do not think is naive. Lets say okay im not going to let you start. Dont tell me that there is nothing you can do because youve got another 800 come in and tear bank account. Its time you got your act together. Multiply that kind of interaction, in terms of people who had human need. What im saying is dealing with those human beings is going to be pushed down to the level where you have the best chance of getting an effect. If theres one thing that anybody who has ever worked with people with serious albums knows it is that some people need a pat on the back and other people needed a kick in the pants. People who are closest to them. The people who are most ineffectual at doing that our government iraq received because government bureaucracies must be run that are not easily adapted. The ways in which it revitalizes Civil Society is not limited to people about the problems and need to have those problems addressed. One of those things that made america exceptional. Not exceptional in our eyes bragging about the United States after the 19th century this is the extent to which the American Community in the north than once dealt with their problems and is tocqueville famous they describe but also in all sorts of informal ways which did it as we did. They try to document it with numbers that if you took a philanthropic efforts in new york city at the end of the 19th century, i am willing to go to the wall and the money and effort spent on those couldve ever matched in terms of Government Services that they decided Government Programs. I wanted to see that come back and that is the stuff of life of communities. That is what making a rewarding in the same way and makes a family were worded. And the title of the book in our hands comes from that concept of putting my back in our hands. Our hands as individuals, our hands as families and our hands as communities. I will stop there, turn it over. Thank you, charles. Its a pleasure to hear you talk about civil discourse because i couldnt figure you a master of that oneonone. A couple weeks ago charles wrote a book called coming apart which i read at the time and i liked a lot of what i read in there and i didnt realize at the time its very much precision as a lot of the dynamics of the current election in my view. This current book i have many more disagreements with. What i would like to do is talk about why i think charles idea for universal basic income is misguided in this sense that it would compound some of the problems we have in our economy. It would get rid of a number of important programs that have evolved in ways which would intend arafat in extremely effect in late and efficiently doing with your supposed to do. It is a policy meant 18 plus trillion dollars economy. And this addition was what we have not wrote in dont fix it and the fixes a lot worse than the Current System. I want to talk about this notion of jobs in the future of work. Charles is part of a Larger Movement wherein many commentators are very much concerned about the future of work from the if you heard from charles. This will take 10 minutes tops on a note of agreement. This is something worth elevating and perhaps agreed upon. I have a pretty significant wrinkle i looked into in of you is if you never will. So this may be aei based on extensive evidence and the Affordable Care act are all working very well. Having never attended and fax a fax, there certainly has to ask of those programs that need work as charles suggested. Solvency issues must be resolved with a social Insurance Program. But in the very first page of this book he says his band political disbelief which is actually a reasonable thing if youre going to read about a large game changer, you have to suspend almost any policy these days you have to suspend political disbelief. I would argue that impact achieving the insolvency of the social Insurance Program is a less heavy lift and getting these kinds of changes charles is introducing. In our commentary i can say more about this. Let me start off as Social Security and work my way through the list quickly. In the absence of Social Security can alter the poverty would be 44 . Social security takes down to about 9 . The administrative costs of Social Security used to be 2 of benefits paid which was already far above any kind of private or Retirement Program of the tightrope is implicitly advocating for down to. 5 . The administration of benefits paid. Social security, riskadjusted provides the same returns as the kind of stock market investment that charles had and what you have a factory in is the inherent risk in putting a retirement account in the stock market. The private account is that gw bush and one of the reasons it went away is in part because the market tanked around the debate which reminded people of the importance of accounting for risk when we talk about a pension program. Social security, and nothing about transaction costs which are huge when you move away from Social Security to sending more variable. Medicare not only is he deeply beloved, but it also is again a highly efficient program. If you look at the cost of the increases and of course if you want to ask where our fiscal pressures coming from, they are precisely pressures on health care in particular. You will find consistently year in and year out medicare and medicaid grew more slowly than the cost of private health coverage, even controlling for age and peoples medical conditions. A highly efficient program. The aca, two things. Do yourself a favor. Look at a plot of the uninsurance ray. That . Insurance. If you do this for nonchildren, youll see particularly what i mean by the way charles would get rid of child insurance as well, check. Draw a line where the aca comes into play. After picking up year in and year out the uninsurance rate drops off a cliff. You want us to go down because of the rate of people uninsured. 16 in 2010 if 9 today. The aca can this also has to do with projection of health care spending, the kinds of delivery masher at the same time have reduced our projections of Health Care Expenditures have been like 800 million a couple of decades as cbo does. These programs are proving to be both efficient, effect at the nasa used to say, then in the cost curve in ways that are extremely important and that i fear going to the solution wont get us there. I very much disagree with the assertions about the extent and the safety net. Over the last 20 years, the safety net has become conditioned on work in effect if youre disabled, elderly for a working person a safety net has been more tilted towards you than it is against you. This poses another problem which is a larger share. By the way here a cash grant would probably be helpful on top of what we are doing already as opposed to replacing it. But again, we are not doing powerpoint here which is fine. Let me describe a graph. If you look at the poverty rating. Not the official poverty rate which is often cited incorrectly, but the poverty rate adjusting for all the things weve done to increase the antipoverty affect mens. The Child Tax Credit from expansion of nutritional support. The supplemental rate has come down from 26 in the late 1960s to 14. 5 today. A 45 decline. Moreover, lincoln outperformed in the Great Recession did the deepest recession since the great depression. It barely us especially for kids. The countercyclical impact for the safety net is more good than its ever been before. Two more points will turn things over to charles. It is simple math that if you were going to take a system, the system of transfers, which is disproportionately tilted towards those at the lower end of the pay scale. Simple arithmetic that if youre going to take a transfer system that is disproportionately targeted as poor and lowincome people and pretty much everyone youre going to dilute the impact of the transfer system. That is pushing back on the equity for the equality inducing aspects of the safety net. It offsets the increase in inequality in Market Income and takes that away, pushes it the other way by taking programs at the low end and diluting their answer to poverty by distributing them broadly. On jobs, now here is the name. Charles and the kind of robots come in for a jobs crowd may be right. Nobody knows. I want to stipulate that in charles doesnt save things lately and so i want to give her to certainly the possibility that the future will be different than the past. However, it is true that what has always been wrong and the idea that future the technology will be unemployment induced in the has never been correct. So specifically and are doubtful about this claim and the nearterm technology at where theyve are substituting capital. The substitutes for workers and labor was entering the workforce at an accelerating rate. Boost the productivity growth accelerate. Nothing but output per hour. Output per hour of work. If we create more output with less work, this intimate this we would be seen productivity accelerates. Instead weve seen productivity decelerate and significantly so. Not so much ubi. There is something wrong with this hypothesis. That is the very near term. Folks in the future were all looking around distant corners. Weve never been right about those distant corners. Im afraid we are not now. Certainly you cant find any evidence that would lead you to believe that you take apart a system that is working extremely well and replace it with one that is inequality inducing a month effect is. Ill save my areas of agreement because i have one that well get to later. Ill try not to react to everything you said because it will be speaking another 15 minutes. So we have these official programs we are sending to state and local and national together 2 trillion a year. The transfer payments and we still have millions of people in deep poverty. We still have billions of people without insurance, health insurance. We still have an intransigent set of people who are unable to live decent existences despite all of these efficient programs. I guess that i will skip over the fact i have an entire appendix reading appendices is asking a lot. I will skip over that. I never make a big deal out of the cost of bureaucracies in these programs. Lets think about a guy who was low skilled and its ever going to be anything except low skilled. If it gets in the labor market and stays in the labor market, you wont stay at minimum wage. The say hes going to be 10 bucks an hour. Andy works 1500 hours a year so thats 15,000. That means that 10,000 doesnt quite double, but boy does that augment his income. The same guy under the Current System can get, you would know these numbers better than i do. Get anything close to 10 grand every year in terms of what it can do. Entry into not just escaping from poverty, but entry into a more comfortable life is pretty much shut off to him and mocked the ways because the labor market will not pay more. A lot more than most things are really low skilled work. Now, think about marriage which has been declining dramatically in the working class. Marriage, which is one of the best ways for all sorts of good things to occur. Well, all at once if you get married in your low when have and even if his wife doesnt work, 35,000. Thats a big difference than anything now. If she does work a little bit, youre up 15 and so forth. The Current System is really bad at taking people whove drawn the short end of the stick on a variety of personal abilities and so forth and giving them an avenue into which they can reasonably look forward and my plan does that. A. So like i is underserved by the system i was touting. I agree with that point. Interests and one of the ways, this as an aside because its on the docket. Believe it or not theres some bipartisan interest in doing this come is expand the earned income tax credit to reach that guy. That is, a single worker, take the guy charles described without any showing, gets very little from the earned Income Credit whereas a single pair with a couple of kids gets five to 6000 macs from eitc. I wanted to talk about that for a second. Two things. First of all, the safety net should not be viewed simply in terms of laying up dollars in saying who gets more. If you did that i still think i would come out on top because was looking at some numbers. Some of this is pretty complicated because it involves a lot of calculations about benefits and intersection of different programs that a colleague of mine at the center on budget was showing me some work suggesting the bottom fifth gets an average about 15 k. A year in the kinds of transfers were talking about. Thats before Social Security. Thats important has also just in a minute. So it is not clear, so thick by mathematical point if youre going to defuse a bunch of transfers will up the income scale, even given your marginal tax rate on higher income people, you would still be distribution only, there would be disc equalizing. But if you look at, we have a very nice paper recently came up from the center of the makes this point in web want it to be very exquisite. If you take a mom with a couple of kids and shes working halftime at the minimum wage, she ends up with an incomebased on the benefits of her food stamps, or snap, over 6000, or eitc is 3000. Her Child Tax Credit is closest owner. Take out of payroll taxes and this moment a couple of kids is making 17,000. Instead of working halftime she doubles her effort and is working fulltime. And minimum wage is still kilo. We might even agree. This is a low minimum wage. Double the work of the minimum wage. This gets to charles point, does she end up with less, and have been worse . She loses about 1. 5000 1. 5 are in food stamps. She more than makes up for that with another 2500 eitc and another 1300 Child Tax Credit. Her income goes from 18,000, the 26,000. Thats the work incentives currently built into our system. Recognize that as thats going on she is contributing to Social Security. She is paying payroll taxes. Social security is the part, getting rid of Social Security is the part of his plan i dislike the most. What he did does is he says everybody should invest in the stock market. They should put 2000 bucks a year in the stock market. There is no rule that they have to do the. This is his admonishing them saying thats what you should do. Guess what, a lot of people who undo the. Because they cant afford to do it. They might not do it because they have a discount rate mean theyre not giving a crap about the future. Giveaway of saying the same thing. And charles solution is a variable pension. Its not a guaranteed pension likes also see to do. Its a veritable pension. It happened to her and a bad year theyre going to do it. This is the private accounts debate unhappy dont want again although we did this pretty thoroughly. Let me stop. Here i have an issue because want to move the top of the long. A lot of people dont Social Security. You could be 65, and under a variety of conditions you either get very little so so scary or not at all. Everybody if they been utterly improvident all their lives they havent saved a penny, and there can grant. If there are two of them they still get 20 grand. Let me just make a blanket statement and say that jared and i to be continued. I think if you talk about putting money in the pockets of low income people, i think i can go to do that with you on numbers and come out looking very good. Im going to put that aside and let me bring up another topic that i want to get too. And that is the future of work and also where we stand right now. Labor force participation has been dropping, especially notoriously among whites, and is even more notoriously among white males. We are now down at historically unprecedented rates of able bodied males of prime working age who are out of the labor force, and that is increasing. In addition to that we have the question of jobs, i actually grant you that luddites have been wrong for disinterested this time its different is a very nice proposition to make. I would argue with you that with the previous transitions you could have a rational person who could have foreseen that things were going to be so bad, that when buggy whips were no longer needed and horses were no longer needed, that a person can acquire resource and but youll need mechanics. U. N. Aegis of the kinds of things that are going to generate jobs. What do you need to replace the jobs of the drivers . One of the largest employment sectors in the country who are going to be without jobs. What are you going to do with millions of whitecollar heres jarrod, ive got to raise it is quickly. I guy whos written about iq, i know where im stepping. But the fact is you have, ill put it in terms of ideas. We a society which give the iq of 105, 110 which is above average. There were a whole lot of really good paying jobs because you could do things that required the ability to make these kinds of judgments. It is really scary to which massive numbers of those jobs are going to disappear. There are examples, i but, let me put it this way. Can i prove do that this time is different . I cant in the conference of this hour. I would have a hard time doing it if we spent three hours on it. It is something i think all of us ought to be thinking carefully about. We are looking, one final comment on this. The decline in social capital that bob putnam made famous for bowling alone has continued, and a lot of the reasons it has continued have to do with the fact that some of the good things occurred. Such as women going into the labor force and having the opportunity to go into labor force. I think that was a good thing. Good things can have collateral effects that are not so good. One of those collateral effects was an awful lot of what women contributed before the war in the labor force where huge amounts of social capital. In the form of just making communities work. I am not in any way in any form let it be perfectly clear, i am not recommending that we encourage women to get out of the labor force. I am saying that the ubi would make it possible for women who want to be out a formal labor force and at home taking, raising children and been deeply engaged in the kennedy come it makes it easier for that to happen and thats a good thing. It also opens up ways in which guys who do not have a place in the labor force two, will be able to find ways to which they can legitimately say to themselves, im doing stuff where i live that is valued, and if i were not doing it i would be missed. I think those are important things. How about a make a closing statement with you land in a place with a may be some agreement. Want of the things i like about a universal income of some sort is that it does allow people not to take really lousy jobs they dont want internet to increase their Bargaining Power in my judgment of someone whos been a student of the wage distribution for about three decades now is that the lack of Bargaining Power is a critical deficit for lowincome people. Let me close with a final critique of the idea but then suggest an idea that maybe theres common ground. It was interesting to me to hear charles say i left out defense, i left out police because these are expenditures that dont count as transfers, and i agree. These are agreements that society has some public goods they want to fund. I cast a broader umbrella of public goods benefiting charles does and certainly most libertarians do. But its one i think i share with most americans. And thats the idea of investment. Investments in Retirement Security such a that we as a nation have agreed, since the 1930s, that we are going to a guaranteed pension for the elderly. It could be improved, no question that the idea of a variable, you on your own and is a couple thousand bucks i hope you invest it fruitfully. No, will have a guaranteed pension for the elderly. We will have health care security. This is medicare which charles ubi also gets rid of. We are going to have a safety net that isnt just a set of consumption programs. Footsteps, eitc, medicaid, head start. These programs now the with data over generations have been found to work like investments. They dont just fill a belly today. They lead to less obesity, better education outcomes, better employment outcome. Better educational outcomes, better earnings outcomes. 20 years hence. So kids who grew up getting these benefits actually did better than similarly placed into did not give them when the adults. These are investment programs. We invest. Our investments are in areas where we agree i think that market failures will not lead to excessive elderly poverty, child poverty, health care deprivation among the elderly. So thats my signature objection to the plan. About the jobs thing and i think nick who was there and he is really worth reading book on this. I have another dissenting, i have a Cottage Industry of deceit is agree with people from aei why the chapter where i disagree with nicks diagnosis but his evidence is extremely well put together. So check that out. The problem we have, now going to talk like a macroeconomist which is how i spend my working days, the problem we have is one of lack of demand. We have output gap meaning that the potential for gdp is consistently been above the actual gdp. If we were fully employed we would be generating more output. We have been at full employment in our job market only 30 of the time since 1980. This is a massive market fairly. Weve been at full implement only 30 since 1980. That cbo data like a point and click calculation you can do yourself. Theres nothing devilish about it. Been told until we establish that we adapt all the demand we can and use the cyclical benefits of a strong command economy to pull people back into the job market, one of the points i made about nicks work is that the employment, the population ratio, the employment ration which fell so much during the Great Recession has climbed twothirds of the way back. It is a cyclical variable. Its not the people running away from work. Its that there are not enough jobs. So im very hesitant as long as with out put gaps in persistently weak demand, to sign off on a technological unemployment thesis that is disproven always been wrong. Heres the thing i agree on. Ive been waiting for this. Instead of the ubi wanted medicare to do jobs program . I think theres a lot of work to do out there. We may disagree but at least based on the numbers i decided absence of fullblown and macroeconomic deficits, what if instead of getting people income we guaranteed in jobs . I think you will agree politically thats a less heavy lift. People, people i in this instant to oblige of the edge of just writing checks were as having people work is something thats kind of more consistent with even your work if you go to your welfare work. What about that . A guaranteed job . No. Look, my problem with it is this, the government has lousy employer. Spin what if we guaranteed private sector jobs . Thats heres what you when you go to employers. These are not decrease. These are employers trying to run their businesses. They say all i want is somebody who will show up on time everyday, doesnt take half our bathroom breaks every three hours, and can deal with his coworkers. And im having a terrible time getting those. And the stories about jobs going unfilled because employers cant find people with is really basic skills. And so, you know what . I think it would be a replay. For those of you, for those youngsters in rome, this is the 1970s. Very, very big comprehensive employmenemploymen t training act for young people especially. I think im just going to go to questions now. Yes, sir. Wait for the mic of all, please. And then do make a question, please. [inaudible] both of you ignore in these arguments people can have all of you argue one american, one society. Can now have job who could live in american society. However, have you considered that some people [inaudible] both of you have ignored the argument speak i think we are right to ignored. I think that were worried about how to make america work better. [inaudible] hold on. Let him respond. Just the notion is that i sensitized this year in this Political Campaign as somebody whos been a big fan of globalization. As i have been. Sang you know what, in the course of this i have not been paying sufficient attention to ways in which my fellow americans have been screwed over in ways that dont affect me. And so i am in fact worried about how to make america work and now what about the rest of the world later. Next question. Towards the back. I thought about only calling on my aei colleagues but im not sure thats a good idea for me. [inaudible] people would be to make good financial decision or be pressured by their social networks to make good financial decisions. However, theres strong evidence in psychology that people were in poverty actually think about my tivoli and think more immediate terms. Anecdotally [inaudible] so in your plan du see any Scientific Evidence to the contrary . Have you taken the research into account at all . My basic statement is even everybody squanders everything and makes no provision for the retirement whatsoever. Theyre getting their 10,000 a year until they die. If you are two of them, thats 20,000 a year. That is a completely improvident, completely stupid and unthinking and no future time horizon. But i will tell you, you of kind of guaranteed, and that is that certain things about money cometh everybody has 10 grand and about investments that are Common Knowledge among the people in this room, will be the topic of conversations in barber shops and in cafes and bars in ways they are not now. Such as you know what, somebodys going to walk in the bar and it is great rich scheme where theyre going to buy tulips and there will be people who do that and theyre also quite a lot of of people around the bark when their eyes and say what you need is really diversified portfolio. Things that are not set in bars now and barber shops now im going to be a lot more widely spread. Its part of something jared and i did not get to at all. The way in which, when everybody has 10 grand, the dynamics change within communities and how people talk to each other and the assumptions they make about each other, about victim and all the rest of the bible go off on that. Thats an objection that i have as well as i try to suggest in my comments. I worry people and invest more in adequate in this, i cant imagine why we would break a system that guarantees a pension now, which on average base more than 10,000 a year. But it doesnt get you everybody. Thats the thing. This will be for our argument after this. I think Social Security is an extremely pervasive program coming anyone, any citizen has been in the country for the requisite amount of years is going to get Social Security either themselves or through their spouse. Let me say this. Where i have a some objection that did come up as in Charles Health care plan, so this is basically, its a catastrophic plan where you have to take 3000 off the top of the democrats and by this Catastrophic Health care in the private market. So this is basically just a very high deductible plan. Hear the psychology mentioned comes into play as well, because what we found is that especially for low and middle income people who have a high deductible plan commit doesnt make them more price colleges were shot more. What it does is they dont go to the doctor when they are sick. It ends up costing more because they dont get preventive care. Let me see who i ill go here and do not go back there. Walter with the heritage foundation. Trying to make these questions, i will start messing youre welcome what youre saying about this higher marginal tax rate [inaudible] because as food stamps go down, you see eitc go up and to take it to earnings of around 20,000 a year, marginal tax rates are around 17 . There are a few anomalies were thats not the case. Secondly, you talk about while making progress against poverty, against deeper poverty, you know perfectly well the reason with the poverty and poverty is because the eitc and food stamps are not counted as income. Each account those things as income, then you cut the poverty rate at least and have, at the poverty rate essentially disappears for families with kids. So its a lot easier to count rather than abolishing Social Security and medicare. Just count what we already spend, counted accurately. So here are two questions. My calculations would be that if you take Social Security and medicare, and were to do this tomorrow and transfer it into your system, the cost of that in terms of Social Security is 378 billion. The cost to lost medicare benefits is close to a 400 billion a year. I know your transitions and stuff, but when they dont emphasize the fact whats your question speak with a huge transfer from the elderly to others your second question [laughter] what was the first question . Seriously, weve got youve made a lot of great points. I was told to go back to im willing to say ive got to look at the marginal tax rates again. Thank you. Voice of america. My question gets too, talk about the [inaudible] how will your plans, what will your plan do to the price, especially low cost working price . Would that help increase marriage, the incentive of marriage, or decrease incentives for marriage . I have run to the alternatives for what this will do for marriage and there are different outcomes for different people. Ill tell you a couple of things that i think would incentives will be done right, and one of those has to do with children, having children. From the womans point of view today, having a baby creates an income stream. I am not making any collateral statements about her getting pregnant so that she can get the money. Im saying having a baby creates an income stream. Under the ubi having a baby is a drain on an existing income stream, and thats as it should be. Having a baby should be something we save when its going to cost a lot of money but we really want to do this. For the guys its much more blunt and much more brutal, and i think appropriately so. You now have a case where you cannot enforce Child Support on a guy who walks with him children he has fathered is either hes in the gray market or yes no income or whatever. Under ubi psa known bank account with electronic deposits, and its real easy these days to establish paternity beyond a shadow of a doubt, and all the judge has to do is say x number of dollars every month is garnished, youll never see it, go strictly to the child. Do you think i will get around to . Do you think maybe guys will see that fathering babies creates a drain on the income stream and my change incentives . So with issues of marriage and issues of private company book i recommend people look at it, i think there are lots of ways in which youre going to quit what i like to call value placements, where people are functioning in their communities in ways which gained them the respect and gives them status what theyre doing. Those are elaborate arguments im not going to try to talk about here. Just jump in whenever you want. Right in front. Thank you very much to both of you. My question is, going back to Civil Society and looking back in 19 century new york, what would be both other explanation for why voters decided that wasnt good enough . Over the last century on a welfare state. To extend our political disbelief, if paul ryan out tomorrow and said this is it for the next term, no way jose . They dont really want ill be real quick with my response to that. Books have been written about that question, okay, but i will say to me one of the things is the first programs that were done were done first to the people who are the greatest objects of sympathy. Namely, widows with children. Thats where weve got the First National welfare program. And the second thing is it seem simple at the time, tha those to also in the 1960s. And incrementally as a welfare state built up, people dont have jobs, given jobs. People dont have skills, send them to job training. Mother still not to take of their children, teaching and parenting. It seemed to be simple and it was only after it began to get these layers built up that it became obvious that you do all sorts of moral hazard problems, all sorts of implementation problems. Its not simple up at that time a great deal of what had formerly been assumed to be the responsibility of families and communities, its the governments job. I mean, i really have very different view of that. Let me put it this way. Look around at every event advanced economy. You see any ubi answer schemes . Now. You see any well first aid squads the answer is in every single one. By well first aid, it becomes a very much for georgia. What im talking about our advanced civil economies that decide that our elderly should not be poor. Our elderly should not be held in secure, that, in fact, its better to provide low income moms with kids with the resources they need to raise their child as opposed to the private them as some kind of punitive measure. What you see in every country is way more of this type of social intervention than we do. If anything weve moved closer to some of at least when it comes as robert was saying to some of the programs that can send work. This is a positive thing. The earned income tax credit, in part because we recognize that it is bring in the political view, in part because we recognize it is confident to americans to consider work as a ladder out of pocket people who are not on these programs have to work to get out, to be nonpoor seats are the other should have to work as well