He Did The Math
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Let’s face it – it’s been a while since we’ve had a worthwhile discussion about UBI (Universal Basic Income). It’s been almost 90 years since Huey Long, and it’s been nearly 300 years since Thomas Paine. But now the libertarian leaning Democratic Candidate Andrew Yang and his Freedom Dividend plan is being held with unnecessary scrutiny by both the liberal left and conservative right.
So what is it exactly?
Yang proposes to introduce a UBI of $1,000 to every United States Citizen age 18 and older. That’s a base income of $12,000 every year, supplementing the population’s current salary. Yang calls it, “Capitalism with a floor that people cannot fall beneath.”
Why do we need it?
For around two decades now, millions of American jobs have been slowly overtaken by automation. As technology advances, experts predict one out of three Americans will lose their jobs in the next 12 years. America is facing a fourth industrial revolution, and the country will either sink or swim.
How would we pay for it?
$1,000 is a lot of money for a pretty sizable chunk of the population- Simple Yang plans to get the money to pay for the program from four sources;
- Cut already bloated and corrupt government programs and utilize current spending. The government already spends $500-$600 billion on welfare programs, food stamps and disability programs. The freedom dividend circumvents the need for such programs, freeing up the funds necessary to fund the endeavour.
- A Value Added Tax (VAT). The current economy is up at around $19 trillion. A VAT around half of the European Level would generate $800 billion in new revenue.
- Additional taxes on high revenue companies and polluters. A carbon fee will be used to sustain the American public, and control climate change in one fell swoop.
- Economic growth. The Roosevelt Institute projects that the American economy will grow by $2.5 trillion and create $4.6 million if UBI is introduced, generating $900 billion in new revenue solely from economic growth and activity.
Simply put, Yang has done the math necessary to instate such a bombastic program, as well as pay for it.
Wouldn’t people stop working, though?
Extensive research has been done to income transfer projects at MIT and Harvard, and they have found that the only people that work less hours are new mothers and school children. Regardless, $12,000 is hardly enough to live off of exclusively.
Wouldn’t that inflate the economy drastically?
As of recent, the federal government has printed $4 billion for bailouts and its quantitative easing program, causing no inflation. Larger companies will increase prices due to the higher buying power of the average citizen, and a Value Added Tax will minimally increase prices of electronic goods. However it’s inevitable that competition between firms will keep prices in line
In short, the Freedom Dividend has been meticulously designed in a way that benefits both the American public and the private sector, and has been mathematically proven to work.
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