When Republicans are debating whether to cut three-figure checks or four-figure checks, Andrew Yang must be smiling.
Yang, a millionaire entrepreneur, made universal basic income a central plank when he ran in the Democratic presidential primary. His campaign provided a youthful and optimistic contrast to the brooding outrage of Bernie Sanders and the “tisk-tisk” demeanor of Elizabeth Warren, but ultimately the Yang Gang ran into a inevitable roadblock.
Giving public funds to every American, just for being an American, seems un-American. Not to mention unproductive.
But then came the coronavirus. Congress passed $1,200 stimulus checks in the spring, a move that was widely supported. Now the debate is whether to provide $600 in the second round of relief or boost that amount to $2,000.
The argument for stimulus checks is similar to the argument for tax cuts. Government money, which is really just redirected taxpayer money, is best placed into the hands of American people who are capable of deciding what to do with it.
Stimulus checks could be viewed as a limited version of universal basic income. During a crisis it becomes necessary, but the benefits can be fleeting. If they aren’t, then why does the stimulus bill include provisions for enhanced unemployment benefits and eviction protection? Why are utilities debating whether to extend moratoriums on disconnections for those who are behind on bills?
It’s important to remember that the bill for all of this eventually needs to be paid. The landlord has to make his or her mortgage payments. With no way to bring in income from renters, that difference is likely to be made up from properties being flipped or just lack of maintenance.
The cost of unpaid utility bills has to be transferred to shareholders, taxpayers or ratepayers if you want to keep the lights on for everyone. It’s no secret that the ratepayer is likely to cover the cost in future billing cycles.
For the federal government, the cost of increasing the rebate to $2,000 for every qualifying adult and child would come to $435 billion. This could be justified as an emergency measure, but it seems unfeasible for the kind of universal income program that sounds pleasing on the campaign trail.
In the debate over COVID-19 relief, some objected to millions of dollars in foreign aid going to countries in the Middle East and Central America. They forget that the central banks of Japan and China hold $6.2 trillion in U.S. debt. That’s money that future U.S. taxpayers will have to pay back, plus interest, to cover this country’s yawning budget deficit.
The deficit hawks were largely silent the last four years. They have no choice now, but when this crisis passes they should be ready to squawk again.