Thoughts and frequently asked questions for Freedom Dividend (FD, i.e. UBI)
I. UBI/FD FAQs
- Today we give out $1000 a month, tomorrow they will ask $2000 a month. Will this snowball?
a. UBI monthly amount is designed to be slightly less than the poverty level. It will not be changed casually.
2. This is socialism.
a. UBI concept can be found in the theories of conservative economists such as Milton Friedman. Under Republican President Nixon, a UBI proposal almost got passed in congress (it failed because the Democrats were demanding higher UBI). In the Repulican leaning state of Alaska, there was a UBI for 30 years. It was very popular. It is the savior of capitalism.
3. UBI will disincentivize work. People will use the money to buy drugs.
a. People can not live on $1000 a month alone. UBI can be regarded as a seed money for people to ease some financial pressure and to have better focus on work. People resort to drugs because they lose goals for live. With hope, most will not touch drugs. UBI gives people hope. UBI experiments in some cities have proven it is a source of positive change in people’s lives.
4. VAT will make high tech companies less competitive.
a. There is room to tax high tech companies and other companies without making them uncompetitive. Oil was the “high tech” for last centuries. Now VAT is used in more than 150 countries. AY is planning to impose VAT at half of the European level. Tech visionaries, such as Elon Musk, endorsed AY for president.
5. The previous industrial revolutions were net job creators. The fourth industrial revolution will be the same. Robots replacing people is fear mongering.
a. In each industrial revolution, different industries were impacted at different degrees. The previous industrial revolutions mostly increased productivity of physical labor. Some industrial revolution reduced income discrepancies. But the current industrial revolution increases the productivity of white collar jobs. It is making a lot of jobs, including white collar jobs obsolete, thus making the gaps between the haves and have-nots wider. In fact, all industrial revolutions caused dramatic changes in labor structure (eg from 70% agricultural employment to 2% agricultural employment). Millions lost livelihood, and had to relocate. In the modern, more humane society, government needs to find ways to mitigate the brutal impacts of ever faster technology advancement.
6. UBI will be used on illegal immigrants, refugees. Can America afford it?
a. Only American citizens over 18 years of age are eligible.
7. UBI is bribe to voters
a. From Thomas Paine to MLK, UBI has been proposed before. It is gaining traction now because it is high time for it to solve fundamental social and economic problems of our time.
8. Even if AY gets elected, congress won’t pass UBI.
a. Obamacare, Trump wall were not possible before their namesakes became president. Obamacare became law and Trump wall is being built. If AY gets elected, it will be a big breakthrough. The UBI breakthrough will then be possible too.
9. AY is not a successful entrepreneur. His company was very small.
a. AY won presidential award, was invited by Obama to WH. His success was made into a documentary which gained Oscar nomination.
10. UBI is too premature. AY is too young.
a. If AY wins, he will be older than Teddy Roosevelt and JFK, will be similar to Obama and Clinton when they got elected. We are right in the midst of the 4th industrial revolution. The tide of time does not wait.
II. Had some discussions with friends for FD, I want to share my thoughts in here.
FD is a policy to eliminate mass poverty and improve social safety net, while not discouraging the initiatives of the people. Compared to the medley of welfare programs, FD will allow the beneficiaries to spend the money where they need, such as food, tuition, medicare, starting up businesses. It will beat all welfare programs, in effectiveness and in execution cost. Since every adult citizen is a beneficiary, he or she will not carry the stigma that comes with a traditional welfare program. This will also reduce the friction between ethnic groups since every group is treated equally by FD.
As the pace of life accelerates, people will change jobs more often. FD provides an “insurance” for people between jobs, a “start-up investment” for people wanting to start their own business. This will reduce stress, improve mental health, and stimulate entrepreneurship.
There has not been a large scale experiment of FD in the US. Some local and small-scale experiments yielded mixed results. As AY and his FD get more traction, there is higher possibility of its implementation. Looking back in history, many great programs started as new ideas. FDR’s New Deal was very bold and controversial. Eisenhower pushed for Interstate Highway system at the time when ownership of cars was still low. JFK’s moon-landing program cost 5% of GDP, but triggered the growth of NASA and the development of. numerous technologies such as the Internet. Bold, successful programs may not need proven pilot. In a democracy like the US, a bad program will be stopped.
In 2020, the economy will still be the number one issue in voter’s mind. Only candidates with economy as his/her priority, have a chance to win.
