One of the most popular and often-discussed topics of the last few years in American politics has been UBI, or the concept of a universal basic income, most often espoused in Democratic Presidential candidate Andrew Yang's campaign proposals. $1,000 per month to every American adult, but he dropped out in January after the New Hampshire primary due to a lack of support. Little did he know that just a couple months later, the whole world would go into global pandemic and become a petri dish for examining the effects of universal basic income, as Congress passed a bill that gave $1,000 to every American citizen who made under $65,000 based on last year's tax returns (humble brag- I made more than that, but even I got a little money from the emergency federal stimulus). Of course, President Trump famously put his name on every check that was sent out, but (surprise!) I did not see that check because I had it direct deposited to my bank account. There was speculation that stimulus would not be the end of the checks to U.S. citizens, but so far no more has come trickling down. I'm not particularly surprised, as each $1,000 stimulus deal costs trillions for the government which is already heavily in debt and doing deficit spending, which will eventually have to catch up to any government sooner or later (look at Greece and a bunch of other European states!) but that kind of long-term thinking is way too far down the road for the immediate pandemic crisis.
That's one of the things I found somewhat flawed about the Yang UBI proposal: Every single adult got $1,000 a month, so it covers the people who most desperately need it, who are struggling to make ends meet every month, but it also covers Bill Gates, Jeff Bezos, and tons of millionaires and billionaires. Even me, I'm glad to get $1,000 per month on top of what I make, but I don't necessarily need it (for now, knock on wood) to pay my rent or to put food on the table, it would just be a bonus check, and I'm not sure I would feel richer and inject that money back into the economy immediately, which is part of Yang's theory, that UBI would pay for itself because the money gets spent right away and is circulated back into the economy. For people with higher incomes, that may not be the case as not only did those people not really need the money in the first place, they won't spend it. However, cutting off the UBI checks for people over a certain income threshold (like $50,000 a year) doesn't seem right, neither.....maybe a formula used like the recent coronavirus stimulus (for every $1,000 earned above $80,000, you take x amount out of your check for the month). Perhaps that could be a good middle ground.
Also the fact that it cost trillions of dollars to get one injection of $1,000 per adult, just imagine having to come up with that money every single month- that's like one of the heftiest rent agreements ever, to be paid by the U.S. government. And it's in perpetuity. Even if UBI does one day become a reality, it seems terribly costly and one of the first things that a new administration would consider repealing (like Trump trying to repeal Obamacare) in order to cut costs, etc. A heavily political divisive topic that despite math possibly proving that it could work, would be too difficult politically to pull off in this country, unfortunately (and that's one of the reasons people complain that nothing ever gets done in this country).
Another stimulus measure similar to UBI has been the increase in unemployment benefits in certain states. In CA, for workers who were laid off/ lost their jobs since March 15, California EDD (Employment Development Department) , through the federal government's provision in the CARES act, called pandemic unemployment compensation, started giving out $600 a week for each week of unemployment on TOP of the normal $400+ they usually give out. That's a really big step, much bigger than the federal stimulus's $1000 one-time hit, because this is WEEKLY. That means more than $1000+ WEEKLY, not monthly. On top of that, CA is currently not requiring that people continue to look for work during this pandemic, so on the unemployment application they expressly tell the applicant to "answer honestly," because it doesn't matter if you're looking for work or not, they will approve the application anyway. This seems like an example of how UBI can go too extreme, where a worker is getting paid about a $27/ hour wage NOT to work during this pandemic (the special benefits run out in July, for now). There are plenty of stories now about people just sitting at home, not looking for work (even if there was work out there) and just taking in the benefits, because some jobs (many jobs, in fact) don't pay $27/hour (given a 40-hour week). I know my first job out of law school was for $23/ hour at a small law firm. If I was given the option to work back then for that rate or just sit at home, I would seriously consider just being at home and enhancing my career by studying or something. UBI can fail, it seems, if the basic income is too high, and we're already seeing that play out in CA (that is, of course, if you can even get your application filed and start receiving benefits, which has been very difficult for some because the EDD phone line is constantly busy, can't get any customer service, and it takes them weeks to process a filed application.
Fantasize on,
Robert Yan
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