Political Explanation: Universal Basic Income (UBI) vs Means-tested Welfare Programs
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The basics of a Universal Basic Income (UBI) is that a certain amount of money per month (A prominent baseline is $1000) is transferred to the bank accounts of each legal and registered American Citizen no matter race, gender, financial stability, etc.
☆||Pros of a UBI + Cons of a UBI
Pros:
-According to the Wharton Public Policy Initiative, a Universal Basic Income, quote: “Will not leave the risk of certain needy people ‘falling through the cracks’ due to eligibility rules.” This is why Martin Luther King, Jr. said that a universal income would help to abolish poverty and reduce income inequality. (thebalance.com)
-The Overseas Development Institute recently released the largest analysis of cash transfer programs ever, spanning 15 years and 165 studies. The main takeaway is that studies show a consistent reduction in poverty measures, making UBIs not only a simpler program that would not miss millions of Americans, but a reduction in poverty also.
-Studies show a number of additional benefits of a UBI:
-UBI increases entrepreneurship because it provides for basic needs in the early days of a company. It also gives you more consumers to sell to because everyone has more disposable income.
-The Roosevelt Institute found that a UBI would create 4.6 million jobs and grow the economy by 12 percent continuously.
-UBI improves the mental health of recipients as it reduces scarcity, poverty, and financial insecurity, which are major sources of stress for citizens.
-UBI improves physical health as people are less prone to stress, disease, and self-destructive behavior with an experiment in Canada seeing hospitalization rates go down by 8.5 percent.
-UBI increases art production, nonprofit work and caring for loved ones because it provides a supplementary income for those interested in labor that doesn’t earn much salary.
-For example, according to Wharton Public Policy Initiative, people in Finland who received a basic income, quote: “experienced significantly fewer problems related to health, stress, and ability to concentrate,” and they were “considerably more confident in their own future and their ability to influence societal issues.”
-The efficiency argument on behalf of cash grants is straightforward: unlike in-kind benefits, people can use cash on whatever they need the most. If what they need is food, they can use the cash they’re given on groceries—and they’re no worse off than if they had received food stamps. But if what they need is something else—to pay their rent, or an overdue utility bill, or maybe even to save a little for the future—then cash is much better.
-This isn’t just theory. There is a growing body of empirical evidence showing that the poor use the freedom cash provides to make real improvements in their lives. From the Bolsa Familia program in Brazil, to cash grants in Uganda and Mexico, we’ve seen that poor people who are given cash grants typically use the money responsibly: purchasing basic necessities and trying to generate sustainable streams of revenue.
-Paternalism isn’t just ineffective; it’s insulting. It presumes that the poor are incapable of managing their own lives. And it requires a great deal of invasive and degrading snooping on the government’s part to ensure that the poor are living up to the demands we’ve placed on them. Cash transfers, in contrast, give recipients the resources and responsibility to take charge of their own lives.
Cons:
-To date, a nation has never replaced welfare programs with a UBI, so any examples given by my opponent of a UBI working is not relevant to this resolution.
-In fact, the University of Chicago asked a panel of the leading economists in the country if a UBI should replace all welfare programs, and only 2% said “yes.”
-Even those who claim to support or experiment with a UBI do not believe in replacing all means-tested welfare programs. For example, Andrew Yang, who ran a presidential campaign on the need for a UBI, believes that individuals should be given a choice between receiving the “UBI” or welfare assistance. (Yang2020.com)
-Michael Tubbs, the mayor of Stockton, California, who is piloting a basic income experiment, told Business Insider that he would, quote, "oppose any policy that will get rid of the existing safety net and replace it with a cash transfer."
-The Brookings Institution estimates that giving every U.S. adult $10,000 per year would cost the government roughly $2.5 trillion dollars, which is almost three-quarters of the entire federal budget.
-The cutting of welfare programs would provide less than $1 trillion to this budget, so, clearly, funding would need to come from somewhere else - likely increased taxes, as Andrew Yang suggests.
-If taxes are higher and products cost more, those depending on a UBI for basic needs like health care and food will be hurt in the long run.
-A study done by the Organisation for Economic Cooperation and Development (OECD) predicted that a true UBI would do little to help poverty, actually making it worse in most projections (source: Dylan Matthews of Vox).
☆||Pros of Welfare Programs + Cons of Welfare Programs
Pros:
-The programs which make up our means-tested welfare programs —Temporary Assistance for Needy Families (TANF), Medicaid, SNAP or "food stamps", Supplemental Security Income (SSI), Earned Income Tax Credit (EITC), and housing assistance —cater millions of needy Americans who rely on these organizations for financial stability, especially aiding in children-overrun households and the elderly.
-According to the Brookings Institution, studies show long-term positive effects on those who receive aid from these programs, including improved physical and mental health.
-Robert Greenstein of the Center for Budget and Policy Priorities (CBPP) writes that, instead, quote, “we should take advantage of the relatively low cost of expanding targeted programs – and their proven record of lifting families out of poverty.”
-According to TheBalance.com, in October 2019, Medicaid helped pay for the health care of more than 71 million low-income adults and children. This includes paying for a significant portion of U.S. births (between 30% and 50% of births in -most states).
-According to Singlecare.com, quote: “the average hospital stay in the U.S. costs $5,220 per day.”
Without Medicaid, an unexpected hospital stay would put millions of Americans into crippling medical debt, and this is not even including trips to a physician, dentist, or eye doctor.
Cons:
-According to the Cato Institute, quote: “The one thing experts from across the political spectrum agree on is that our current welfare system fails to help people escape poverty, become self‐sufficient and flourish as full participants in society.”
-In fact, the Cato Institute states that, “The current system discourages work and marriage and calls it an overly complex “nightmare of unaccountability.” The nation’s highest marginal tax rates are not on the wealthy, but on a poor person who leaves welfare for work.”
-According to a report done by Lexington Law, $77.8 billion in welfare payments were fraudulent or improperly filed in 2016.
-According to the Center on Budget and Policy Priorities (CBPP), in 2017, only 23% of families that qualified to receive aid from Temporary Assistance for Needy Families (TANF) actually did.
-UBI Expert, Scott Stantens points out that only 24% of people who qualify for housing assistance receive it, often after being on a waiting list (thecrunch.com) and in some states, only 1 to 7% of qualifying families receive aid. (thecrunch.com)
-“Millions who qualify for food assistance get none, and about one-third of those who do get food assistance still depend on food banks and only one-quarter of Americans with disabilities get any disability assistance,” (Santens - thecrunch.com)
-By making welfare recipients so financially fragile, we ensure that any little unforeseen financial setback will be very damaging. By diminishing their ability to surmount events such as a car repair or the need to buy a new home appliance, the government makes it more likely that people end up homeless, hungry, or unable to pay their regular bills on time.
-The third flaw in the government welfare system is the way that benefits phase outs as a recipient’s income increases. As a household’s income approaches the poverty line and rises above it, families on various welfare programs can actually face effective marginal tax rates of 50 or 60 percent. That means that the combination of taxes owed on new income and benefits lost because of the rising income causes the family to lose 50 to 60 percent of its initial income gain to the federal government.
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