Building on Part 2 of my ideas for America's Guaranteed Universal Basic Income, one popular question would undoubtedly be, "How could America possibly afford GUBI, at least as you describe it?"
Quite easily, actually. America is a wealthy country, and GUBI would make America wealthier and happier.
First keep in mind that government at all levels spends an enormous amount of money on programs and tax breaks that would be entirely or mostly eliminated with GUBI. I mentioned several previously, but there are others: Medicare and Medicaid (replaced with universal $10/visit and $10/drug basic healthcare at public and some contracted facilities), student loans ($5000/year public universities and technical colleges would replace those), Pell Grants, farm subsidies and price supports, trade adjustment benefits, Railroad Retirement benefits, and school lunch programs, among others. The government twists itself it knots trying to "target" assistance so much that the end result is an expensive mess that grifters and rentiers exploit. Social Security is America's most popular, most effective, and comparatively simplest program, and it should be enhanced and expanded with GUBI, particularly now in these distressing economic conditions. GUBI would also help many more Americans take entrepreneurial risks, leaving jobs they hate (or that left them), retraining, relocating (even overseas), and so on.
But let's take a look at the basic numbers. The annual GDP for the U.S. is about $16 trillion. Ignoring GUBI's GDP-boosting benefits -- and that's a big omission! -- let's assume 300 million Americans receiving an average of $11,500 in GUBI. (Both numbers are probably too large due to children, noncitizens, idle rich with no W-2s to qualify, and overseas/expatriating Americans, but this is a basic calculation.) That's $3.45 trillion, and that's about 21.6% of GDP. Let's round up to 22%. That's a big hunk of GDP, sure. However, current total government spending at all levels in the U.S. is about 37%, so GUBI would leave about 15% of GDP for public education, healthcare, military, public transportation, and other remaining government functions. That's enough, actually, particularly with the GUBI-associated healthcare changes I've included which would dramatically improve the cost efficiency of healthcare. And much of the military's budget is payroll which would drop quite a lot since servicemen/women would receive GUBI just like everyone else, and therefore the market-clearing price for volunteer soldiers should also fall. ("It depends," but that's a likely result. The military budget is far too large anyway.) The same is true for public education and healthcare which are labor-intensive, although the impacts should be modeled to quantify them. Crime- and prison-related expenses would also likely fall significantly with the elimination of poverty and the expansion of higher educational opportunities, and the victims of remaining crime would get more help.
On the revenue side, it works. The income threshold for the 50% marginal tax rate could be set low enough to fund at least GUBI, but that math works, particularly given the big drops in household medical and higher education outlays. A simple corporate income tax with loopholes eliminated, the estate tax, and a carbon tax would likely take care of the rest. Transition costs would likely be funded with debt (at record low bond interest rates).
In short, GUBI is very doable within generally accepted ideas of government and its role (and size) within the overall economy.
Quite easily, actually. America is a wealthy country, and GUBI would make America wealthier and happier.
First keep in mind that government at all levels spends an enormous amount of money on programs and tax breaks that would be entirely or mostly eliminated with GUBI. I mentioned several previously, but there are others: Medicare and Medicaid (replaced with universal $10/visit and $10/drug basic healthcare at public and some contracted facilities), student loans ($5000/year public universities and technical colleges would replace those), Pell Grants, farm subsidies and price supports, trade adjustment benefits, Railroad Retirement benefits, and school lunch programs, among others. The government twists itself it knots trying to "target" assistance so much that the end result is an expensive mess that grifters and rentiers exploit. Social Security is America's most popular, most effective, and comparatively simplest program, and it should be enhanced and expanded with GUBI, particularly now in these distressing economic conditions. GUBI would also help many more Americans take entrepreneurial risks, leaving jobs they hate (or that left them), retraining, relocating (even overseas), and so on.
But let's take a look at the basic numbers. The annual GDP for the U.S. is about $16 trillion. Ignoring GUBI's GDP-boosting benefits -- and that's a big omission! -- let's assume 300 million Americans receiving an average of $11,500 in GUBI. (Both numbers are probably too large due to children, noncitizens, idle rich with no W-2s to qualify, and overseas/expatriating Americans, but this is a basic calculation.) That's $3.45 trillion, and that's about 21.6% of GDP. Let's round up to 22%. That's a big hunk of GDP, sure. However, current total government spending at all levels in the U.S. is about 37%, so GUBI would leave about 15% of GDP for public education, healthcare, military, public transportation, and other remaining government functions. That's enough, actually, particularly with the GUBI-associated healthcare changes I've included which would dramatically improve the cost efficiency of healthcare. And much of the military's budget is payroll which would drop quite a lot since servicemen/women would receive GUBI just like everyone else, and therefore the market-clearing price for volunteer soldiers should also fall. ("It depends," but that's a likely result. The military budget is far too large anyway.) The same is true for public education and healthcare which are labor-intensive, although the impacts should be modeled to quantify them. Crime- and prison-related expenses would also likely fall significantly with the elimination of poverty and the expansion of higher educational opportunities, and the victims of remaining crime would get more help.
On the revenue side, it works. The income threshold for the 50% marginal tax rate could be set low enough to fund at least GUBI, but that math works, particularly given the big drops in household medical and higher education outlays. A simple corporate income tax with loopholes eliminated, the estate tax, and a carbon tax would likely take care of the rest. Transition costs would likely be funded with debt (at record low bond interest rates).
In short, GUBI is very doable within generally accepted ideas of government and its role (and size) within the overall economy.
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