The solution for the funding of UBI is very simple, it should be paid out of newly created debt-free money. And when people hear this they cry instinctively “That would cause inflation”. No! Inflation is caused by too much money chasing too few goods. The people at the bottom of society: the underclass, the homeless, the unemployable, do not have too much money, some of them have no money at all. While simply printing money is no solution, and printing it without regard to the goods and services available would indeed cause inflation, printing money is relatively inexpensive, and printing it electronically literally costs nothing. The central bank does this all the time by means of a conjuring trick known as quantitative easing. The big difference is that QE involves printing this money and giving it to the clearing banks, where the bulk of it is used for speculation.
By creating the bulk of the money needed for public expenditure out of thin air rather than borrowing it from the central bank or from the public, the government would avoid paying interest, which would save billions. This was the recommendation of the Royal Commission On Money back in 1937. The reason this recommendation was ignored was because there is too much vested interest behind the current set up, too many people getting rich by doing nothing. The same people who object to the poor being paid anything for doing nothing.
If Andrew Yang decides to run for President in 2024, he should not target Amazon but the banks. This is already happening in other jurisdictions after a fashion, in particular China and more recently Mexico. By taking back control of its money supply from the privately owned banks, the government can save billions, and some of this money can be used to finance UBI. UBI means just that, unconditional, it is money that is paid to every citizen as a right – including billionaires. There is of course no reason the mega-rich should not opt out, and indeed they could be given the option of doing so on both a quarterly and an annual basis.
UBI would enable first the reduction and then the total phasing out of the social security safety net. Those few people in dire need could easily be supported by existing charities. UBI would not only destroy make-work jobs but would create real jobs. Bernie Sanders and his fellow travellers campaign for a minimum wage, even though this well-intentioned measure is responsible for destroying entry level and unskilled jobs thus hurting most the people its proponents claim to want to help. With UBI, the minimum wage could be abolished, and people no employer in his right mind would employ at $15 an hour would be free to work for $5 an hour or even $1 an hour to supplement their income. After all, many people, including highly paid doctors and lawyers work pro bono in their communities out of public spiritedness.
If on the other hand UBI is not introduced, then sooner rather than later we will see the sickening phenomenon of poverty amidst plenty on an ever increasing scale. Imagine the current situation in San Francisco, but in every city of the nation, and in every nation of the world.
Click here for Part 1.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of The Duran.