While many countries in Europe are still facing austerity measures and the American government is still taking “a break,” Switzerland is considering welfare that is beyond belief.
Some have called it a Star Trek economy. That’s a fair analogy because it would only work in science fiction.
The proposal being considered would provide $2,800 each month to every resident of the country – man or woman, rich or poor, employed or unemployed.
It sounds great at first. The government stipends are intended to let everyone live with dignity and in comfort regardless of economic circumstances.
The idea behind the proposal is that if everyone is provided a livable wage, jobs that are beneficial but don’t pay well would become more attractive. Artists would no longer be starving, volunteers would be able to donate time to non-profits while still making a personal profit, and stay at home parents would not make the same sacrifice that they do in a non-subsidized economy.
The only problem with this theoretically benevolent plan is that it would never work without equally aggressive and outlandish pricing controls.
John Schmitt, a senior economist at the progressive Center for Economic and Policy Research was quoted in a recent salon.com article saying, “This would allow people to survive and to live, with dignity, assuming that other systems stay in place.”
But that’s the biggest problem. Other systems couldn’t stay in place.
Apparently none of the 100,000 people who signed the petition to force consideration of the plan have any concept that increasing the free money in the market by that amount, even if it were possible, would increase demand for goods significantly. If people had the right to choose whether to work at all because they were sufficiently provided for already, the supply of goods in the market would also probably be adversely affected. In the real world, where at least 100,000 Swiss residents haven’t visited, increasing demand and decreasing supply will drive prices sky high. When that happens, the “free money” from the government will be drastically devalued and if the market is left to itself to determine prices, the “free money” will basically disappear to cost increases and cuts to other government services that are supplied by the state now.
If, somehow a plan is devised to control prices, the system would rapidly become impossible to maintain. Their national debt would soar as less revenue comes in and more money goes out.
Wouldn’t it be nice if that kind of program would work?
It is hard to believe a group of elected officials would even consider this plan seriously.
Page 2 of 2 - The base wage might be a nice dream. When it comes to Star Trek, the economy shouldn’t be the first science fiction idea we try to turn into a reality.
We should focus on beaming people from one location to another first. Then we can pursue a base wage.
Kent Bush is the publisher of the Augusta Gazette, the El Dorado Times, and the Andover American newspapers. He can be contacted at: email@example.com