Mark Zuckerberg of Facebook fame is touting the idea of a “universal basic income”, the notion that every citizen should be paid some fixed subsistence on an annual basis, and he has been joined in this thinking, for various reasons, by Tesla CEO Elon Musk and former Secretary of Labor Robert Reich. In commenting on this goofy idea, Andy Kessler quipped, “If we get universal basic income, the millennials will never leave our basements”.
I have a better idea that might help achieve the same result and it came from Vernon Smith, the 2002 Nobel Laureate in Economics from Chapman University. He thinks that President Trump should advance a proposal to privatize the interstate highway system by holding a series of auctions, the proceeds of which could provide a permanent basic income for every citizen through a Permanent Citizens Fund much like the oil trust in Alaska does for citizens of that state. (Or even better, how about national debt reduction?) He even suggests broadening the asset sale to include the Bureau of Land Management’s vast grazing lands and eventually oil and gas resource rights. This parallels some thinking I have had; after all, the federal government owns over 50% of the land west of the Mississippi River excluding Texas. Neither Smith nor I would include the national parks and monuments or forests, but the private sector would be a much more productive manager of these valuable resources than government and better stewards for the true owners, the American people.
Such a proposal would have the added benefit of rolling back the Progressive Era thinking of the early 20th century, which favors large-scale ownership of natural resources under management by experts in federal bureaus, and which was itself a reversal of the previously dominant classical liberal ideas that produced the successful privatization through dispersal of federal lands via the Homestead Acts.
You’re probably thinking that this is either a very bad idea or a fantasy that couldn’t get ten votes in Congress, but I think it’s time we had this conversation. Is there any other way that we are seriously going to begin to retire any significant portion of over $20 trillion in national debt?
Jim,
The suggestion for selling the interstate highway system to toll operators (presuming who would make the purchase would seek a return on their investment) is cumbersome where there are many entrances and exits. Still, larger portions are practical as evidenced by the existing toll roads in our country.
The sale of government lands would please the Founders who did not see those resources as belonging to government but, rather, to the people. Reduction of debt must take priority over redistribution of our nation’s wealth, public or private.
A guaranteed income is not to be found in our nation’s constitution and I oppose it on that ground as well as the moral errancy in the idea itself. It is ordained in nature that man must work for his bread and I believe it accrues to his spiritual health as well as his physical well being.
There are several interstate highway toll sections in existence today and they work just fine. The one section we drive most often is in Kansas on the Kansas Turnpike, over 350 miles of toll based limited access highway that runs from the Oklahoma state border up to Kansas City. There are over 350 miles of IH in Illinois. Many states have toll based sections on interstate highways, and even more have toll based managed lanes similar to the MaxLanes along IH-10 in Houston. The only existing toll based section of interstate in Texas is in Brownsville.
So my guess is that tolling interstates would not be a big challenge. The big challenge would come from other issues that come with privatization such as the need for “Non compete” arrangements. Private companies are not going to allow anyone to add capacity nearby that would challenge revenues needed to return profits to investors or to pay off the debt issued to acquire the roads. Then needed expansion would be a challenge. This happened in Florida recently when a PPP developed a new toll road, only to have the state buy out the investment at a huge cost a decade later when the road needed to be widened and expanded. Our interstate highway system would become regulated public utilities, subject to a new regulatory scheme that hasn’t been invented yet to be taken advantage of by all kinds of political forces.
And this to guarantee a base income for everyone? Don’t we sort of have that now? Food stamps, Section 8 housing, Medicaid, low income tax credits, welfare, etc.? Do we really want to add another item to this list and create a new entitlement?
Tolls, park entrance fees, hunting licenses and such are use taxes which normally I strongly prefer over other forms of taxation. Basically, Harris County has done the same thing with law enforcement through their contract deputy program. Though technically not privatized, it functions very much as if it is. There are serious inherent drawbacks, but at least in the case of contract deputies, it is highly popular with most voters.
I love the Vernon Smith ideas, especially the land sale. However, the Libs will fight privatization tooth and nail: they would rather live with (and pay the taxes for) government mismanagement and huge cost inefficiencies vs. trusting a private citizen to steward the assets. It might be interesting to take a simple poll: who do you believe would take better care of 100 acres of land in Colorado: the US govt or a Coloradoan family?