Poverty in America has been a struggle for a long time, exacerbated after the Great Depression with 15% of Americans living below the poverty line of $11,945. The Atlantic’s Matt Bruenig and Elizabeth Stoker brought up an idea to solve this problem in their article, “How to Cut The Poverty Rate In Half (It’s Easy)”. The solution? Give every American $3000.

Hypothetically, if the Government gives every American citizen a cheque for three grand, it could cut poverty in half; however, this project would also cost around $907 billion or 5.6% of the nation’s GDP. This sum is almost equivalent to the government’s current expenditures of $750 billion on low income families and by implementing this idea, the government can also eliminate other costly social welfare programs. This sounds like a simple and potentially successful solution to a very complex problem, but there must be reasons for why it’s highly unlikely to pass congress.

I believe, along with Danny Vinik from Business Insider, that this could decrease the incentive to work for many low income bracket Americans, especially if the money given is wasted. If those in poverty receive the money and decide to rely on the Government instead of work, it could worsen the economy.

Switzerland will be holding a referendum to give each adult $2800; if this vote is successful, Switzerland will be the first country in the world to give its citizens a basic income. Whether it will be applied to the US is still questionable down the road.

Works Cited:

Bruenig, Matt et al. “How to Cut The Poverty Rate In Half (It’s Easy)”. The Atlantic. Web 29 October 2013.

Vinik, Danny. “Everyone’s Talking About This Simple Solution To Ending Poverty By Just Giving People Free Money”. Business Insider. Web 12 November 2013.