This was an interesting watch. The concept of a universal basic income is one that is very intriguing and has many potential benefits to society. As is repeated multiple times throughout the lecture, the success of such a policy depends heavily on the means by which it is enacted. If it is enacted as a congressional act at the mercy of the politicians’ desire to change it year by year, then it would be very difficult for it to be successful. But if it can be instituted as an amendment to the constitution and serve as a replacement for the many forms of welfare already in place in our government, then I can see it being quite successful at solving a variety of problems in our economy and society.
Education
In relation to some of last week’s content, the topic of public education is briefly brought up. The idea proposed is that without the typical burden of taxation for public education, and a system of universal basic income that leads to privatized education, schools would be more specialized and poorly performing school systems would be weeded out. This is an idea that I highly agree with. Higher earning individuals and organizations would be more financially free under a system that takes less to support UBI than typical taxes that support other welfare programs, thus they would have excess capital to potentially spend philanthropically on private education. This would in turn benefit them by providing access to a better educated working class. The entire education system would most likely benefit from such a change, as the proposed mobilization with UBI would allow families to leave schools they are unhappy with. Schools facing competition and punishment for poor performance can only lead to an enhanced quality of education.
Hayek Question
A question asked at the end of the lecture raised the objection that under the theory of Hayek, an artificial boom period would cause a period of recession due to what the student called “malinvestments” or something similar. The student argued that individuals having money to spend that they had not earned would cause a false boom in the economy that could only be followed by a crash due to falsely inflated numbers. My response to this would be that we already clearly have a system in which citizens receive money through various programs that is not earned directly through labor. A system of UBI as described would be less drastic in the amount of wealth redistributed in my opinion, especially going off the numbers presented stating that 25 percent would be the highest rate of tax. In addition, the scenario described by the student would have a brief period of financial boom, with the key word being brief. The system of UBI does not fit their imaginary scenario. If citizens are receiving their 9,000 annual income every year, then there would be no brief period of financial boom followed by one of drought because the income being granted to each citizen would not suddenly disappear, leaving the success of businesses to plummet. The influx of income available to every citizen would be consistent across every year, so the described scenario of cyclical recession does not seem plausible. Also, it’s not like this income would be coming out of nowhere. It would be a redistribution of tax dollars from programs that already exist that would be rendered unnecessary with a UBI.
State's Cost of Living
Another point I thought was profound was the solution to the disparity between living costs of different states. As Dr. Trost simply put it, if you cannot afford to live in New York on 9,000 dollars a year, move. This is something that causes many problems today. People feel stuck in their lives earning a certain wage in higher cost of living states. However, if they were to move somewhere with a lower cost of living, they would be much better off. Sometimes they feel stuck because of a lack of mobility and consistent income. It can be tough to start all over somewhere new. However, if you were guaranteed to receive a set amount of income every year, then that would completely remove a large part of the risk of moving to a new state or area with a lower cost of living. Even if it took you a year or so to find a new job, you would be more able to sustain yourself in the meantime on your UBI in that location. I think the mobility offered by this idea alone is a strong enough reason to encourage support. A large portion of our population is stuck in poverty in urban areas with no way to escape. Universal basic income would provide a way for them to relocate and by doing so, they would redistribute population into more rural areas and help grow those economies. Such a simple concept as mobility provides the means of combatting poverty in both urban and rural areas, which is an undeniable benefit to society and our economy.
