There’s now a lot of evidence that inequality is so high in the US that it’s become a drag on the economy. “Too many” people are stuck in poverty—inadequate, full-time job opportunities; mass incarceration; inadequate retirement options; etc…
While the larger and more difficult problem is too much power concentrated in too few hands, we could deal with inequality (to a reasonable extent) right away by implementing a “social wealth fund”: a simple, economically safe way of ensuring everyone a base level of spending cash each year or month.
David Dayen in the Huffington Post, surveying its use, and summarizing a recent report on how it could work across the US:
In one of America’s most libertarian states, people are benefiting from what is essentially a universal basic income. In 1976, Alaska Gov. Jay Hammond, a liberal Republican, established the Alaska Permanent Fund, putting a percentage of all state oil revenues into a fund, which buys stocks, bonds, real estate and other assets. Money made on these investments is distributed to every man, woman and child in Alaska in the form of an annual dividend, which since 1982 has ranged between $1,000 and $3,000.
This cash has reduced income inequality in Alaska to the lowest level in America in 2016. And the state’s libertarian bent has not dampened enthusiasm for redistributing wealth from oil companies into money for all. “It’s been described as the most popular program in the history of the U.S.,” said Bill Wielechowski, a Democratic state senator from Anchorage. “It’s hugely relied on for fuel and food. It helps bridge the gap.”
America is struggling with a huge wealth inequality problem. The wealthiest 1 percent of households control 40 percent of the nation’s wealth, and this gap has been widening over the last few decades.
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…About 30 percent of all income is derived from capital, according to Bruenig’s calculations. When trying to tackle wealth inequality, “liberals tend to focus mostly on labor income,” Bruenig said in an interview. “That’s all well and good but you’re just missing one-third of the pie.”
Here’s how it would work. The U.S. government would gradually build up assets for the wealth fund. Independent fund advisers under the direction of the Treasury Department would manage it. The Treasury could create rules and directives to guide what fund managers could purchase.
Everyone over age 17 and not collecting a Social Security old-age pension would receive a non-transferable share, entitling them to an annual dividend equal to a five-year average of the market value of the fund. (For the first five years, the average would be based on the number of years the fund has been in existence.) The aim would be to prevent the dividend rising and falling sharply depending on the success of the fund.