New Paper: Against the Coupon State

By Mike Konczal |

Imagine if current neoliberal policymakers had to sit down today and invent the idea of a library. What would it look like? They’d likely create a tax credit to subsidize the purchasing and reselling of books, like much of our submerged welfare state. They might require a mandate for people to rent books from approved private libraries run by Amazon or Barnes and Noble, with penalties for those who don’t and vouchers for those who can’t afford it, like the recent health care expansion. 

Or maybe they’d create means-tested libraries only accessible to the poor, with a requirement that the patrons document how impoverished they are month after month to keep their library card. Maybe they’d also exempt the cost of private library cards from payroll taxes. Or let any private firm calling itself a library pay nothing in taxes while exempting their bonds from taxation and insuring their losses by, say, paying for books that go missing. You can imagine them going through every possible option rather than the old-fashioned, straightforward, public library, open to all, provided and run by the government, that our country enjoys everyday.
I have a new white paper out with New America’s “Renewing the American Social Contract” series, titled “No Discount: Comparing the Public Option to the Coupon Welfare State.” Here’s the introduction, and here’s the full pdf.
Given that the state wants to provide a certain good, I wanted to find the arguments over whether or not the government should provide that good itself or provide coupons for purchases in the private market. Surprisingly, there were few cohensive summaries, so I created one myself. Though not explicitly stated, It’s relevant for discussions over whether or not the welfare state should be entirely replaced with cash (the ultimate coupon).
The rest of the papers in the series are very much worth your time too. I hope you check them out. Mine starts out with:
The fundamental ideological conflict surrounding the Welfare State in the U.S. is no longer over the scope of government, but instead how the government carries out its responsibilities and delivers services. The conservative and neoliberal vision is one of a government that provides a comparable range of benefits as conventional liberals, but rather than designing and delivering the services directly, it provides coupons for citizens. Coupons – whether by that name or more anodyne terms such as “vouchers” or “premium support” or tax subsidies – could then be used to purchase the services in the private market. Whenever neoliberals have sought to expand the scope of the welfare state or conservatives have tried to fundamentally shrink it, both have come bearing coupons.
Read the rest at New America.
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Mike Konczal is a Fellow with the Roosevelt Institute, where he works on financial reform, unemployment, inequality, and a progressive vision of the economy. His blog, Rortybomb, was named one of the 25 Best Financial Blogs by Time magazine. Follow him on Twitter @rortybomb.