- Joined
- Jun 7, 2019
I've been looking into the universal basic income idea for a while now, but only recently but effort into researching it. I'm making this thread to get some feedback on what others think of the idea, and what you think in regards to my theory that it would fail spectacularly.
According to Wikipedia, 13.5% of Americans live under the poverty line. Rounding out to about 43,000,000 people.
This is a lot of impoverished people for the richest nation in history. There are a variety of factors leading to this, from immigration, technological progress, offshoring jobs, etcetera. But we're trying to determine how to alleviate this with UBI, not the macroeconomic factors driving it.
According to Presidential hopeful Andrew Yang, he wants to give each citizen in the USA $1,000 per month, or $12,000 per year. His website explaining the idea states this:
You could argue that using the total population for the calculations is an unfair representation, since it is specified for people over 18, but this argument is flawed. The vast majority of people will live long enough to collect their monthly payment, combine this with overall population growth, and immigration on top, and the point is moot. Even so, the total yearly cost for everyone currently over 18 years old would be $3,770,780,824,000. The difference is relatively better at best.
To add some context to this, the total yearly budget for the USA federal Government, which according to Yang would be the provider of this welfare, is $4,746,000,000,000. The 'Freedom Dividend' would nearly double the USA federal budget. Eclipsing military spending by four times the amount. For those with knowledge of economics, you know that this would be absolutely devastating. Even those with barely any knowledge in economics can easily see how this can fail miserably almost instantaneously.
But let's say we cut out Yang's idea and instead op for a middle of the road approach. Say we provide this only to Americans who are in poverty, and near poverty. The number I mentioned earlier being 13.5% of the country, or approximately 43,000,000 citizens. Doing the math, it seems it might actually be plausible. The total it would cost to provide UBI to the impoverished of America would be $516,000,000,000. Compared to the previous numbers, this seems much more realistic. But, there's a catch to this. This only helps people in poverty, not in near poverty. The total amount of people in near poverty, or right on the brink of falling into the impoverished category, is 100,000,000 people. Nearly a third of the American population. Again, these numbers are from the mentioned Wikipedia post at the top. Combine this with the other 43,000,000 and you see the issue.
The total cost of providing 12,000 a year to the in poverty and near poverty people in America will cost right around $1,716,000,000,000. Increasing the US federal budget by almost 50%. Even accounting for budget cuts in other sectors of government, the damage would be irreparable.
Taxes will absolutely skyrocket. Both on the super rich and the common man. Given the habit of the rich to bail to third world nations with their offshore millions, the economy of the United States will very likely crash. Hard.
Small businesses and corporations alike would snap under the pressure and go out of business, causing unemployment to skyrocket and leaving only the richest companies to remain. Resulting in a mass of Monopolistic Enclaves controlling massive sections of the remaining economy. In conjunction with this, prices would also shoot up, possibly, even probably to a degree where the Universal Basic Income will need to increase further to make it effective.
In most cases like this, the current government may panic, and begin to print more money to put into circulation to pay for this. Considering the people pushing for this idea, and the intelligence they've displayed, they likely won't know of the consequences to such rash inflation. The value of the US Dollar would plummet, further destroying the economy. Many companies would outright abandon the United States as a possible trade zone, leaving the USA in possibly the worst financial disaster in history. And just as the Great Depression rippled across the globe, strangely enough just shy of a hundred years ago, other economies could be so badly damaged by the fall of the American economy that they could crash as well. creating a Global Depression not seen, once again, in nearly a century.
What do you think? How are my numbers, my predictions? Do you agree, or did I get something wrong? Do you think some form of UBI could work? Can Yang make a system complex enough to handle such a massive boost in spending without neutering other sectors of the government and its responsibilities to its people?
I'm curious to see what people here think.
en.wikipedia.org
www.yang2020.com
www.thebalance.com
According to Wikipedia, 13.5% of Americans live under the poverty line. Rounding out to about 43,000,000 people.
This is a lot of impoverished people for the richest nation in history. There are a variety of factors leading to this, from immigration, technological progress, offshoring jobs, etcetera. But we're trying to determine how to alleviate this with UBI, not the macroeconomic factors driving it.
According to Presidential hopeful Andrew Yang, he wants to give each citizen in the USA $1,000 per month, or $12,000 per year. His website explaining the idea states this:
The Freedom Dividend, as he calls it, would fundamentally change how the United States as a nation functions. Say it passes. The total cost for this endeavor, if he truly means what he says, would cost the American taxpayer on a yearly basis over $3,948,647,844,000. Just shy of four trillion dollars. A staggering $329,053,987,000 per month.
You could argue that using the total population for the calculations is an unfair representation, since it is specified for people over 18, but this argument is flawed. The vast majority of people will live long enough to collect their monthly payment, combine this with overall population growth, and immigration on top, and the point is moot. Even so, the total yearly cost for everyone currently over 18 years old would be $3,770,780,824,000. The difference is relatively better at best.
To add some context to this, the total yearly budget for the USA federal Government, which according to Yang would be the provider of this welfare, is $4,746,000,000,000. The 'Freedom Dividend' would nearly double the USA federal budget. Eclipsing military spending by four times the amount. For those with knowledge of economics, you know that this would be absolutely devastating. Even those with barely any knowledge in economics can easily see how this can fail miserably almost instantaneously.
But let's say we cut out Yang's idea and instead op for a middle of the road approach. Say we provide this only to Americans who are in poverty, and near poverty. The number I mentioned earlier being 13.5% of the country, or approximately 43,000,000 citizens. Doing the math, it seems it might actually be plausible. The total it would cost to provide UBI to the impoverished of America would be $516,000,000,000. Compared to the previous numbers, this seems much more realistic. But, there's a catch to this. This only helps people in poverty, not in near poverty. The total amount of people in near poverty, or right on the brink of falling into the impoverished category, is 100,000,000 people. Nearly a third of the American population. Again, these numbers are from the mentioned Wikipedia post at the top. Combine this with the other 43,000,000 and you see the issue.
The total cost of providing 12,000 a year to the in poverty and near poverty people in America will cost right around $1,716,000,000,000. Increasing the US federal budget by almost 50%. Even accounting for budget cuts in other sectors of government, the damage would be irreparable.
Taxes will absolutely skyrocket. Both on the super rich and the common man. Given the habit of the rich to bail to third world nations with their offshore millions, the economy of the United States will very likely crash. Hard.
Small businesses and corporations alike would snap under the pressure and go out of business, causing unemployment to skyrocket and leaving only the richest companies to remain. Resulting in a mass of Monopolistic Enclaves controlling massive sections of the remaining economy. In conjunction with this, prices would also shoot up, possibly, even probably to a degree where the Universal Basic Income will need to increase further to make it effective.
In most cases like this, the current government may panic, and begin to print more money to put into circulation to pay for this. Considering the people pushing for this idea, and the intelligence they've displayed, they likely won't know of the consequences to such rash inflation. The value of the US Dollar would plummet, further destroying the economy. Many companies would outright abandon the United States as a possible trade zone, leaving the USA in possibly the worst financial disaster in history. And just as the Great Depression rippled across the globe, strangely enough just shy of a hundred years ago, other economies could be so badly damaged by the fall of the American economy that they could crash as well. creating a Global Depression not seen, once again, in nearly a century.
What do you think? How are my numbers, my predictions? Do you agree, or did I get something wrong? Do you think some form of UBI could work? Can Yang make a system complex enough to handle such a massive boost in spending without neutering other sectors of the government and its responsibilities to its people?
I'm curious to see what people here think.
Poverty in the United States - Wikipedia
en.wikipedia.org
The Freedom Dividend - Yang2020 - Andrew Yang for President
Universal Basic Income, or UBI, is a version of Social Security where all citizens receive a set amount of money per month independent of their work status or income. Everyone from a hedge fund billionaire in New York to an impoverished single mom in West Virginia would receive a monthly…
www.yang2020.com
How Congress Really Spends Your Money
U.S. federal government spending for FY 2021 is $4.829 trillion. The most expensive programs are Social Security, Defense, and Medicare. How are you affected?
