Under a Universal Basic Income (UBI) plan, the federal government will pay a monthly stipend to each adult citizen irrespective of their needs or circumstances. The growth of Artificial Intelligence and Robotics has prompted many Silicon Valley leaders and other celebrities to raise UBI's issue as a countermeasure to this emerging threat to the American labor force. Former presidential candidate Andrew Yang even made the UBI the centerpiece of his campaign, labeling it a 'Freedom Dividend.' Here are some of the apparent reasons why Congress should seriously look into it:
1. The UBI plan will incentivize early Retirement – Though the eligible people can activate Social Security at age 62 and retire, the vast majority of them are unwilling to do so due to the reduced qualifying income. Since the UBI plan will not interfere with the social security income, those willing-to-retire-early folks would welcome this supplemental income and seriously consider the move.
2. The UBI plan will Create a new generation of young Entrepreneurs – Millions of young people, especially college students, have forward-looking business ideas. Still, they generally go nowhere with their brilliant ideas as they lack the start-up capital. The UBI plan will empower them to move forward with their ideas, knowing that this is not a one-off stimulus. The perennial monthly UBI (could be higher over time with adjustments for CLI) would allow them to allocate a portion of their business income while taking on fewer student loans, reducing the usual mental and financial stress.
3. The UBI plan will turn Stay-at-home moms into a new generation of Home-based Entrepreneurs – Stay-at-home moms would be one of the program's big beneficiaries. Most of them have the time but not the capital to invest in bringing their entrepreneurial dreams to reality. Now, with the new-found capital, their lives would be financially lifted to the next level. Since women tend to be better money managers, they would better allocate the money between family and business, adding a whole new dimension to the economy.
4. The UBI plan will do yeoman's service to Inner City Youths – The inner-city youths in America are severely deprived of essential economic opportunities, resulting in higher drop-outs from high schools. The UBI plan would entice them to stay in schools, opt for college education, and compete more effectively. Minority youths, especially African-American youths, would see the leveling of the playing field. In no time, the enterprising youths would pool their resources together and take the entrepreneurial plunge, pulling their neighborhoods and communities out of poverty.
5. The UBI plan will immensely help seniors currently living off Social Security incomes only – Today, millions of seniors live off social security incomes only, which sometimes are below the national poverty level, despite having worked and paid taxes all their working lives. It would be the saving grace for those seniors living month-to-month off the social security incomes. Using a typical proposal of $1,000/mo., the additional $2,000/mo. (for two seniors) would lift them out of the poverty threshold.
The new $10K SALT cap has been hurting the rich folks in high tax states. Therefore, the government should offer a deal whereby those rich folks would give up the monthly UBI in exchange for a correspondingly higher SALT cap. Right now, the cap has been severely impacting specific housing markets, making them very illiquid. The higher SALT cap could make those housing markets a bit more liquid.
Again, the UBI is a plan to fend off poverty and unprecedented calamities. The merits are numerous and multi-faceted. It helps the poor. It helps the middle class. It even helps the rich in specific scenarios. Last but not least, it would be growth-financed without having to tax and spend.
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