Universal Basic Income: Not As Ridiculous As It Sounds?
Charles Murray on the Universal Basic Income
Full discussion: https://www.youtube.com/watch?v=SStZxI1rH-A
In recent years, the idea of a universal basic income (UBI) has floated around several Western countries. The idea behind UBI is to provide each person a certain level of money per month regardless of work status or financial need; contrary to most welfare and entitlement benefits, one would continue to receive this stipend no matter how high his or her income goes.
The opposition to this idea is largely rooted in the idea that the government should not be handing out resources that have taken through taxation. However, in every society there is going to be some form of social safety net; we crossed the threshold of no government safety net decades ago. The key is to ensure that existing programs are used effectively and efficiently.
I am inclined to oppose a UBI system, but Charles Murray, who has done a lifetime of research on social welfare and economics, believes that UBI could be the solution to runaway entitlement spending in America. It seems contrary to what we actually need, but he provides a unique argument in favor of UBI in the interview above.
At the age of 21, every American who holds a passport, which is issued at birth and some use as the same function as an ordinary passport, but also establishes your eligibility as an American citizen for the universal basic income (UBI), starts to receive a monthly deposit electronically to a known bank account of 13,000 divided by 12. 13,000 is the total basic income of which 3,000 must be devoted to health care, which I'm going to push aside because it's a complicated additional topic. So you have 10,000 of disposable income they are getting in monthly allowance.
What Murray is proposing is not an addition to the current system, absolutely not. A UBI system would be a replacement of what we currently have. If it was merely added to the current system, Murray believes it would be catastrophic (as do I).
I think that there are all sorts of ways to do that, which would cause catastrophe. I think if we simply add that onto the current benefit system, it's not affordable and it also is a catastrophe; but what if it replaces everything else? There's no more Medicare, no more Social Security, there is no more welfare, and there's no more corporate welfare, there's no more agricultural subsidies. I can go through the whole is the transfers. There's none of that stuff, and there's also none of the bureaucracies that administer it.
With this in mind, let's consider an American example of UBI. Stockton, Calif., recently implemented its UBI program, and low-income families will receive $500 per month. The experiment will run for about 12-18 months, and the results analyzed.
But here's the problem with Stockton's plan: the rest of the welfare state spending has not been cut. They're doing the exact thing that Murray warns against doing.
What will the result be? I think that it will only increase the city's financial woes. Stockton went bankrupt in 2012, and clearly did not learn the lesson about overspending.
Now if a state were to get rid of all entitlement spending, all welfare and all the associated bureaucracy, then that would provide a more tenable experiment for the UBI. For now, though, the experiments will be plagued by the fact that they are add-ons, not substitutes.
I'm still not completely on board with the idea of UBI, but Murray makes a logical case for it instead of our current welfare system. If there was more evidence for it, I'd be open to the idea. Perhaps we just need a few more case studies. For the time being, though, I remain opposed to creating this kind of system.