Y Combinator Learns Basic Income Is Not So Basic After All
So here&#x27;s my basic criticism of universal basic income:<p>There are 325 million people in the United States. If we give each of them a &quot;basic income&quot; of $1,000 per month (which is bare bones subsistence basic income), the accumulated cost would be $12,000 per year times 325 million people, or $3.9 trillion <i>per year</i>.<p>The entire US federal budget is already $4.094 trillion. (<a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;2018_United_States_federal_budget" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;2018_United_States_federal_bud...</a>), and once you account for things like defense, interest on the national debt, and Medicare that we&#x27;d still have to pay for, it&#x27;s still looking like we would have to add maybe $3 trillion to the annual budget. (You can get really deep into the weeds on this: for example, even if you replace some or all of Social Security with UBI, some Social Security recipients receive more than $1000 per month, so you would need to top them up to the same levels they&#x27;re already receiving because of the time-honored principle of The United States Government Does Not Welch On Its Debts).<p>So here comes the other side of the argument: &quot;you can just raise taxes on rich people to make up for that 3 trillion dollar shortfall!&quot;. Yeah, but you can already raise taxes on rich people.<p>The steelman version of that argument is more like, &quot;even if we give away 4 trillion dollars, we can set up the tax brackets so we get some of it back, so the total cost is less than 4 trillion&quot;. OK, cool, let&#x27;s do some napkin math. It looks like $100,000 is around the 75th percentile of income in the US (<a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Household_income_in_the_United_States#Distribution_of_household_income_in_2014_according_to_US_Census_data" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Household_income_in_the_United...</a>), and that&#x27;s a big round number where people definitely shouldn&#x27;t be receiving public assistance anymore, so let&#x27;s make that the break-even point where we tax back all of the UBI we give away in the first place, which means we get to cut our UBI budget by at least 25% (since only 75% of the population gets any), and maybe let&#x27;s throw in another 12.5% for gradually taxing back some of the UBI for people in the 50th-75th percentiles, too. So our $4 trillion expenditure is now $2.5 trillion, and let&#x27;s assume we can write off the same trillion dollars as before by canceling out existing welfare and entitlements, so now you&#x27;re adding a net $1.5 trillion annual expenditure.<p>That actually seems doable. This would also mean that providing a UBI for ten years would cost $15 trillion. So, OK, let&#x27;s accept for the sake of argument that the federal government is going to spend $15 trillion over the course of the next ten years to make everyone&#x27;s lives better. Is this really the best way? Or could you do something like:<p>* Repair and replace damaged and worn out US infrastructure: $2 trillion (<a href="https:&#x2F;&#x2F;www.csmonitor.com&#x2F;Business&#x2F;2018&#x2F;0118&#x2F;Why-fixing-US-infrastructure-matters-9-per-household-per-day" rel="nofollow">https:&#x2F;&#x2F;www.csmonitor.com&#x2F;Business&#x2F;2018&#x2F;0118&#x2F;Why-fixing-US-i...</a>), much of which will create jobs and stimulate enough economic activity to pay itself off in the long run.<p>* A manned mission to Mars: At most, $1 trillion (<a href="http:&#x2F;&#x2F;time.com&#x2F;money&#x2F;4765718&#x2F;travel-mars-price-cost-tourism&#x2F;" rel="nofollow">http:&#x2F;&#x2F;time.com&#x2F;money&#x2F;4765718&#x2F;travel-mars-price-cost-tourism...</a>), much of which will create jobs.<p>* ITER, the best-funded effort to develop fusion power, costs about $20 billion (<a href="http:&#x2F;&#x2F;www.sciencemag.org&#x2F;news&#x2F;2016&#x2F;04&#x2F;updated-panel-backs-iter-fusion-project-s-new-schedule-balks-cost" rel="nofollow">http:&#x2F;&#x2F;www.sciencemag.org&#x2F;news&#x2F;2016&#x2F;04&#x2F;updated-panel-backs-i...</a>). Spend $250 billion on a Apollo&#x2F;Manhattan Project scale effort to develop low cost energy solutions, either from fusion or other projects. (It&#x27;ll create jobs!)<p>* It would cost $10 billion to build a Lofstrom loop, but since the federal government is doing it and we&#x27;ve never done anything like that before, let&#x27;s 10x that. That&#x27;s another $100 billion. (And even more jobs!)<p>And you still have $11.5 trillion left to either spend on even more extravagant government projects or eat a decent chunk out of the $21 trillion national debt (<a href="https:&#x2F;&#x2F;www.usgovernmentdebt.us&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.usgovernmentdebt.us&#x2F;</a>). And in addition to creating more than enough jobs for everyone who needs one, we get to potentially solve some of the most important long-term problems for human civilization, repair all of our infrastructure, land on goddamn Mars, and knock out half of our national debt.