Can Universal Basic Income Achieve Economic Security?
The complexity of the contemporary economy means that policies for economic security are among the most significant decisions a state can make. Indeed, the largest and longest-lasting policy to emerge from the New Deal legislation during the Great Depression is dubbed Social Security, a state-managed old-age pension.
Lightly-regulated capitalism leads to boom-bust cycles. And these cycles threaten the livelihood and survival of the poor in times of crisis, such as the Great Depression of the 1930s and Great Recession in the past decade. States have therefore made larger and larger policy interventions to provide a welfare “safety net” for the poorest.
By certain measures, the American economy in 2018 is strong. And yet, during and since the 2008 financial crisis, the federal government has made decisions, such as the bank bailouts and tax cuts, that have shifted public wealth to the pockets of the 0.1% wealthiest. The stagnation of incomes has led to an overall decline in economic demand. $1 billion in the hands of an individual merely adds to the ocean of liquid investment capital chasing low interest rates, but in the hands of 10 million middle and working class families, it becomes groceries, home improvements, and other necessary purchases that stimulate the economy. Raising income tax for the wealthy could fund new programs and help reduce income inequality. But what is the best way to reinject this wealth into the economy?
Supporters of single-payer healthcare have adopted the political strategy of advocating for extending a policy that already exists to the rest of the population: “Medicare for All.” Although there is yet no widespread movement in the United States, intellectuals from a wide political spectrum are now weighing the benefits of a universal basic income—essentially “Social Security for All”—to combat poverty and income inequality. Other countries have taken steps in this direction. In 2003, Brazil created a wide-ranging if not universal program of direct welfare payments to the poor, called Bolsa Familia. However, recent trials of basic income payments in Ontario and Finland have ended after political infighting.
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