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Analyzing the idea of universal basic income

Imagine you have purchased a Pennsylvania lottery ticket for the fun of it one night while stopping for some snacks at a local gas station. You have no expectation of winning anything but rather just want a little thrill. The next night, you tune into the drawing of the winning numbers and cannot believe what you are seeing when your numbers match exactly. You might not have won $100 million, but for your small investment of $1 into a ticket, you will now be receiving $1,000 a month for the rest of your life.

You probably won’t be able to go out and buy a sports car or a mansion in Hollywood Hills, but it will certainly be a nice source of income to pad whatever other money you will make in the future. Now imagine that you not only received this free money for life, but everyone around you did as well. This is the concept of a universal basic income, where the government transfers a sum of cash to all of its citizens, without reservation. While it might seem like an outlandish or novel idea, some experts have predicted that it is where developed countries like the United States are headed.

A universal basic income system would not necessarily mean that capitalism would be phased out, as private citizens would still own the businesses and corporations that produced goods an services. Rather, each individual would be guaranteed a minimum income, and on top of this each person would make a choice as to whether this supplement was enough to live the kind of life they preferred or to make money on top of it by working just as they would now.

One of the main arguments behind a universal basic income is the criticism that as technology progresses, jobs become harder and harder to find. This has always been the case with technological innovation, as the tractor put farm hands out of work just as the creation of textile mills reduced the need for individual seamsters. In the past, new jobs have always popped up in the newest industries that replaced the old ones. However, in recent years, especially with the improvement in artificial intelligence, new job creation has been nowhere near as rapid as old job destruction. This has left many individuals, especially unskilled workers, with few places to turn to. The solution to this widespread problem may be universal basic income. Some have even argued as business expenses fall as they replace humans with machines, this leaves greater profit margins which could potentially be taxed to pay for the unconditional extension of government transfers.

Others have argued that a universal basic income may allow for the elimination of social programs like unemployment insurance and Medicaid, which some see as broken or ineffective. Many of these programs that are currently only extended to the less fortunate are conditional; they can only be spent on food or healthcare, or they only last for a short period of time while the recipient is unemployed, which potentially creates conflicts of interest. However, if the government gave everyone the same, unconditional benefit, it would be much harder to take advantage of the system or see it as unfair because everyone would be a recipient.

One other point forwarded by proponents of a universal basic income is that it would encourage innovation. Often, individuals are discouraged from taking risks like staring a small business as it usually means quitting the job they currently have and forfeiting a steady stream of income. However, if everyone was guaranteed even a small amount cash each month, they would become less uncertain of how their potential risk might permanently hurt them. Despite the encouragement to take risks, others have made the case that the implementation of a universal basic income would hurt innovation; the necessary increase in taxes and debt to pay for it would hurt the economy and discourage businesses to invest. Because this system is a relatively new idea, both sides can argue a similar benefit from opposing policies.

Although a unconditional basic income has never been tried in the purest sense, there has been some experimentation with the concept, although the results are quite unclear and ambiguous. For example, the Roosevelt Institute has created a model that predicts the economic impact of extending a basic income across the United States for various amounts. A real life study is also being conducted in Finland this year, but it is neither universal or basic. Rather, the government has chosen about 2,000 people who are currently unemployed to receive a small amount of cash each month. While once enrolled in the study, the participants may take up a job, the parameters of the study make it look less like a study on the true effects of implementing a universal basic income and more like an experiment for a television show.

While the concept might seem either exciting or unrealistic, depending on your political and economic viewpoint, the idea of a universal basic income is still largely theoretical at this point in time. It promises to solve some of the big issues if the 21st century, but it remains to be seen whether it can deliver on these assurances. It is likely that in the coming decades we will see policies that resemble unconditional government transfers and possibly even full implementation in more developed countries. But for now, both proponents and opponents will argue for and against this mostly abstract concept.

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