Quote from Savings Beagle on April 14, 2020, 4:37 pm

Yes, Universal Basic Income is a controversial topic to say the least.  Which is why I'm posting it.  To generate not only a discussion but to spur thought on a fiscal relief option that may come to bear in America as a result of coronavirus and the efforts governments have put forth to mitigate its spread.

Universal Basic Income, in a nutshell, would provide a universal, unconditional cash payment by the federal government to U.S. citizens to partially, or fully, make up for income either lost, or potentially lost, as a result of the pandemic.

The reason behind a Universal Basic Income is to keep Americans "whole" and allow for the normalization of an economy that is currently teetering on the edge.

We're already seeing aspects of this "propping up" in the form of $1,200 payments to adults and $500 to children.  And for businesses that keep employees on the payroll, a complete forgiveness of Paycheck Protection Program loans when the money is used to pay 8 weeks of pay as well as rent and utilities so the business can stay in operation.

These are limited period of time benefits, though...at least at this point.

And the job losses as a result of these government-mandated shutdowns will likely continue even past the end-date of the stay-at-home orders.  The economic damage, worldwide, has already been done and a sharp bounce back is extremely unlikely.

So, in an effort to not only help individuals, but to assist the overall U.S. economy, a Universal Basic Income, or something similar, may be the next booster-shot to be implemented.

No proposals have yet been "officially" introduced, I can only present what has been discussed in the abstract.

First, an interesting proposal from Chamath Palihapitiya, an early senior executive at Facebook and founder and current CEO of Social Capital, a venture capital firm. 

In a heated and controversial interview on CNBC last week, Mr. Palihapitiya proposed that instead of the U.S. government and Federal Reserve Bank providing funding to large corporations (U.S. airlines were a main point of the discussion) the money should be focused on paying all Americans the wages earned on their last W-2 for the period of time coronavirus is an issue.

While not a full-on endorsement of Universal Basic Income, it comes pretty close.

I'm sure if that part of the discussion had been fleshed out more, time limits and how exactly he could see it being implemented would have been detailed.

As it was, the discussion was more focused on how individual Americans and their incomes should be the focus of federal fiscal interventions rather than large businesses.

All in all, this was really just one person's view, but considering his position, it does start more of a discussion than if, for example, I were to bring it up.

But now we have two U.S. lawmakers with proposals that mirror somewhat the idea Mr. Palihapitiya presented.

Representative Pramila Jayapal (D., Washington) has floated a plan that would have the federal government:

Cover the costs of payroll and related benefits, as well as rent and utilities for companies that shut down or suffer a decline in demand as a result of the pandemic.

Guarantee workers' wages for three months, up to an annual salary of $100,000 per worker. Guarantees would be renewed monthly after that until a government gauge of consumer spending increases nearly to the level before the pandemic.

The plan would be retroactive to March 1, 2020.

Senator Josh Hawley (R., Montana) has also put forth a plan that would have the federal government:

Guarantee 80% of wages up to the national median, with bonuses for firms that rehire laid-off workers.

Backstopping of wages would be retroactive to workers laid off in March and rehired in April or May by their former employers.

Both proposals would allow for workers to remain attached to benefits such as employer-provided health insurance.  And, allow businesses to more quickly restart normal operations once the downturn of coronavirus abates.

Granted, none of these proposals are full-on Universal Basic Income, but they are an inch - or more - in that direction.  And once a door is slightly ajar, especially when it comes to unprecedented economic times, you never know what will result.

What do you think of these proposals?  And Universal Basic Income itself?  Of course, they sound good...and probably will be needed in some form as the U.S. and the world move through this crisis...but consequences both known and unforeseen should be factored in.

I'd love to hear your thoughts.

Update 4/15 - House Democrats introduce plan to pay Americans $2,000 a month until the economy recovers.

Representatives Tim Ryan (D., Ohio) and Ro Khanna (D., California) have introduced legislation (named The Emergency Money for the People Act) that would give $2,000 a month to Americans over the age of 16 who make less than $130,000 a year.  Payments would continue for at least six months and would last until unemployment falls to pre-coronavirus levels.  Qualifying families would receive $500 per child with money deliverable via direct deposit, check or mobile apps such as Venmo.

This proposal comes much closer to Universal Basic Income...especially if there are no requirements of being furloughed or laid off to receive the $2,000 per month payments.

While the bill at introduction has 17 cosponsors - all Democrats - I doubt this specific legislation would actually pass both the House and Senate in its current form.

But, we'll see.