In the history of bad economic ideas, there have been bad ideas, worse ideas, and catastrophically bad ideas. Then there's the whole notion of a Universal Basic Income, or UBI, which sets a whole new level of bad ideas. The "universal" part is a big part of what makes UBI a stupid idea; in that "universal" form, proponents of this cockamamie scheme would have every breathing person receive a certain income, from the government, every month, or week, or whatever - the interval doesn't matter.
In other words, the government takes money from the taxpayers, filters it through several layers of bureaucracy, each of which siphons off some of the boodle, and then hands some of it back out to those same taxpayers, along with all the people who don't pay taxes and have no skin in this game.
See why I say it's a stupid idea?
Investopedia has a good list of "key takeaways" for this nitwittery:
- Universal basic income (UBI) aims to provide every adult with a regular, unconditional sum of money, potentially simplifying social welfare systems.
- UBI has been proposed as a solution to reduce poverty and support individuals affected by job loss due to automation and AI advancements.
- Critics argue that UBI could be financially unsustainable and may discourage workforce participation.
- Political and public support for UBI remains divided, with ongoing pilot programs in various localities testing its feasibility.
- Historically backed by both liberal and conservative thinkers, UBI continues to spur debate over its costs and societal impacts.
If there is, throughout the history of civilization, any country, any people, any economy where poverty has been reduced by throwing taxpayers' money at it, I'm not aware of where that might be. The only possible advantage I can see is that if it were implemented to replace all other government social welfare systems, it would at least simplify matters. But that's not a good enough reason, especially if "every adult" is to be a beneficiary of the taxpayers.
This brings me to Jack Watson, who hails from the United Kingdom and who is a "17-year-old schoolboy in Year 12." He has penned an excellent piece of work for the Daily Sceptic detailing the deleterious effects of even an attenuated version of UBI, and it's worth reading.
While Universal Credit plays an essential role for those who genuinely need support, it has increasingly become a system that some people rely on instead of seeking employment. In its current form, UC can function as ‘free money’ for individuals who are capable of working but choose not to. Claiming Universal Credit is relatively straightforward: applicants create an online account, provide bank details and income information, and the DWP verifies eligibility through online checks, documentation and interviews. As a result, any young person who has finished college and is unemployed but fully capable of finding work can qualify simply by falling into the ‘low income and out of work’ category. Unfortunately, this is something I am witnessing first-hand.
Note that this system, as described by young Mr. Watson, isn't really universal. There is an application process, and it would seem to be needs-tested, at least to some extent. That makes if marginally less insane than the pure UBI systems that the American left loves to talk about, but only marginally so.
One might also ask how many young skulls full of mush in Britain who are recent college graduates can't find work and why that is, but that's a discussion for a different time.
Mr. Watson continues:
Many people I know who have left college and chosen not to go to university are not actively seeking employment. Despite being healthy and able to work, they have successfully claimed Universal Credit and now receive a comfortable monthly income. Because the amount they receive can exceed what they would earn in a part-time job, there is little incentive for them to look for work. Although claimants are required to demonstrate that they are searching for employment by attending job centre interviews, merely turning up is often sufficient to remain eligible. They are supposed to tell their coach they are looking for work, but this does not seem to be monitored strictly and is a point of failure in the system that leads to too many people claiming it when they do not need it. This issue appears to be growing, not just locally but nationally.
This should not happen.
Read More: We Have More Proof That Welfare Hurts, Not Helps
Universal Basic Income Plans May Have Negative Consequences for Recipients—Who Knew?
Even though this isn't a real universal basic income, this still serves as a great illustration of how government handouts discourage enterprise by subsidizing sloth. It's an unchanging law of economics that what we tax, we get less of, and what we subsidize, we get more of. This UK system is subsidizing sloth, laziness, lack of drive, call it what you will, but it all boils down to productivity.
All economies, everywhere, depend on productivity. In economies where productivity is high, where most of the population is involved in making things, or growing things, or fixing things, or providing some essential service, things usually go along pretty well. People are making money, business is humming along, and things go well. But in economies where productivity is low - see California in about five years - where enterprise and productivity are punished, where sloth is rewarded, and it's only a matter of time before it's baggy, one-size-fits-all trousers and waiting in line for potatoes.
Mr. Watson concludes:
Universal Credit was originally intended to help people transition into work, not to replace it. In its current form it risks becoming less of a short-term benefit and more of a long-term substitute for employment.
That's precisely what it is, and when one looks at the various economic tomfoolery proposed by the left, both in the UK and here in the United States, you can see that this sure looks a lot more like a feature than a bug.
I'm not saying we should go completely over to a "those who do not work, shall not eat" system. There are actually some people who, through no fault of their own, are unable to support themselves, due to illness, disability, and a lack of a family to help them. A prosperous society can always find a way to help such people. But any society that just hands out money for healthy, able-bodied people to sit around doing nothing won't be prosperous for long.
