Wednesday, April 25, 2018

Universal Basic Income, like Socialism, appears to only work until you run out of other people's money

It was the former Prime Minister of Britain who once said, 'Socialism works until you run out of other people's money'.  And ironically this appears to also be the case for the world's first Universal Basic Income experiment as the nation of Finland has decided to scrap the program just two years after implementation.

With high-profile champions such as Richard Branson, Facebook boss Mark Zuckerberg, and Tesla CEO Elon Musk, backing the idea of governments giving non-working people money (from working people) to do nothing - what could go wrong? 
Well, two years after enthusiastically beginning its experiment with a universal basic income - in which people are paid an unconditional salary by the state instead of benefits - Finland is abandoning the project as government enthusiasm wanes and additional funding requests are rejected. 
Proponents argue that: 
  • The lack of expensive means-testing leads to a higher proportion of the budget going to recipients. This would be more efficient
  • The transparency of universal payments would drastically reduce the need to detect benefits fraud
  • One scheme could replace the current complex arrangement of government benefits, rebates and tax rebates
  • Work will always benefit recipients of this welfare, rather than the ‘benefits trap’ that leaves part-time workers
Critics argue that: 
  • Universal income may be inflationary and, in attempting to move all individuals out of poverty, it may simply raise the level of the poverty line
  • It may reduce the incentive to work and studies have found some evidence to support this 
  • A reduction in taxable income would reduce the government’s ability to cover other expenses, such as healthcare -  Zerohedge

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