A Case for UBI - Part One

Universal Basic Income. UBI. Ugh. You hate it. Fair enough. The burden is on me. I will give it my best shot in two posts of about 900 words. Then I will slink away.

Reasons One, Two, and Three: The goal is compassion without dependency. I define dependency as a lack of ambition. Traditional welfare leads to dependency for three reasons.

• • • One, if welfare is generous enough to live on, why work? Ambition for “more” may be universal, but the greater the creature comforts for the unemployed, the weaker the ambition.
    • Two, traditional welfare creates a high tax rate for reentrants to the workforce. If your benefits go down two dollars for every three dollars you earn, that is like a 67% tax rate. Incentives go down with a high tax rate.
    • Three, traditional welfare requires a humiliating monthly ritual of formally begging the government for money. The first month is horrible—you have to share every detail of your personal and financial life with the government. Sadly, it gets easier every month. It becomes habit. It wears you down. Psychologically, you quit fighting for independence because fighting means facing a monthly failure.

  
  
  
  

A low-level UBI avoids these three problems. In theory, a low-level UBI should increase, rather than decrease, the labor participation rate.

Reason Four

Now, here is the most compelling reason for a UBI. Fathers! Under traditional welfare, if a man moves in with Momma and the kids, the government has to be informed—and then reduces benefits. Kids get more money if dad lives elsewhere.

The best way to break the cycle of poverty is to give children two full-time live-in parents. The percentage of fatherless children has continually gone up since modern welfare was created. Active fatherhood improves both the child and the father. With UBI, even an unemployed dad can contribute to family income by moving in, and mom suffers no lowering of her benefits.

It is not just fathers. Under UBI, everyone will rediscover the economic benefits of sharing housing. Welfare has made us all lonelier.

The Obvious Reason Against

This plea for UBI will not propose a dollar amount for “low-level” UBI. Yes, if progressives get their way, the amount will be too high and UBI becomes unaffordable and dependency-inducing. (You don’t have to scream, I hear you.)

This post defines “low-level” as less than current benefits.

Transparency

Which brings us to the next benefit of UBI—transparency. Odds are that you do not know the total monthly welfare benefits for a mom and two kids. There are three, maybe four, separate numbers you have to add up: the welfare grant, the food assistance grant, the housing subsidy, plus for some, the earned income tax credit (EITC). No effort has been made to make that total public. Other things nobody knows include what all these things cost. What does the supporting bureaucracy cost? How do things vary from state to state? What do state taxpayers pay for?

UBI has the advantage of a single number. Everyone would know it because every adult citizen would get it. Custodial parents with children would get a supplemental amount.

Here are some additional details:

• • • My proposed UBI is not a supplement. It is a replacement for welfare, food assistance, housing assistance, EITC, everything. (Except Medicaid.)
    • No checks. No paper. Everyone gets a debit card.
    • The hosting financial institutions would serve as initial application locations. They would scan citizenship and age documents, a photo, and fingerprints, and digitally forward them to the government. In return, they get to host the debit accounts.
    • A single, national, UBI. Full mobility. If individual states want to pay their residents more, they may create their own programs. If a resident's current city is unaffordable, they can move.
    • Starting age is 18 with a high school diploma or GED, or 21 without.
    • A non-custodial parent would have a portion of their stipend diverted to the custodial parent. If there is one child, one-half would be diverted. If two children, one-third for each child. If three children, one-fourth for each child. (And on and on.)
    • The program is for adult citizens and the children of those citizens. Child citizens of noncitizen parents would not qualify.
    • The sheriff, warden, or any other jailer could ask for 90% of an inmate’s stipend to pay for room and board. The children of inmates would not have their share of the stipend reduced.
    • Once a year, within 10 days of their birthday, recipients would go to the financial institution hosting their account and submit a photograph and fingerprints to confirm their continued eligibility (i.e., that they are still alive).

  
  
  
  

A Hopeful Psychological Speculation

This last point may or may not be important. If everyone is receiving UBI, there is no stigma attached to receiving one. The opposite of dependency is self-reliance, and self-reliance is helped by not having to bow your head and be ashamed for accepting UBI.

Conclusion

Okay, I am near the end, and I can hear you screaming WE CAN’T AFFORD IT! Yeah, that is a big issue. Too big for this post. This one focuses on the pluses of UBI. If the stipend is low enough, if it is truly a low-budget safety net, the benefits listed above might just accrue. The labor participation rate must go up. If it doesn’t, UBI fails, and something new must be tried. If you can close your eyes and see the benefits of UBI, then this post succeeds even though you remain convinced UBI is unaffordable.

Part Two is about paying for it.

G-Pub