Lyman, I only read this because you wrote it.
David Cearley


Thanks for your response!

For UBI generally, I’d count myself an “interested skeptic.” I’m very interested in the idea. I can see some real benefits. I have serious worries about costs.

But I do think a good UBI system could replace many other programs, like SNAP, TANF, Pell grants, etc. It’s not just welfare that could be replaced; even many “non-welfare” or “semi-welfare” programs could be replaced.

Consider, for example, what might happen if, as I think would be prudent, UBI were to be deferred/reduced for the young. I would suggest that whatever parent(s) or guardian with whom a young person residedes should receive a share of the child’s UBI added to their own to cover expenses, with that share to decline over time, phasing out entirely at age 18, so by 18, the young person receives their whole UBI. The amounts deposited for the very young should be put into savings bonds on their behalf that mature when they’re 12, and then go into a checking account they can use as they wish.

Furthermore, I’d suggest a share of a young person’s UBI should be with-held entirely and put into an Individual Development Account. The UBI recipient should be prohibited from using it for any purpose other than (1) education, (2) 1-time migration expenses, (3) serious medical issues, (4) capital purchases other than housing. I would suggest that the share of the UBI check given to a child/parent/savings bond on child’s behalf should decline as the UBI beneficiary gets older, and by age 25 they should receive all of it. This IDA should be invested in some reliable, low-yielding asset, and at age 25 should be given to the UBI recipient to use as they wish. If they keep it as an IDA, they can use it for any of the approved expenses right away, and can invest it in higher-yielding assets. But any withdrawals from the IDA before Age 30 for non-approved purposes are taxed.

So, if we assume a $12,000/yr UBI, then a 12-year old in this system would have $17,000 set aside for them in a checking account. By the time they went to college at age 18, they’d have directly received $56,000 in UBI, and have $133,000 in their IDA to pay for college, moving, medical, a car, a computer, etc. I’m not including any gains from investment returns here, BTW, so real sums could be higher. Meanwhile, this would be equivalent to a substantial child tax credit: over the 18 years of a child’s life, their parents would receive $26,000 or so. That’s more generous than the current child tax credit, which tops out at around $18,000 over a child’s life. This would hugely encourage parents to reside with their kids, as they could earn, in peak years, over $2,000 a year from residing with a child.

By age 18, notably, the child beneficiary would still only be receiving $8,600/year a year: not enough to live on. Essentially, this would enable them to cover room-and-board at a safe, hygienic, reasonable comfortable apartment during college.

By age 25, if they haven’t used their IDA, it has $144,000 in it.

There are problems with UBI. But with good programmatic guidelines focused on eliminating poverty and chronic lack of opportunity, rather than just dumping cash on people and watching them bid up rents while exploiting their children’s UBIs, I can see how the program could be beneficial.

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