Miles Franklin sponsored this article by Gary Christenson. The opinions expressed are his.
Several countries and cities studied and tested a universal basic income (UBI). At first glance it looks like giveaway nonsense:
- Who pays for the giveaways?
- Does the UBI discourage work and self-improvement?
- How much price inflation does it create?
- How much additional unpayable debt will be created by the UBI?
- The UBI should be how large? If $1,000 per month per person is good, is $10,000 per month better? Which bureaucrat defines the size of the benefit?
- Does it apply to everyone? Adults only? Means tested? Only those who voted and paid taxes? Only those in good standing with the “thought police?”
However, intelligent people have advocated a UBI to minimize wealth inequality, technological unemployment and social unrest. “Let the rich pay so I don’t need to work,” is compelling political nonsense. Perhaps the political and financial elite will legislate a UBI for the lower strata of society to discourage rebellion and social unrest.
The idea ought to fail…
BUT WAIT! THERE’S MORE!
Most western welfare states implemented programs similar to a UBI years ago. Consider:
The U. S. Military—a hidden UBI:
The U.S. military spends $800 billion, perhaps $1 trillion per year, defending the country from less than obvious dangers. Recipients of that $800 – $1,000 billion per year influence politicians at the local, city, state and national level. The military budget is untouchable and will persist even though some argue 25% would adequately defend the country.
This massive funding acts like a UBI for the military-industrial-security complex of companies embedded into American society. They will collect ever-increasing budget dollars.
Military expenditures of nearly one trillion dollars are impossible to imagine. The following graphic shows a trillion dollar stack of one hundred dollar bills. That $1 trillion costs about $10,000 per American worker per year. The total national debt is 21 times larger. Unfunded liabilities are 100 to 200 times larger. Hmmmmmmm!
Medicare, Big Pharma, Social Security, Health Department and others – another UBI:
The Human Resources section of the U.S. government budget for 2018 is about $2.9 trillion. How many millions of individuals, doctors, hospitals, clinics and pharmaceutical companies depend upon this portion of the budget for their jobs and wealth creation? Expenditures will increase.
SNAP – The Food Stamps Program:
This program costs around $70 billion per year. It looks like a UBI based on EBT cards for food items instead of cash giveaways.
Student Loans – A UBI for Academia:
The U.S. government guarantees student loans, which enable colleges and universities to increase tuition costs. Those loans experience a large delinquent and default rate. However they assure huge revenues to colleges, universities and their professors.
Honorable Mention UBIs:
The “beltway bandits” (consultants) working for D.C. politicians;
A host of “think tanks” that influence foreign policy and military adventures;
Section 8 housing;
Free cell phones, Child Care Fund, WIC, School Lunch Program;
Many others.
SO WHAT?
- A UBI for individuals may be no more nonsensical than a UBI for the military-industrial-security complex, “Big Pharma” or food stamp recipients.
- A UBI may become necessary to quell social unrest regarding wealth inequality. Payoffs to the poor are as effective as payoffs to military contractors.
- Congress and the administration must determine the recipients and the size of their payoffs. The crucial question is always, “Who Pays?”
THE ANSWER TO WHO PAYS IS USUALLY:
- The taxpayer pays, but politicians spend more than they collect in taxes.
- They borrow the deficit which boosts debt, currency in circulation and price inflation.
- Savers who saved dollars but get repaid with quarters—when measured in purchasing power.
- Workers in the bottom 90%, because their expenses rise faster than their wages.
WHO DOES NOT PAY?
- The political and financial elite. They make the rules and write the loopholes. They benefit from the inevitable inflation.
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- The Federal Reserve and their army of employees.
- Congress, Wall Street, “beltway bandits,” military contractors, pharmaceutical CEOs, big banks, and more.
From Charles Hugh Smith: “Here’s Why Rip-Roaring Inflation Is Inevitable”
“To quell the revolt of the many, the Powers That Be will create trillions in new money and helicopter-drop it to the masses. This mass distribution of newly created money (borrowed into existence by the central bank and/or government) will flow into the real-world economy, not assets [stocks and bonds], and so the inflation (higher prices for the same item) will manifest in goods and services.
This helicopter drop of newly created money will be called pensions, Universal Basic Income, tax subsidies, negative tax rates, etc.”
SUMMARY:
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- A UBI for the masses may become a reality. It will be costly. Bailing out the big banks in 2008 was also costly. The military-industrial-security complex, “big pharma” and other programs are costly.
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- We already fund an equivalent of UBI for the military contractors, Big Pharma, Academia, food stamps and others.
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- We will pay for current and future UBIs with consumer price inflation, devalued dollars, and diminished purchasing power of savings. As it has been since 1913, is now, and ever shall be…
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- The banking cartel has devalued dollars for over a century. Stocks and commodity prices rise, but prices rise faster than wages for workers. Gold and silver prices rise as dollars devalue.
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- The debt, deficit, UBI for everyone game will continue. Got gold?
Miles Franklin will convert dollars recycled from over-valued stock markets into real money—gold and silver bullion and coins. Russia dumped most of their Treasury bonds and Notes in the past. They bought gold every month for years. Individuals should buy gold as well.
Gary Christenson
