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The Mincome experiment

Giving people a guaranteed annual income is an idea that’s been embraced by a lot of smart people. What most people don’t know is that in Canada, for a short time, it actually happened:

Although the Mincome experiment was intended to provide a body of information to study labour market trends, Forget discovered that Mincome had a significant effect on people’s well being. Two years ago, the professor started studying the health records of Dauphin residents to assess the impacts of the program.

In the period that Mincome was administered, hospital visits dropped 8.5 per cent. Fewer people went to the hospital with work-related injuries and there were fewer emergency room visits from car accidents and domestic abuse. There were also far fewer mental health visits.

It’s not hard to see why, says Forget.

“When you walk around a hospital, it’s pretty clear that a lot of the time what we’re treating are the consequences of poverty,” she says.

Give people financial independence and control over their lives and these accidents and illnesses tend to dissipate, says Forget. In today’s terms, an 8.5 per cent decrease in hospital visits across Canada would save the government $4 billion annually, by her calculations. And $4 billion is the amount that the federal government is currently trying to save by slashing social programming and arts funding.

Having analyzed the health data, Forget is now working on a cost-benefit analysis to see what a guaranteed income program might save the federal government if it were implemented today. She’s already worked with a Senate committee investigating a guaranteed income program for all low-income Canadians.

The Canadian government’s sudden interest in guaranteed income programs doesn’t surprise Forget.

Every 10 or 15 years there seems to be a renewed interest in getting Guaranteed Income (GI) programs off the ground, according to Saskatchewan social work professor James Mulvale. He’s researched and written extensively about guaranteed income programs and is also part the Canadian chapter of the Basic Income Earth Network, a worldwide organization that advocates for guaranteed income.

GI programs exist in countries like Brazil, Mexico, France and even the state of Alaska.

Although people may not recognize it, subtle forms of guaranteed income already exist in Canada, says Mulvale, pointing to the child benefit tax, guaranteed income for seniors and the modest GST/HST rebate program for low-income earners.

However, a wider-reaching guaranteed income program would go a long way in decreasing poverty, he says.

Sober as a judge

This just bolsters my theory that most judges are drunk.

Moral hazard

It’s a common thread in this story, from the White House on down: Not “how do we punish the leaders and institutions who committed systemic mortgage fraud?” but “how can we best punish the victims?”

Fannie Mae (FNMA) pulled the plug on a 2010 plan to forgive borrowers’ mortgage debt because company executives were “philosophically opposed” to the idea, a former company employee told House investigators.

In a letter today to the Federal Housing Finance Agency, House Democrats challenged a January analysis from Acting Director Edward J. DeMarco that claimed principal writedowns would raise costs and increase taxpayer losses at the government-owned company.

“We have now become aware of new information that calls into serious question the accuracy and completeness of your response, as well as your motivation for continuing to oppose principal reduction programs even when they have the potential to save American taxpayers billions of dollars,” said the letter from representatives Elijah Cummings of Maryland and John F. Teirney of Massachusetts, Democrats on the House Committee on Oversight and Government Reform.

FHFA spokeswoman Corinne Russell did not have an immediate comment. The agency oversees Fannie Mae and Freddie Mac, which were taken over by the federal government in 2008 as they neared bankruptcy.
According to the letter, a former Fannie Mae employee told the committee that the mortgage finance company had developed a pilot program for reducing mortgage debt for borrowers who owe more on their house than the property is worth.

The purpose of the plan was to develop “a responsible way to reduce principal balances for underwater mortgage borrowers without creating undue incremental moral hazard,” the employee told the committee.
The pilot had preliminary approvals from officials at Fannie Mae, FHFA, and the Office of the Comptroller of the Currency, a bank regulator, according to the former employee.

In mid-2010, two weeks before its launch, senior Fannie Mae executives cancelled the program because they were “philosophically opposed to writing down principal balances,” according to the former worker, who was quoted in the letter without being identified.


Why Wall St. should quit whining.

Pay the writer

I love this Harlan Ellison rant:


We’re getting a small storm this afternoon, an inch or less. But the local weather bobbleheads are so starved for snow stories, you’d swear it was an impending blizzard.


The United States of Unemployment – The Roller Coaster:

Not one single step back

What Athenae said.

Protecting your internet privacy

Makes you into a suspicious person these days…

Ha ha

Funny, how whiny they get when they’re the ones losing their economic footing!

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