The idea of a universal basic income (UBI) is certainly an intriguing one, and has been gaining traction. Swiss voters just turned it down. But it is still alive in Finland, in the Netherlands, in Alaska, in Oakland, CA, and in parts of Canada. 

Advocates of a UBI include Charles Murray on the right and Anthony Atkinson on the left. This surprising alliance alone makes it interesting, and it is a reasonable response to a growing pool of Americans made jobless by the march of technology and a safety net that is overly complex and bureaucratic. A comprehensive and excellent analysis in The Economist points out that while fears about technological unemployment have previously proved misleading, “the past is not always a good guide to the future.”

Robert Greenstein argues, however, that a UBI would actually hurt the poor by reallocating support up the income scale. His logic is inescapable: either we have to spend additional trillions providing income grants to all Americans or we have to limit assistance to those who need it most. 

One option is to provide unconditional payments along the lines of a UBI, but to phase it out as income rises. Libertarians like this approach since it gets rid of bureaucracies and leaves the poor free to spend the money on whatever they choose, rather than providing specific funds for particular needs. Liberals fear that such unconditional assistance would be unpopular and would be an easy target for elimination in the face of budget pressures. Right now most of our social programs are conditional. With the exception of the aged and the disabled, assistance is tied to work or to the consumption of necessities such as food, housing, or medical care, and our two largest means-tested programs are Food Stamps and the Earned Income Tax Credit.

Liberals have been less willing to openly acknowledge that a little paternalism in social policy may not be such a bad thing. In fact, progressives and libertarians alike are loath to admit that many of the poor and jobless are lacking more than just cash. They may be addicted to drugs or alcohol, suffer from mental health issues, have criminal records, or have difficulty functioning in a complex society. Money may be needed but money by itself does not cure such ills. 

A humane and wealthy society should provide the disadvantaged with adequate services and support. But there is nothing wrong with making assistance conditional on individuals fulfilling some obligation whether it is work, training, getting treatment, or living in a supportive but supervised environment.

In the end, the biggest problem with a universal basic income may not be its costs or its distributive implications, but the flawed assumption that money cures all ills.  

The Medicare Access and CHIP Reauthorization Act of 2015, referred to most often as “MACRA,” set in motion a new approach to Medicare physician payment and replaced the oft-criticized Sustainable Growth Rate with two new payment schemes. In late April, the Centers for Medicare and Medicaid Services (CMS) released many proposed details surrounding the law’s implementation; however, it is important to keep in mind that the final rule is still forthcoming and may incorporate significant changes in response to public comments made on the proposed rule.

While there are many stakeholders trying to understand the implications of this significant legislation, physicians and other providers—whose response is critical to the success of MACRA—must prepare quickly and almost immediately make decisions about which incentive program to pursue and what steps will increase prospects for success. Starting January 1, 2017, physicians’ and other providers’ performance will determine their payment rate updates. Because of the time required to gather and evaluate performance data, spending and other performance measures in calendar year 2017 will provide the basis for physician payments in 2019.

In this piece, we offer a glimpse into the potential financial changes in physician payment based on the proposed rule. Due to the complexity of the MACRA provisions and their significant effects on payment, policymakers, physicians, and other providers alike must better understand the various dimensions of MACRA. We focus on the financial flow of dollars to help physicians and other providers assess which path within MACRA to take and how best to forecast the impact on their payments, as well as to provide an overview for policymakers on the financial implications of different options physicians are actively weighing now as a result of MACRA.

MACRA overview

As established in the law, MACRA creates two primary payment schemes that physicians accepting Medicare can choose to be judged under:

1. The Merit-Based Incentive Payment System (MIPS), which administers bonuses or penalties based on how well physicians perform relative to other physicians on a set of quality and value measures (detailed later); or
2. The Advanced Alternative Payment Model (APM), which initially offers bonuses and then provides higher annual fee updates than MIPS when physicians earn a sufficient amount of their revenue (or see a sufficient percentage of their patients) through qualifying Medicare or approved private payer payment models that require accepting financial risk if spending exceeds targets.

At least initially, the large majority of physicians and other providers likely will be judged under MIPS, with CMS projecting in the proposed rule that only 4 to 11 percent of Medicare providers will qualify for the Advanced APM payment approach in its first year because of the relatively strict standards to qualify. Unlike the expectations expressed during congressional debate over MACRA, which mainly focused on encouraging physicians to form or contract with APMs, the rules proposed by CMS will lead many to remain in MIPS for the foreseeable future. Indeed, we understand that many physician specialty societies are advising their members to remain in MIPS. In a comment letter to CMS, we suggested ways to better support the pipeline of physicians and other providers into APMs.

The graph below illustrates the potential scenarios for the flow of funds under the proposed rule. In MIPS, payment is based upon physician performance relative to all other physicians in the program, with bonuses and penalties centered around the base fee-for-service (FFS) payment rates and annual payment updates. MACRA explicitly requires bonuses or penalties in MIPS—not including exceptional performance bonuses—to be budget neutral.

Unlike MIPS, the Advanced APM program dictates that physicians receive a fixed 5 percent bonus for each of the first six years and higher base payment rate updates than MIPS from 2026 onward, in addition to additional bonuses or penalties based on quality and cost performance under their respective Advanced APM contracts. Adding to the contrast with MIPS, bonuses in the Advanced APM program, as well as contractually specified bonuses or penalties, have no requirement to be budget neutral.

The graph below illustrates that consistently high performers in MIPS can actually financially outperform physicians in APMs for many years. In theory, therefore, physicians in an APM—for instance, a Next Generation Accountable Care Organization (ACO)—who are confident that they would score well on relevant quality and value metrics might actually prefer to be judged as a group under MIPS.

In assessing their options, though, it is important to recognize that performance under MIPS as an individual physician or small group may be less predictable than as a part of an APM, because performance in MIPS is relative to the performance of other physicians. This unpredictability occurs because, as explained above, MACRA requires MIPS incentive payments to be budget neutral, which makes performance among MIPS providers a zero-sum-game—one physician’s increase in performance threatens the payment of another, such that bonuses and penalties offset each other overall.

The Merit-Based Incentive Payment System (MIPS)

MIPS consolidates three existing programs that dictate physician bonuses or penalties for Medicare physicians and other providers (the physician quality reporting system, a meaningful use incentive program for electronic health record use, and the value-based payment modifier) into a new system that creates a composite score based on:

• The quality of care provided (30 percent in 2021 and beyond), as measured under current law;
• Resource use (30 percent in 2021 and beyond), which consists of the “measures of resource use established for the value-based modifier under current law and, to the extent feasible, accounting for the cost of Part D Drugs”;
• Meaningful use of electronic health records (EHRs) (25 percent), established under current law to determine whether a provider is meaningfully using EHRs; and
• Clinical practice improvement activities (15 percent), a broad subsection decided on by the Secretary.

Physicians and other providers’ weighted scores in each of these categories for a year are aggregated into an overarching Composite Performance Score (CPS) for each practice. The CPS values are ranked from highest to lowest, and the relative ranking of each score determines how provider payments are adjusted, dictating whether a bonus or penalty results as well as its size. Each year, the Secretary will select either the mean or the median of CPSs for that year to serve as the performance threshold above and below which physicians and other providers will receive bonuses or penalties, respectively.

Initially in 2019, 4 percent of a medical professional’s revenue generated through Medicare fee-for-service payments will be redistributed under MIPS, growing to 9 percent by 2022 and remaining at that level indefinitely. By comparison, under the three previous reporting programs, physicians in small practices were subject to combined penalties as high as 6 percent or bonuses up to 2 percent; larger practices (with 8 or more physicians) were subject to maximum penalties and bonuses of 8 percent and 4 percent, respectively.

Maintaining budget neutrality requires that CMS pay the same amount in bonuses as it receives in penalties. To assure that penalties offset bonuses, the MIPS bonus percentages described above are potentially subject to a scaling factor of up to three-times to maintain budget neutrality. For example, having the Secretary adopt the median CPS would mean half of all physician practices would rank above that value and half would rank below. However, because practices can differ in both number of physicians and the extent of their Medicare billing, there is no guarantee that the Medicare payments—and associated bonuses—earned by practices above the midpoint would exactly equal the penalties owed by practices below the midpoint. CMS would compute and apply an appropriate scaling factor to assure total bonuses equal total penalties and achieve budget neutrality.

Outside of the budget neutrality requirement, the law provided $500 million each year from 2019 to 2024 to award “exceptional performance” bonuses to MIPS providers with the highest composite performance scores. The bonuses would be awarded on a sliding scale up to as high as 10 percent added to the base MIPS bonus.

Advanced Alternative Payment Models (Advanced APMs)

The other pathway under MACRA involves alternative payment models that meet the criteria established by CMS to be designated “advanced.” Advanced APMs are defined as (i) measuring physicians and other providers according to metrics similar to those of MIPS, (ii) requiring providers’ use of certified EHRs, and (iii) holding providers accountable for at least “nominal financial risk.” In the proposed rule, CMS outlines which of its current APMs measure up to this “Advanced” threshold, including:

• Medicare Shared Savings Program ACOs, Tracks 2 and 3;
• Medicare Next Generation ACOs;
• Comprehensive Primary Care Plus (CPC+) Model;
• Oncology Care Model (two-sided risk); and
• Comprehensive End-Stage Renal Disease Care Model (Large Dialysis Organization arrangement).

Notably absent from this list of proposed approved Advanced APMs are Track 1 MSSP ACOs and various bundled payment models.

By earning a sufficient percentage of their revenue through an Advanced APM, physicians can qualify for a bonus payment equal to 5 percent of their annual fee-for-service revenue in years 2019-2024 and a 0.5 percentage-point higher annual fee rate increase than physicians and other providers in MIPS each year starting in 2026 (0.75 percent vs. 0.25 percent). Alternatively, as a new feature under this rule, physicians can also qualify by seeing a sufficient percentage of their patients through an Advanced APM; notably, the patient percentage thresholds are lower than the revenue percentage thresholds.

Specifically, for physicians participating in Advanced APMs, there are four ways to qualify for the bonuses and higher payment updates of the Advanced APM track. Across all, the thresholds increase in the initial years and remain constant from 2023 onward. However, the thresholds are distinct in whether they are based on revenue or patient volume, as well as whether they are based on Medicare alone or on all payers. The four categories for qualification are:

1. Earn a minimum percentage of their Medicare Part B revenue through an Advanced APM;

2. Starting in 2021, earn a lower minimum percentage of their Medicare Part B revenue AND a minimum percentage of their revenue from all payers through an Advanced APM;

3. See a minimum percentage of their Medicare patients through an Advanced APM; or

4. Starting in 2021, see a lower minimum percentage of their Medicare patients AND a minimum percentage of their patients from all payers through an Advanced APM.

Importantly, if physicians and other providers fall short of these minimums, they would not qualify under the Advanced APM track. However, physicians and other providers participating in APMs who meet the lower “Partial Qualifying Provider” percentage thresholds for either revenue or patients can choose to opt out of MIPS reporting altogether, guaranteeing that they will receive neither a penalty nor bonus for the year. Further, the providers participating in APMs that were not designated Advanced may still qualify as MIPS APMs and receive some automatic credit under the Clinical Practice Improvement Activities (CPIA) category.

Potential for low specialist participation in the Advanced APM program

Over time, MACRA is likely to continue to evolve and the All-Payer Combination Advanced APM option will become available, making payment models developed by private insurers increasingly available and allowing more payment models to gain “advanced” recognition.

Notably, however, the “advanced” list does not include any of the current bundled payment models established by CMMI. This omission will be particularly critical to specialists, as bundled payments represent a significant share of their participation in APMs and many of the proposed “advanced” APM qualifiers have more effectively engaged primary care physicians and other providers than specialists to-date.

To this end, in their proposed rule, CMS’ requested comment on how to offer an option based on bundled payments, a model that has garnered comparatively greater specialist participation. Bundled payments as a concept have often been cited by economists and health care policymakers as a strong policy lever to shift to value-based payment, but their exclusion may effectively limit many physicians and other providers.

Concluding thoughts and outstanding questions

With only six months before physicians’ performance will have an impact on their payment under MACRA, physicians are intensely scrutinizing the two payment incentive programs and how they would fare under them. But most are confused about how best to navigate the various programs given the complexity of the rules and options. The lack of timely data with which to assess their performance on an ongoing basis may further handicap the ability of physicians to make informed choices and improve their performance.

While the proposed rule elucidates many elements of the new payment systems and the final rule will help clarify some remaining questions, many questions about moving parts remain, including those related to: the different risks and rewards for MIPS vs APMs; the uncertainty of movement between both pathways; and the potential for additional payment models (such as the Physician-Focused Payment Model option). These and other uncertainties have raised concerns about the viability of small practices in this environment and the risk that MACRA will lead large numbers of physicians to seek employment by hospitals and large physician organizations. This risks potentially leading to to much higher degrees of consolidation and losses in physician productivity.

MACRA remains a fundamentally important change from the status quo. It offers significant promise to change—and hopefully improve—physician practice and move payment from volume to value. Without question, its implementation will be watched intently.

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"Out of ammo?" The Economist recently asked of monetary policymakers. Stephen Roach has called the move by major central banks – including the Bank of Japan, the European Central Bank, and the Bank of Sweden – to negative real (and, in some cases, even nominal) interest rates a “futile” effort that merely sets “the stage for the next crisis.” And, at the February G-20 finance ministers meeting, Bank of England Governor Mark Carney reportedly called these policies “ultimately a zero-sum game.” Have the major advanced economies’ central banks – which have borne the burden of sustaining anemic post-2008 recoveries – really run out of options?

It certainly seems so. Central-bank balance sheets have swelled, and policy rates have reached their “near zero” lower bounds. There is plenty of cheap water, it seems, but the horse refuses to drink. With no signs of inflation, and growth still tepid and fragile, many anticipate chronic slow growth, with some even fearing another global recession.

But policymakers have one more option: a shift to “purer” fiscal policy, in which they directly finance government spending by printing money – a so-called “helicopter drop.” The new money would bypass the financial and corporate sectors and go straight to the thirstiest horses: middle- and lower-income consumers. The money could go to them directly, and through investment in job-creating, productivity-increasing infrastructure. By placing purchasing power in the hands of those who need it most, direct monetary financing of public spending would also help to improve inclusiveness in economies where inequality is rising fast.

Helicopter drops are currently proposed by both leftist and centrist economists. In a sense, even some “conservatives” – who support more public infrastructure spending, but also want tax cuts and oppose more borrowing – de facto support helicopter drops.

Recently, more radical proposals have surfaced, reflecting a sense of urgency and widespread disappointment with the impact of current monetary policy. Beyond advocating higher minimum wages, some are calling for “reverse income policies,” with governments imposing across-the-board wage increases on private employers – a move that would drive up prices and defeat deflationary expectations. The fact that economists whose views typically fall nowhere near those of the far left are even thinking about such interventionism shows just how extreme circumstances have become.

I favor all of these proposals, in some form. The details of their implementation would obviously have to vary, depending on each economy’s circumstances. Germany, for example, is in a strong position to implement a reverse income policy, given its huge current-account surplus, though there would undoubtedly be major political barriers. More spending on education, skills upgrading, and infrastructure, however, is a no-brainer almost everywhere, and is politically more feasible.

But there is another dimension of the challenge that has so far not been emphasized nearly enough, despite the warnings of Carney, Roach, and others. Zero or negative real interest rates, when they become quasi-permanent, undermine the efficient allocation of capital and set the stage for bubbles, busts, and crises. They also contribute to further income concentration at the top by hurting small savers, while creating opportunities for large financial players to benefit from access to savings at negative real cost. As unorthodox as it may sound, it is likely that the world economy would benefit from somewhat higher interest rates.

Raising interest rates cannot, however, be a stand-alone policy. Instead, small policy-rate increases must be incorporated into a broader fiscal and distributional strategy, implemented alongside more public spending on infrastructure and skills upgrading, as well as some gentle forms of income policies, employing, for example, “moral suasion.”

Even with such an approach, however, major central banks would have to coordinate their policies. If a single major central bank attempted to introduce higher interest rates, its economy would immediately be “punished” through currency appreciation, declining competitiveness, and falling exports, all of which would undermine aggregate demand and employment.

If the major central banks decided to increase their policy rates simultaneously, these spillover effects would cancel one another out. A coordinated move, perhaps raising rates in two modest 25 or 30 basis-point increments, would be neutral in terms of exchange rates and short-term competitiveness, even as it moved real interest rates back into positive territory. If successful, this effort could eventually be followed by further small increases, creating space for more traditional monetary-policy “ammunition” to be deployed in the future.

Success also hinges on the simultaneous pursuit of fiscal expansion worldwide, with each country’s efforts calibrated according to its fiscal space and current-account position. The expansion should finance a global program of investment in physical and human infrastructure, focusing on the two key challenges of our time: cleaner energy and skills for the digital age.

A coordinated and well-timed policy package could boost global growth, improve capital allocation, support a more equitable income distribution, and reduce the danger of speculative bubbles. The various meetings in the run-up to the G-20 summit in China, including the spring meetings of the International Monetary Fund and the World Bank, would be ideal forums for designing such a package, and advancing its implementation.

Economic orthodoxy and independent actions have clearly failed. It is time for policymakers to recognize that innovative international policy cooperation is not a luxury; sometimes – like today – it is a necessity.

Editor's Note: This blog post is part of The Primaries Project series, where veteran political journalists Jill Lawrence and Walter Shapiro, along with scholars in Governance Studies and the Campaign Finance Institute, examine the congressional primaries and ask what they reveal about the future of each political party and the future of American politics.

A great deal of attention has been paid to the existence of independent expenditure groups and to the billionaires who fund them. The Koch brothers and Sheldon Adelson, right wing billionaires in politics, and Tom Steyer, the newest left wing billionaire in politics, seem to have had nearly as much ink spilled on them as have the candidates and causes they endorse.  And no wonder. Americans are fascinated and worried about the question Darrell West poses in the second chapter of his new book Billionaires, “Can rich dudes buy an election?”

Tracking the sources and amounts of money in post Citizens United elections is a full time and complex job. Our hats go off to the Campaign Finance Institute who has recently completed the most extensive study ever of the role of independent expenditures in primary elections. Michael Malbin, Founding Director of the Center and author of the upcoming report on this year’s primaries, shows us just how big these groups, often funded by billionaires, have gotten.  In research focusing on independent spending in the 2014 congressional primaries, Malbin points out that in the 15 House races with the most independent expenditure money ($500,000 +) these expenditures counted for 76% as much as the candidates own campaign money. In Senate races, the independent expenditures accounted for 44% as much as the candidates own money.  Even the candidates themselves are worried about this trend since it often seems that outside groups can swamp a candidate’s own message.

Malbin also shows us why it is so hard to figure out what’s going on in an individual election. Only 49 of the 281 organizations that were around in the 2012 cycle spending money on behalf of congressional primary candidates were also around in 2014. That means that there were 232 new and different groups playing in 2014, posing challenges for the journalists and academics trying to track them.

The Campaign Finance Institute, however, has data on all these organizations from 2012 and 2014.  They have categorized them by ideology and, as the following chart shows, there are some interesting developments. For instance, while conservative independent expenditure groups remain the biggest spenders in the 2014 congressional primaries, their overall proportion of independent expenditures is down from 2012.  That year, conservative groups spent $40.5 million, nearly three quarters of total independent expenditures, compared to $9.3 million or 17 percent of total expenditures for Democrats.  In 2014, conservative groups upped their spending to $56.8 million, but their overall share of independent expenditures fell to 68% as liberal groups doubled their spending and increased their percentage of the total to 23%.

Even more surprising is the change in spending patterns within the Republican Party. As the following table shows, this really was the year when the establishment fought back. In 2012 anti-establishment spending by independent expenditure groups in congressional primaries constituted 59% of all such expenditures while spending by independent expenditure groups on behalf of establishment Republicans was only 36% of the total.  In two years, those numbers flipped.  In 2014, with control of the Senate at stake, the establishment mobilized independent expenditure groups which spent 55% of all the money spent by such groups while the anti-establishment groups spent only 37%.

There’s something for everyone in these findings. For the Democrats who have been on the defensive for much of this year but who have gotten through a primary season with few internal divisions, the increase in spending on their behalf and the sense that they will be able to run a good ground game in the key states where it really counts is a plus.

For the Republicans, the heavy spending by establishment groups has paid off in that they haven’t let weak candidates slip into the general election contest. They are probably as strong as they can be going into the fall campaign.

Nonetheless, tracking the money in this new election environment is a complex and full time job. And Darrell West’s question still hangs over us—“Can rich dudes buy an election?”

Editor's Note: As part of the 2014 Midterm Elections Series, Brookings scholars and outside experts will weigh in on issues that are central to this year's campaigns, how the candidates are engaging those topics, and what will shape policy for the next two years.

Since the Citizens United decision, political spending by outside groups has been shaping voters’ opinions before Election Day and public policy afterwards.  Spending patterns that began after the 2010 decision will continue during the upcoming midterms: nonparty, outside spending will flow through two distinct pipelines—super PACs and politically active nonprofits. This time around there seems to be a partisan split to the spending, with Democrats leaning towards super PACs and Republicans relying more on dark money nonprofits. But whichever tool is used to funnel money into competitive races, imperfect or non-existent disclosure rules leave voters unable to determine whether access and influence is being sold to highest bidder.

Shining a brighter light on super PAC and nonprofit campaign spending would not cleanse the system of all of its corrupting influences, but it would help to restore citizens’ trust in government by eliminating the secrecy that makes voters believe their elected officials have something to hide. More disclosure would also result in the equally important outcome of demonstrating that government trusts us, its citizens, with information about how the influence industry works.   

When Thomas Jefferson wrote, “Whenever the people are well-informed, they can be trusted with their own government...whenever things get so far wrong as to attract their notice, they may be relied on to set them to rights,” he certainly could not have conceived of secret money’s impact on elections and policy-making. But every year that goes by with Congress failing to address secret campaign spending challenges the founding father’s time-tested wisdom.

When the Supreme Court decided Citizens United, it was either willfully blind or sorely naïve about the state of political finance disclosure. Justice Kennedy swept aside concerns about the corrupting influence of unlimited political spending by claiming that, “With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions. . . This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

Unfortunately, no such prompt disclosure existed at the time, nor has Congress been able to pass any improvements to the transparency regime since then. In the case of super PACs, while information about donors must eventually be disclosed to the Federal Election Commission (FEC), disclosures can be delayed by up to three months.  This is not an inconsequential delay, especially when contributions come are in the multi-million dollar range.

There is even less disclosure by politically active nonprofits.  Their overall expenditures are only disclosed after the election in annual reports filed with the Internal Revenue Service (IRS). The donors to dark money groups may never be known, as the law does not require the names of donors to such groups to be disclosed. Yet more than 55 percent of advertising has been paid for by dark money groups, and 80 percent advertising benefitting Republican candidates has been paid for with undisclosed funds according to the New York Times. 

Congress and the executive branch have no shortage of methods to make money in politics more transparent, but have so far failed to demonstrate they respect voters enough to entrust us with that information.  The Real Time Transparency Act (S. 2207, H.R. 4442) would ensure that contributions of $1000 or more to candidates, parties and PACs, including super PACs, are disclosed within 48 hours. It would also require electronic filing of campaign finance reports.  The DISCLOSE Act, S. 2516, would disclose contributors to political nonprofits entrusting voters with information that currently is only known to the candidates who may benefit from dark money contributions. 

Affirmative congressional action would be the strongest signal that government trusts its citizens, but executive branch agencies can also take important steps to make political finance information more transparent. The IRS is in the process of reforming rules to better clarify when a nonprofit is a political organization and thus must disclose its donors.  The Securities and Exchange Commission can likewise modify its rules to require publicly traded companies to disclose their political activities.

Many large donors have gone to great lengths to take their political activities underground, claiming they fear attacks in the form of criticism or boycotts of their companies.  But just as participating in the political process through contributing to election efforts is an expression of free speech, so is criticizing such efforts.  Yet until campaign finance information is fully and quickly made public, the first amendment rights of voters and their ability to participate fully in our democracy are drastically shortchanged.

Since September of 2014, Jordan has joined other Western and Arab coalition partners in striking Islamic State (IS) positions in Syria, with the country’s King Abdullah framing the war against IS as a “third world war.” How have conflicts on Jordan’s borders and now the country’s direct intervention strained the country’s resources? How have the country’s leaders presented their participation at home and abroad?

In a timely Policy Briefing based on field research, Sultan Barakat and Andrew Leber assess Jordan’s vulnerabilities to regional conflicts and domestic pressures. Despite broad public support for action against IS, they note a growing gap between state and society only exacerbated by adverse events such as the capture and uncertain fate of a downed Jordanian pilot.

Read "Fortress Jordan: Putting the Money to Work"

Ultimately, Barakat and Leber note Jordan’s strategic importance to its allies but caution against it playing a front-line combat role. The authors contend that reducing threats to Jordanian stability lies not in “taking the fight to IS” abroad, but in strengthening Jordanian society at home.

While calling for improved governance in the Kingdom, the authors note reluctance on the part of Jordan’s ruling elites and their allies to promote full-scale political reforms. Barakat and Leber contend that they should therefore channel their fears about regional instability and extremism into productive action on Jordan’s economy. This will entail restructuring aid flows to the country toward productive investment, selectively incorporating Syrian refugees into the workforce, and putting forward a credible vision for the country’s economic future.

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The idea of a universal basic income (UBI) is certainly an intriguing one, and has been gaining traction. Swiss voters just turned it down. But it is still alive in Finland, in the Netherlands, in Alaska, in Oakland, CA, and in parts of Canada. 

Advocates of a UBI include Charles Murray on the right and Anthony Atkinson on the left. This surprising alliance alone makes it interesting, and it is a reasonable response to a growing pool of Americans made jobless by the march of technology and a safety net that is overly complex and bureaucratic. A comprehensive and excellent analysis in The Economist points out that while fears about technological unemployment have previously proved misleading, “the past is not always a good guide to the future.”

Robert Greenstein argues, however, that a UBI would actually hurt the poor by reallocating support up the income scale. His logic is inescapable: either we have to spend additional trillions providing income grants to all Americans or we have to limit assistance to those who need it most. 

One option is to provide unconditional payments along the lines of a UBI, but to phase it out as income rises. Libertarians like this approach since it gets rid of bureaucracies and leaves the poor free to spend the money on whatever they choose, rather than providing specific funds for particular needs. Liberals fear that such unconditional assistance would be unpopular and would be an easy target for elimination in the face of budget pressures. Right now most of our social programs are conditional. With the exception of the aged and the disabled, assistance is tied to work or to the consumption of necessities such as food, housing, or medical care, and our two largest means-tested programs are Food Stamps and the Earned Income Tax Credit.

Liberals have been less willing to openly acknowledge that a little paternalism in social policy may not be such a bad thing. In fact, progressives and libertarians alike are loath to admit that many of the poor and jobless are lacking more than just cash. They may be addicted to drugs or alcohol, suffer from mental health issues, have criminal records, or have difficulty functioning in a complex society. Money may be needed but money by itself does not cure such ills. 

A humane and wealthy society should provide the disadvantaged with adequate services and support. But there is nothing wrong with making assistance conditional on individuals fulfilling some obligation whether it is work, training, getting treatment, or living in a supportive but supervised environment.

In the end, the biggest problem with a universal basic income may not be its costs or its distributive implications, but the flawed assumption that money cures all ills.