wasn't quite so sobber and quite so discreet and in the correspondence that he had with his old friend harry blackman who was a judge at the time on the a circuit back in minnesota, we see the real burger, on labor days 967, burger wrote, quote, if i were to standstill i would i'm sure want to shoot myself in later years. these guys referring to the supreme court justices, these guys just can't be write, there's nothing to do but resist. in another letter to blackman in march 1969 which was about four weeks before he was named to the court, he was very sharply critical of the court referring to president nixon by initials observed rn can only straighten that place out if he gets four appointments. if he gets four appointments

and, of course, he got four appointments. richard nixon was a very lucky man. he got burger first, powell and rhenquist all within the first three years of his first administration and that changed, enabled the reversal that we see in the burger courts. i was signing books last week in the annual convention and a judge who i won't name, a judge known to all of you saw the stack of books and said, the burger court, nothing much happened in the burger court. i said read the book.

[inaudible conversations] the change the moderator is an indication that generally enjoyed talking to each other about issues about which we disagree and i don't know the extent to which we disagree. it is good that you do because otherwise this would be pretty boring. the topic is universal basic income, and i published a book on this in 2006. i had been interested in the concept since the 1980s and i republished a revised version of the this year for a couple

reasons. one is in 2006, i was doing well, couldn't afford it right now with the same budget we have, i was actually off by a couple years. but now we are well above, we could implement the plan i presented in the book in our hands for less money than we currently have, that situation is going to get dramatically worse over the next several years because we do have rising entitlement costs, can look out pretty confidently at the future and see deficits that are extremely serious and one way or another there has to be reform. congress does not do major reform unless it has 2 and it

will have 2. that was one reason. a second reason, much more than 2006, i was aware of a huge shift taking place in the job market, it was my 50 years down the road, the obvious example are things like truck drivers and the advent of driverless trucks and driverless cars, much scarier aspect, and the nature of the changes were white-collar where after decades of being overhyped, artificial intelligence, very large numbers of jobs that up until now offering college degrees with average intelligence, make complex decisions to go away.

that was the second reason. third reason i will finish off by saying we are looking forward to a future in which living a satisfying life will involve vocation but not necessarily vocation as 9-5, 40 hour a week job. and the same reason i was interested in guaranteed income in 2006 and it offers a chance to revitalize civil society i am going to make a brief statement on what the plan consists of and what i hope to achieve, try to hold that within 10 or 11 minutes and a chance to respond at length and we will go back and forth on the things we do

disagree on and open up for questions later. first the basics of the plan as i present it. i will start out by saying universal basic income would be a disaster. i think if it were an add on to the current system it would be a disaster for all the reasons a lot of people say it would be. however if it replaces everything else, financially becomes more feasible and a variety of good things happen. we replace all transfers with universal basic income and by all transfers are included social security, medicare, medicaid, welfare programs, all agricultural subsidies, anything that constitutes a transfer from some american taxpayers to other american citizens as opposed to things like police protection

and so forth. it is in the amount in the plan of $13,000 a year for every person in the united states who is 21 years or older, and need an electronic deposit bank account to get the plan for that stipulation and monthly installments. here is stipulation. the only stipulation i have is $3000 must be used for health insurance. that is accommodated subsidy, happy to do it. i believe it out of this discussion, presentation, and say one way or another $2000 of that out and let's say we are talking in terms of money, disposable income, $10,000, you can't live on $10,000 a you are saving to me, you are right you want to live all by yourself without reference to anybody else, and if you don't want to

work at all, that is true. you can very easily make a decent living for yourself if everybody else has $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, still not working, $20,000 a year. if you hold down a minimum wage job, say $7.5 an hour job and you work for 2000 hour the year that is $25,000. if you are living with someone else $35,000. you can go through a lot of permutations and say universal basic income makes it really easy for people doing very ordinary things to live well above the poverty line. forget the poverty line, makes

it easy to get into the middle class you have a couple, $20,000, some fairly -- getting into middle-class. with that comes progress against poverty that has eluded us for the last 40 years. it has all sorts of ways of making retirement a comfortable retirement easier than it is under social security especially among lower earners. a lot of these are issues i have to execute to make my case but i research that and move on. a couple issues are really important. let me pause for a moment. i felt this plan can never be enacted as specified but they are really important. what i mean is whatever version of this might actually be considered the things i am about to say need to be taken into

account. you need a high payback point. in my plan i start to clawback part of the grant at $30,000 of earned income and at that point pay 10% tax on every thousand dollars. the point is this. current programs have terrible marginal tax rate so that if you have medicaid and form of food stamps or assistance it can be very dicey to get a job. because you lose those. if you are on disability and the people in this room are aware of the increase in the disability program which includes lots of people who may have a real disability, but could hold other kind of jobs, they cannot go to

work without jeopardizing a guaranteed lifetime income and quite naturally a lot of people don't want to do that. if you have a high payback point, sidestep all of those traps and you really lure people into working until they can't afford to live. someone working at a job and gotten raises, $30,000, they have a net of 40, i don't think many of them will quit working because they have to start paying a small amount and go from $40,000 a year lifestyle to $10,000 a year lifestyle. let me move to a brief outline, ubi offers a chance to revitalize american civil society. it is a complicated argument in a lot of ways. let me put it in terms of one of the things most commonly brought

up, you are going to have to drink up money before the end of the month and if you have taken -- what is going to happen is they have to seek help but it can't be going down to the bureaucracy outside. they have to talk to the girlfriend, boyfriend, relatives, friends, salvation army and i am tapped out, don't have anywhere to go, you've got to help me, you have changed the dynamic. the person who is doing that no longer is a victim who has no resources. america does not have a history of letting people die in the streets. here is the kind of response i envision which i to not think is naïve but entirely practical,

you are going to have boyfriend and girlfriend say okay, not going to let you starve, don't tell me there is nothing you can do because in the first month you have another $800 coming into the bank account, time you got your act together. multiply that by interaction by millions of times every day around the country. in terms of people who have human needs. what i am saying is dealing with human needs is going to be pushed down to the level where you have the best chance of getting the effect. if there's one thing anybody who ever works for people with serious problems knows it is that some people need a pat on the back and a helping hand and sympathy and other people need a kick in the pants. people who know how to do that are people closest to them, people who are most ineffectual at doing that our government

bureaucracies, run by rules, rules are not easily adapt to the complexities of human beings. the way in which it revitalizes society to the people who have lots of problems and need to have those problems addressed, one of the things that made america exceptional, not exceptional in our eyes bragging about the united states but exceptional in terms of europeans eyes who came over saying we had never seen anything like this, that is the extent to which american communities especially in the northwest dealt with their problems forming associations but also in all sorts of formal ways. there are a few societies around

the world that did it as we did. i sometimes made the case, you take the philanthropic efforts in new york city at the end of the 19th century i am willing to go to the law saying the amount of money spent on those were far more the tax base of new york city than ever matched in terms of government services. a lot of that has gone away. i want to see that come back. because that is the stuff of life in our communities, that makes the community rewarding in the same way you worry about what makes vocation rewarding. the title of the book "in our hands: a plan to replace the welfare state" comes from that

concept, putting life in our hands. her hands as individuals and communities. i will stop there, turn it over to jared bernstein. >> thank you. good to hear you talk about discourse because i consider you a master at that on one on one, one of the reasons i enjoy interacting with you. a couple books ago charles wrote a book called coming apart. i liked a lot of what i read in there and it presages the dynamics of the current election. if you haven't read that you should look at it. the current book, many more disagreements. i want to talk about why i think

charles's idea for universal basic income is misguided in the sense that it would compound the problems we have, a number of programs, in ways in which they are having their intended effect, extremely effectively and efficiently doing what they are supposed to do which is easy to do in social policy in an $18 trillion economy. a lot of my reaction to reading our "in our hands: a plan to replace the welfare state," what we have not broken, don't fix it and fixing is a lot worse than the current system. i want to talk about the notion of jobs, the future of work because here, charles is part of a larger movement where many

economic commentators, and thinking i will disagree with that, try to end, and areas i think charles does, something, and agreeing upon if we can, pretty significant wrinkle i will dangle in front of you. and based on extensive evidence that social security, medicare, medicaid, the affordable care act and the safety net are all working very well, having their intended effect efficiently and effectively, there are certainly aspects of those programs that need work as charles suggested,

solvency issues must be resolved for large social insurance programs but in the first page of his book, suspend political disbelief which is a very reasonable thing because you will read about a very large game changer, you have to suspend -- talking about any policy change these days you have to suspend disbelief. but achieving solvency, big social insurance program, is a less heavy lift than getting these changes. in our commentary i hope i can say more about this so let's talk about social security and work through that list quickly. social security. in the absence of social security, elderly poverty would be 44%, security takes it down to 9%. the administrative costs of social security used to be 2% of benefits which was already far

above any kind of private sector retirement program of the type charles is implicitly advocating, it is down to 0.5%. administration of social security 0.5% of benefits paid, social security provides the same returns as the stock market charles has and by risk-adjusted, what you have to factor in, i didn't see this anywhere in "in our hands: a plan to replace the welfare state" is the inherent risk inputting retirement account in the stock market. we had this debate in the private account days of george w. bush and one of the reasons it went away, in part because the market tanked when we were having this debate which reminded people of the importance of accounting for risks when talking about pension programs, guaranteed pension programs, charles says nothing about transition costs which are huge when you are moving away

from social security to something more variable. medicare. medicare is not only like social security a deeply beloved program, you have some real headaches trying to deal with that, getting rid of that but also a highly efficient program. if you look at the costs, want to ask where our pressures coming from, the pressures from healthcare in particular, you will find consistently year in year out medicare and medicaid grow more slowly than the private health coverage even controlling people's medical conditions. again, highly efficient program. what about the aca? two things. first of all, do yourself a favor, not hard to find, look at a plot of the insurance rates,

the share of the population that lacks insurance and draw a line where the aca comes into play, do this for non-children, the working adults, exactly what i mean, get rid of child insurance as well, draw a line where the aca comes into play, you will see after year in year out the uninsurance rate drops, it was 16%, the rate of people who are uninsured, 60% in 2010, 9% today. the aca, this has to do with changes in medicare, if you look at projections of healthcare spending the kind of delivery measures in the aca and other things going on have reduced our projections of healthcare expenditures by 4% ep, what it

takes a couple decades, programs are proving to be both efficient, effective, bending the cost curve in ways that are extremely important and i fear going to the private sector solution charles had to get us there. i disagree with charles about the safety net. there may have been a time when it was more of a problem, but the last 20 years the safety net has become increasingly conditioned on work and if you are disabled, elderly or a working person the safety net is much more tilted towards you then it is against you. there is another problem where you have a larger share from the job market and hear a cash grant would be helpful on top of what

we are doing about replacing it. power points are fine as it should be. and not the official poverty rate, cited in -- incorrectly adjusting for all the things we have done to and i poverty effectiveness of the safety net, child tax, expansion of nutritional support, those are no official rates, the supplemental rate has come from 26% in the late 1960s to 14% today. look how it performed in the great recession. and more effective than it has

ever been. we will turn things over. it is simple math that if you are going to take a system of transfers, disproportionately tilted toward those at the lower end of the system. and that will dilute the system. they will be pushing back. and taking a set of programs

that are disproportionately targeted and anti-poverty or low income effectiveness, and finally on jobs, here is the thing. charles, the kind of future, robots coming for our jobs crowd may be right, nobody knows. i want to stipulate that. charles doesn't say things lightly. i went to defer to the possibility that the future will be different than the past. it is true luddites have always been wrong. the idea that you jerk, the technology induced in the future has never been correct. so specifically doubtful about this claim in at least the near term. if in fact technology or labor substituting capital, that

substitutes for workers was entering the workforce at an accelerating rate we would see productivity growth, nothing but output per hour. output per hour of work. if we were creating more output let's work which is what technologists tell us is a symptom of this we would be seeing productivity celebrate. and significantly, i would argue what really should be arguing about up here, evidence that there is something wrong with this hypothesis. that is very near term, looking around distant corners which we have never been right about distant corners and i'm afraid we are not now but any evidence that would lead you to believe you want to take apart a system i think is working extremely

well, replace with one that is inequality inducing is less effective. i will save my areas of agreement so let me stop and that you read this. >> i will not try to react to everything. we have these efficient programs, suspending state and local, up to $1 trillion a year, transfer payments and millions of people in deep poverty, still have millions of people without health insurance, we still have an intransigent set of people will unable to live this existence despite all these efficient programs and i guess -- i will skip over the fact

that i have an entire appendix on transition processes, reading appendices is asking for trouble. i never make a big deal out of the cost of bureaucracies. let's think about a guy who is low skilled and never going to be anything except low skill, if he gets in the labor market and stays in the labor market he won't say minimum wage but say it will be $10 an hour and he works 1500 hrs. a year or so. that means his $10,000 hasn't quite doubled but it does augment his income. the same guy under the current system can -- you know these numbers better than i do, he can

get some other help. he doesn't get close to 10 grand every year in terms of what he can do. entry into not just escaping from poverty but entry into a more comfortable life is pretty much shut off to him in lots of ways because the labor market will not pay more. a lot more than those things really skilled work. think about marriage, which has been declining radically in the working class which marriage, which is one of the best ways for all sorts of good things to occur. all at once if you get married and you are low in, 35. that is a big difference. if she does work a little bit,

what i am saying is the current system is really bad. at taking people who have gone the short end of the sick and giving them an avenue to which they can reasonably look forward and my plan does that. it is a huge transfer of money toward the lowest income groups because part of the grants for the people who are above $60,000 in income, that is the price, the payoff of medicare and social security. that advantage of my plan is the focus, anything else i want to say. >> the guy you just mentioned doesn't have a family. >> turned out with him not

having a family. >> that guy is underserved. this is on the docket. and to reach that guy. that is a single worker, take the got charles described without any children, gets little from the earned income credit where is a single parent with a couple kids gets 5 to 6k match and in fact i wanted to talk about that for a second. two things. first of all the safety net should not be viewed in lining up dollars, and if you did that

i still think i would come out on top because i was looking at some numbers and some of this is pretty complicated a lot of complications of benefits and intersection of different programs but a colleague of mine at the center on budget was showing me some work suggesting the bottom step that's on average 15 k a year in the transfers we are talking about and that is before social security and that is important. a mathematical point if you are going to defuse transfers of the income scale given your marginal tax rate on higher income people and still be distribution only disparate is -- equalizing. but if you look -- we have a nice paper from the center that

makes this point. if you take a mom with a couple kids, working half-time at minimum wage, ends up with an income-based on the benefits of food stamps or snap, $6000, her child tax credit, 700, you take out her payroll taxes. this mom with a couple kids is making $17,000. she doubles her effort as working full-time. we might even agree it is too low. a very low minimum wage. this gets to charles f point about work disincentive. does she end up doing worse? she loses 1,500, she more than makes up for that with 2500 in

the itc and another 1300 with child tax credit, income grows 18,000 to 26,000. those other work incentives built into the system. recognized as that is going on she is contributing to social security, social security is the part of charles's plan i dislike the most. what charles does is everybody should put $2000 a year in the stock market. this is charles admonishing, a lot of people won't do that. they have a hyperbolic discount rate, different way of saying

the same thing. charles absolution -- a variable pension. if they retire in a bad year they feel it. this is a private account i am happy to have once again, let me stop there. >> i have an issue to move along. a lot of people don't get so scared, you could be 65 years old and under a variety of conditions you get little social security or none at all. they haven't saved a penny. they got there 10 grand for 20 grand which let me make a blanket statement, jared bernstein and i to be continued, talk about putting money in the

pockets of low income people, i can go to the mat with you on numbers, i will put that aside and bring up another topic. that is the future of work and where we stand right now. labor force participation has been dropping, and more notoriously among white males. we are now down historically unprecedented rates of able-bodied males of crime age and that is increasing. in addition to that, we have a collection of jobs i absolutely grant the luddites, nothing wrong in two centuries. this time is different, a difficult proposition to make. i would argue with the previous transition you could have a

rational person who could have foreseen it wasn't so bad. when buggys were no longer needed, the person could have said will need these other kinds of things to generate jobs. what do you need? to replace the jobs of the driver, one of the largest employment sectors in the country who are going to be without jobs. what will you do with millions of white-collar -- i got to raise this quickly. the fact in terms of iq, we had a society, an iq of 105, 10010, a lot of really good paying jobs

because you could do that require the ability to make these judgments. it is really scary, massive numbers of jobs, there are examples i could give to you. can i prove to you that this time is different? i would have a hard time doing it if i spent three hours on it, something all of us should be careful about. and one final comment on this incline in social capital bob putnam made famous with bowling alone has continued and a lot of the reason it has been continued has to do with the fact that some other good things occurred like women going into the labor force and having the opportunity to go into the labor force, that is a good thing, good things can

have collateral effects and one of those collateral effect was a lot of what women contributed were huge among social capital form of communities. i am not in any way in any form, let it be perfectly clear, not recommending we encourage women to get out of the labor force. i am saying the ubi would make it possible for women who want to be out of the labor force and at home raising children and being deeply engaged in the community makes it easier for that to happen. it also opens up ways with guys who do not have a place in the labor force to come will find ways in which they can legitimately say to themselves i am is valued that if i were not doing it i would be missed.

>> how about i make a closing statement. you land in a place there may be some agreement. one of the things i like about a universal income of some sort as it does allow people not to take really lousy jobs they don't want and increases their bargaining power. as someone who was a student of wage distribution for three decades, lack of bargaining power is a critical deficit for low income people. let me close with a final critique of the idea but suggests there is may be common ground. it was interesting to me to hear charles say i left out police because these are expenditures that don't encounter transfers, these are agreements that society has public good i cast a

broader umbrella on public good than charles is or most libertarians do but one that i share with most americans, that is the idea of investing. investment in retirement security such that we as a nation have agreed since the 1930s that we are going to have a guaranteed pension for the elderly. it could be improved, the idea of a variable you are on your own pension, i hope you invest in the market fruitfully, we have a guaranteed pension, healthcare security, this is medicare which charles gets rid of, we are going to have a safety net that is just a set of conjunction programs, food stamps, medicaid, head start, these programs now that we have longitudinal data have been found to work like investments,

they lead to less obesity, better employment outcomes, better educational outcomes, better earnings outcomes, 20 years hence so kids who grew up getting these benefits are similar to those who didn't get them as adults, these are investment programs, we invest and our investments are in areas where we agreed market failures will not lead to excessive elderly poverty, child poverty, healthcare and that is my signature objection to the plan is about the job thing, a worth reading new book on this. disagreeing with people, i have a chapter where i disagree with nick's diagnosis but his evidence is extremely well put

together. i check that out. the problem we have and now i will talk about the macroeconomists, how i extend my working days. the problem in our economy is lack of demand. we have output gap's meaning the potential for gdp has consistently been above the actual gdp. if we were more employed we would generate more output. we have full employment in the job market only 30% of the time since 1980. this is a massive market failure. we have been at full employment in 1980, cbo data, point and click, nothing devilish about it establish, we tapped all the demand and cyclical benefits to pull people back to the job

market. one of the points i made is the employment population ratio which fell so much during the great recession has climbed two third of the way back. it is a cyclical variable, not that people are running away from work but there are not enough jobs. i'm very hesitant, persistently weak demand to sign off on a technological unemployment thesis that has already in wrong, to increase the quality and probation. here is where we agree. instead of ubi, what if we had guaranteed jobs program. we may disagree on that but based on the numbers i cited, macroeconomic deficits, instead

of guaranteeing income, we guarantee jobs and politically that is a less heavy lift because there are people in this instance who pledge having people work is something more consistent with even your work if you go back to healthcare work but a guaranteed job -- >> my problem is the government allows employment -- >> guaranteed private-sector job. >> that is -- >> here is what you hear when you go to employers. is our employer's trying to run their business and they say all i want is somebody who will show up on time every day, doesn't take half hour bathroom breaks

every three hours and deal with coworkers. i am having a terrible time getting those and stories about jobs going unfilled because of these basic skills and if -- you know what it would be? for those of you youngsters in the room this is the 1970s, very big comprehensive employment training act, i am going to go to questions now. wait for the microphone please and make it a question please. >> one question.

one big fact in these occupants, people -- one american, only have jobs in american society. other countries successfully seeking other countries. both of you have ignored the argument. >> we are right to ignore it. we are worried how to make america work better. >> a global pension. >> hold on. just the notion that i am sensitized in this political campaign as somebody who has been a fan of globalization as i

have been saying you know what? in the course of this i have not been paying sufficient attention to ways in which my fellow americans have been accrued over in ways that don't affect me. so i worried about how to make america work. toward the back, the gentleman -- i thought about calling on my colleagues but not sure that is a good idea. >> the plan seems to be people make good financial decisions or the social networks to make financial decisions, strong evidence people in poverty think about money differently and in

immediate terms and anecdotally, see it in my friends. so in your plan do you see any scientific evidence to the contrary or taking research into account at all? >> even if there are no provisions for retirement whatsoever they're getting $10,000 year until they die. 2 of them, $20,000 a year. it is completely stupid, unthinking and no future time horizon. that is the certain thing about money, anybody who has 10 grand and assessments that are common knowledge among the people in this room will be the topic of conversation in barbershops and

cafés, somebody has to walk into the bar and have a great get rich scheme where they are going to buy tulips, there will be people and other people rolling their eyes saying what you need is diversified portfolio. things that are not set in bars or barbershops, going to be a lot more widely spread. the ways in which when everybody has 10 grand the dynamics change in communities and the assumptions they make about each other about victimhood and the rest. >> that is an objection i have as well, and adequately invest,

and the system that guarantees pension now which on average pay more than $10,000 a year. this will be for arguments on the blog, and it is extremely pervasive program, anyone, any citizen who has been in the country for the requisite amount of years, where i have a similar objection to the health care plan, basically a catastrophic plan we thousand dollars off of the top and this catastrophic health care in the private market. and a high deductible plan and the psychology the questioner mentions, what they found was middle income people with high

deductible plan. it is not more price conscious or helps the shop more, what it does is they don't go to the doctor when they are sick so it costs more. >> let me -- i will go here and there. familiar figure. >> the heritage foundation. try to make these questions, what do you think of the marginal tax rate. for 25 years because until you get to the earnings of $20,000 a year, 17%, there are a few anomalies. secondly you talk about making

progress against poverty, you know perfectly well deep poverty because it is counted as income and if you count those things as income you cut the poverty rate at least in half, deep poverty rate in decent years. it is a lot easier to count rather than abolishing social security and medicare and counted accurately. here are two questions. if you take social security and medicaid or do this tomorrow and transfer it in your system in terms of social security benefits, navigating $3 billion, and the lost medicare benefit as opposed to $4 billion a year.

i know you have transitions, but this emphasized -- a huge transfer from the elderly to others, second question. >> what was the first question? >> you made a lot of great points. >> i am going to say i have to look at this market. >> boys of america. my question is about a talk, working-class men which creates enormous social problems. what can you do to low-cost --

would that help increase marriage? or decrease the incentive of marriage? >> running through the alternatives, there are different outcomes for different people. i will tell you a couple things that will be gotten right, one of those has to do with children, having aldrin but the woman's point of view, having a baby creates income. i'm not making collateral -- having a baby creates -- under the ubi, having a baby is on an existing income stream as it should be. having a baby will cost a lot of money but we really want to.

for the guys are blunt and brutal and appropriately so. you now have a case where you cannot enforce child support. the guy who walks away from children is in a gray market or has no income or whatever. under ubi he has a known bank account with electronic deposit and to establish paternity beyond a shadow of a doubt and all you have to do is say you will never see it, you think maybe that will get around? you think maybe guys will see father and babies created drain on their income stream? with issues of marriage and issues of private work in the book that i recommend people look at, there are lots of ways to create value places where people are functioning in their

communities in ways which gained them the respect, give them statements for what they are doing, those are elaborate arguments is let me jump in. >> my question, civil society, restoring civil society in the 19th century new york, what would be the explanation why voters decided that was not going to happen? in the last century we had it to suspend political disbelief, if paul ryan said this is it for the next term, would be first in line say no way josé, don't

really want. >> real quick with my response, books have been written -- the first programs that were done, the greatest objects, widows with children. the first national welfare program and the second thing is it seemed simple at the time. that was true in the 1960s as the welfare state built up, people don't have jobs, give them jobs, people don't have skills, on-the-job training. mothers don't know how to take care of their children, disparity. it seemed to be simple and only after these layers were built up that it became obvious there was a moral hazard problems and implementation problems. it is not simple but by that

time a great deal of what was assumed to be the responsibility, it is the government's job. >> i heard a different view of that. let me put it this way, look around at every advanced economy, do you see any ubi sees or any welfare states? the answer is every single one. ..