Grow the Economy…By Handing Out Free Cash Each Month?
The hot new idea among fans of Bernie Sanders and other democratic socialists – including none other than Facebook CEO Mark Zuckerberg – is a concept that’s come to be known as “universal basic income.” The general idea is that the federal government will simply give out a certain amount of money to every American adult each month…and presto, Americans will be freed from the wage slavery that currently keeps talented, creative free spirits chained to a desk for sixty hours a week. These young liberals not only claim that such an idea would reform the ugly capitalistic society we’ve built, but that it will be absolutely necessary in the face of the coming robotic revolution, where millions will lose their jobs to computers.
Now this idea, long relegated to the halls of Reddit and other online hangouts where full-time “gamers” fantasize about a world where they can get paid to do nothing, is going mainstream. According to an article this week on CNBC.com, a new study proclaims that by giving every American adult $1,000 a month, we can grow the economy by $2.5 trillion by 2025. By god, why haven’t we started??
The report was released in August by the left-leaning Roosevelt Institute. Roosevelt research director Marshall Steinbaum, Michalis Nikiforos at Bard College’s Levy Institute, and Gennaro Zezza at the University of Cassino and Southern Lazio in Italy co-authored the study.
The study made economic forecasts for three proposals: a full universal basic income in which every adult gets $1,000 a month ($12,000 a year), a partial basic income in which every adult gets $500 a month ($6,000 a year) and a child allowance in which parents get $250 a month ($3,000 a year).
The larger the universal basic income, the greater the benefit to the economy, according to the report.
Well, well, well. We’re not economists, but that last sentence makes us wonder…why stop at $1,000 a month? Why not $10,000? Why not $1M? If it’s true that the larger the UBI, the greater the economy, then there’s no point beating around the bush, is there? We might as well go for broke.
No pun intended.
Which brings us to one tiny, nagging question: How would we pay for such a scheme? Did someone invent a money-making machine without telling us?
No, the study’s author’s came to these conclusions by assuming that the U.S. would dispense this monthly income by simply “increasing the federal deficit.” Which, duh, why didn’t we think of that? It’s like when you realize there’s a little too much month at the end of your money and you still want that killer new game system on sale at Best Buy. You can have it! Just…buy it! Sure, you’ll increase your debt, but who cares? It’s just numbers.
But, okay, what if we wanted to have universal basic income but also pay for it in a responsible manner, such as raising taxes? Well, it turns out the study looked into that and the conclusions aren’t good. All of the benefits to the economy were wiped out. This is not only unfortunate, it also marks the first time in history that a left-wing think tank found no benefit to raising taxes. The Roosevelt Institute will probably be hearing from their donors on that one.