The idea of a universal basic income (UBI) has been met with resistance from several quarters. One view of it is that it will stifle initiative and dampen the desire to work. Well, most countries are doing that already with generous welfare programs.
The best approach to this idea came from Charles Murray a few years ago. His UBI plan called for replacing all other forms of government outlays to individuals. And that plan would be cheaper than the programs it replaced. So far, none of the governments or entities that have experimented with UBI have done that. Now the latest experiment will take place in Italy. And they'll be doing it wrong, too.
One of the problems is that there's a big underground economy in Italy, and it's likely to get bigger as people angle to get their incomes low enough to qualify for UBI. Another problem is that there are already plenty of taxpayers who are comfortable with cheating. They could probably be counted on to cheat the UBI system as well.
For the longest time I was in favor of a UBI for the money savings as a way to pay off the federal debt and ultimately reduce taxes. But the more evidence that pours in, the less likely it appears to be a system that would do what the original proponents hoped. After all, it's just people who design and implement it. And there simply isn't a genius smart enough to anticipate and overcome all the problems. Think Obamacare.
Meanwhile, check out these two articles, both of which describe the problems Italy will encounter:
Italy Starts Handing Out Free Money by Ferdinando Giugliano; and
Italy Institutes a Universal Basic Income. Is the U.S. Next? by Adam O’Neal.
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1:37 PM 3/3/2019
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