Universal Basic Income (UBI) has been all the talk recently with the likes of Mark Zuckerberg, Bill Gates, Elon Musk, Hillary Clinton and former president Barack Obama voicing their gleaming support. At first glance, this proposal seems like a refreshingly simple alternative to the United States’ current welfare program (and hey, we all get a piece of the pie!) In reality, the “U” in UBI turns out to be the most damning aspect of this “plan,” if you can call it that. Here are 6 reasons why UBI is a terrible idea.
For the purpose of demonstrating my point, let’s assume a UBI of $30,000 a year has been implemented.
1. UBI will cause massive inflation.
People pay other people for goods and services. A young entrepreneur uses the money he or she earned through market interaction to hire a programmer to develop an app. What’s different about the government paying people an income? The money the government gives out is either collected forcibly though taxation, or printed by the Federal Reserve. Unless they raise taxes considerably (which doesn’t help with re-election), the money will be printed and the money supply increased exponentially. Imagine everyone having $30,000 extra in their pockets when I snap my fingers. What’s bound to happen? Long term, the market will adjust to treat $30,000 as our current $0. Eventually, your UBI will be worth nothing, and politicians will call to raise it: $45,000 for everyone. Soon enough, $45,000 will be worthless, and so on. “What if they raise taxes and not print money?” Well, first, taxation is theft. Second, producers will stop wasting their time:
2. UBI will disincentivize the productive members of society.
Starting a business is a risk. What makes it worth it for most people? The reward. If you’re being taxed 90% of your income, what’s the point of doing that work at all? Plenty of people are passionate about their work, their new idea… but no one can deny the sleepless nights it takes to successfully launch a business or invent a new product. If the result of that immense effort would be the same thing you started with, you’d rather not strain yourself. Read a book, sit by the pool… you know, the simple, enjoyable things. This country would quite literally stop. Progress in any field would be rare, if not totally nonexistent.