One definition of insanity is “doing the same thing over and over expecting different results.” The left seems to introduce the same old bad idea expecting the public to swallow it as a good one. No matter how many times the idea is rejected, they always find a way to repackage it. This time, the bad idea with a new name is Universal Basic Income (UBI).
Robin Hood’s modus operandi was to steal from the rich and give to the poor; today’s socialists are doing the same. Under the guise of fighting poverty, socialists take from those who will work and give to those who cannot or who will not.
Their goal is not prosperity or wealth creation. They want to level society. They hate inequality and hierarchy. And since there is never enough wealth to level society upward, it must always go downward. The planned result is always the same, the ruin of society. The list of leveled countries is well known and includes Russia, North Korea, Cuba and Venezuela to name a few.
Universal Basic Income’s Long History
Universal Basic Income schemes have a long history. As early as the sixteenth century, socialist dreamers such as humanist Johannes Ludovicus Vives (1492-1540) advocated using the civil authorities to distribute a basic income to all citizens. The idea has also been known by titles such as negative income tax, social dividend, state bonus and national dividend. All such proposals call for unconditional and universal basic income. This socialist process always redistributes both wealth and poverty.
In 1969 President Nixon proposed the Family Assistance Plan. It was a catastrophic failure attempting to end welfare by guaranteeing a family of four an income of $1,600 per year. At the time, the median household income was approximately $7,400. Therefore, the program would have provided 21 percent of median family income for doing nothing. Questions about where this money would come from went unanswered.
During the seventies, the federal government ran four random control experiments in six different states implementing programs like UBI. Every state demonstrated identical results; the deterrent to work was appalling. For every family that received $1,000 in free money, the average reduction in wages from work was $660.
Green New Deal Taxes
Indeed, in all these schemes, governments can only give when they take away from others. They all must increase taxes sharply.
The recent proposal to supply UBI is the Green New Deal (GND) proposed by socialist Democrat Rep. Alexandria Ocasio-Cortez. She plans a 70 percent tax on income over $10 million to fund it.1 The funds raised from this tax will not put a dent in the proposed cost of $93 trillion needed for the GND. It will not affect most taxpayers who are not rich. However, the move could well initiate an exodus of wealth from America as it has in other countries that have imposed similar confiscatory policies. At the very least, it would certainly serve to jump-start a new round of suffocating tax increases.
Cortez’s interpretation of UBI would provide “a job with a family-sustaining wage, family and medical leave, vacations, and retirement security” and “economic security for all who are unable or unwilling to work.”2 It is unclear how offering UBI to every adult will offset a cost of $650,000 per family to pay for the GND.
The Green New Deal Is a Bad Deal
Plato correctly affirms, “Statesmen cannot allow citizens to vote themselves benefits, drain the public treasury, increase public debt, and bankrupt the state. This is parekbaino,3 deviant and perverse.”
The Green New Deal does exactly this by allowing massive government control of income, wealth and many details in the private lives of Americans. This is done under the guise of eliminating poverty and saving the planet.
The GND also proposes providing $12,000 per year for every adult over eighteen regardless of need. This expense would require three more trillion dollars per year in taxes and would make up 75 percent of current total federal expenditures. Federal taxes would jump by at least 50 percent. Even if all food stamps, welfare and the Earned Income Tax Credit were eliminated, the savings would not put a dent in the deficit created by a UBI program, let alone the entire cost of the GND.
Sacrificing People on the Altar of Equality
However, worst of all, this proposal would shift government handouts from those who need them the most to absolutely everyone in the name of equality. Offering benefits to those who have no need of them or are unwilling to work is not an act of charity, but a means of creating dependency. Real charity would entail teaching the poor how to be self-sufficient and reap what they sow.
Welfare systems are susceptible to abuse and foster dependency and indolence. If money is given without making an effort, there is no incentive to work. If wage earners are penalized for working hard, they will be encouraged to stop laboring. For both groups, the result is injustice and disaster.
Failed Pilot Programs
Socialist pilot UBI programs always fail in every place they have been imposed. Finland is an excellent example. Its two-year experiment aimed at revamping the welfare system by reducing welfare recipients and increasing employment, failed in its first year.
Participants were given free money whether they were actively seeking employment or not. This experiment failed to increase the employment of participants. Finland’s socialist government had hoped that many participants would rush back into the labor force after receiving free money. However, the recipients saw no reason to work when money is free. The Finnish UBI program punished work and subsidized sloth.
The city government of Stockton California initiated a similar project in 2018 called the Stockton Economic Empowerment Demonstration, (SEED). The city is not known for its stellar financial management since it had declared bankruptcy four years earlier. Stockton’s 27-year-old mayor Michael Tubbs cites Martin Luther King Jr. as the inspiration for the program since he referred to “a guaranteed minimum income for all people” during a 1967 speech at Stanford.
A very small number of participants had received money during the project’s test period at $500 per month and the money for Stockton’s SEED pilot program came from private donors. Had the program been a real test, the money should be given to all citizens and the money taken from government coffers. Then the results would be clear for all to see.
The Failed Logic of UBI
Without imposing work requirements on recipients, the result will always be dependency and poverty. A sensible alternative would be to expand the earned income tax credit, a program that rewards work with benefits. This would have the same effect as guaranteeing a minimum income, but instead of giving money freely, it becomes linked to constructive contributions to society.
Implementing UBI will reduce the workforce and overburden taxpayers. The wealthy will flee and move money to safe havens. In France, President Macron has not only levied high taxes upon the wealthy; he has imposed a wealth tax on high value real estate. This has caused an exodus from France of the wealthiest residents at a rate of 12,000 millionaires per year.
A musty idea that failed from its conception, Universal Basic Income has no better chance of success today than it did centuries ago. Common sense and the cardinal virtue of justice dictate that hard work should be rewarded, not punished!
- Parekbaino means to stray from the three “straight systems of government” that are kingship, aristocracy and polity.