UBI, and How It Could Work

This posting is my opinion on Universal Basic Income (hereafter referred to as UBI). The concept of UBI is that everyone deserves a certain minimum amount of money to live well enough. There are a few ways this can be done, but the most popular is that everyone gets UBI. My concept for this plan is that everyone qualifies, but is a means tested. If the person doesn’t have a certain amount of finances available to them, then they will qualify. Once they reached a certain threshold, then they won’t qualify for UBI.

The amount will depend on the program. Some concepts of UBI is that everyone gets an amount to the level of poverty. This of course will NOT eliminate other social welfare programs such as SNAP and HUD’s HCV program (Section-8). The other concept is that everyone will be guaranteed a livable income, but other social welfare programs will be eliminated. I see the second option as too taxing for the government to deploy, and may cause undue taxes on the lower income people. UBI to the poverty line, and provide for other social welfare programs will be the better solution. The UBI program will eliminate all other means tested programs such as cash welfare, and SSI.

Poverty line for 1 person in the US is $1,250. Anyone who has no other source of income will receive this amount while still qualifying for housing programs, and SNAP. Now, how does the means test work? Well, similar to the SSI program, if you have other income, then ½ of the other income is deducted from the UBI. Therefore, if you are working a part-time job, and get $600 Net per month, then $300 will be deducted from your UBI program. This means someone could make a net income of $2,500 per month before they no longer qualify for the UBI program. While $2,500 is not a lot of money, it does push the person out of poverty. If they qualify for other programs like SNAP or subsidized housing, then they should be able to apply for that. This is one reason why I feel other social welfare programs should remain in place with UBI replacing means tested programs.

However, as with all means tested programs now, there are asset limits. I do not feel this is the just thing to do. You basically are punishing a person for wise financial decision making. For example, if I needed to replace my MacBook Air, it will cost me $1,500. However, including my income, I am not allowed more than $2,000 in assets. This means I will have to use credit cards to pay for the computer. $1,500 is not a lot of money at all, and with wise financial budgeting, someone with the right resources can save for this amount of money. It might take several months, but it is possible. However, including my income, I cannot have assets of more than $1,000. This means I could deplete all of my savings, and will still need to put $500+ on a credit card. How does that benefit the person living in poverty? And what happens if they don’t qualify for a credit card? Would this mean that the person will have to hide money so they can buy a basic notebook PC? If so, they are committing fraud. It’s not just PCs, but anything that would cost more than $1,000.

So to recap, UBI should push the person to the poverty line. Additional net income will deduct ½ from the UBI benefit. There will be no other means tested programs, and other social welfare programs will remain in place. There will be no asset limits even if you are under a social welfare program.

So why UBI? Why not just keep doing what is being done? Well, the reason is simple. Everything is broken. Social Security will not survive in the near future. This will push millions of people into abject poverty. Simply put, if there is no other program to replace Social Security, then millions of seniors and disabled people will have to rely on the state welfare program. When I had welfare last time, it was $205/month. This was back in 1991, but let’s say welfare tripled. That is still $615, and while my rent would only be about $200 a month, this leaves me with $400 to cover for all of my other expenses. This is NOT sustainable. That is plain and simple. UBI will replace Social Security and cash assistance from Welfare. This will streamline benefits, and reduce paperwork. This will also provide income for everyone that needs it. This means fewer homeless people as they will be able to apply for subsidized housing programs. Simply put, UBI is a benefit not only for the people receiving it, but also the tax payers that would be paying for the program.

This will NOT encourage laziness. I don’t think anyone is going to say, I would rather sit on the couch watching TV all day and live at poverty if they could earn more than poverty. If there are, this will be a significant minority, and not the norm.

So, how would this work for me? Well, first I will receive $1,250 in UBI. SSI and cash welfare services will no longer be available. Since I can not work, UBI will be my only income. There will be no asset limit on me, and this would mean I could properly save for a significant purchase such as a new PC, or a new phone. I will still receive Medicaid, SNAP, and housing assistance since even at $1,250 – I can still no longer afford my apartment that is marketed at $1,600 for rent. While I wouldn’t mind that my SNAP is made into cash and added to my UBI, I know this is not realistic.

I am sure there would be people that would disagree with me. But I am a big proponent of UBI as described here. My income will not increase by much, but I will no longer have asset limits, and will still be able to keep the programs that I would need to make ends meet. Even if I was a billionaire, I will still feel that UBI is the better solution.

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