Why Universal Basic Income Is Great For The Economy Actually

Sarah Moran joins the program to discuss the benefits of UBI. Universal basic income (UBI) is a cash payment made by the government to all citizens, regardless of income or employment status. One of the key arguments in favor of UBI is that it has a multiplier effect on local economies. When people receive a UBI payment, they are more likely to spend it on goods and services, which in turn boosts demand for those goods and services and leads to increased economic activity. This increased demand can lead to increased production, hiring, and ultimately, economic growth. Additionally, UBI can reduce poverty and income inequality, which can also have positive effects on local economies.

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So yeah I think we've we've worked across different contexts and what we've seen universally regardless of whether you're working in a high-income country or a low-income country. is that people spend the money on first meeting their basic needs. you know in the US that's paying their bills. That's buying groceries. That's paying for child care. and internationally it's you know it's also investing in productive assets. you know rebuilding their houses. buying cows. getting better stock for the stores that they run. and so you know what we've seen across all of our programs is the direct impact on the people receiving the funds. but we've also seen spillover impact in the communities where we're working. and so you know one of the things that are really exciting about our work is one of our studies showed that there was a multiplier effect that actually injecting cash into a community had, you know, a 2.6 x multiplier effect on the kind of income of that community. and I think that's also where you know again we want to continue to make the argument that cash is not only the most direct way to support individuals but that there can be Community impact as well. will you just expand a little bit on that multiplier effect? like I'm not sure that everybody is aware of what that means. and I mean we hear it in the context of a lot of different unemployment insurance or something to that effect. but will you just like to walk us through what that means? and is it different in or have you been able to study because I? My intuition is that the implications of this money in an extreme poverty situation in let's say Kenya is different than it is in maybe you know a town in West Virginia. Will you walk us through those two things? definitely so for the spillover effect first I think the bottom line is if you give one person one dollar the basic idea is giving one person one dollar creates two dollars and sixty cents a contribution to the local economy.

[corringhamdepot]

Yah! I learnt about the multiplier effect in my first basic economics course at 18 years of age decades ago. Basic economics should be taught in every school. Maybe then the "trickle down" theory will be recognised for the BS it is. If you give extra money to rich people they will just save it. If you give it to low income people they will spend it, and it becomes the next person's income. So it will be spent over and over again multiple times, before it hits the person rich enough not to spend it, and they will just save it.

[imnotmike]

This is an economic principle known as the velocity of money. You can look it up under that term.

If I have a dollar, I go out and spend that dollar. Then somebody else has that dollar that they got from me, so they go and spend that dollar. Then the person who received that dollar goes out and spends that dollar, etc. So by putting 1 dollar into the economy, you're actually impacting the economy far more than 1 dollar. That dollar gets spent multiple times. Given enough time, 1 dollar will be spent an infinite number of times. The cycle eventually stops because rich people don't need to spend all their money, so eventually that dollar will end up in the pocket of a rich person who will tuck it away and remove it from the economy. The velocity of money refers to the number of times a dollar gets spent over a specific time interval before it is taken out of circulation in the economy, or the time interval expires, and the overall financial gain to the economy by adding 1 dollar to the economy, which is always greater than 1 dollar.

[gracewhite]

I’ve started to think of UBI in terms of going back to the values of our Hunter-gatherer ancestors while keeping the benefits of our large, complex society.

Before civilization, you would provide for the people in your group. That was a given, if one person goes hungry we all go hungry. With exceptions of course, but very common attitude among indigenous people.

With Markets and Capitalism, many of us have lost this basic moral sentiment and don’t bat an eye when we see people without homes or starving even just down the block.

It may not be feasible to just distribute food and water directly to everyone in a multimillion person country, but you can guarantee a base amount of money enough to meet a person’s basic needs.

There are other components to this like universal healthcare and public utilities, but I can’t see a society where we guarantee everyone a living in which a UBI is not a part of it.

[LordChevonlier]

If you give average people money to spend they boost the economy. Who would've thought.

[summondadrummin]

People generally do not know or even think about how the money supply is sourced. 97% is created as interest bearing debts owed to private Banks. These loans are what the money supply is primarily composed of, a Universal Basic Income provides another much more democratic way to source the public's money supply. Its comparable to watering a whole field rather then just part of it.

[russrollins]

An extra $1, 000 a month would almost double my income. The impact on my quality of life would be significant.

[TLombardo]

Weird, if you give people disposable income, they dispose of it and the economy improves.

[bmmeier]

I like the idea of UBI, but I agree with everyone saying that without price controls it will just inflate prices of housing, cars, food etc.

[summondadrummin]

Universal Basic Income is a good opportunity for people to reflect on the monetary system in general.

[NumeroSystem]

Capitalists are against UBI because it relieves economic pressure experienced by the poor. Capitalists want the poor to feel economic pressure because the more desperate poor people are the more easily and cheaply they can be coerced into serving the interests of the rich. So, that's the basic argument. The capitalists want to keep poor people poor. The progressives don't want anyone to be poor. Whose team are you on? I'm on team Progressive.

[ZangariRC]

a ubi is the only humane solution, it must become a prerequisite of capitalism.

[timgwallis]

THANK YOU for keeping the conversation on this going. UBI is SO important, but the Right is vilifying it under the guise of inflation, when really the war in Ukraine precipitated the inflation. The Left needs to full-throatedly and consistently push UBI

[dannywindham]

Here's another problem with Ubi if price controls aren't implemented the corporations will suck up every dime of it through price gouging like they're doing now

[machestro]

05:40 - eyyyy Sam's restating the Sam Vimes 'Boots' theory of socioeconomic unfairness.

[achaes]

Gotta fix it top down... companies will just raise prices based on the disposable income.
We need to tie ceo pay to base employee pay. No more stock options. Also tie production cost to a maximum per unit profit. Hard to do but this needs to be done.

[spiders]

If we just pay everyone $100 / hour, we would all be rich, right? No?

[donovanc]

Didn't this channel used to shit on UBI? I seem to remember them mocking Andrew Yang for pushing it as a policy platform, maybe I'm wrong but that always kind of annoyed me.

[johnnesmith]

It pretty inevitable over time, we may need to put in a ubi or something. The economy is going through some changing. How fast or slow the changes is. I don't know. This will effect millions of people in that change. The change will have a very large impact for years to come.

[LinkRocks]

UBI is the most effective way to lower or even eliminate poverty.

[wiyxgyo]

The economic argument for low taxes is that the government will spend money on things that people predominantly don’t want or on things which create unsustainable demand for goods and services produced by producers with capital requirements that cannot be converted efficiently into other productive activities. Direct income redistribution, like guaranteed income. if it is efficient in terms of not requiring a lot of governmental investment in capital really does not create a malinvestment problem in terms of either mslinvested capital because the program is not sustainable or not continued sustainability, or because money is spent on things the public predominantly dues not want. There could be a point at which it is too much because the investment in desired/needed productive capital objectively is too low relative to available consumption spending, but a) nobody seems to take any serious effort to manage that in a centralized manner, and b) guaranteed income or other redistributed income recipients are not guaranteed not to be savers or investors (or to not borrow less relative to) of their own overall marginal income.