The case for Unconditional Cash and then growing up in a small town in North Carolina called hickory North Carolina near the appellation mountains the mother was a School Teacher and my a father was a newspaper salesman we had a good middle class existence i got Financial Aid to go to a fancy boarding school then to harvard where we started facebook 2004 and the rocketship rise of facebook is pretty wellknown story. But in my own case i made quite a bit of money at a young age and it forced me to think about what is the most powerful way we can help rebalance the economy so the. 1 percent two is so lucky is not getting lucky at the expense of everyone else. That is a long journey of the most powerful way to help people get ahead. It turns out the evidence is pretty clear if you provide people with cash, Unconditional Cash, then they invest in themselves, their families, communities kids do better in school they do better if not better in school the reason to empower is not only to make a moral case to wipe out poverty but also the pragmatic one that people want the best in themselves there is no more efficient way to do that than with the cash to do so. Host what you say to the skeptics they will just spend more money on tobacco or alcohol . Is there any research to support that . We know a lot about what people do when they get cash and had the opportunity to invest and those that provide people with those resources more often than not will always be one or two people out of 100 who doesnt use the money the way people were deemed responsible but on balance they dont spend more money on alcohol and they dont smoke anymore actually is the opposite they have some Financial Stability to eat healthier and invest in families. So when people ask the question with booze and cigarettes are asking the question fundamentally about what we consider the right thing to do and there is a sense we should just do more Government Programs and build more regulations to tell people to do this or that with the many so to just ground ourselves in the data and challenge some of those fundamental assumptions then i think we do well to use cash to invest in people this isnt just the left, right issue the unearned income tax credit in the Worlds Largest cash program and then to despite concerns that there is the immense amount to show that people are responsible with the many and it is the most efficient way to lift people out of poverty every president since gerald ford republican and democrat alike and with the and earned tax credit thats the case to be made with some bipartisan appea appeal. Host this was originally a Milton Friedman idea . The eitc came out of the last big debate that we had around guaranteed income. From the late sixties and early seventies. It was widely accepted on the left and the right with a guaranteed income to ensure that no one lived in poverty in america and the most efficient way to provide Economic Opportunity so Milton Friedman an early proponent talks about extensively in that era and at the same time doctor king junior from a moral perspective at that moment in history to support the idea the guaranteed income and eventually failed in the senate and eventually failed in the senate earned on unearned income tax credit is a policy that came out of that. And with that steppingstone has been expanded again and again. So now we have a new moment, new opportunity the changing nature of work in the United States and economic mobility and income inequality is that historic levels and you would do well to ground that conversation how cash can be the most powerful way to provide that Economic Opportunity. How do you address the irony Mick Mulvaney omb suggested and with that relatively unrestricted to shift people back to meals . Is this the wrong direction . I agree. That would be a move the wrong direction ironically that kind of outlook that would drive somebody is that paternalistic view of Government People on the libertarian right have been skeptical for a long time. And then to tell people or even to the benefits to work requirements to throw people off of the roles is the wrong direction but as part of the pattern thats part of the economic thinking that is more focused on doubling down and trickledown economics which the past 40 years have created record profits for companies. That kept union wages flat. The cost of living has increased. And the near record highs. Met me feel good you son in the short term but it is a sugar high. And just found the ethical perspective the idea and then what they should be eating that just seems fundamentally out of line politically and those longterm values. And the freedom and the responsibility we all have to ensure that no one in america in 2018 lives in poverty. So the original proposal in his book that 500 per month for families making less than 50000 per year. How many people would be lifted out of poverty and how many receive payments . Lift that overall structure. Where we want to go in the long term is income that ensures nobody in america lives in poverty. So to talk about a universal basic income theres no way to slice and dice it. And im very focused on the income inequality and then to create the first major step toward the eradication of poverty. So in my view, we can build on and expand what we know works significantly expanded inside and less than 50000 in the United States working in some way and income for 500 a month on this order of magnitude it would be expensive it is about half of today it with of 20 Million People out of poverty overnight and stabilize the lives of 90 million americans who very much need not only abuse to the bottom line but the stability to count on the 500 per month in the background. I think it is a powerful way to begin to establish the income in the longterm could potentially be even bigger. But this is a place you dont have to worry about if the robots are coming for all the jobs. We know this probably could be massively impactful in the here and now. Talk about the philosophical idea who can solve rather than government. And especially among elites. And to engineer that progress we want to see. And im pretty skeptical of that adm myself and i became skeptical of it from the perspective so after facebook went public in 2012 my husband and i made a commitment to give a vast majority of our wealth over the course of our lifetime. And in taking on that challenge we can look at all the different nonprofits that were out there doing good work specifically with the Economic Opportunity and that. Internationally. I have a whole chapter in the book with a journey that i went on to highlight a couple moments in the book and i spent time with one nonprofit working in africa to engineer progress. This idea if we could just invest enough in education roads, sanitation, fertilizer, roads, sanitation, fertilizer, e training, all of this administration and bureaucracy and then to lift everyone out of extreme poverty. And those villages and became pretty skeptical pretty fast. With the village from the kenya and somalia border. And then we went into some dormitories. There wasnt really anything in the dormitories. No sheets, books and pencils that you would expect them to have it seemed wrong they said we cleaned it up beforehand. And it also was clean and orderly nobody was using it. Later they showed me the computer the tech guy that was supposed to be impressed to the connection to the internet and said what you use it for . Everything. There was little specificity. And to chronicle this story they were never used. They were later stolen and the villagers themselves were not able or willing or interested to takes advantage of so many opportunities in the may petition the kenyan government to push out the nonprofit that was administering that. It is indicative that we can just engineer progress that is in direct contrast to the idea we can use cash to enable the beneficiaries themselves to choose what they want and to invest in themselves and create their own lives. So another nonprofit to take a very different approach unconditionally no Strings Attached and running a random control trial to measure that exact impact didnt get wasted was it used productively . They found results that were in line with hundreds of other studies that show that dollar for dollar, cash is one of the most if not the most effective policy that is out there. Seven United States context right now there is a big question who do we trust more . Who should we invest in at this moment in time . More complex Government Programs that lecture the poor or the middle class who havent gotten a reason decades and we know when provided with cash and it is a big debate that goes to the core of who we want to be as a country but its time that we have a conversation that puts the emphasis on what we know already how people use money and to bring more people to the place they feel they can trust. And then masters of your own destiny. Fascinating by these examples people that try this. But statement with the unrestricted Cash Transfer for a while. How does that work out . A small guaranteed income the Permanent Fund dividend is unexpected. The republican governor in the seventies when alaska was enjoying a huge amount of economic success decided he would place a small royalty on oil and Gas Companies and pay a few Percentage Points of their profits into a fund every year. That fund would distribute two. 5 percent in dividend checks to every single alaskan, man woman and child it was put up for a referendum and pass on passed overwhelmingly. So for the past 30 some years every alaskan, 700,000 has benefited from a Permanent Fund dividend check about 1500 every year that comes in october. Is a family of four you are getting a check at 6000 every fall which is a meaningful amount of money. So much people can hang out and put up their feet or to drop out of the workforce. So some of my colleagues and i were in alaska last fall saying what did they do . And that Empirical Research back to many of the stories that we heard using it to cover a month or two of rent they were behind on some are using it to prepare for the winter and for heating fuel and that the middleclass and wealthy people using it to fund vacation january or february and go somewhere warm when its cold up there. But the biggest learning we can take away from that Permanent Fund not only do people love it because it provides them with some breathing room but also one of the most powerful factors to be back against the poverty rate in the state of alaska to lower that rate significantly and to contribute to the fact it is the most equal stay in the United States of america. There is a lot we can learn from that. And by the way this isnt welfare or handout that this is something each alaskan and benefits from and each can use as they see fit we know culturally its very much possible to create for this kind of security and have it be massively effective and its a great provocation and for how could we create in alaska for america kind of program . Hillary clinton talk specifically about that idea but in her book it is one of the small set of ideas. Because of the boldness and the power to combat poverty and provide mobility to the middleclass. Its not a small idea. We struggle so much on capitol hill how to overcome income inequalities so we realize in the winner take all economy is the largest since before the market crashed 1929. So the alaska example shows this guaranteed income may be the single biggest step toward creating income inequality alaska of all places is dead last her dad first cash is not Silver Bullet that cash will solve all of our problems that we need good schools and a Healthcare System to provide accessibility with those smart skills building its amazing to do. And then at systemic solution. So i think we would do well to think about cash and the creation of the guaranteed income and in conjunction with these benefits not instead of them. But i truly believe it could be the most powerful tool in the toolbox to accomplish those goals that we share. Host so small amounts of regular cash produce the feeling of living on the brink with research unsurprisingly shows and with the stress and poor decisionmaking and with the ted talk they are not poor because they make bad decisions they are bad decisions because they are poor. And as you mentioned there is a whole body of psychological research. Which suggests when people and live scarcity because there is a limited amount and we dont know how we can make ends meet. And then with that cognitive function one specific study that is indicative of a whole set of others in a mall in new jersey you ask people what would you do if your car broke down . The cost is 300. And with the wealthy people and middleclass people and poor people that question and immediately afterward to have the same iq. And then it costs 300 to fix it then they say what you do if you car breaks down in cost 3000 . Then each group take another iq test. And what you saw in the second scenario and those that have Financial Security did just as well five or ten minutes before. The group that was closer to the edge saw the iq drop about 12. Switch just to have some context is the level after they pull the all nighter. That has been interpreted when you shift that cognitive outlook from a place of Financial Security and begin to ask people to think about how can you cover the cost you cannot cover . It introduces a whole level of stress and distraction that they then move on to other tasks that doesnt just immediately go away it stays in place. So if we did not zoom out and think whats going on in america we know half of america cant find 400 in the emergency like a car breaking down or healthcare emergency. That you know is going to arrive in your bank account every single month by direct deposit or debit card that you know you can rely on and that stability i think is as important with the changing nature of work as income equality but also. Host what about folks that cant work because they are staying home taking care of an elderly parent or raising kids or have a disabled brother or sister they are taking care of . How do you deal with those . Guest we need to expand the definition of work that you and many others used and connect it to what everyday people already recognize. When we talk about work conversationally and working to raise the family similarly if you have an aging parent involved in elder care and you are atheywere at home taking cat parent that is what works. Similarly, education. Students are working hard. They may not be getting paid for it they are workers in a broad sense of the term so i think as long as you are doing something for your family or community you shouldnt live in poverty. If that is the fundamental value that a guaranteed income should support. I think that that is why the social safety net is so critic critical. My uncle on disability benefits for much of his life comes he could not have survived without Social Security disability. Those kinds of benefits i think need to be supported, reinforced and expanded and not cached into pay for any of the guaranteed income and its only when those things work in concert with one another. I think that is a keyvalue of how the guaranteed income i think should work and its an important thing i very strongly believe that this should be built on top of the existing benefits. Host i know when my children were young and my wife stayed home taking care of them she pointed out she was working much harder than she was working in the outside world. People having no Social Security contribution that really bugged me. I look at the difference between what i guess a thats what she gets at the end of our careers and its unfair and different. Guest women and people of color that are most likely to be in those roles so those are groups weve often overlooked with social policy and the idea that we have to ask a mother of kids to go leave her kids and take on all the childcare expenses to work at burger king in order to qualify to be doing real work in order to qualify for many benefits i think that that is indicative of the kind of paternalistic state of prescribing behavior to people when what we want more of is recognizing the work that is already happening and to ensure that we can make good on the promise that if you are doing something for your family or community you shouldnt live in poverty. Host i assume the numbers you talked about, they are affecting 60 million overall, those include those homemakers and caretakers and students. One of the fascinating statistics in your book is that black mothers have a 76 workforce Participation Rate whereas white men only 72 . It is against the popular myth at least i think there is a pervasive myth in the country of kind of quote unquote and underclass of people who just want to hang out and not work and i think that is left over from the reagan era but i think we should also be clear that a lot of the conversation around these have bought into that kind of claim and that is fundamentally wrong. The data shows that if you highlight that workforce participation is lowest among white men who historically reviewed as those being heading out of the factories every day but those are the folks working and they would invest in many of those that are suffering from the structural changes in our economy today. But if it is the key for us to understand that the myth of the welfare queen is out there is just that, it is a myth that works to enforce certain biases and stereotypes about the poor because no basis in the data. Host there may not be any research on this yet and i didnt see it directly addressed in your book that we are all very familiar with the Opioid Crisis. Its the same folks living on the brink. Can you speculate about the positive impact the guaranteed income would have on this healthcare level that we are dealing with . Guest i think that its so complex because it has multiple causes and no clear magical solution. Thats why as a country and a culture we should spend more time paying attention to whats happening. When we think about whats causing it the growth in prescription painkillers, some of the unfortunate innovation in Drug Delivery that came out of the past 15 decades, cell phones making it easy for people to access drugs more conveniently and the fact that a lot of the country is suffering from the deindustrialization and particularly in many of the places that are the hardest hit by the Opioid Crisis. I think that there are a lot of different people talking about what are the solutions to the problem, everything from reforming prescription painkillers to Substance Abuse clinics etc. I do also think that we need to provide Economic Opportunity to the individuals that want to work which is effectively in my view every american and the issue is in many of these communities where they are suffering from this, the idea that people should just take care of themselves doesnt line up with the lived experience on the ground. I will give you an example. Last summer i was in ohio and i was talking to a young woman who was the mother of a couple of kids. She had a job in retail and i asked many questions, one of which was do you want to go back to retrain for other jobs and what she said to me is by all means, of course. But lets talk about how im going to do that. I said okay. She said the local Community College where those classes are his 45 minutes away, just outside of youngstown in ohio and the closest campus location was about 45 minutes away. The cost of the yearly tuition was 8,000. She could get Financial Aid and by hebuy her estimates it wouldt about a thousand dollars to enroll for a year. Then we got onto the logistics of how shes going to be able to go to these classes. Classes meet every tuesday and thursday at 10 a. M. Or monday, wednesday, friday at 7 p. M. But she has to get into a job where shes going to be able to tell her boss i need off every tuesday and thursday morning and i need you to schedule around me which anybody familiar with scheduling particularly in the lowwage Retail Sector right now workers dont even have any idea of how many hours they are going to get this week or next week let alone specifically what days they are going to need to work. In addition to all of that, the cost of childcare to cover her children for when shes in class in school and at th the gas mono get there and take it back not to mention the lost wages from the time itself the point isnt that there are so many barriers we should just give up and she was just totally stuck. The point is we can have the most incredible Education System ever. We could have fantastic programs at the local Community College, but if people dont have the basic foundation of Financial Stability to be able to pay a babysitter, to have negotiating power to get into a job where there is some predictability around the shift to afford the lost hours than they are not able to take advantage of many of these opportunities. So i did think it is so critical when we talk about the reasons that the Opioid Crisis has happened in all of the Economic Mobility Solutions many people spend a lot of time thinking about, that we dont lose sight of the fundamental lack of Financial Security people need to be able to take advantage of many of those opportunities in the first place. Host so far weve talked about what this would do but how does the where does the money come from any federal budget that is already very much upside down . Guest there are a lot of ways to finance a guaranteed income. My view is to ask those that have done the best in the new economy to pay their fair share and that is people like me so specifically to bring tax breaks on income above 250,000 back up to where they were historically and close close some of the most egregious loopholes like the buffet rule which enables billionaire investors like Warren Buffett to pay a lower tax rate than his executive assistant. If we do those two things, then i think that would bring not only balance back into the tax system overhaul, but it would raise enough revenue for people to live 20 million out of poverty overnight. The tax rates of roughly that level or what we had for the decades following the Second World War when we had an immense Economic Growth and that Economic Growth was broadly shared. We have broadbased prosperity. So, this for me is not about pitchforks coming for the rich. Its about what we owe one another. We all should invest in an america to provide Economic Opportunity to all americans and whats happened right now in the economy because the way we structured it is that it is egregiously unfair and they consistently go to the top 1 or. 1 rather than to everyone else and this is bringing it back into line. You mentioned the upside down tax code that we have. The cost of what im talking about over the next decade is just a little bit more than the cost of the trump tax reform bill passed at the end of last year so anybody whos out there who thinks that this is such a farfetched idea, this is far too expensive, the question is what are the priorities as a country . If it is so easy to think about 1. 5 troy or 2 trillion on corporations, why cant we think about that when it comes to working people and i very much think that we should. And it is doable. It is expensive, to be clear, and i think that it would be a very meaningful change in how the tax code is structured but i think is the movement to repeal and replace last years bill grows and we move into 2020 and 2021, hopefully we can see opportunities to do something. Host im impressed that the People Living in poverty and the people on the edge would be the beneficiaries of this 500 a month are likely to spend almost all of us it, the high propensiy to spend as we consume whereas people at the top 1 are not so you would think from the dynamic scoring perspective, the economy may grow more quickly and robustly. Guest theres research that suggests the institute did a study last year that modeled out what would happen if we created a guaranteed income of about 500 for every american progressive taxation and what they found is that it would boost economic overall output and gpt by about 7 over the next eight years, nearly a plaintiff extra gdp growth per year. The reason that wasnt all that surprising to a lot of economists is because of exactly what you mentioned when you get an extra 500,000 to a family struggling to make ends meet they are going to invest in housing, healthcare, childcare costs, whatever is the most urgent. You give me an extra 500 im going to put it in the bank. Its not going to be used in the productive economy and given that our economy is driven by Consumer Spending for the most part, spurring Consumer Spending with the guaranteed income would create meaningful Economic Growth and i think its worthwhile to say anybody who thinks about it how that would affect, the Economic Growth is good for everybody, its good for the middle class, its good for the poor and for the wealthy as well. Host you put your finger on what is the more effective and true criticism of the trump tax reform is the republicans are saying we are going to cut the Corporate Tax rate from 39. 7 down to 21 and it will cause the economy to grow faster but in fact what we see happening is theyre spending more than 80 of that on stock buybacks and dividends so the money is going to the people who are not going to spend it who can put it in the bank. Guest that is exactly right. The facts are pretty clear no matter your political approach. The wall street journal had a series of pieces covering the fact that the Corporate Tax cuts at least plus far are not going into r d and outside of some symbolic small wage increases do not think at least so far going into raising wages instead they are going into the stock buybacks and dividends. A small group of americans own a lot of stock and those are the folks who are benefiting disproportionately and that is going to reinforce the income inequality that we have and make it worse. Host and its an old employer trick. You give your employer a 1,000dollar bonus and then its done you dont have to worry about it the next year or after. But you laid out the principles. One is regularity that you get it every month. Second was the expanded definition of work to include students and stay at home moms and dads and those who care for the elderly but next was overcoming complexity. One of the challenges weve had through the years is people dont know how to apply for it or what it is and it sounds complicated. How could you address the do yoe complexity piece of this . Guest i think its a large issue with the current infrastructure. I was in detroit last spring in a conversation about, with folks struggling to make ends meet and there was a moderator and the facilitator asked the question have any of you benefited from the earned income tax credit. And they go around biggert and people are little confused. One woman raised her hands, everybody else was quiet and then the one of the criteria that the facilitator used to bring the group together was income levels of a certain amount, so the facilitator knew several people in this group were very likely to be getting it to then she asked the question again and said to do any of you get a check in the spring a couple months after you filed your taxes, a check that you can use for whatever. And then several people in the group said yes, i get that. One woman in particular said i got that last year and she was a woman in her 20s with a couple kids at home, she was a waitress. She said i got that check last year and i thought it was wrong so i called up the irs and i said wait a second, you made a mistake. You send me a check for i dont remember the exact amount to Something Like 1,500 i just want to let you know because i cant be depositing the money in my account and have you come back six months later meeting is because ivitbecause ive got by and i will spend it. They said no, no, what this is is actually the earned income tax credit and you claimed it on your taxes and its your money to spend as you see fit and she said okay. And she did. She bought School Supplies for her kid and paid a months rent in advance so she had a little bit more security and she was good to go. But the followup question was do you think that you will get that next year. She said i have no idea. Its true many people have no idea because the grand prix this structure depends on so many factors. How much money you made this year, how many kids you have, whether or not you were married, what state you live in. There are so many different factors that its not a predictable source of security. And as powerful as it is, i think a lot of the power of it particularly an expanded earned income tax credit is in the stability and security of knowing that every month you are going to get 500 as long as you were working in some way to take care of your family or community and you are going to be able to rely on it consistently. Its a flat amount so you know how much it is and it comes every month like clockwork so you know that you can rely on it. So if we think about modernizing the earned income tax credit i think the key is to adapt it. The instability that has become synonymous with the economy for so many people to make sure that it has the Effect People want and need to have. Host people dont need to apply for it, it will be based on their tax return from the Previous Year . Guest there are a lot of policy people specifically like others before him like. Right now it is complex and we know all of us were the most critical pieces of data so there is a way to simplify it. Another big policy detail is exactly how do you phase it out because with any policy you dont want to create some kind of cliff where people dont want to make just 49,999 not go to dover over to lose it, so there are a really important policy designs that the experts. They are anxious to work on and guide you into this year and next year. These are the kind of problems that we can figure out in developing the political will to say we can beat generation thatn that end poverty in america and we can use cash is the way to do it. Host is there a champion yet for this plan . Guest there is a lot of people interested and we would love it if you would become one of the supporters. There are a lot of people who are intrigued and really understand the power of cash and stability and senator brown leading the way with a big proposal expanding the earned income tax credit however we are seeing a lot closer in the levels of government that are closer to the lived experience. The mayor of stock is 27yearsold, the youngest mayor of American City in the United States and stockton is a challenge to city it was under different leadership that would be the first study to demonstrate the power of the guaranteed income it was working with him and he called the stockton demonstration to play with the idea with a guaranteed income of about 500 a month for several years and is a thats an important opportunity to bring more attention to the issue. Hopefully we will get others that want to do similar things and we can build the momentum that there is a sense that this is doable. What are the big ideas when it comes to income inequality. I very much hope that the guaranteed income will be at the center of the debate. Host i have about two minutes left and want to take a couple of seconds to read one paragraph from your book in which you quote doctor king who in just a week or so we are going to celebrate and remember the 50th anniversary of his death. When the defense is to be a good decisions concerning his life on his own hands and he has the assurance that stable and certain and when he knows he has the means to seek selfimprovement. It sounds like your book and wonderful lady is here fulfilled his vision very well. Guest of passage that you read and many other speeches are a kind of almost scripture to me he talked about how to do a guaranteed income, but at the end of the day he is making a moral case. The case that no one in america should live in poverty and cash is the clear way to respect the fundamental dignity of the individual and provide for his or her freedom to figure out what kind of lives they want to lead to doctor king led on this and the sermon he gave just before he was assassinated was on many of the same themes of the National Cathedral in washington. This is a test. Thank you for your business. We are going to be the generation that takes the sign for once and for all to ensure no one in america lives in poverty. Its a big idea. It may take another 50 years. Hopefully it doesnt that we have to roll up our sleeves and work to continue that fight. Chris hughes thank you very much for sharing many of the most important ideas in your book and to with patrick king and many others all of you watching tonight thank you for watching author answer on that entrepreneur and philanthropist read his book to be into with the wonderful ideas he present. Thank you