One of the main arguments against UBI is the cost. How can we afford such an expansive, expensive program? It’s true: A simple back-of-the-envelope calculation shows that having the government provide everyone with a living wage requires far too much money than can be found through raising taxes. A 100-person experiment in Oakland is one thing, but a program that covers 2.5 million people? How could any government afford that?
If you acknowledge the question you lose the argument. The math simply doesn’t work within the framework of thought currently accepted concerning currency, taxes, and economics. Don’t feel bad though, because nothing actually works within that box, which is why politicians promote it. Want single payer health care? Sorry, can’t afford it. Want universal free college? Sorry again. Want — — — ? Nope, sorry. It doesn’t matter what you want (unless it’s war), we can’t afford it.
I watch people making all kinds of economic gyrations with tax schemes that are doomed to failure, along with whatever they are meant to fund, long before they ever see the halls of government. Just stop already. It’s unnecessary and much too complicated to ever win over anyone, and it proves the lack of understanding of macroeconomics that should be the first priority for anyone advocating for such radical change in a democratic system. The simple truth is that we answer the “how do you pay for it?” question with “We just pay for it”.
With a fiat currency and a “debt” that is denominated in the same currency there is never a question of what we can afford, and paying for UBI is no harder than paying for anything Congress appropriates funding for. Congress’ spending funds the private sector, not the other way around as is commonly accepted. It is the only issuer of the currency, and it is not restrained by revenue in its spending. Taxes are “NOT” a source of revenue, but simply canceled currency, as the creation of currency must precede taxation or there is no currency in circulation to pay taxes. The accounting category, purposefully labeled “debt” to mislead is nothing more than an accounting of money that Congress has spent into the private sector that hasn’t yet been canceled by taxation since our nation’s founding.
This is critical for understanding economics in a sovereign currency economy. We don’t “owe” $17 Trillion. We “OWN” $17 Trillion, albeit very poorly distributed. Paying off the debt would mean removing all currency from the economy and selling off many national resources in some denomination other than the dollar to compensate for trade deficits, so it is not even a serious goal of any politician who understands how it all works. Our sovereign (not pinned to a commodity or fixed exchange rate) currency is the only tool we need to fund whatever program or system Congress can be motivated to approve, and without a single dime in added taxation if necessary. When asked “How do we pay for it?”, don’t even acknowledge the question. It’s a trap.