If you do not know what a universal basic income is, it’s an idea that the government gives every citizen a fixed sum of money on a monthly or yearly basis. Think social security for all. A number of prominent proponents of the idea are former Secretary of Labor Robert Reich, Elon Musk, Keith Ellison and Mark Zuckerberg. While it is argued we will need a universal basic income in the future to provide financial security for citizens, according to a new report conducted by Marshall Steinbaum of the Roosevelt Institute, Michalis Nikiforos of the Levy Institute and Gennaro Zezza from the University of Cassino and Southern Lazio, a universal basic income could grow the United States’s economy by trillions of dollars. According to the study,
The new study based its forecasts on three basic income scenarios. According to the first of these, if adults are given $1,000 every month, the U.S. economy could grow by 12.56 percent after an eight-year implementation. With current GDP pegged at $19.8 trillion by the Congressional Budget Office, this translates to a total growth of $2.48 trillion.
In the second and third scenarios, a monthly UBI of $500 and $250 could lead to a GDP growth of 6.5 percent and 0.79 percent, respectively. It’s also worth noting that the report used an economic model that assumed that growth is constrained due to low household incomes, which the researchers note is debatable.
Before going back to the universal basic income, it should not really be that debatable about whether growth is constrained due to low household incomes. It is quite obvious growth is tied to the wealth of consumers, and the increasing concentration of wealth in the United States being concentrated at the top, is stifling economic growth. If lower income Americans made more money, they would spend that money, as shown by this Federal Reserve publication in 2015. With an increase in demand for goods and services, businesses would have to increase output in order to meet demand, which could possibly require more employees in order to meet that demand. This is elementary economics, people. Yet, it is somehow not entirely common knowledge, *cough* Republicans *cough*.
Aside from the above comment, this is momentous. At a time where the U.S. economy is barely meeting a 2 percent growth in GDP every year, a universal basic income would provide a substantial boost to that growth. A universal basic income would also provide an additional safety net for the lowest tier of Americans. Not only that, but a universal basic income would provide a guaranteed safety net for Americans which could possibly make reluctant entrepreneurs more likely to try and innovate. Arguably, the only downside is the massive cost of undertaking this sort of idea. Other than the massive cost, a universal basic income is a way to help provide Americans with a more economically secure future in a world that is constantly innovating and increasingly making many humans obsolete. What are your thoughts on a universal basic income?