by Gary Christenson, Deviant Investor:
Several countries and cities studied and tested a universal basic income (UBI). At first glance it looks like giveaway nonsense:
However, intelligent people have advocated a UBI to minimize wealth inequality, technological unemployment and social unrest. “Let the rich pay so I don’t need to work,” is compelling political nonsense. Perhaps the political and financial elite will legislate a UBI for the lower strata of society to discourage rebellion and social unrest.
The idea ought to fail…
Most western welfare states implemented programs similar to a UBI years ago. Consider:
The U.S. military spends $800 billion, perhaps $1 trillion per year, defending the country from less than obvious dangers. Recipients of that $800 – $1,000 billion per year influence politicians at the local, city, state and national level. The military budget is untouchable and will persist even though some argue 25% would adequately defend the country.
This massive funding acts like a UBI for the military-industrial-security complex of companies embedded into American society. They will collect ever-increasing budget dollars.
Military expenditures of nearly one trillion dollars are impossible to imagine. The following graphic shows a trillion dollar stack of one hundred dollar bills. That $1 trillion costs about $10,000 per American worker per year. The total national debt is 21 times larger. Unfunded liabilities are 100 to 200 times larger. Hmmmmmmm!
The Human Resources section of the U.S. government budget for 2018 is about $2.9 trillion. How many millions of individuals, doctors, hospitals, clinics and pharmaceutical companies depend upon this portion of the budget for their jobs and wealth creation? Expenditures will increase.
This program costs around $70 billion per year. It looks like a UBI based on EBT cards for food items instead of cash giveaways.
The U.S. government guarantees student loans, which enable colleges and universities to increase tuition costs. Those loans experience a large delinquent and default rate. However they assure huge revenues to colleges, universities and their professors.
The “beltway bandits” (consultants) working for D.C. politicians;
A host of “think tanks” that influence foreign policy and military adventures;
Section 8 housing;
Free cell phones, Child Care Fund, WIC, School Lunch Program;
Many others.
From Charles Hugh Smith: “Here’s Why Rip-Roaring Inflation Is Inevitable”
“To quell the revolt of the many, the Powers That Be will create trillions in new money and helicopter-drop it to the masses. This mass distribution of newly created money (borrowed into existence by the central bank and/or government) will flow into the real-world economy, not assets [stocks and bonds], and so the inflation (higher prices for the same item) will manifest in goods and services.
This helicopter drop of newly created money will be called pensions, Universal Basic Income, tax subsidies, negative tax rates, etc.”
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