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UBI Would Create A Massive Economic Boom in Most Red States

Abandoning welfare and switching to a UBI stimulus plan could save struggling red states.

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Universal Basic Income (UBI) is an economic policy that is supported by many of the world’s greatest business minds. It is a policy that, unlike welfare, provides a basic level of cash flow support to all citizens regardless of their financial or employment status.

It is rarely mentioned by political leaders in the United States. Currently, Democrats argue for more welfare (needs-based assistance) and Republicans argue for less welfare (needs-based assistance). UBI is a superior policy to classic welfare because it effectively solves all the problems but cuts out bureaucracy, government oversight, and fraud; it treats every citizen the same; and unlike welfare those who receive it are not discouraged from being more productive.

In this article I’ll go over many of the effects UBI would have if implemented in the United States.

Funding

UBI often sounds too good to be true which leads to the misconception that it must be unaffordable. Fortunately, it is affordable. This program would cost around $2 trillion per year and could be paid for by a simple 10% sales tax on our $23 trillion GDP.

This is a simple funding mechanism that collects more revenue from entities that spend massive amounts of capital and a little bit of money from entities that don’t spend much.

For the person who spends $30,000 a year… they will now spend $33,000, but they will be left with a net gain of $9,000 each year due to the $12,000 they would have received.

For the person who spends $100,000 a year… they will now spend $110,000, but they will be left with a net gain of $2,000 each year due to the UBI stimulus.

For the company that spends $1,000,000 every year, though, they will now spend $1.1 million, and as a company they do not receive UBI.

It’s clear that this policy would receive money from the biggest entities that spend the most money and distribute it to all citizens equally. However, the relative benefit is appreciated most by those at the bottom who need the most help and have little room for error.

Effect on Small Businesses & Main Street

While it’s clear that UBI would be a monumental improvement for those with a low income, those in or around the poverty line, artists, and solopreneurs; one of the greatest beneficiaries will be your local Main Streets and small businesses.

More specifically, UBI would drastically increase the success rate and cash flow to businesses that serve common people because of the influx of cash flow and discretionary spending in the communities that they serve.

By investing in people at a local level more cash will flow to the small businesses in that community. And by ensuring this cash flow to the small businesses, those businesses will be more successful and more able to grow and spend money themselves. The cash stimulus trickles up the chain to bigger and bigger businesses based off of where and who people choose to spend their money with.

It’s obvious that this is a better policy than our current model of giving money to big businesses so that they can displace workers and succeed as a business – with the theoretical fallacy that if that business does well everyone else will do well too. As we’ve seen with the destruction of jobs from outsourcing, people get left out in the cold when governments rely on big businesses to take care of society’s people.

No More Homelessness

Homelessness is a major problem. Our current policies address this issue are well-intended but inefficient and limited. Democrats believe in building low-income housing. This often results in the construction of what will eventually become slums and relies on government appropriated funding which opens the door for fraud and those of power to take advantage of the opportunity. Republicans do not have any solution other than to blame Democrats.

Many people who are homeless work but simply do not earn enough to afford shelter. Many are veterans. Many are suffering from psychiatric conditions. And some are just deadbeats.

UBI fulfills key objectives that would effectively eliminate homelessness. While $1,000 a month is not enough for someone to buy their own mansion, that is not the point of UBI. The point of UBI is to ensure that all eligible citizens have the the means to find shelter.

UBI does not depend on the government to fix cost of living problems that have been created by people naturally moving to places with more economic opportunities, commerce, and opportunities. Such policies are not cost effective, and only reinforce the problems.

While there are many different reasons why someone may be homeless, UBI ensures that all citizens have the capacity to find shelter on their own.

Cash Flow Redistribution

The current welfare system entraps aid and assistance to the community in which someone is living. This virtually eliminates any ability for anybody to ever relocate anywhere else.

UBI creates the opportunity for people to relocate. In practicality, it is nearly impossible for a poor person to leave where they are in search of an opportunity somewhere with a lower cost of living.