Study: A universal basic income would grow the economy
&gt; They find that enacting any of these policies by growing the federal debt — that is, without raising taxes to pay for it — would substantially grow the economy. The effect fades away within eight years, but GDP is left permanently higher. The big, $12,000 per year per adult policy, they find, would permanently grow the economy by 12.56 to 13.10 percent — or about $2.5 trillion come 2025. It would also, they find, increase the percentage of Americans with jobs by about 2 percent, and expand the labor force to the tune of 4.5 to 4.7 million people.<p>&gt; They also model the impact of the plan if it&#x27;s paid for with taxes. That amounts to large-scale income redistribution, which, the authors argue, would stimulate the economy, because lower-income people are likelier to spend their money in the near-term than rich people are. Thus, they find that a full $12,000 a year per adult basic income, paid for with progressive income taxes, would grow the economy by about 2.62 percent ($515 billion) and expand the labor force by about 1.1 million people.<p>So, borrowing and spending 300 million adults * $12,000&#x2F;adult&#x2F;year = $3.6 trillion&#x2F;year would grow the economy by $2.5 trillion? And raising it in taxes would grow the economy by just half a trillion?<p>Or what am I missing?<p>Also this:<p>&gt; because lower-income people are likelier to spend their money in the near-term than rich people are<p>But what about the long term? We can debate the finer points about when and how much etc, but it remains uncontroversial that rich people invest nontrivial amounts in long term stuff. With near-70% top average (not marginal!) tax rates, this will go down by <i>a lot</i>. How will this redistribution from long-term investments to near-term spending affect the economy over the long term? Yes, fewer yachts and private jets (there are also people employed supporting those, and the net employment benefit suggested is already quite modest), but would an Elon Musk or Jeff Bezos subject to a 70% tax rate invest in the next SpaceX&#x2F;Blue Origin (not to mention thousands of other startups backed by angels and personal&#x2F;friends&amp;family savings)?