Mark Zuckerberg has made headlines recently over his support of a universal basic income system, following his trip to Alaska. His inspiration appears to have come from the Alaska Permanent Fund, which uses funding from a state oil company, guarantees Alaskan citizens roughly $1,000.
that having such a system could potentially create a better economic environment for individuals to take risks and better society.
Surprisingly, this type of system does have some bipartisan support. Milton Friedman, a conservative/libertarian intellectual icon and strong proponent of the free market system, was a supporter of what he referred to as the “negative income tax.” He argued that guaranteeing people an income would serve as a far more efficient welfare system than the current one.
At this point, there are three major potential issues with a guaranteed income. The first is that it could reduce the incentive for people to work. The second is that people could spend their money improperly (on drugs, etc). And the third and most important issue is that it could be extremely difficult to fund.
There is a huge problem in this country with social programs that very few people want to talk about. Programs such as Medicare and Social Security are becoming increasingly difficult to pay for as our population begins to age and people live longer. These programs are set to go bankrupt within the next decade or so and no one seems to be willing to address it.
In fact, rather than making reforms to the programs through means-testing, raising the retirement age, or increasing taxes, a lot of people are talking about expanding these programs. There has been a lot of talk about implementing a single-payer system, making public college tuition free, using government money to fund paid parental leave, and expanding funding for veterans, to name a few.
And the thing is that people are never done wanting more. Once people get more social programs, they begin to plan their whole lives around the funding they receive and think about how their lives could be easier if they had even more help for the government.
Some conservatives, libertarians, and liberals believe that a universal income could replace many of the current social programs. But there’s a problem with that as well. What if a poor person suddenly requires $10,000 worth of health care services in order to survive and they only receive a stipend of $5,000 from the government? With a guaranteed income, there would be less variation in government assistance based on need.
If a universal income system was added to the current amount of social spending, instead of replacing current social programs, than paying for it would be very difficult. Alaska has even reduced their dividends payments over recent years due to declines in oil revenue.
The question of implementing a universal basic income system in the US is a very interesting one. Unfortunately, the country is currently in a tough financial position to implement this system and it would be unwise to replace current welfare systems with it.