The Inevitability of Universal Basic Income UBI for the Homeless & the Addicted - Bad idea or coming necessary? With my added comments in the context of a post-labor economy.
Donald H. Marks, Physician, Scientist, 3rd generation Veteran
My take, as a concerned non-economist
What is Universal Basic Income (UBI)?
Universal basic income (UBI) is a proposed government program in which every citizen may receive a regular financial supplement as needed to maintain an adequate existence. Most models of UBI advocate payment that is not based upon need, which is an option that makes no sense to me and certainly will lead to rejection by voters, inevitably leading to corruption and waste of money. The proposed use and justification of UBI is to help offset the cost of basic expenses including minimally adequate housing, food, certain essential medications, childcare, and others for those who have an established need and do not have adequate resources just to survive, i.e., both need-dependent and resource-dependent. Despite the theoretical appeal to some, in my opinion, there is near-zero likelihood that UBI will be established in the U.S.A in my lifetime.
The Changing Economy and the Need for UBI
Much of the renewed interest in UBI appears to stem from a perceived fundamental change to the economy—namely, the growth of automation and the shift to a post-production and post-labor economy—that threatens to leave many Americans without jobs that pay a livable wage, as opposed to the often cited, but in practice inadequate, minimum wage.
The End Goals of UBI
The end goals of a basic income system would seem to be to alleviate poverty and potentially replace other need-based social programs that require greater bureaucratic involvement. World economies seem to be repeating past major changes, similar to those seen during the industrial revolutions, the Great Depression, and world wars. The idea of UBI has gained momentum in the U.S. and worldwide as automation and AI increasingly replace workers in manufacturing and other sectors of the economy. A number of noted proponents of UBI have emerged, leading to increased discussions in recent years.
My Thoughts on UBI
As a non-economist, practicing physician, former military doctor, and someone currently treating those struggling with opioid addiction, I’ve thought about UBI for a long time. It’s important to assimilate a position on this seemingly reasonable concept to understand its potential implications.
The Impact of AI on UBI Necessity
The advent of AI is laying a strong foundation for increased productivity and GDP growth, setting the stage for a future where UBI may become not only possible but necessary. As technology evolves and societies adapt to this 'new normal,' we will likely witness a profound transformation in our global economic model, potentially evolving somewhere between capitalism, state capitalism, socialism, and a post-labor economy.
UBI’s Impact on Economic Inequality
What ultimately will be UBI's impact on economic inequality is a subject of much debate and certainly revolves around the realities of its implementation. Proponents argue that UBI can help reduce inequality by providing financial support to low-income individuals and families. However, critics contend that the effectiveness of UBI in reducing inequality depends on its design, funding, and UBI’s interaction with other social policies. For a comprehensive approach to addressing economic inequality, some experts suggest combining UBI with other policies that focus on wealth redistribution (a forbidden concept in the USA) and asset-building programs.
Leading economist thought-leaders in this area include Thomas Piketty and Marina Gorbis. In essence, UBI alone may not be a comprehensive solution to increasing economic inequality, and its effectiveness would depend on how it is implemented and integrated into broader social and economic policies. The devil will be in the details, as always.
How will UBI be applied specifically to those dealing with substance abuse issues?
Implementing UBI for people dealing with substance abuse and other addictive behaviors will require a thoughtful, careful, and holistic approach. This must integrate current social and rehab services while acknowledging the cruel reality of drug dependency. As a provider in a methadone treatment facility, and as a general internist and hospitalist, I have had first-hand exposure to these issues. Here are some considerations:
1. Identifying Appropriate Recipients
Identify individuals struggling with drug addiction and enlist the help of healthcare professionals, addiction treatment centers, counselors, and wider outreach initiatives.
2. Tailored Support
Customize the UBI program to address the specific needs of drug addicts. This could include additional funds and access to addiction treatment, counseling, and rehabilitation services.
3. Education and Awareness
Invest in education and awareness programs to inform recipients about the importance of seeking help for their addiction and how UBI can support their recovery.
4. Monitoring and Evaluation
Continuously monitor the progress of recipients to ensure that UBI is being used for its intended purposes only and that individuals are making efforts to overcome addiction. It is essential to assess the specific areas for appropriate and inappropriate use of funds. Enabling and misuse should not be tolerated.
5. Collaborate with Addiction Treatment Centers
Partner with organizations and facilities specializing in addiction recovery to provide comprehensive support to recipients.
6. Prevent Enabling
Ensure that the UBI does not inadvertently enable drug and alcohol addiction, destructive and anti-social compulsive behaviors, violent aberrant behaviors, diversion of resources, and other problems. Offering essential adequate support in the form of goods and services (perhaps a form of CBDC with restrictions) rather than cash can help mitigate these issues.
7. Access to Mental Health Services
Many drug addicts also suffer from underlying mental health issues. AI will play an increasing role here. Provide access to mental health services alongside UBI to address these co-occurring problems. AI-empowered therapeutic chatbots can assist in this area.
8. Rehabilitation and Reintegration
Encourage and support drug addicts to seek rehabilitation and help them reintegrate into society with vocational training and employment support.
9. Social Services
Make social services like housing assistance and food programs available to ensure the basic needs of recipients are met.
10. Evaluate and Adjust
Continuously assess the UBI program's effectiveness and make adjustments as necessary to ensure it is fulfilling its goals.
Addressing Drug and Alcohol Addiction, and Socially Destructive Behaviors
Remember that addressing drug and alcohol addiction and compulsive, violent, or socially destructive behaviors is a complex issue, and UBI will not be the sole solution. It should be part of a comprehensive strategy to provide realistic support and opportunities for recovery.
What Exactly Should be Covered by UBI?
To start this conversation, I offer the following list of areas appropriate for UBI funds:
1. Essential Generic Life-Saving Medication and Access to Basic Healthcare
UBI should ensure access to essential life-saving medication and basic healthcare for all citizens. Medicare, Medicaid, the VA, and other health insurance systems play an important part in providing coverage.
2. Access to Basic Safe Food and Shelter
UBI should include provisions for access to safe food and shelter, ensuring the basic needs of all citizens are met.
3. Basic Healthcare for All Residents
All states need to make basic healthcare available to all residents, including those who earn too much to qualify for Medicaid but cannot afford adequate health insurance. It is important to recognize that junk health insurance policies, which often fail to protect against pre-existing conditions and do not cover essential services, should not be considered adequate.
4. Providers Accepting All Insurance Plans
All licensed physicians, nurse practitioners, and primary health providers should accept all insurance plans, including Medicaid, as a condition of licensure.
What Should Not be Covered by UBI?
To ensure the sustainability and fairness of the UBI system, we need a consensus on what should not be covered:
- Non-essential medications and elective medical procedures
- Certain vaccines not already covered by government programs or mandates
- Sex reassignment procedures and medications
- Addictive drugs (e.g., heroin, cocaine, methamphetamine, marijuana)
- Alcohol and nicotine products
- Weapons
- Elective recreational activities
Critics and Drawbacks of UBI
UBI, being universal, certainly has its critics and drawbacks:
1. Cost and Sustainability
Critics argue that providing a universal income to all citizens will be prohibitively expensive for governments. Funding a UBI program could lead to substantial increases in taxation or divert resources from other essential public services, potentially straining national budgets. Making UBI needs-based will increase its overall acceptability and affordability.
2. Inequity
Some believe that a universal approach doesn't effectively target those in greatest need. UBI may provide unnecessary financial assistance to individuals who are already well-off while not providing enough for those facing severe economic hardships, potentially exacerbating income inequality.
3. Workforce Participation
Critics argue that a universal income might disincentivize people from working, as they would receive money without the requirement of employment. However, studies have shown mixed results regarding the impact of UBI on workforce participation.
4. Budget Allocation
Allocating resources universally to all citizens may not address specific societal challenges effectively. Critics suggest that targeted social programs could better address the diverse needs of different demographics and address specific issues, such as healthcare, education, or poverty reduction, more effectively.
5. Political Feasibility
Implementing a universal income may face significant political opposition and challenges in achieving bipartisan support, making its implementation more difficult.3
Where Will the Money for UBI Come From?
Everyone asks: Where will all the money come from? Potential sources for UBI include:
- Redirecting the interest on the national debt
- Diminishing foreign wars and military aid
- Expenses through the Military-industrial complex
- Revising payments to pharmaceutical and healthcare complex industries, including opening all drug prices to negotiation, allowing imports of medications, and removing blocking patents
- Addressing Income and asset redistribution and maldistribution (As of Q1 of 2021, the top 10 percent held 69.8 percent of total U.S. net worth)
- Collection of taxes from hidden assets, tax shelters
- Maybe a “needs test” for certain social services, excluding social security
Criticisms of UBI
Despite its promise to curtail poverty and cut red tape, UBI still faces an uphill battle. Perhaps the most glaring downside is cost. According to the nonprofit Tax Foundation, former Presidential candidate Andrew Yang’s proposed $1,000-a-month “Freedom Dividend” for every adult would cost $2.8 trillion each year (minus any offsets from the consolidation of other programs). UBI universality should be needs-based. Offering it for ALL residents is counterintuitive and sabotages acceptability.
Yang’s Proposal
Yang, ever the dreamer, proposed covering that substantial federal budget expense, in part, by shrinking the size of other social programs and imposing a 10% value-added tax (VAT) on businesses. He also proposed ending the cap on Social Security payroll taxes and implementing a tax on carbon emissions to fund UBI. These proposals, like his candidacy, never gained traction for good reasons.
An analysis by the Tax Foundation concluded that Yang’s revenue-generating ideas would only cover about half of the total impact on the Treasury.
Disincentivizing Work
Among the other criticisms of UBI is the argument that an income stream not reliant on employment would create a disincentive to work. That, too, has been debated, although it seems intuitive and reasonable. Yang suggested that his plan to provide $12,000 a year wouldn’t be enough to live on, and therefore, most adults would need to supplement the payment with other income.
UBI’s Merits and Concerns
While UBI has its merits, including poverty alleviation and simplifying social welfare systems, there are valid concerns regarding its universality. Critics argue that UBI may strain government budgets, not effectively target those in need, and potentially discourage workforce participation, among other challenges. Whether to implement UBI universally or in a targeted (needs-based) manner depends on the specific policy goals and the economic and political context of a country.
Basic Income Support for Eligible Needy Citizens
Basic Income support for eligible needy citizens could be universal for several compelling reasons:
1. Simplicity and Efficiency
UBI should serve to simplify social welfare systems by providing a fixed, unconditional minimum sustainable floor income to every eligible citizen. This reduces the need for complex means-testing and administrative overhead, addressing bureaucratic inefficiencies and lowering administrative costs, as discussed in the World Bank's guide on UBI.
2. Poverty Alleviation
UBI should help reduce poverty by providing a financial safety net or floor for citizens, especially vulnerable or low-income groups. It ensures that no one falls below a certain sustainable, livable income threshold, contributing to poverty reduction and improving living standards, as mentioned by a recent Brookings Institution report.
3. Economic Stability
UBI can stimulate economic activity by increasing consumer spending. When everyone has a guaranteed basic livable income, they are more likely to spend money on essential goods and services, which boosts demand and supports businesses.
4. Flexibility
UBI provides eligible citizens with the freedom to allocate their funds as they see fit—whether for education, healthcare, starting a business, or covering basic needs. This flexibility empowers individuals to make decisions that align with their unique circumstances, as noted by UNC at Chapel Hill.
5. Social Cohesion
UBI could, in theory, promote social cohesion and reduce income and asset inequality by ensuring that everyone benefits from economic progress. It could help bridge income disparities and foster inclusivity, as pointed out by the World Bank.
6. Future of Work
In a rapidly changing job landscape with automation, AI, gig work, and the shift to a post-labor economy, UBI could provide a safety net for individuals facing job disruptions, as discussed in CNBC's article on UBI in the USA.
In Summary
A universal approach to UBI is an interesting, potentially stabilizing (or divisive), and equitable policy option. It could simplify welfare systems, contribute to poverty alleviation, stabilize the economy, empower individuals, enhance social cohesion, and address challenges in the evolving job market. UBI may provide a working solution to mass unemployment caused by AI-driven automation.
Your comments are always welcome.
References:
- Post-labor economics: Will capitalism work when the robots take over? by Loz Blain, March 08, 2024
- Brookings - Money for nothing: Why a universal basic income is a step…
- UChicago News - Universal basic income policies don't cause people to leave…
- Ray Dalio. Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail. 2021
- David Floyd. The Long, Weird History of Universal Basic Income—and Why It’s Back. 2024
- Marina Gorbis. To fix income inequality, we need more than UBI—we need Universal Basic Assets. 2017
- Commentary: Universal Basic Income May Sound Attractive But, If It Occurred, Would Likely Increase Poverty Than Reduce It. June 13, 2019, by Robert Greenstein
- Neil Howe. The Fourth Turning Is Here: What the Seasons of History Tell Us about How and When This Crisis Will End. 2023
- Thomas Piketty, Capital in the Twenty-First Century. 2013
- Thomas Piketty. Basic income, a job guarantee, and inheritance for all must all be implemented. 2021.
- Peter Turchin. End Times: Elites, Counter-Elites, and the Path of Political Disintegration. 2023.
- Fareed Zakaria. Age of Revolutions: Progress and Backlash from 1600 to the Present. 2024
- Fareed Zakaria. Ten Lessons for a Post-Pandemic World. 2020.
- Peter Zeihan. The Accidental Superpower. 2023.
- DH Marks. Should ALL Medical Doctors Be Required to Accept Medicare and Medicaid $$$ as a Condition of Licensure? Can the Gods be humble and care for their lowly helpless subjects? 2024.
- Therapy chatbots vs living breathing human therapists. Alternative Options for hard-to-get Mental Health Support. by DH Marks, 2024.
- The End of Reality, by Jeffrey Talpin. 2024. My review of this thought-provoking and brutality honest analysis of the goals and approaches of Mark Zuckerberg, Peter Theil, Mark Andersen, Elon Musk
- World Bank. Exploring Universal Basic Income : A Guide to Navigating Concepts, Evidence, and Practices. 2020.
The Potential of Universal Basic Income (UBI) in a Changing World
As the global economy grapples with the rapid advancement of automation and artificial intelligence (AI), discussions on Universal Basic Income (UBI) have gained momentum. The fundamental goals of UBI are to reduce poverty and address income inequality while simplifying bureaucratic welfare systems. But the challenge remains: can UBI realistically deliver these benefits while ensuring sustainable funding?
The Impact of AI on UBI
AI is revolutionizing sectors like manufacturing, healthcare, and services, promising increased productivity. However, with automation replacing jobs, UBI could act as a safety net for those displaced by technological advancements. Some economists argue that UBI, combined with wealth redistribution programs, could help address widening economic gaps, as seen in the works of thinkers like Thomas Piketty and Marina Gorbis.
Yet, the design and implementation of UBI remain contentious. Its success hinges on funding mechanisms, careful targeting, and integration with existing social policies. The evolving landscape may require a hybrid approach between capitalism, state capitalism, socialism, and post-labor economies.
UBI and Substance Abuse
When considering the application of UBI for individuals grappling with substance abuse and addiction, careful strategies are needed to prevent misuse. UBI should offer more than just financial support—it should be paired with mental health services, rehabilitation programs, and community outreach. Key recommendations include:
- Identifying appropriate recipients, including those struggling with addiction.
- Tailoring the UBI program to include funds for addiction treatment.
- Ensuring recipients have access to rehabilitation and reintegration services.
- Preventing the misuse of funds by offering goods and services rather than cash.
While UBI might help alleviate economic hardship, its role in addressing addiction must be approached holistically, with collaboration between healthcare providers and addiction treatment centers.
What Should Be Covered by UBI?
Essential coverage for UBI should include:
- Healthcare: Access to life-saving medications and basic health services.
- Food and Shelter: Ensuring that basic needs are met for all citizens.
At the same time, UBI should avoid covering non-essential goods, such as elective procedures, recreational activities, or addictive substances.
Critics of UBI
Despite its potential, critics argue that UBI could lead to economic inefficiencies and exacerbate inequality. Key criticisms include:
- Cost and Sustainability: Providing a universal income is expensive and could strain national budgets, especially if it replaces other social services.
- Inequity: UBI might not target those who need it most, offering unnecessary funds to wealthier individuals.
- Workforce Participation: Some argue that UBI could reduce the incentive to work, though studies show mixed results on this front.
To mitigate these concerns, a needs-based approach could be more feasible, targeting the most vulnerable populations rather than distributing funds universally.
Where Will the Money for UBI Come From?
Potential sources for Universal Basic Income (UBI) funding include:
- Redirecting national debt interest
- Reducing foreign military spending
- Cutting expenses related to the military-industrial complex
- Revising pharmaceutical and healthcare payments, such as opening drug prices for negotiation and allowing imports
- Redistribution of wealth
- Tax collection on hidden assets and shelters
- Possible “needs test” for certain services, excluding Social Security
Criticisms of UBI
While UBI promises to reduce poverty and bureaucracy, critics point out several challenges:
Cost: Andrew Yang’s proposed “Freedom Dividend” of $1,000 per month for every adult would cost $2.8 trillion annually. Proposals like offsetting costs through reduced social programs or a value-added tax (VAT) may not fully cover the costs, with estimates suggesting Yang's ideas would only cover about half of it.
Disincentive to Work: Critics argue UBI could discourage employment, though Yang suggests the amount would be insufficient to live on alone.
Budget Strain: Universal UBI might strain government budgets and not effectively target those most in need.
Needs-Based UBI: Some argue that a targeted, needs-based UBI would be more effective than offering it universally.
Arguments for UBI
Despite criticisms, there are strong reasons to support UBI:
Simplicity and Efficiency: UBI simplifies welfare by providing a fixed income to all eligible citizens, reducing bureaucratic overhead and administrative costs.
Poverty Alleviation: UBI offers a safety net for vulnerable populations, ensuring no one falls below a sustainable living income.
Economic Stability: Guaranteed income boosts consumer spending, stimulating demand and supporting businesses.
Flexibility: UBI gives individuals the freedom to use the money as they see fit—whether for education, healthcare, or business endeavors.
Social Cohesion: By reducing income inequality, UBI can promote a sense of inclusivity and shared economic progress.
Adapting to the Future of Work: With automation and AI reshaping job markets, UBI can serve as a safety net for those facing job displacement.
UBI’s Future and Impact
UBI offers an opportunity to stabilize economies, reduce poverty, and enhance individual empowerment. However, its success depends on thoughtful design and complementary policies.
Addressing Mass Unemployment: UBI could offer support to those affected by automation and AI-driven job loss, promoting inclusive growth and innovation.
Economic Resilience: A well-designed UBI system could help economies adapt to the post-labor world and evolving employment trends.
In Conclusion
UBI is a compelling policy option, potentially offering a solution to poverty, economic instability, and workforce disruption caused by technological advancements. However, the debate continues on its feasibility and effectiveness, especially regarding universal versus targeted implementation.
References:
Post-labor economics: Will capitalism work when the robots take over? By Loz Blain, March 08, 2024
Brookings - Money for nothing: Why a universal basic income is a step…
UChicago News - Universal basic income policies don't cause people to leave…
Ray Dalio. Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail. 2021.
David Floyd. The Long, Weird History of Universal Basic Income—and Why It’s Back. It's not a new idea, but many think it's time to adopt it. 2024.
Marina Gorbis. To fix income inequality, we need more than UBI—we need Universal Basic Assets. 2017.
Commentary: Universal Basic Income May Sound Attractive But, If It Occurred, Would Likelier Increase Poverty Than Reduce It. Updated June 13, 2019 | By Robert Greenstein
Neil Howe. The Fourth Turning Is Here: What the Seasons of History Tell Us about How and When This Crisis Will End. 2023.
Thomas Piketty, Capital in the Twenty-First Century. 2013
Thomas Piketty. Basic income, a job guarantee, and inheritance for all must all be implemented. 2021.
Peter Turchin. End Times: Elites, Counter-Elites, and the Path of Political Disintegration. 2023.
Fareed Zakaria. Age of Revolutions: Progress and Backlash from 1600 to the Present. 2024
Fareed Zakaria. Ten Lessons for a Post-Pandemic World. 2020.
Peter Zeihan. The Accidental Superpower. 2023.
DH Marks. Should ALL Medical Doctors Be Required to Accept Medicare and Medicaid $$$ as a Condition of Licensure? Can the Gods be humble and care for their lowly helpless subjects? 2024.
Therapy chatbots vs living breathing human therapists. Alternative Options for hard-to-get Mental Health Support. by DH Marks, 2024.
The End of Reality, by Jeffrey Talpin. 2024. My review of this thought-provoking and brutality honest analysis of the goals and approaches of Mark Zuckerberg, Peter Theil, Mark Andersen, Elon Musk
World Bank. Exploring Universal Basic Income : A Guide to Navigating Concepts, Evidence,
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