UBI
Recently, more and more countries have been switching over to an economic system of private ownership. This capitalistic system has resulted in enormous economic growth in some countries such as China. It may seem great on the outside as we see the emergence of beautiful cities and the luxuries of the future. But, capitalism does not benefit all. Capitalism increases the extremities on both sides of the spectrum, the rich become richer and subsequently the poor become poorer. Many people have introduced solutions to this problem of poverty, one of these being a Universal Basic Income or UBI. Some say that a UBI would be ineffective due to the cost to fund it, but the correct implementation of a UBI could help solve the problem of poverty on a national level because it would provide enough money to cover necessities.
The strongest argument against the funding of a UBI is where would the money come from to fund it? Many argue that the funding for a UBI would have to come from the cutting of the social safety-net program in order to meet budget goals. Or that it would have to come from a Value Added Tax(VAT), which would be a 10% added tax on all goods. Regardless of the method of funding people say that it would not be efficient, result in lots of debt and be too expensive. As Greenstein says in CQResearcher, “If you cut programs targeted on low income people and redistribute the money in equal payment amounts that go all the way up the income scale, you’re increasing poverty and inequality”. Basically, a UBI could do exactly the opposite of what it is intended to do due to the nature of how it is funded, it could result in the poor actually becoming poorer. It would then be reasonable to assume to not choose a UBI as the solution to poverty as it could worsen the condition. Although I agree with this notion that a UBI that is funded through cutting social programs that pays all people would be unbeneficial, this is not the type of UBI I would recommend implementing.
Rather, a more beneficial way of implementing a UBI would be through an opt-in system. An opt-in system would allow people to choose whether to receive a UBI or receive federal funding through welfare programs. The money that people request for a UBI would be paid for by taking money out of the social-welfare program, this way welfare programs aren’t completely cut out of the system, they just aren’t as prominent. This option would only be available to low-income individuals as implementing a UBI to individuals of all incomes would be too costly. Additionally, this would solve the problem of increasing poverty and inequality; by only granting a UBI to lower-income individuals as opposed to everyone all the way up the income scale, a UBI would benefit the poor. The ability to choose between welfare programs and a UBI would allow individuals to have freedom in their source of federal aid. Individuals who prefer cash have the opportunity to spend their money on what they want, and those who would prefer to still receive welfare programs don’t lose out as they can still benefit from these programs. Although this would still be very expensive as a UBI would be more costly than welfare programs, taxing corporations like Amazon who paid “$0 in federal income tax in 2018 “ (https://smartasset.com/financial-advisor/universal-basic-income) could help fund the UBI. But, the cost would still be enormous and many people worry about the economic feasibility of a UBI.
There is no way around the economic deficit that a UBI would place us in, but this economic deficit is not nearly as bad as it seems. People fail to realize the economic benefits that come with a UBI. Putting more money into the hands of Americans will permanently grow the economy. According to a 2017 report by the Roosevelt Foundation, “an unconditional cash assistance program of $1,000 for all adults annually would expand the economy by 12.56 percent over the baseline after eight years”. (https://econreview.berkeley.edu/unboxing-universal-basic-income/) More cash will mean more spending which will help boost the economy. Increases in output, employment, labor force participation, price, and wages will follow. A UBI would help lower-income individuals escape the cyclic nature of poverty and fund itself through the nature of spending in the economy.
The implementation of a UBI is very crucial to its effectiveness. Granting a UBI to everyone would only increase the gap between the rich and the poor, and removing welfare programs for a UBI would only make some upset and wouldn’t help the situation of poverty. The best solution would be to create an opt-in system this way people are able to choose if they want a UBI or government funding, this way people will have freedom in their options and the funding for a UBI won’t be nearly as expensive as money from social welfare goes to UBI funding.
