The Reality of Free Money: Debunking Universal Basic Income
Every day, the question of providing everyone in America with free money is brought up, particularly in the guise of Universal Basic Income (UBI). The idea of free money is appealing, but it's essential to understand that there is no such thing as free money. Every adult has in one way or another contributed to the fund that the government will disperse to needy people. This article aims to shed light on the realities of UBI, its implications, and why the concept is problematic.
Understanding the Fundamentals of Free Money
First and foremost, it's critical to recognize that even when the treasury prints more fiat currency, it creates a cost in the form of inflation and devaluation. In essence, printing more money doesn't magically create more value; it merely dilutes the existing value. Any perceived benefit of free money is short-lived when considering its long-term consequences.
The Myth of Free Money
Consider a thought experiment: turn to the person on your left and ask them to give you ten dollars. Then, turn to the person on your right and give them ten dollars. Now, everyone has "free money," but ask yourself, who is ahead? The person who had to relinquish money is no better off, while the person who received the money now has it but didn't create it. This is the essence of giving everyone free money—it seems free, but it's not.
Historical Precedents and Failures
The concept of handing out money as a form of relief has been tried before, such as with the so-called "COVID relief" measures. These measures led to high inflation and a scarcity of goods, ultimately failing to achieve their intended purpose. The implicit belief that handing out money will magically create more goods and services out of thin air is both na?ve and unrealistic. There are no warehouses filled with stuff just waiting for people to have more money to buy. Everything that is currently being produced is being bought, so handing out more money doesn't create more goods; it merely redistributes the existing goods and creates inflation.
The Consequences of Universal Basic Income
When people have more money, they try to buy the same amount of stuff, but with more money. This leads to price increases, as the economy adjusts to the influx of additional money. In short, free money doesn't make people better off; it often makes them worse off because the value of their money decreases. Additionally, providing more money doesn't create more goods and services; it only creates more cost without generating additional value or supply.
A Better Alternative: Encouraging Productivity
The reality is that what America needs is a policy that gets people off their butts and create more value, more goods, and services. By focusing on productivity and innovation, the country can produce more goods and services, ensuring that there is more stuff to be bought. This would lead to a more stable and prosperous economy, rather than the short-term fixes and long-term negative consequences associated with UBI.
Conclusion
In conclusion, the idea of universal basic income is rooted in a misunderstanding of how money and economics work. While the concept of free money may seem appealing, it often has the opposite effect and can lead to broader economic dysfunction. Instead of relying on a policy that gives everyone free money, America should focus on policies that encourage productivity and innovation, ensuring that there is a surplus of goods and services to meet the needs and desires of its citizens.