Instigator / Pro
4
1566
rating
29
debates
56.9%
won
Topic

A UBI would be beneficial to said country

Status
Finished

All stages have been completed. The voting points distribution and the result are presented below.

Arguments points
0
3
Sources points
2
2
Spelling and grammar points
1
1
Conduct points
1
1

With 1 vote and 3 points ahead, the winner is ...

Swagnarok
Parameters
More details
Publication date
Last update date
Category
Economics
Time for argument
Three days
Voting system
Open voting
Voting period
One week
Point system
Four points
Rating mode
Rated
Characters per argument
7,500
Contender / Con
7
1507
rating
3
debates
50.0%
won
Description
~ 392 / 5,000

To keep things relative, let's use America as an example, with a $1000 payout to every adult (like Yang's plan).

We should mainly focus on how a UBI would impact the country in various factors, like the economic, political, and social sectors.

Talking about the realism of implementing a UBI is off-topic, unless specified otherwise.

I'm actually looking forward to this debate. Good luck!

Round 1
Pro
Hello Swagnarok and thanks for accepting. Sorry for the late reply, I'm awfully busy this week and I wrote this in a rush...

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A) OPENING


Outline

Round 1 - First Argument
Round 2 - Clash, and Second Argument
Round 3 - Clash, and Summary

Note - Some significant information related to this debate will be merged with clash

First Argument - Economic Impacts
How will implementing a UBI positively impact the economy?

Second Argument - Social Impacts
How will implementing a UBI positively impact the society?


Context

A UBI is a system put in place which gives every citizen $1000 per month, regardless of any standards. A UBI isn't actually a new concept. In fact, it dates back to the
16th century! However, the concept recently gained attention when 2020 presidential candidate Andrew Yang marketed his UBI plan as a so called "Freedom Dividend". And this debate is very similarly modeled after his plan...

Like stated earlier, we will be using America as the sandbox for this debate, just to keep everything consistent and relatable. Also, as previously agreed upon, we will be debating whether or not a UBI would be beneficial or not. We won't touch upon whether it's realistic to implement, or all that stuff (although that could be for another debate).

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B) ARGUMENT

Economic Impacts How will implementing a UBI positively impact the economy?

Some recent studies have found that 25% of jobs in America are at risk to being lost. That correlates to the unemployment rate, which is already at around 3.6%, to rise even higher!

This also contributes to individual people's wealth.

When people don't have enough money, they tend to cut down on their spendings. Goods like clothing, food, and various accessories will be limited in purchase. This can lead to a sort of 'dry economy', where not much goods are being bought. And when little goods are being bought, stores won't make enough money. This can result in even more people being fired, and shops closing all over.

Money isn't being circulated.

However, that's where a UBI comes in! A UBI will help the economy as a whole by giving people some extra money for them to spend. This money will be circulated through the economy and renew it.

The economic benefits of this include [1]:

Economic growth
  • More money is being used and circulated
  • 12% growth in the economy by 2025
More jobs and related benefits are created
  • More economic activity means than more jobs will be born [2]
    • An estimated 4.7 million jobs are to be created [3]
  • Increased bargaining power for workers
    • "More pay more say" - Thought provoking quote from Squid
Less Poverty
  • A UBI almost guarantees everyone will be above the poverty line
  • Families can have more support (a topic for round two)

And more!


As you can clearly see now, a UBI is a clear benefit to the economy.

And, all this data is backed up by numerous professional research papers [4].

Now you might be asking, "but this is all speculation!" How do we actually know that the predicted results might happen?

Well, surprisingly enough, versions of the UBI have actually been tested before! Follow my words...

  • Alaska's current UBI [5]
  • Namibian poverty support [6]
  • My People Fund program [7]
  • And even more!
All these tests and real world situations turned out great, and we can even learn from some of them to improve our sense of a UBI.

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C) CONCLUSION

In this round, I have talked about the major economic factors that would be benefited from a UBI.

In the next round, I will be clashing with my opponent, perhaps elaborating on my previous arguments, and presenting a new one.

Well, that is all from me now, and I wish you the best Swagnarok!

Thank you.

Links:


Con
Forfeited
Round 2
Pro
Change of schedule

Extend Arguments
Con
1. Cost

As of July 1, 2018, the US population stood at 327,000,000. [1] Of these, only around 22.4% were under the age of 18. [Ibid.] This leaves approximately 240,000,000 Americans over the age of 18.
For purposes of simplicity I will not be factoring in the several million Americans imprisoned. Any UBI scheme would have to answer the question "Would they be receiving UBI too?". The most straightforward solution to this would be to deny it for all months in which the subject spent any time in jail or prison. Again, for the sake of ease I will assume that all American citizens in the appropriate age bracket will be receiving UBI every month of the year.

$1,000 x 12 =$12,000 per annum (year) for each eligible person. 240,000,000 x $12,000 = $2,880,000,000,000. Or, that is to say, 2.88 Trillion dollars. That would be the rough price tag of UBI every single year, not counting such things as administrative costs.

In comparison, the International Monetary Fund has estimated that total GDP in 2019 would stand at 21.4 Trillion. [2] What this means is that in order to pay for Universal Basic Income, the United States would have to spend equivalent to over 10% of its total GDP every year.

At this point, my opponent would likely step in and say "Aha but you're wrong! You see, UBI can replace many existing welfare programs!" And in fact this is true...but only to an extent.
In 2018, welfare spending by the federal government stood at $851.1 billion dollars. [3] Note that this doesn't count the services of the Department of Veterans Affairs, because, well, the general tendency is to think of the VA as just compensation to brave soldiers who put theirs lives on the line rather than as a government handout. In 2019 the White House requested $83 billion for the VA. [4] We can combine this to get a rough estimate of $900-950 billion spent on welfare annually.

Even if UBI completely replaced all of these programs (doubtful, especially in the case of the VA for reasons already stated), that would still leave an extra 1.9 Trillion dollars. The government would have to collect the money to pay for this somehow. If taxes weren't raised, then this would all become deficit spending.

In 2019 government outlays (expenditures) are projected to stand at 4.4 Trillion, while receipts (amount collected in taxes) will stand at 3.4 Trillion. [Ibid, page 121]
Whenever outlays are larger than receipts, the government borrows to pay the rest. This is called the deficit. The deficit describes how much debt the government is going to take on that year, which is added to the outstanding National Debt. In 2019, the deficit is projected to be almost 1 Trillion dollars; if you were to add the costs of an implemented UBI, you'd have a minimum deficit of 2.9 Trillion.

(Please note: Elderly people have a strong tendency to view Social Security as something that they've earned/invested rather than as welfare. If you deduct a retiree's UBI allowance from their Social Security payout, they'll perceive that the government is either robbing them of the money they earned/invested into the system or discriminating against them by denying them the same UBI younger people get. There are tens of millions of people over 65 in America, and they consistently turn out in large numbers come election day. If it's even hinted at that either party would try this, I absolutely guarantee you they'd lose in a landslide. That is to say, the elderly under this scheme would receive UBI on top of Social Security, whether you like it or not.)

At this point you have two options:

First, you can accept a 2.9 Trillion dollar deficit. This is clearly unsustainable, given that the US national debt is already larger than GDP, and that the deficit in this scenario would significantly outpace economic growth (see projected GDP growth rates in source 2).
How large is the national debt already? 23 Trillion dollars, as of the time of posting. [5]

Second, you raise taxes to such a degree as to keep the deficit manageably low. The fact that we have such a large deficit already suggests this isn't going to happen, because the political will is lacking.
In addition, tax rates affect investment, wages, and so on. There is a phenomenon called "Capital Flight" which can have devastating effects on any economy, and which is much more likely to happen when tax rates are oppressively high. All in all, talking about this would entail an entirely separate debate that I'm simply not ready to have, because I'm not an economist. Suffice to say, however, deciding that you're going to raise another 1.9 Trillion dollars in taxes every year would have drastic and far-reaching consequences.
With that having been said, I'm going to move on to my second point.



2. Price Inflation

Imagine the following scenario.
You own a supermarket. All of the sudden, your typical customer has $12,000 more dollars every year in disposable income. In addition, taxes on your business went up to pay for this. Way up.
So what do you do? You jack prices on everything. It's clear that they can afford it now, so they probably wouldn't care that much. Even with these price increases they still enjoy greater financial security than they did before UBI.
And this would affect everything. Absolutely. Everything. There is no consumer market whose prices would not skyrocket in the aftermath of this. In the end, you would merely be subsidizing the likes of Wal-Mart.

What would the end result of this be? While people would still gain from UBI, the free money would not go as far as you might initially think. Relying on a cost-benefit analysis (the price of a 1.9 trillion dollar outlay increase vs. the benefit to the consumer who has more money), the balance would not be in favor of benefits.



3. Perverse Incentives

While in the future work may become obsolete altogether, at present the economy still relies on human labor.
However, there are millions upon millions of people who hold jobs out of necessity, because the alternative to working is living on the streets.
But what if all of these people got a paycheck of $12,000 a year? Something that they would receive regardless of whether they worked or not. There would be stigma attached to them receiving UBI because everybody else would. In this case, you could have groups of, say, 2 or 3 slackers who get together, pool their UBI money, pay rent on a cheap place, and live off of that without having to work another day of their lives.
Without these people, the economy would possibly contract, making the above-mentioned deficit problem even worse.



4. Alaska

My opponent cited Alaska as a model for the US to emulate. The problem with this is, the economy of Alaska does not mirror that of the US. As his own source admitted, Alaska is an extraction based economy. The oil can be extracted and sold by anyone, and this will happen whatever the tax rate is. The US proper, on the other hand, is a wealth creation economy. High taxes stifle this process.


Sources:





Round 3
Pro
Forfeited
Con
Both me and my opponent ended up forfeiting at critical moments during this debate. We can just chalk it up to one giant bust.


Anyways, I will summarize as following:
Implementing UBI would cost inordinately huge sums of money, even by the standards of the world's first/second largest economy, the United States. Even if many existing welfare programs were eliminated to compensate, some significant increase either in deficit spending or in tax revenue collected would still be required. The United States has a severe debt problem (and also one of the highest corporate tax rates in the world) and implementing UBI would only make this worse. In exchange for bearing these costs, each adult citizen would reach approximately $12,000 a year. However, because of the rampant price inflation that would almost surely follow much of these financial gains to individuals would be disappointingly lackluster. Many individuals would have unprecedented opportunity to completely drop out of the workforce, and this in turn would depress the economy.


And that concludes this debate. Thank you all for reading.