OTTAWA - The government's fiscal watchdog says a guaranteed basic income program at the federal level could cut poverty rates in Canada by up to 40 per cent.
The Roosevelt Institute did a study 15+ years ago that showed UBI only creates growth if the money is entirely funded through the creation of debt. You cannot create growth in an economy that utilizes UBI for the UBI itself unless the money falls from the sky and you need a griwing economy to fund an entitlement program like UBI.
It makes more sense to target those that need the money than give everyone money.
Edit: “ For all three designs, enacting a UBI and paying for it by increasing the federal debt would grow the economy”
The above is from the cited paper. There’s zero growth if you fund it through taxes and only growth if you fund it through debt. As increased debt payments require more of the budget to pay back said debt year to year after time the ability to provide UBI is threatened. UBI is not a long term solution.
Citation, please. Everything I’m reading from the Roosevelt Institute seems to directly contradict your claims.
We examine three versions of unconditional cash transfers: $1,000 a month to all adults, $500 a month to all adults, and a $250 a month child allowance. For each of the three versions, we model the macroeconomic effects of these transfers using two different financing plans - increasing the federal debt, or fully funding the
increased spending with increased taxes on households - and compare the effects to the Levy model’s baseline growth rate forecast. Our findings include the following:
For all three designs, enacting a UBI and paying for it by increasing the federal debt would grow the economy. Under the smallest spending scenario, $250 per month for each child, GDP is 0.79% larger than under the baseline forecast after eight years. According to the Levy Model, the largest cash program - $1,000 for all adults annually - expands the economy by 12.56% over the baseline after eight years. After eight years of enactment, the stimulative effects of the program dissipate and GDP growth returns to the baseline forecast, but the level of output remains permanently higher.
When paying for the policy by increasing taxes on households, the Levy model forecasts no effect on the economy. In effect, it gives to households with one hand what it is takes away with the other.
However, when the model is adapted to include distributional effects, the economy grows, even in the tax-financed scenarios. This occurs because the distributional model incorporates the idea that an extra dollar in the hands of lower income households leads to higher spending. In other words, the households that pay more in taxes than they receive in cash assistance have a low propensity to consume, and those that receive more in assistance than they pay in taxes have a high propensity to consume. Thus, even when the policy is tax- rather than debt-financed, there is an increase in output, employment, prices, and wages.
Edit: “ For all three designs, enacting a UBI and paying for it by increasing the federal debt would grow the economy”
Yes, I quoted that in my other comment that sparked your edit.
The above is from the cited paper. There’s zero growth if you fund it through taxes
I also quoted the two paragraphs after your quote, and the paragraph before your quote, all of which discussed tax-funded UBI. I even bolded some text. And yet,
You still missed this:
However, when the model is adapted to include distributional effects, the economy grows, even in the tax-financed scenarios. This occurs because the distributional model incorporates the idea that an extra dollar in the hands of lower income households leads to higher spending. In other words, the households that pay more in taxes than they receive in cash assistance have a low propensity to consume, and those that receive more in assistance than they pay in taxes have a high propensity to consume. Thus, even when the policy is tax- rather than debt-financed, there is an increase in output, employment, prices, and wages.
Let me repeat that again, since you have missed it three times now:
Thus, even when the policy is tax- rather than debt-financed, there is an increase in output, employment, prices, and wages.
Nothing you said about tax-funded UBI is reflected in that report. You have blatantly misrepresented their position.
The Roosevelt Institute did a study 15+ years ago that showed UBI only creates growth if the money is entirely funded through the creation of debt. You cannot create growth in an economy that utilizes UBI for the UBI itself unless the money falls from the sky and you need a griwing economy to fund an entitlement program like UBI.
It makes more sense to target those that need the money than give everyone money.
Edit: “ For all three designs, enacting a UBI and paying for it by increasing the federal debt would grow the economy”
The above is from the cited paper. There’s zero growth if you fund it through taxes and only growth if you fund it through debt. As increased debt payments require more of the budget to pay back said debt year to year after time the ability to provide UBI is threatened. UBI is not a long term solution.
Citation, please. Everything I’m reading from the Roosevelt Institute seems to directly contradict your claims.
deleted by creator
Yes, I quoted that in my other comment that sparked your edit.
I also quoted the two paragraphs after your quote, and the paragraph before your quote, all of which discussed tax-funded UBI. I even bolded some text. And yet,
You still missed this:
Let me repeat that again, since you have missed it three times now:
Thus, even when the policy is tax- rather than debt-financed, there is an increase in output, employment, prices, and wages.
Nothing you said about tax-funded UBI is reflected in that report. You have blatantly misrepresented their position.