The cost of free money

Some politicians and activists are eager to give you “free” money.

They call it universal basic income or UBI – cash for all, no strings attached.

Comedian Dave Chappelle believes UBI would “save my community almost instantly.”

In my new video, UBI activist Conrad Shaw agrees: “You would effectively eliminate extreme poverty immediately.”

He says a UBI will help people “start businesses, repair their homes or invest in sustainable gardens”.

Well, “sustainable gardens” may be nice, but someone still has to do something. And that takes work – often difficult work.

When I was young, I wouldn’t have tried so hard to overcome my fears, my stutter, and my reluctance to speak in public if I didn’t have to work to make a living. I wouldn’t have been successful. I might have stayed in bed most of the day.

But Shaw disagrees. “I don’t believe you,” he says. “Nobody really wants that…people don’t find their passions just because they need to make money.”

We could argue about this all day. It would be nice if someone did a serious test of UBI – by giving lots of people significant money for three years, for example. Would people still work? Improve your life? The lives of their families?

It turns out that Sam Altman, the man behind ChatGPT, helped create such a test. His large study gave 1,000 low-income people $1,000 a month for three years – no strings attached. What happened?

Not the great things that were promised. After three years of receiving $1,000 per month, UBI recipients were actually slightly more in debt than before.

Why? Because they worked less. Their partners did too.

Some recipients talked about starting a business, but few actually tried it. Most who said they started a business waited until their third year of college – when their free money soon ran out.

I’m not surprised. When you give people free money, you take away their incentive to work. Incentives are important.

Shaw argues, “We are conflating the idea of ​​work with jobs.”

It’s true that people do meaningful work outside of their jobs. But if you get paid to do a job, that means you are worth that amount to someone.

“How much money are you worth to the child you are raising?” Shaw replies. “The sick parent you’re caring for?”

A lot.

“But it’s not about other people having to work to pay for it,” I say.

Shaw responds: “We pay taxes for things that are better for our people and general welfare. It’s…something we do as a country.”

“But that would pretty much double it!” I point out. “We already spend almost $2 trillion on social programs. Would you like to add anything?”

Shaw says no, universal basic income should “replace existing welfare programs.”

That’s an interesting idea.

“If we got rid of unemployment insurance, food stamps, welfare and all the other crazy policies we have and just had a moderate universal basic income,” says Harvard economist Jeffrey Miron, “I think that would be a huge improvement.” .”

But that will never happen. Whenever someone tries to cut any Government program, people are freaking out. Imagine trying to cut all Welfare.

“The political chances of that happening are probably zero,” says Miron.

Progressives want to add UBI to existing programs.

“Adding more programs is crazy,” Miron says. “It will melt the whole country. The people who will bear the brunt of this will be people who are poor. The rich will move to other countries… hide their wealth. We will have a debt crisis like no one has ever seen before.”

We already have a debt crisis like no one has ever seen before!

Let’s not make things worse with a universal basic income.

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