$175 billion dollars is the amount America spends on Social Security every year. That equals a little over one percent of our nation’s total GDP and comes out to exactly one fourth of the yearly budget of the U.S. military. It is also the difference between our current poverty rate of 15 percent and a rate of zero.
In 2012, The Census reported that 46.5 million Americans resided below the poverty line; collectively, these citizens need the aforementioned $175 billion to be above it. Now, of course, our nation already has a handful of programs, from Social Security to SNAP to the Earned Income Tax Credit, that already alleviate poverty. The latter two programs, as well as others, do not count towards income for poverty purposes; thus the 46.5 million number is slightly deceiving. The number of fully impoverished likely lies between 35 and 40 million.
Regardless, alleviating poverty is not as expensive as it may seem. What’s needed is an efficient and fair way to deliver these funds to the destitute. Economists Matt Bruenig and Elizabeth Stoker suggest a “universal basic income.” They argue that giving every single American (including children) roughly $3,000 each year would reduce the poverty rate by half. Naturally, this program would cost a lot: $907 billion if theoretically implemented in 2012. Even if the program excluded Social Security recipients, it would still cost $790 billion, or $90 billion more than our nation’s yearly defense budget.
Where could we find the money? For starters, eliminating a handful of tax expenditures that generally help the affluent could raise around $230 billion. In addition, we’d likely have to raise taxes on every economic class. This would, of course, be hugely unpopular among the current crop of conservative politicians, but it should find support with lower-middle class and poor families—all of which would receive more in universal basic income than they would lose in increased taxation.
Despite its cost, a Universal Basic Income (UBI) clearly has appeal. The most appealing part of his program may be what it could do for people’s actions:
That security might not just keep people out of poverty. It might let workers demand better wages and working conditions, because they know they always have something to fall back on. In other words, it could level the playing field for the bottom 99 percent.
Could this idea gain any traction? I’m afraid not, at least not in this political environment. Remember how much ire this statement provoked? Even though a UBI addresses all citizens, one can already hears the calls of “socialism,” especially given that the only countries having even a modicum of success in establishing a UBI reside in the European Union. Still, as pure food for thought, the idea represents a new, novel way to think about and address poverty in the United States.
Check the video below for a discussion on universal basic incomes:
“How To Cut the Poverty Rate in Half (It’s Easy),” Matt Bruenig and Elizabeth Stoker, The Atlantic