Universal Basic Income

I. Intro Thank you to Varrack for what promises to be a stimulating discussion, and 1harder for the tournament. II. Cost As of 2012, means-tested welfare in the United States was comprised of 79 programs which cost $927 billion. [1] We can assume it has increased since then, so as a generous figure, we can suppose it currently costs roughly $1.1 trillion. Under Varrack"s plan, each adult in the United States would receive $10,000. Kids Count Data Center estimates that as of 2016, there were approximately 249.5 million adults in the United States. [2] Providing each of these adults with a UBI would cost approximately $2.5 trillion annually, and this excludes all bureaucratic costs. It"s clear to see that the cost is well over double the cost of the current welfare system. Not only does Varrack have to prove that his plan is superior to the current welfare system, he also must prove that it is worth the astronomical increase in the cost of welfare. There is also the negligible harm that it provides an extra $10,000 to individuals who do not need it. Images of Jeff Bezos or Bill Gates receiving this guaranteed income is ridiculous, but the same principle can be applied to individuals making a fraction of what the super-rich make. A family with a combined income of $500,000 may find that an extra $20,000 is nice to have, but hardly necessary. I"m the first to admit that this isn"t a significant harm to the plan, but a harm nevertheless. III. Capitalism is not compatible with UBI Proponents of UBI often argue that UBI is the first step on the path toward de-commodifying labor and allowing citizens the freedom from work that a utopian society promises. However, in order to do this, citizens must be paid a sum high enough to allow them freedom from work. If not, they will be forced to continue working to reach a living wage. According to Professor Daniel Zamora of Cambride, employers know this and will be able to drive down wages, effectively turning this plan into a subsidy for businesses. [3] According to David Graeber, Professor at the London School of Economics, implementation of the UBI without first transitioning away from capitalism would only exacerbate many of the issues capitalism presents, and increase in the number of "buIIshit jobs." [3] Rather than working in the intended manner, UBI would cause businesses to pay less, and end up causing Americans to work less fulfilling jobs just to maintain the same level of comfort that they had before the UBI was implemented. IV. UBI is ineffective Let"s say we implement UBI in the United States. Though Varrack has provided examples of UBI being implemented in other nations, none are comparable to the market tendencies of the United States. Instead, we should look to the micro-implementation case study done by the think tank "Compass" in the UK. By implementing a smaller version of Varrack"s plan, the impact was devastating. Child poverty actually increased by 10%, poverty among pensioners by 4%, and among working class families by 3%. For Varrack"s more comprehensive plan, the analysis points to slight reductions of poverty (7% for children, 1.9% for working age people, and 0.8% for pensioners.) [3] In order to do this, as stated earlier, the United States would have to pay approximately $2.5 trillion, which is over 12.5% of US GDP. [4] 2012 estimates on the price of eradicating poverty put the cost at around 1% of GDP. [5] If we can do so much more for so much less, why don"t we? V. The American System and The American Dream Though individuals on both sides of the aisle attack the current state of welfare (albeit for entirely different reasons) by pointing to poverty rates, what isn"t often taken into account is that this statistic ignores reception of in-kind welfare. It doesn"t consider food stamps, Medicaid, housing vouchers, and the like, when these really put people in a much better situation than what the "poverty rate" implies. Impoverished Americans are, on average, far better off than their European counterparts. [6] Furthermore, the negative incentives "discouraging impoverished Americans from working" simply does not exist. Americans that earn less actually have a greater incentive to work than those in higher tax brackets. Their "marginal tax rates" or losses of benefits due to increased income, are actually significantly lower than the rest of the workforce. An individual below half the poverty line faces a marginal tax rate of approximately 14%. A person from 50-100% of the poverty line has a marginal tax rate of about 24%. Individuals with higher incomes faced a marginal tax rate of about 34%. [6] This phenomenon that Varrack and many pundits tout is actually nonexistent. VI. Conclusion To summarize, our current system works. Critics use inaccurate statistics to discredit a system that is doing wonders. In contrast, the idea of UBI has never been tried in a developed country with a largely market economy, and without first dismantling capitalism, UBI would serve only to subsidize corporations to lower wages. Varrack must prove that 1. UBI is worth the massive increase in welfare costs 2. UBI could be implemented successfully within a capitalist economy and 3. That the limited testing in developing nations would be able to translate into the developed world. VII. Sources [1] http://budget.house.gov... [2] http://datacenter.kidscount.org... [3] https://www.jacobinmag.com... [4] https://data.worldbank.org... [5] http://prospect.org... [6] https://www.forbes.com...