Universal basic income or UBI is pretty much exactly what it sounds like.
It’s the idea that the government should provide a basic monthly income to every citizen.
It’s basically a stimulus check on a monthly basis.
This basic income should be high enough to allow people to function properly and not live below the poverty line.
Let’s suppose the poverty line is $1,000 a month for simple math.
Anybody making less than $1,000 is considered living in poverty and anyone above it is not.
Universal Basic Income Theory would suggest that every person in that particular society be paid $1,000 so they are not living in poverty.
On the surface it looks like a fantastic idea.
But there are some pros AND cons to universal basic income theory.
I’ll get into it in depth in this article but here’s a video overview to help explain it.
Pros and Cons of
Universal Basic Income Theory (UBI)
Supporters are quick to point out all the positives while ignoring the negatives of UBI.
I invite you to walk with me as we explore this topic on a deeper level…
Some of the arguments in support of a universal basic income sound good on the surface, but when we dig deeper we quickly realize that things are not as they seem.
For starters, how are we all going to pay for this?
It would cost about 2.14 trillion dollars to pay people $11,945 a year, which is the current poverty level in the United States. (1)
From what I’ve heard, we could dissolve a few government programs such as welfare to help pay for it, but that would only cover a trillion dollars a year.
We would still need to come up with the rest of the cost somewhere else.
For the remaining balance, there are a few options.
Option 1 is– we could just print money every month and hope we don’t cause hyperinflation.
We’re already in the middle of the greatest economic experiment of all time.
Why not just keep printing that cash, crossing our fingers, and hoping for the best?
(By the way, if you’re concerned about inflation, check out my video below on how you can prepare for inflation BEFORE it arrives.)
The other option of how we pay for Universal Basic Income is to tax the wealthy either by income taxes or by taking more property taxes.
That way, those who own lots of residential real estate and commercial real estate can float the bill for everyone else.
UBI Issue #1: Entitlement Mentality
Have you ever heard of the entitlement mentality?
Gee… I can’t imagine why we are struggling with people feeling entitled in our country.
We give out trophies to everybody whether they win or lose… and now we’re going to start passing out money for breathing!
The idea that you can take from the rich and give to the poor in order to facilitate a redistribution of wealth is a pipe dream… it’s preposterous!
You can’t redistribute wealth, not really.
The money will end up in the hands of the wealthy sooner or later because they know how money works and how wealth works. After all, that is how they got… and stayed…. wealthy.
But let’s suppose for a moment we could somehow pay for a universal basic income and get it implemented on a large scale.
What would happen then?
Supporters like to point out that if there was a universal basic income, it would allow people to hold out for better jobs or better wages because they wouldn’t have to take a job just for basic income…
especially if it wasn’t the right job for them.
If you have any kids or you understand human nature even a little bit, you know this entire thing is a bad idea.
UBI Issue #2: Something for Nothing
Forget kids, give anybody something for nothing, and you take away their incentive to produce.
There are millions of people in our country who would be happy to sit and watch tv, play on their phones, or play video games if you gave them just enough to eat and have a roof over their heads.
They would never even look for a job.
As technology increases, this problem will be magnified even more.
For example, what happens when virtual reality becomes more common than television and we’re paying people for just being alive?
People will sit in their virtual reality world and not even try to be productive.
Hasn’t anybody seen the movie “ready player one”.
Heck, if I had the option when I was younger to do something productive or just sit around and get paid… I’d pick to sit around every… single…. time.
I would have never went to college, never been driven to succeed, and would probably be living in a van down by the river!
This entire UBI model would basically make work optional (instead of required) for many people.
So what would happen then?
Do you think most people would go to work if they didn’t have to?
People who are making good money at their job would probably still go because the universal basic income payment would be supplemental… think doctors, lawyers, surgeons, managers, etc.
But people on the lower end of the pay scale would be more inclined to quit their jobs completely because it wouldn’t be worth it to work in a job they hate.
Without workers, supply and demand would plummet and push the wages up in those lower level jobs in order for companies to fill the positions.
This would force business owners to raise their prices so they can pay higher wages and still make a profit.
As prices go up, it would make the $1,000 universal basic income payment go down in value (that’s how inflation works).
At the end of the day, people would be getting a check for $1,000 and it would eventually cause prices to rise until a thousand dollars wasn’t enough…
Raise it to 3,000? Then to 4,000, then to 5,000?
Do you see the problem here?
UBI Issue #3: Forced Inflation or Hyperinflation
Before we know it, we’re in a cycle that keeps driving inflation up higher and higher and higher… and people are still in poverty.
There are quite a few countries who have tried some form of universal basic income such as Canada, Brazil, Finland, Iran, Spain, the Netherlands, and many more.
Some have even reported successful implementation of the concept on a small scale.
The problem is the experiments are flawed from the get go.
Many of outcomes are things like “participants reported feeling less stressed and less anxious”
One study reported that participants felt more motivated and used the money to go back to school.
First of all, yes… if you give me a monthly income on top of my current job for the next 2 years- I will feel less anxious as well.
Go ahead and give me the survey now. I’ll fill it out ahead of time before you even start sending me checks. I already know the answers because that’s a dumb thing to track.
But less anxiety doesn’t lead to growth and fulfillment.
Anyway, that’s just a rant and not why the studies are flawed.
The studies are fundamentally flawed for 2 reasons.
First, countries have done small scale universal basic income experiments, but nobody has done universal basic income on a grand scale.
Nobody has sent checks to everyone in their entire country, every month.
They’ve only done it to small groups or pockets of individuals.
The 2nd reason it’s flawed is the timeframe.
You could give me a check equal to my salary for the next 5 years and I wouldn’t quit my job because I would see it as an opportunity to get ahead.
An opportunity that I could use to my advantage.
Maybe I would use it to launch a business, pay off debt, or even go to college.
But I wouldn’t quit my job because I know that the check is going to end eventually….. even if it’s 5 years from now.
On the other hand, if you say you’re going to guarantee me my monthly income forever until the I breath my last breath…. Well, that’s a different story.
Historically, we haven’t referred to that situation as universal basic income.
When the government sends you a check that can come very close to covering your monthly income, well…. Traditionally we call that retirement.
And people typically stop working when they retire because if they’re working… they aren’t really retired.
UBI Issue #4: Early Retirement
The universal basic income theory would basically help people retire NOW… instead of waiting until they’re 65 or older.
I guarantee if you give people their basic income, a large percentage of the population (me included) would remove themselves from the work force.
You may be thinking, oh well… so what?
So a bunch of people aren’t working, that doesn’t sound too bad.
Again, let’s follow this rabbit trail and see what it means exactly.
For one, nothing is free in this world.
What’s the incentive for the people who continue to work hard?
What’s the carrot when they have larger and larger portions of their income siphoned off to prop up an entitled class of people who are doing nothing but freeloading?
Those hardworking people won’t stand for it.
At least not for long.
If you think they will, you’re fooling yourself.
You need to read Ann Rand’s book Atlas Shrugged.
In the book the producers of society, the ones who are doing the work… pack up, ship out, and the disappear from the society that is taking advantage of their work ethic.
It may not happen the way it did in the book, but people won’t stand for working their butts off in order to support those who choose not to.
Atlas Shrugged was written years ago but it perfectly aligns with this topic and I highly recommend it!
Anyway, if we had universal basic income, it’s not just the working group that would have problems.
UBI Issue #5: Mental Health and Happiness
Let’s talk about 2 things nobody talks about when it comes to UBI…
Mental health and happiness.
You can’t truly be happy and content unless you’re investing your time doing something productive.
Without a vision people perish (Proverbs 29:18)
There are so many good things that happen to a person psychologically, emotionally, and spiritually when they are forced to go out and make something happen.
Challenges and failure are a necessary part of development.
Could you fail?… yes.
Will you fail?… yes.
Everybody fails, it’s part of the learning process.
You can’t experience true success… unless there was a chance you would fail.
Without risk of failure, success means nothing.
You can’t feel true confidence, unless you’ve been tested by life and have absolutely proven to yourself, that you DO indeed have what it takes.
You can’t win without the possibility of losing.
Not everybody gets a trophy!
We MUST stop the madness.
Yes, poverty needs to be eradicated but implementing a cloaked form of socialism is absolutely NOT the answer.
What is the answer?
I’m not sure but I invite you to join the discussion in the comments section of my Atlas Shrugged.
Please be civil & I look forward to hearing your ideas.
If you believe in the American Dream and would like to join us in helping people (people who aren’t looking for a handout) create exceptional income…. then check out what we are doing here.
Here’s the kicker in all of this though… when life is over none of this will matter anyway.
The author of Ecclesiastes says it this way “Everything is meaningless, a chasing after the wind.”
In the end, what actually matters is that you have a personal relationship with Jesus Christ and he is your Savior.
If you’d like to have your sins forgiven, get your ticket punched, and start a personal relationship with the Maker of the universe, please visit our salvation page.
Jason & Daniele