Presidential candidate Andrew Yang’s campaign has made implementing a Universal Basic Income (UBI) a consistent theme. He plans to pay every American citizen, regardless of socioeconomic status, $1000 a month. However, his plan raises questions about the viability of UBI, including how it will be financed, in addition to concerns of lost productivity.
There are roughly two hundred million American citizens over the age of 18 that UBI needs to cover, which equates to extracting an additional three trillion dollars from our economy to pay for UBI. Although this might seem unfeasible, UBI can actually grow the economy by $2.5 trillion. The remainder can be covered by increasing taxes, shifting government spending to pay for UBI, and adding a value added tax. However, still UBI faces controversy. Many people worry that it could lead to a decrease in economic output if people spend their money on drugs and alcohol instead of improving their condition. However, studies of people who were given Universal Basic Income appear to show the opposite; for instance, according to an article by Forbes Magazine, Alaska currently has a form of universal basic income where money from oil reserves is distributed among Alaskan citizens unconditionally. While there was no effect on employment, part-time jobs increased by seventeen percent. In addition, stress levels decreased and mental health improved when basic income was introduced.
UBI has been shown to increase consumer spending, which in turn boosts economic growth. Test runs for Universal Basic Income appear to be successful. Rarely anybody abuses their basic income, very few people quit their jobs, and consumer spending rises. However, Universal Basic Income is still stigmatized by many who claim that people would misuse their money, despite evidence to the contrary. Despite current public opinion, a thousand dollar check might appear in every American citizen’s pocket in the not so distant future.