The unrealistic idea of Universal Basic Income
Universal Basic Income is the idea brought forth by the left wing bringing the idea that the government would give each person a minimum monthly income sum regardless of circumstance or need. Some politicians state that the universal basic income will help global poverty by providing a fund for them to be able to reach and receive education which in the long term increasing the education level will help to reduce global poverty and boost the GDP. However, in my opinion, the universal basic income would not help global poverty because the government can’t afford the huge expenditure spending on the UBI and the consequence of providing the universal basic income which is to add taxation to people will demotivate and dissatisfied citizens.
For all the politicians and proponents who support the law of UBI, UBI is important because it can provide a more simple and beneficial welfare program meeting what citizens actually need. Although the society has already provided many ways to ensure basic social security to all the citizens, each of them has the requirements and is limited to only one benefit. For example, the financial aid provided by the school to the students requires those students who needed it to provide the financial statement to prove. Thus, unlike the basic welfare, the function of using UBI can vary for every citizen. According to the CQ researcher article “A guaranteed basic income could help with such problems, and provide benefits in a simpler, less bureaucratic way than typical social welfare programs, say Yang and other UBI proponents. Yang’s proposal also would provide retraining to help displaced workers start businesses, engage in creative pursuits or care for children or aging parents.” With the support of the UBI, people’s level of happiness would also increase, resulting in a boost of body and mental health. Also supported by the CQ article that “having a guaranteed income can also create health benefits such as less stress, a greater sense of well-being and fewer doctor and hospital visits, researchers have found.” In daily life, when people facing a problem require a huge amount of money but they can’t afford it. It will cause a lot of negative emotions such as anxiety and stress. These emotions not only are harmful to themselves but also effective to people around them. Therefore, by giving the UBI which does not have limited functions, people can more easily solve daily problems and decrease stress. And as a result of decreasing the stress, people will be more productive and the negative emotions will fade away. In the long term, with more and more healthy and productive people joining the labor force, the amount of global poverty will decrease.
However, the positive outcome is ideal but in the real world, providing UBI is not realistic. In order to provide universal basic income, governments will need a huge amount of budget to support the process. The main reason that the universal basic income wouldn’t work is because the nation and the government both cannot afford the expenditure. Because the US is already in the midst of a financial deficit. According to the Forbes articles: “The most quoted schemes today would, according to calculations from Commerce Department data, cost the federal government between $2 and 4 trillion a year, amounting to a 50% increase in current federal outlays or more than 10% of last year’s gross domestic product (GDP). Such a draw on the economy would markedly burden taxpayers and increase government debt with all the associated economic ills.” Normally, all the budget from the government will invest into building the infrastructure and the social security for citizens. Therefore, as the article mentioned, the federal government will need to spend $2 to $4 trillion dollars a year giving to people. The government will be stuck with the financial problem of not having enough money to build the infrastructure and ensure the social security of citizens while providing the universal basic income. The current COVID-19 pandemic has shown as the shadow of the result when the federal government promotes the law of universal basic income.
During the pandemic, when the cut off of global trade and the social prevention for spreading the disease, many citizens lost their jobs. Without a stable income from a job, these people have become the representation of “the poverty” with no ability to afford the necessities for a normal life. In these similar conditions, the federal government chooses to give out money called ‘aid’ for citizens to overcome this hard period of time. Facing the problem of couldn’t afford the expenditure, the government chose the method of collaborating with the federal reserve to print out more money.
By facing an even long term financial problem led by the universal basic income same as the situation in COVID-19 pandemic, the method politicians suggest to fix the problem of unarrfording the expenditure is to increase the tax on the general public which will both demotivate and desatisfing them. Politicians argue the most efficient and stable way to earn the budget except for receiving the sponsor and selling government assets. An example of this suggestion would be to increase the tax on the market capitalization of public companies. Referring to the Forbes article that “Other UBI proponents suggest a tax on the market capitalization of public companies. One proposal calls for an initial 3% levy on all corporations followed by a lower ongoing tax. Some would add a 5% levy on initial public offerings and a 3% tax on mergers. A carbon tax occasionally makes it into the mix. Even if these financing options could balance the accountant’s books, and that is doubtful, they, like other taxes, would still have ill effects on economic incentives as well as investing and hence on growth prospects generally.” Taxation has already become an unavoidable part of daily life. Even though the attitude from the general public towards taxation is negative, the building of infrastructure and the social security system can show the function of the tax. Admittedly, providing universal basic income is also a part of the social security system that can help the poor. But most groups of people don’t see the benefit of receiving universal global income by giving more money to the government other than the group of people who need the basic income. The amount will be taxed by the government based on the rate and the amount of assets you own. In other words, people having a high monthly salary may be taxed more than the basic income they will receive. Under this unfair system, people who strive to work hard to live will not be willing to work even more. By extension, the universal basic income will not help global poverty because it can’t even help the poverty in a country because not only the US, almost every country in the world is facing a financial deficit.
In my opinion, UBI should be provided in another form such as aiming the target for a specific group of people and with a limited time. Admittedly, that the main goal of UBI is important and it is a current problem the government should consider. But giving money won’t solve the problem because we cannot control the use of money and the outcome. Government should provide the UBI with the aim of helping poverty one day to achieve economic independence. For teenagers having the problem receiving the education, the UBI can be the government directly giving the tuition to the school to ensure this amount of money goes into the function of helping the teenager gain the ability to find a job in the future to get rid of the poverty. And for those needing medical support, the UBI can be supported as a kind of “loan” which has no interest and provides a chance of work. Limiting the time for the loan to be returned within a realistic time period. There is no other way better than to give stable work to the poor to help them find the value of contributing to society. Also, with the increase of productivity in the nations while giving out money to peoples, the economy will still be in the state of increasing. Solving the fundamental financial problem of providing the UBI.
In conclusion, the universal basic income will not help global poverty because the taxation will demotivate and dissatisfied citizens. And politicians and economists should find other ways to physically help the poor other than giving them universal basic income.
