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If the government gave people enough money to take care of their basic needs, could we eliminate poverty? Proponents of Universal Basic Income think so. Are they right? Would it really be that simple? Aldo Buttazzoni lays out the pros and cons of UBI.
#ubi #basicincome #prageru
How does this sound?
$1,000 a month. No questions asked. You don’t even have to buy a lottery ticket.
All you have to do… is breathe.
Too good to be true?
Well, that depends on your view of UBI or Universal Basic Income.
UBI is an idea that has been kicking around for a while.
The concept goes like this: give people enough money to take care of their basic needs and we can eliminate poverty. In other words, we establish a floor below which no one will fall. Every citizen is provided for.
Appealing, no? After all, we live in the wealthiest country on earth and yet we have people living in the street. It’s a moral travesty. UBI solves it.
Of course, there’s the small question of who is going to pay for it.
Giving $1,000 a month to every American citizen (that’s the Universal part of UBI) would cost something like three trillion dollars a year.
That would make it by far the most expensive item in the federal budget. Of course, everybody’s taxes would have to go up to pay for this gigantic new expense.
David Henderson, an economist at the Hoover Institution calculates that to pay for UBI “the federal government would have to increase taxes by 74 percent.”
Venture investor and former Democratic presidential candidate Andrew Yang, a vocal proponent of UBI, says we can fund UBI with a 10% value-added tax, which means that everything you buy will have a 10% surcharge built in. Would Americans agree to such a big tax on top of all the taxes they already pay? Seems unlikely.
The chances, then, that we could raise the money in taxes—by any method—to pay for the program are almost zero. That means the government would have to make up the difference; that is, go deeper into debt, which is just another way of saying “print more money.” The inflation this would almost certainly cause would raise prices and make the dollars people were getting from UBI worth steadily less, therefore defeating the purpose of the entire enterprise.
Of course, some proponents say that UBI would make many existing government assistance programs—like food stamps and Medicaid—unnecessary, and that would save a lot of money. Okay, but as generous as a $1,000 monthly giveaway might seem, do you really think it would cover food, healthcare, and other living expenses? Let alone your iPhone?
For the sake of argument, let’s say money or inflation were not big obstacles. Would it be a good idea then?
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