A Time for New Ideas
Universal basic income — a monthly payment to everyone sufficient to meet basic needs — could end poverty overnight. But the question remains: can we do it? Implementation is straightforward: an account at the Federal Reserve for every American based on existing Social Security information would make it simple to deposit payments for all, among other benefits discussed here. But a monthly UBI of $1000 for adults and $500 for children, which would bring almost all Americans above the federal poverty line, has a $3.4 trillion annual price tag — how do we pay for it?
The rapid spread of COVID-19 is a disaster that has unfortunately only just begun. The necessity of shutting down non-essential businesses has left millions of people jobless and wondering how they will get by. The most effective way to provide immediate relief is to put cash directly in people’s hands — in other words, an emergency universal basic income. Suddenly, in a time of crisis, policymakers across the political spectrum have realized that a universal basic income would provide financial support and security in a time when both are hard to come by.
“How are you going to pay for that?” You’ve seen it a hundred times: some serious-looking pundit with glasses and a suit interrogates some over-eager politician who actually wants to do something meaningful with their elected position. They recite some jargon about taxes and savings, bicker briefly with the pundit, and then the segment ends. The pundit is proud to have done their job holding this politician accountable to fiscal responsibility; what could be more important? After all, there isn’t an infinite supply of money. Except, in a very important sense, there is.
Let’s go back in time. Prior to 1933, the U.S. dollar, like most currencies, was on the gold standard, limiting the amount of money the U.S. could create. However, this is no longer the case.