Question: how do you spell “Moron”?

Answer: “A-L-O-N L-E-V-Y.”

You know my posts on instituting a welfare state in the US? The ones about minimum income and unemployment insurance? There’s something wrong with them. The way I calculated the cost of a guaranteed minimum income program in the US was by calculating a mean cost per household – $3,100 without either tweak – and then saying that since it’s 8% of the USA’s GDP per capita, the cost of the program would be 8% of GDP per capita.

Which, of course, would be right only if each household only had one person. $3,100 times 113,000,000 households equals $350.3 billion dollars, which is just under 3% of GDP. With both tweaks, the assumed cost goes down to $1,800 per household, which translates not to 4.5% of GDP but to 1.7%.

The stated cost of unemployment insurance is $800 per capita. Assuming that the cap is $75,000/household rather than $40,000/person and that the unemployment rate in the relevant income group is 5%, it actually works out to $900/household, i.e. 0.8% of GDP. So the actual cost of welfare is 2.5% of GDP rather than 6.5%.

In other words, if my own views had any bearings on tax policy, Americans would be getting a 4% tax cut. Incidentally, government spending would drop from 32% to 28% of GDP, lower than the current level of about 31%. Even the overall level of taxation would remain about constant, not dropping only because I don’t think running indefinite deficits is a good idea.

Even social spending would remain about constant; Medicare and Medicaid cost together more than a universal single-payer health care system would, and the US overspends on education due to unequal and hence inefficient allocation of money. The saving comes mostly from gutting farm aid and reducing military spending.

The most straightforward way to cut 4% in taxes from my proposal, by the way, starts by reducing corporate/dividend and capital gains taxes from 60% to 50%, which reduces revenue by about 1.5% of GDP. Then the most obvious thing to do is raise the initial exemption until the budget is balanced, which works out to a level of about $27,000.

But check my numbers. As this post shows, I’m not always right.

12 Responses to Question: how do you spell “Moron”?

  1. Sorry, but you spelled it wrong. It’s T-Y-L-E-R D-I-P-I-E-T-R-O.

    I simply will not be outdone as the blogosphere’s biggest moron who manages to stop just shy of being a spammer. 🙂

  2. Alon Levy says:

    For someone who considers himself a spammer, you engage in surprisingly little blog-whoring.

    Speaking of which, what happened to your banner?

  3. whig says:

    How about issuing a dividend to every citizen in compensation for filing a return, sufficient to cover the minimal cost of living?

  4. whig says:

    The problem with this (my proposal) is that over time, the citizenry would grow comfortable by exploiting the non-citizens, and those would be made into slaves. Consider carefully how we can end class disparity.

  5. whig says:

    Automatic birth citizenship is constitutionally protected, but must be defended against those who are trying to subvert it.

  6. Alon Levy says:

    The main problem with a dividend is that it’s annual, while good welfare is typically weekly or monthly. But the other problem you raise, how to treat non-citizens, is a lot more acute than I originally thought. Extending benefits to permanent residents is easy, but a large percentage of low-income people in the US are illegal immigrants; a nation that spends money on harassing illegal immigrants will find it very hard to accept spending a little bit of money on making sure they don’t starve, unfortunately.

  7. Speaking of which, what happened to your banner?

    I have a new one up, had to do some remodeling and when I started I didn’t feel like finishing.

    And by “spamming” I mean the retarded crap I’ve posted on several blogs. Mostly off-topic, semi-humorous comments (many of which recursively reference my propensity for writing retarded, off-topic and semi-humorous comments).

  8. […] Update: check here for a crucial numerial […]

  9. […] to four years, and limiting subsidies to tuition, fees, and books, will cut it to maybe $50. Unemployment insurance costs $100. Full daycare funding at 5 grand per kid is $100. Together that’s about 4% of […]

  10. CYRIL says:

    @timarbuckle StartUpers fresh job feed!-Zoosk Inc. is now hiring a Web/Graphic .. stop

  11. FERDINAND says:


  12. CLAUDE says:

    RT @pipesnew ::#analyticsdennis: Reading: Twitter Statistics with Yahoo Pipes and the Google Chart API: http://

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