Opinion of Universal Basic Income

[Associate Justice PiT]

I am yet to encounter a construction of UBI that does not either a) condemn some poor people to basically starve or b) bankrupts the budget in a way that is totally unsustainable to finance even with higher taxes. Most cases I've seen for it have seen confused to me.

From my understanding, it's contested, but there is no conclusive evidence that, when applied, UBI does lead to people choosing not to work. Some correlates have been noted with a reduction in number of hours worked, but largely among new mothers and teenagers; so you could argue that was a good thing

That's not the issue though. Women becoming stay at home moms and teenagers staying in school are small beer compared to the sheer cost of the system overall.

In order for a minimum income to work, it needs to be high enough to keep the poor comfortable, have reasonable clawbacks to maintain economic mobility, and be cheap enough that it can be reasonably achieved through taxation without crowding out the rest of government spending. The problem is that government can only choose two of those things in a universal system.

If the income floor is reasonable, and clawbacks modest, the cost will be high enough to crowd out everything else, even in a high tax country. If costs are controlled and clawbacks modest, then the poor are condemned to starve. If costs are controlled and the income floor is good, then clawbacks must be so high that they prevent the poor from ever moving out of poverty.

Given this paradox, I think it is more appropriate to limit UBI to vulnerable groups to keep the system effective and inexpensive.

     I was just thinking about this, and guesstimating numbers was pretty stunning. A truly universal system that paid a living stipend would be enormously expensive.