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> All the austrian economics fans ...

Depends on why one is a fan of Austrian economics. There is this (strawman) group that Krugman loves calling "austerians". And then, there are others who subscribe to the idea of "Not Yours to Give". (http://www.fee.org/library/detail/not-your-to-give-2) Friedman was inconsistent. There is not much point ascribing an ideology to what he said. There is no scope for Austrian economics in India. I won't get into the "why" of that.

Our politicians love spending our money on schemes that get them votes. This is another such scheme. But, if I can give away a portion of my income directly to people who are extremely poor, (after proving that they, indeed, are), and declare that as a 100% tax deduction, I'd support it!

It won't happen. Our politicians will want to introduce a scheme that they can name after one of their dead party-members. They want to be seen as the direct benefactors. Come election time, they want to be able to tell the poor "now look, under the Narasimha Rao* scheme, we give you x hundred rupees each month. Vote for us, and we will double that amount."

* As if that's going to happen!



Public choice theory, isn't it?

If they give everyone the same cheque, then no-one will feel special. No-one will feel reliant on the politicians for giving them a special handout.




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