The problem with UBI, in the US at least, is that they government doesn’t have enough money to pull it off.
Like, the first thing people always say is to take the defense budget and give it to the citizens instead, right? Skipping right past the problems with not maintaining a standing military, that would give you (as of 2020) 714 billion dollars. Divide that by 328.2 million citizens, and you get $2,175.50 per person. For the entire year. That’s less than a sixth of the poverty line.
So let’s gut Social Security, Medicare, Medicaid, Unemployment (don’t need that anymore), just end every single support program that’s happening so far. That gives you another 2.8 trillion, give or take (contrary to what the pundits want you to believe, the majority of the budget is in fact already going to support programs). Add that to what you already have from removing your entire military, and that’s 3.514 billion divided by 328.2 million, which comes out to $10,706 per person! For the whole year. That’s not ‘pay your medical bills’ money. That’s not even ‘comfortable apartment’ money. In a lot of parts of the country, that’s ‘I have to choose between food or rent’ money.
So let’s take the entire $3.4 trillion that the government had in total revenues in 2020. That’s every single tax dollar turned directly around and put back in your pockets, and… oh wait, that’s less money than we got from social programs plus military already. That’s right, before we even get into infrastructure, the federal budget is already waaaay outside of the federal income.
But let’s try to make this beautiful dream work. How much money would you need to lift every american out of poverty? Official poverty line is supposed to be $12,880. That’s not enough to live in any state, but it’ll get you by in one of the cheap ones and hey, nothings stopping anybody from moving across the country right? 12,880 * 328.2 million comes out to 4.227 trillion dollars. The GDP, that is the sum total of all goods and services produced and performed in the entire country, was 20.93 trillion last year. So in order to do this basic income thing, The government would need to take about 21% of everything made in the entire country in additional taxes. Assuming of course that this program was 100% efficient and every dollar of it went exactly where it was supposed to without any bureaucratic costs or graft or corruption of any kind, unlike every other government program in all of history.
And once that’s done, you start getting ripple effects. Every business that was previously making a healthy profit margin, like bringing back $105 dollars for every $100 they spend on materials and infrastructure and wages? They need to pay an extra $22 for every $105 they brought in, which means instead of gaining $5 they lose $16 on every transaction. So they either go broke instantly, or they increase their prices dramatically to compensate, and suddenly the cost of living for all the people who use those products or services increased by about 26%… and all the people who you just pulled up to ‘just barely at the poverty line’ are hopelessly drowning again.
So yeah, there’s a lot of ways in which Universal Basic Income would be great if it happened by magic, but here in reality it’s just not possible.
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