Monthly Archives: May 2020

Basic Income, often refered to as Universal Basic Income or a Basic Income Guarantee is a system in which all of the citizens of a country get a certain amount of income from the government -- unconditionally. This income would be received regardless of other income from work or any other limitations.

Basic Income would, in theory, allow for the removal of many other government support programs which would no longer be necessary. It would also give citizens the ability to survive without work. In turn, those who do continue to seek employment would earn a living at a standard above the minimum.

This system is a more efficient option than having a variety of cluttered, complicated, and bloated welfare and assistance programs. The goal would be to spend a similar amount of money in total, but with a far more efficient result. The amount given each individual would need to be enough for a single person to survive. Consequently, this would result in a lower homeless rate, and less people without enough money to eat or pay rent. At the same time, it allows those who can and do work to have free income to spend on things that aren't bare necessities, fueling the economy.

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What is Basic Income? | Guaranteed Universal Basic Income

Last Updated on August 20, 2019

UBI, or Universal Basic Income, is also generally linked to BIG Basic Income Guarantee. Both terms are defining and describing the same thing a monthly stipend paid by the government unilaterally across the board to all citizens. Most people and even influencers like Forbes.com acknowledge that the future of banking and financial services is digital, so rolling out monthly stipends is not impossible or even challenging.

The City of Stockton, CA recently released some data on its pilot program using Universal Basic Income on 500 randomly selected participants. There were improvements reported primarily related to health and stress levels.

We can debate the true intent or motivation for such a program, but its existence and format is not rocket science. Everyone gets a monthly check. Zerohedge.com recently publish an analysis of some of the challenges related to UBI and BIG and whether handing out money solves anything effectively.

Lots of questions surround such a program the least of which is certainly not inflation and hyperinflation. Where will all this new money come from? How much is money worth of it can be printed from nothing and handed out for free? Maybe its time to further consider Bitcoin and services such as Lolli to store and preserve personal wealth.

This idea of UBI is not crazy either. In fact, its already in motion in 2019 right in California in addition to various places in Europe.

Furthermore, even social media giants such as Facebook are now rolling out their own digital coin. Perhaps the Facebook Libra is the UI (User Interface) for Universal Basic Income and Basic Income Guarantee.

Warning: if you read and truly absorb how do banks create money, then you might be demanding more than just UBI.

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Basic Income Guarantee | Universal | UBI

While countries in east Asia and Europe are gradually taking steps towards reopening their economies, many in the global south are wondering whether the worst of the pandemic is yet to come. As economists who work on poverty alleviation in developing countries, we are often asked what the effects of coronavirus will be in south Asia and Africa. The truth is, we dont know. Without extensive testing to map the number of cases, its impossible to tell how far the virus has already spread. We dont yet have enough information about how Covid-19 behaves under different conditions such as sunlight, heat and humidity. Developing countries more youthful populations may spare them the worst of the pandemic, but health systems in the global south are poorly equipped to deal with an outbreak, and poverty is linked to co-morbidities that put people at a higher risk of serious illness.

Without the information widespread testing provides, many poorer countries have taken an extremely cautious approach. India imposed a total lockdown on 24 March, by which time the country had about 500 confirmed cases. Countries such as Rwanda, South Africa and Nigeria enforced lockdowns in late March, long before the virus was expected to peak. But these lockdown measures cant last forever. Poorer countries could have used the quarantine to buy time, gather information about how the disease behaves and develop a testing and tracing strategy. Unfortunately, not much of this has happened. And, far from coming to their aid, rich countries have outrun poorer nations in the race for PPE, oxygen and ventilators.

In many places, the human toll of the lockdown is already becoming obvious. Children go without vaccinations and crops are not harvested. As construction projects stall and markets are shuttered, jobs and incomes evaporate. The effects of prolonged quarantine on developing nations could be as harmful as the virus itself. Before Covid-19 rippled across the world, 15,000 children under five died every day in the global south, mostly of preventable diseases associated with poverty. Its likely that many more will die if their families are plunged further into poverty.

What can poor countries do in the face of this pandemic and how can rich countries help them? First, the systematic testing strategies that have been crucial to containing the epidemic and easing lockdown measures in Europe are equally critical in poor countries. In places where public health authorities dont have information about the spread of the virus and resources are limited, the response to coronavirus needs to be targeted at active hotspots. In this way, rather than imposing a universal lockdown, health authorities can identify the clusters where quarantine measures are required.

Second, developing countries must be able to improve the ability of their health systems to cope with a potential sudden influx of sick people.

And third, its crucial that poor countries are able to guarantee people a secure livelihood in the months to come. In the absence of such a guarantee, people will grow tired of quarantine measures and lockdowns will be increasingly difficult to enforce. To protect their economies from a collapse in demand, governments must reassure people that financial support will be available for as long as its needed.

In our recent book, written before coronavirus struck but with a title that is now eerily appropriate Good Economics for Hard Times we recommend that poor countries implement what we call a universal ultra basic income (UUBI), a regular cash transfer that amounts to enough for basic survival. The virtues of a UUBI are its simplicity, transparency, and its assurance that nobody will starve. It avoids the problems of many welfare systems that are designed to exclude the non-deserving, even at a cost to the needy. During a pandemic, when governments need to help as many people as quickly as possible, the simplicity of a UUBI could be lifesaving. Reassuring people that nobody will be excluded from subsistence aid also limits the feeling of existential foreboding that so many individuals in poor (and not so poor) countries are currently experiencing.

These ideas arent mere fantasy. The small west African country of Togo, with its eight million inhabitants and its GDP (purchasing power parity) per capita of $1,538, is working on all these fronts. In addition to testing 7,900 suspected cases, the country is deploying 5,000 test on a random basis to assess prevalence. Health authorities will use the results to determine when and where to restrict peoples mobility. The government has also launched a cash transfer scheme linking an electronic wallet to peoples cellphones; it already has 1.3 million people registered and has sent money to 500,000 in the region of Greater Lom (the capital) alone.

The good news is that many countries, particularly those in Africa, already have the infrastructure to rapidly transfer money across a population using cellphones. Many people already use these systems in private exchanges, so government schemes based on this infrastructure can be up and running in a matter of days. If phone data indicates that some regions are experiencing greater economic distress, the transfer could be more generous in those places.

In fact, the greatest constraint we face isnt the feasibility of these measures its the willpower to finance them. Developing countries will need a substantial amount of help from richer nations if they are to pay for a UUBI. Some fear that their currencies will depreciate if they act aggressively, potentially spurring a debt crisis. Richer nations will need to work with global financial institutions to offer debt relief and additional resources to developing nations. Many developing countries will need to buy food and medical supplies with hard currency, which will become increasingly difficult because of faltering export earnings and collapsing remittances.

Given the unprecedented collapse in earnings that many people face, conventional fiscal prudence is perhaps less important now than it was in the recent past. Now is the time for governments to help citizens and economies by spending more, rather than less. The governments of developing countries may need to accept large budget deficits in order to finance a UUBI, at least in the short term. When countries begin to loosen their lockdowns and resume production, they will face extremely weak demand. Pledging that cash transfers will continue for some time in the future will allow people to go out and spend money when it becomes safe to do so. In turn, this will drive the revival of the economy.

None of this means that governments should simply ignore concerns about macro-economic stability. But a clear spending plan that responds to the immediate shock of coronavirus, in conjunction with a longer term strategy for how the lockdown will end, offers the best hope for preventing the present crisis developing into a future catastrophe.

Esther Duflo and Abhijit Banerjee won the 2019 Nobel prize in economics for their work on poverty alleviation. They are the authors of Good Economics for Hard Times

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Coronavirus is a crisis for the developing world, but here's why it needn't be a catastrophe - The Guardian

A growing number of representatives in the U.S. Congress are calling for a monthly stimulus check sent to Americans for the duration of the coronavirus pandemic. On Tuesday, it received the added support of former presidential candidate Andrew Yang. Yang is no stranger to the idea, having run his campaign around the promise of Universal Basic Income (UBI) to combat the growing threat automation poses to the job market.

Congress is beginning to seriously consider a measure to approve monthly coronavirus relief payments for at least six months. A fledgling bill called the Emergency Money for the People Act would guarantee $2,000 per month for most taxpayers, ensuring that Americans could safely practice social distancing. On Tuesday, Yang added his support for the idea, which is hardly a surprise given his advocacy for UBI in the past. Now, many of Yang's vehement supporters want to make sure he gets credit for his early adoption of the idea.

Millions of Americans have gotten a single stimulus check worth up to $1,200 under the CARES Act, but for those out of work, that money has probably already gone to pay for food, housing or utilities. "They essentially helped pay last month's bills," said Yang in an appearance on Fox 11. "This month's bills, and next months bills, are right around the corner. We have to put $2,000 a month into everyone's hands for the duration of the crisis because that money doesn't disappear, it goes right back into our local economies, into groceries, rent, fuel, and things that help keep our communities, frankly, functioning."

More and more lawmakers seem to agree. In total, 28 Democratic representatives have now cosponsored the Emergency Money for the People Act, feeling that taking care of basic needs is the best way to ensure that Americans continue social distancing.

For Yang, the idea goes even further than that. Through his background in Silicon Valley, Yang came to believe that the automation of more and more jobs would inevitably leave vast swaths of Americans out of jobs, with no new work to replace it. Through a system of automation taxes, Yang wanted to implement UBI for those people in the United States.

With the coronavirus pandemic upon us, Yang's platform seems closer to reality than ever, and many Americans are now revisiting it. Here's a breakdown of how Yang proposed UBI in the U.S.

Yang grew up in Westchester County, New York, the younger son of two immigrants from Taiwan. He skipped at least one grade in school, attended gifted summer programs, went to an elite boarding school and then graduated from Brown University with a degree in economics and political science. Yang then attended Columbia Law School, graduating in 1999.

Yang worked as a corporate lawyer in New York City for a brief time, but found the work unfulfilling. In a profile for The Washington Post, Yang later said that the job was "a pie-eating contest, and if you won, your prize was more pie," and that he wanted to "build something" instead.

After that, Yang worked in some of the earliest online startups, as well as the health care industry and a standardized test preparation company. He also founded Venture for America, a nonprofit dedicated to helping potential entrepreneurs find the resources they needed to continue pushing the U.S. forward.

Finally, Yang has written two books throughout his career Smart People Should Build Things in 2014 and The War on Normal People in 2018. Both are about his experiences in the world of business, his thoughts on entrepreneurship and his belief in UBI as the future for America.

For those that had heard of Yang, this was the reputation he brought into the 2020 presidential race. He sometimes described his political views as "Human-Center Capitalism." This included the implementation of UBI through a program that Yang called the "Freedom Dividend."

As president, Yang promised, every U.S. citizen over the age of 18 years old would receive $1,000 per month from the U.S. government. He argued that this was necessary to make up for the number of jobs being lost to technological automation, which he projected would increase drastically in the coming years.

To pay for the Freedom Dividend, Yang proposed a value-added tax on large American corporations. He argued that he was qualified to combat corporate tax avoidance thanks to his background as a lawyer. Most other countries in the world have a value-added tax in their laws, though some refer to it as a goods and services tax. Either way, it is a complex method of taxing a product or service at every stage of production and distribution, compensating a community for the environment and infrastructure it provided for the creation of that product.

Yang's plan included other forms of welfare already in place. According to Yang, the Freedom Dividend would replace some extant welfare programs, but others would remain in place, meaning that people could continue collecting aid they already received with an additional $1,000 per month on top of it.

Yang's plan also noted that the Freedom Dividend would operate on an opt-in basis, so Americans who did not want the stipend for one reason or another did not need to refuse it. According to a report by USA Today, he theorized that a society with UBI would produce "healthier people, less stressed-out people, better-educated people, stronger communities, more volunteerism, [and] more civic participation."

While Yang advocated for Universal Basic Income, he was more moderate on other universal programs, such as health care. According to a report by CNN, Yang said in November that he supported "the spirit of Medicare for All" but also said that as president, he would take a gradual approach to it in order to convince the American people. He wanted to leave the option of private insurance available for those who wanted it, and thought that the public would eventually realize "that private insurance is not what [they] need" and that Medicare for All is "superior to [their] current insurance."

Still, Yang's policy proposal during his presidential campaign did not include a public health insurance option, nor did it commit to Medicare for All. He was criticized by some for his commitment to UBI and his apparent hesitation on any form of universal health care.

Yang suspended his presidential campaign on Feb. 11, 2020, and later endorsed Joe Biden for president. However, Yang has continued to advocate for UBI in media appearances since then, and has become a regular media presence. Eight days after suspending his campaign, Yang took a job as a political commentator on CNN.

Yang will soon be launching his own podcast as well, titled Yang Speaks. An audiobook version of his second publication The War on Normal People: The Truth About America's Disappearing Jobs and Why Universal Basic Income Is Our Future, is now available for free on YouTube, sparking more discussion than ever about UBI in the U.S.

In February, Yang mentioned on the air that it was "flattering to be considered for a VP role or any role in someone's campaign," implying that one of the remaining candidates was considering him. He also later said that he was interested in running for Mayor of New York City in 2021.

Yang has popularized UBI for modern Americans, but the idea is by no means his. Yang himself has said that he became an advocate for the idea after reading Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford.

Before that, however, the idea of UBI goes back as far as 1796, when it was suggested by writer Thomas Paine. Pain called for a tax on heritage used to fund "basic incomes" for people in their 20s. The following year, Thomas Spence wrote out a more official proposal for the idea.

If the trend of support for the Emergency Money for the People Act continues in congress, this long-held idea may soon be a reality. For updates on your stimulus check visit the IRS' Get My Payment website. For the latest information on the coronavirus pandemic, visit the websites of the CDC and the World Health Organization.

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Universal Basic Income: Andrew Yang Was Pushing for It Long Before Coronavirus Pandemic - PopCulture.com

The quarantine and cessation of economic activities as a result of this pandemic has put uberised workers on the frontline, and other kinds of precarious workers at even greater risk.

The COVID-19 crisis also has farther-reaching consequences: for example, the revelation of the scale of the underground economy (whether related to legal or illegal activities) in Europe, which some states prefer to ignore, while others include it in the calculation of their GDP. The increase in unemployment, the reduction in benefits to the unemployed and the increasingly restrictive policies for entering the European Union have led a significant part of the European population to fall back on the underground economy.

By definition, the underground economy consists of undeclared (and therefore also not taxable) economic activities that are difficult to measure. Legal underground activities are estimated to account on average for 17% of GDP of, while illegal underground activities are estimated to account for at least 3% of GDP. The COVID-19 quarantine and the resulting halt of the free movement of people and goods at both national and cross-border levels has left a significant part of the population without an income.

Beyond a more or less protective social safety net, European states have hypocritically relied upon humanitarian organisations, local associations and even the goodwill of local authorities to take care of those who have been left behind in the event of a hard blow.

But because of the COVID-19 crisis and its economic repercussions, humanitarian organisations and associations, which are already usually overburdened, are currently overwhelmed. These organisations and associations are themselves already suffering the repercussions of certain ultra-liberal policies. For example, one of the first measures taken by the Macrons government in France, immediately after its election, was to abolish the wealth tax.

In the past, taxpayers who paid this tax could reduce their tax burden by contributing to the budgets of humanitarian organisations. As wealth tax no longer exists, they no longer see any point in doing so, and humanitarian organisations are seeing their budgets significantly reduced. For the first time in its history of 70 years, the Emmaus aid association, for example, is calling for donations.

Schools also used to provide a safety net for vulnerable families that rely on the virtually free school lunch (13 cents per lunch in Paris for the poorest families) to guarantee their children one nutritious meal per day. With schools closed, many families are unable to feed their children, as no meals sold in shops are available at an equivalent price.

In the UK, it is estimated that this could affect 4 million children, i.e. almost 30% of school-age children. The same applies to students throughout Europe who used to eat at university canteens. At the same time, large supermarket chains are taking advantage of the opportunity offered to them by current confinement policies to drastically increase the price of food.

Whether in France, Italy, Spain or elsewhere in the European Union, children are hungry and families can no longer feed themselves. European governments alerted by their respective intelligence services are worried about the repercussions, such as major hunger riots that could explode in southern Italy, in the suburbs of large French or British cities.

These same governments have for decades tolerated the expansion of underground economies by reducing the number of labour inspectors and turning a blind eye to employers not declaring their employees and the trafficking of contraband to avoid social unrest. They have failed to offer lasting solutions such as creating more jobs and legalising immigrants.

Governments now seem to be surprised, or at least worried, about the resulting violence and repercussions of these increasingly ultra-liberal policies of which they were the architects. Worried about hunger riots, some governments are also concerned that criminal organisations may substitute the state in helping citizens and small businesses, and may definitely take roots in large areas of the economy.

DiEM25 has, from the outset, advocated not only the end of ultra-liberal policies, but also the introduction of a Universal Basic Dividend (UBD) that would accompany the foreseeable end of the job market as it was traditionally known after the war. It has to be said that although we at DiEM25 have often been labelled as dreamers, now most of our opponents seem to be coming to this exact conclusion.

Japan has just introduced a minimum income for every resident, national or foreigner, to cope with the crisis. Some mayors in California have also tried it and are now pleading to have it implemented nationwide to avoid the worst. Alaska is already offering it statewide. The Democrat candidate Andrew Yang based his platform on this policy.

The UN assistant Secretary General Kanni Wignaraja and the UNDP AP Chief Economist Balazs Horvath are pleading for a universal basic income within the World Economic Forum on 17 April 2020 declaring: rule number one of crisis management: when you find yourself in a hole, first, stop digging. They argue that social inequalities end up costing more by way of causing social unrest, mass migrations and the increase of extremist groups capitalising on them. The European Central Bank vice president Luis Guindos mentioned it as well. Even the Pope declared in his Easter letter that it might be time to consider universal basic wage.

Two days ago, more than 100 British MPs pleaded for the introduction of a Universal Basic Income (UBI) after 30% of British children have been considered as lacking food; and Spain is taking steps to implement next month a basic income to help citizens weather the economic fallout due to COVID-19. The Spanish minister of economic affairs said we are going to do it as soon as possible. So it can be useful, not just for this extraordinary situation, and it remains forever. Other countries in the European Union are thinking about it, and left-wing parties are pushing them to do so. The major counter-argument is the burden put on the taxpayer to finance it.

For the time being, DiEM25 is the only movement offering a solution to the financing argument: we refuse that the universal basic revenue be financed by the taxpayers. That is why we advocate for a Universal Basic Dividend and not simply a Universal Basic Income, i.e. financed in the form of a dividend paid from a portion of shares of listed companies pursuant to stock market transactions or IPOs. We see this dividend as a fair toll payable to the public on stock exchange transactions, particularly from those companies benefiting from state support shares which would be pooled in a European collective fund that would itself produce a due return.

In the meantime, we would go even a step further in the time of COVID-19: what about helicopter money to be created by the ECB: this is totally realistic as it is estimated to 750 billion , an amount which Lagarde regarded as an amount which can be made available to the banks.

Revolutionary ideas? Not so much at a historical moment when only creativity and thinking outside of the box will allow European states and their citizens to survive this crisis.

Consider donating to a food bank near you, if you are able to. The image used in this article can be found on Twitter.

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Starvation in the time of Corona: momentum for the Universal Basic Dividend - DiEM25