The Most Important Part of UBI is U

The Most Important Part of UBI is U

I recently finished the book : Give People Money by Annie Lowery. It is all about universal basic income. It is a decent book but the author seems to miss the most critical part about UBI. And that is U. Not you, but universal.

There are three parts to UBI. Universal, Unconditional, and Income. Each have their own importance to this social benefit.

Universal

Universal and Unconditional means that every single citizen receives the benefit. There are no income requirements, unlike many of our other social benefits. It doesn’t matter if you are homeless, or the richest man in the world, or anyone in between. You receive the same benefit as everyone else. The benefit is blind race, sex, creed, and socio-economic status.

There are only two conditions. You must be a citizen of the country and be at least 18 years of age. Not very difficult conditions.

Income

Income is the other part of UBI. And it represents the type of benefit you receive. Which is equivalent to income. You receive cold hard cash each month. With no restrictions on the cash. You can spend it on rent, food, clothing, college tuition, starting a business, drugs and alcohol, or anything you want.

Unlike other assistance programs that have conditions on the benefit. Good luck paying rent with food stamps. Or good luck paying for higher education with section 8 benefits. Our other welfare programs limit what you can spend your benefits on. Not UBI, you are free to allocate you benefits the best way you see fit.

Cost

The biggest hurdle for UBI to be successful is overcoming the cost. A thousand dollars a month for ~$250Mil people (USA population over the age of 18) for a full year would cost around $3Tril. To put that into perspective the United States spent $1.9Tril in the 2023 Fiscal Year. So adding UBI would increase spending by about 150%, ceteris paribus.

There are many proposals of how to cover this increased spending. One is increase individual taxes. So income tax, property tax, or sales tax. Another is to print the money. Go in debt to ourselves. Another is a VAT or value added tax. So a tax along the production line of products produced. Typically a combination of all these methods are proposed.

Conditional Basic Income

Each method of paying for this benefit has a major downfall. This has lead many including the author of Give People Money, Annie Lowery, to propose conditions on who receives UBI. I call this CBI or Conditional Basic Income. I am very creative if you couldn’t tell.

These conditions are usually on income, so higher income earners will not receive the benefit. This would lower the cost of CBI. But defeats the entire purpose of UBI. Which is Universality.

Universal is Conditional to Include Everyone

If you put a condition on who receives UBI, it is not UBI. Because that means the benefit isn’t universal. It doesn’t include everyone.

This means that your CBI is exactly what we have now for welfare. Our welfare is smothered with conditions. Which incentivizes being on welfare. Exactly the opposite of what it is designed to do. This is why universality is important. It doesn’t incentive people to remain poor, it instead allows people more freedom to do what they actually want.

Universality allows for simplicity. The government is notorious for inefficiency. So the more conditions you put on government benefits the more difficult it is for the government to help the people that need to be helped. UBI eliminates this problem, everyone citizen get the benefit. Classic KISS strategy. Keep It Simple Stupid.