The Un-fixable Problems with UBI (universal basic income) скачать в хорошем качестве

The Un-fixable Problems with UBI (universal basic income)

Andrew Yang gained popularity with being the first major proponent of universal basic income to run for president. First of all, UBI is the proposal to give all individuals of a certain country in this case, the United States, a fixed amount of money free of circumstances and income already generated within a household. Yang has touted it as a solution to the welfare-dependent state we are currently in, with 21.4% of the population currently on welfare programs. Yang has also claimed it can decrease poverty and therefore decrease crime and incarceration expenditure, thus decreasing the money expenditure in these areas. First of all, let’s look at some of the practical problems: mainly how UBI is paid for. So UBI at 1000 per month for every US adult, would cost 2.8 trillion per year. Yang plans to pay for it in 5 ways: A 10% value added tax - 952B each year Taxing financial transactions - 78B Taxing capital gains at ordinary income tax rates - 7B each year Removing wage cap on Social security payroll tax - 133B $40 per metric ton of carbon tax - 123B Now, this only adds up to 1.2T, so Yang proposes that the remaining 1.6T needed would come from people choosing their existing welfare over UBI, and economic growth. As a realistic person, this doesn’t seem possible, so likely other taxes would need to be implemented, the VAT would need to be higher, and it would likely be less than 1k per month. The first fundamental issue I’ll talk about has to do with the way the free market functions, and the potential of UBI to drive inflation. For example, if all adults suddenly receive 1k more money per month, all business owners and producers of goods and services will simply raise their prices. They will know that people are now willing to pay more for the same product or service. For example, If I’m a landlord and I knew that people in an impoverished neighborhood were previously paying 50% of their monthly income on rent, I’m simply going to raise rent by that much. Even if I don’t want to, I’ll need to or risk losing out because every other landlord is doing this. This is the first economic issue I don’t see as solvable with UBI, and it could lead to hyperinflation. Once this sets in, it won’t take long before 1k per month is not sufficient to pay for much, and then one would need to raise taxes to give out 2k per month. It could be a never-ending game of chasing hyperinflation. The 2nd more important issue has to do with work and its purpose in people’s lives. The main issue with ubi has to do with the effect other welfare programs have had of diminishing the sense of meaning people have in their lives. The modern opioid crisis is a great example of what happens to communities once affluent and thriving when industries and jobs leave, and mass unemployment takes root. Even though the basic needs of these people is often provided for, such as health care, food, and housing assistance, people, especially men, lose their sense of meaning in life. Work and being able to provide for your family is critical to a man’s sense of purpose. When this goes away, men give into substance abuse, domestic violence, divorce, crime, and are much more likely to be incarcerated. Roughly 25% of people prescribed prescription drugs misuse them, and 80% of people on heroin started out on prescription opioid drugs. The communities hardest devastated by this crisis are also those where poverty is prevalent, industries and jobs have left, and people are heavily dependent on welfare to survive. I’m not saying that the answer is to not care for these people and provide for their needs, I’m just saying the solution is much more complicated than handing out free money or benefits. It has much more to do with the sense of purpose a family has given to them from the father and husband, and the meaning he has in providing for them without assistance. The data doesn’t lie: regardless of race and background, when poverty sets in people are much more likely to give into substance abuse, domestic violence, and crime. I don’t see UBI as an improvement on existing welfare systems, and I don’t think there is a way around this fundamental problem of the meaning people derive from work. So, as much as it might sound new and exciting, I’m not optimistic about the idea of ubi. Will it happen? Unfortunately I think it will in the near future. There are just many many people in Washington who don’t think through their policies before enacting them, and are only trying to win votes. We’ve already seen with the stimulus and QE infinity by the fed’s own admission that they are willing to print money to please people, so UBI isn’t much further from this. I hope I’m wrong, but this is just the direction I see the culture, particularly with younger people who want something to save them from their situations. However, I think only a willingness to work hard and learning how to succeed can save someone from lifelong dependence on the government.