How Do We Pay for Universal Basic Income (UBI)?
How could we build 144 million homes across America?!? Who is supposed to pay for it?!? Not me!
Policymakers didn’t let this misguided thinking stop them from investing in the US housing market, creating the largest source of wealth for middle class Americans by far. We understand houses are investments, increasing our national asset value. Similarly, Universal Basic Income (UBI) isn’t just handouts – it’s an investment in people and our economy.
Many ask, “But how can we afford it?” When you receive $1,000, it doesn’t vanish. You spend it, and that money becomes someone else’s income, creating a multiplier effect. This is often ignored by critics who forget cash fuels the economy.
My book, “End Poverty. Make Trillions.” proposes a simple flat-tax phase-out UBI: everyone receives a basic income at the poverty line, gradually reduced with higher incomes. This money isn’t hoarded; it’s spent on essentials, stimulating the economy from the bottom up.
But isn’t that backwards? Shouldn’t we stimulate from the top, with corporate tax cuts? History shows corporations often pocket such stimulus, hindering the multiplier effect. Instead, pilot programs show low-income UBI recipients immediately spend the money, often investing in education, business startups, or career advancement. The multiplier effect thrives. Financing Basic Income is far simpler than we imagine.
Furthermore, UBI can save money. The costs of managing poverty, like homelessness shelters, are significant. By empowering individuals, UBI can reduce reliance on these expensive systems, further bolstering the economic case.
So, the next time someone asks, “how can we afford UBI?” say to them: How does any businesses invest in its future? They finance it, knowing the long term returns exceed the upfront costs. Just like building homes, UBI is an investment with enormous potential to end poverty, generate economic growth, and create a stronger, more equitable society.
Listen to End Poverty. Make Trillions. on Spotify or Audible
Read, “Exploring the Basic Income Guarantee” book series here
