Should a family of four, earning $96,000 annually and living in the country illegally, be eligible to receive taxpayer-funded cash gifts totaling $36,000 over the next three years? Politicians in Los Angeles County, Calif., believe so. And like so many other recent bad ideas, it’s being bankrolled in the name of federal COVID relief.
L.A. County has been accepting applications for a lottery that will divide a $36 million prize among 1,000 lucky winners, each of whom will receive $1,000 per month for 36 months. Officials boast their “Guaranteed Income Program” will “come without the scrutiny and work requirements of certain public benefits.” And this time they mean exactly what they say: Winners aren’t even required to complete follow-up surveys and interviews.
While the researchers behind the program set a lofty goal to “determine the impacts of guaranteed income on the overall health and wellbeing of recipients,” the only data they are certain to obtain is a list of transactions made with the debit cards used to pay winners. They can be expected to inform us the vast majority of winners spent at ordinary stores, like ordinary people, just like they did in a similar program in Stockton.
They may even find those who respond to their voluntary survey report slightly better physical, mental or financial health. After all, who wouldn’t expect to be a bit better off after getting an extra $1,000 every month, with no strings attached? Even if they aren’t, those who respond to the survey may feel they should report an improvement in their life circumstances, if only to show appreciation for such a substantial gift.
The researchers are guaranteed not to report one thing, however: that the Guaranteed Income Program is not feasible as a long-term national policy. Expanding the program to provide the same $1,000 per month to every current resident of the United States would cost $4 trillion per year. Paying for this would require more than doubling federal revenue, or a level of taxation that would cripple the economy.