There’s been a lot of discussion of UBI—Universal Basic Income—over the last few years, especially with the presidential primary run of Andrew Yang. The concept is seductive in its simplicity: gut the welfare state and its behemoth apparatus of bureaucratic pencil pushers and middlemen, and just cut every adult citizen a monthly check.
For fiscal conservatives, it’s a particularly toothsome Devil’s Bargain: streamline an inefficient and wasteful bureaucracy and simply direct deposit a grand every month into Americans’ checking accounts. Of course, it’s a siren song: we’d just get the payments and still suffer from an entrenched bureaucracy, claiming $1000 a month isn’t enough to meet the specialized needs of whatever community they pretend to support.
Even if the deal were struck and every redundant welfare program was eliminated, there UBI would still be a bad idea. Besides the absurdity of merely paying people to exist, it’s inherently inflationary: if you give everyone $1000 a month, prices are going to go up. Just as college tuition has soared because universities realized they could jack up the price and federal loans would expand to cover the costs, UBI would cause a similar rise in prices. Sure, it’d be great at first, but the inflationary effects would kick in quickly.— The Portly Politico
“Fast Food Premium“
Rather than comment on his post directly, I’ve chosen to put my thoughts out here, both to boost the signal of his post and to avoid clogging up his post with TLDR commenting and bringing in tangential and barely tangential facts and predictions to his discussion.
My Thoughts On His Post and Premise
He right; UBI is prima facie very seductive to those who want to increase efficiency and decrease the size of the federal government’s payroll. He’s also right in his allusion to the fact that such an improvement is unlikely in the extreme to happen. The realities of the Deep State’s power, the issues involved in putting a significant number of federal workers onto the unemployment rolls, and many of the several States each likely deciding that they need more than the proposed $1000 per month per person, all indicate that there would be little, if any, streamlining of the federal bureaucracy.
I also agree that UBI would be inherently inflationary. Any time you inject “free” money into an economic system, inflation will be the result. This is especially true when it’s perceived as a stable, recurring injection of said money.
Finally, I agree that UBI would devastate the many industries that rely upon – and are to some extent relied upon by – the unskilled, lowest tier of workers inside our borders, e.g., the fast food industry that was his example.
I disagree, however, that this would be simply a Direct Deposit of monies into people’s bank accounts. Even today, most form of government “largess” are offered through debit cards managed by various third-party firms who make a great deal of money off of proving that service. There’s just too many of the same sorts who have issues with Voter IDs who “need” that sort of card vs. having a banking account of some sort.
My Thoughts On Near-Term UBI
My first thought is that this very much wouldn’t be a replacement program in the near term. UBI, along with “free” college, pay per baby birthed (I believe this will be expanded and made more direct than the current refundable tax credit), and other subsidies will simply be added to the billions of dollars the federal government hands out as subsidies to the “poor” every year. I firmly believe that, if UBI is enacted, it will be an addition, not a replacement, to the current subsidies collectively referred to a “Safety Net.”
No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!— President Ronald Reagan (Bl. 😉 )
No, my guess would be the only part of the “Safety Net” that might be removed (after a one-time, lump-sum payout) as redundant is Social Security (SSI), which is a largely worker-funded program that has been an issue for the government – as well as a cash cow – for some time now.
My second thought is that this, like minimum wage, unemployment, and a plethora of other nationwide programs, will actually increase the inefficiencies and sizes of state and local governments. After all, $1000 doesn’t go nearly as far in Manhattan, NY as it does in Gering, Ne. Hence, the more costly, Democrat-controlled states and localities will do whatever they can to get significantly (200% or more in some cases) increased UBI stipends.
Hellfire! That’s not even ridiculous or grafting. Just taking into account rent, there’s a huge difference. Apartments in Manhattan average costing 680% ($3670 vs. $540) of what they do in Gering. Other costs are similarly different. It would just make sense for NY politicians to demand more UBI money per resident, especially since UBI wouldn’t be means-tested in any way.
My third and final thought is that the proposed $1000 per month federal subsidy would only be the starting point. It would dramatically increase relatively quickly as increasing the monthly stipend would become a key campaign promise, especially for Democrat candidates.
Alaska’s Permanent Fund Dividend (PFD) – America’s only long term experiment with any form or level of UBI and Mike Dunleavy landslide victory in the 2018 Alaska gubernatorial election after he promised to increase the PFD payout by more than 600% of the then-current payout and over 300% of the original payout, rather proves that point.
My Longer-Term Predictions: UBI → UBM
In the longer-term, I predict that, if UBI is enacted upon America by the Democrats now or in the near future, it will over the course of some amount of time morph into Universal Basic Maintenance (UBM), with specific subsidies, services, and products replacing all or most of the cash payout. The negative synergy between the Republicans’ desire to not spend taxpayers’ money on frivolous or immoral things and the Democrats’ ideology of benevolent tyranny, pretty much guarantees this, as do all the politicians’ perfectly logical desires for increased control over the populace.
So, those UBI monies that bureaucrats think would or should be spent upon food will, at some point, be replaced by actual, preselected, “appropriate” foodstuffs either available for pickup at government or government-authorized locations or delivered to people’s homes.
Remember, President Trump already floated this idea as a change in SNAP, and the only real reason Democrats lambasted it was that President Trump was the one putting it forth.
Similarly, I’d expect some hybrid of government credit system in POS’s for durable goods, e.g., toilet paper and cleaning supplies and home deliveries of the same to replace that expected portion of the UBI cash payout.
Rent could and might well be handled similarly to how NYC’s rent control works, with the landlords receiving federal monies but being required by fiat to limit their rents to a pre-specified level – a portion of the future iteration of the UBM program that they may not be allowed to opt-out of in most cases.
And, of course, even if healthcare doesn’t get moved to a fully government-controlled single-payer model, that portion of each person’s UBI allotment would likely end up under UBM being placed directly by the government into that person’s Health Savings Account (HSA). Additionally, the government will probably at that point completely control how much medical professionals and institutions can charge for individual procedures and medications.
Yes, my predictions is that UBI will mutated into UBM, a para-utero to grave support and control system ran by the government, without the need for- or use of money by the residents of the nation for their basic needs as defined by our government.