There's a Hole in the Bucket
By Amy Willis
There has been a lot of talk lately about the idea of a basic income guarantee, or BIG, which has garnered support from across the ideological spectrum. In this week’s EconTalk episode, host Russ Roberts welcomes back listener favorite Mike Munger, a supporter of the idea. The virtual sparks fly as the two friends discuss the the reasons for and against a BIG. After listening, what do you think the potential for a BIG is? Could it really replace all other welfare programs? Would welfare be more effective or cheaper? Would we get bigger or smaller government as a result? Would we–at last–begin to define ourselves not by our jobs but by something more personal? And what of unintended consequences…they always emerge!
So what were your thoughts on this episode? Use the prompts below to continue the conversation!
1. What are Munger’s grounds for support of a BIG? What are Roberts’s grounds for his skepticism? By whom were you more convinced, and why?
2. Munger argues that we should be more concerned with the substitution effects, rather than the income effects, of a basic income guarantee. What does he mean by this? Which type of effect do you think would be greater? Why?
3. Charity plays a pretty big role in this week’s conversation, as one of the primary motivations behind a BIG is to help the poor. Is charity a public good? Why or why not? How does your answer to this question shape the way you think about the potential efficacy of a BIG?
4. Roberts says the “ugly” way of putting the “big argument” for a basic income guarantee is as follows: “Life is hard for some people, and so it’s OK that they live off the rest of us because we have good lives.” To what extent is that a fair restatement?
5. By his own admission, Munger makes several “ridiculous” claims throughout the conversation. Which of his claims regarding a BIG did you find the most remarkable, and just how ridiculous did you really find the claim?