Universal basic income.

UBI - universal basic income, is the latest fresh new idea emanating from the new-new-left, the new-Progressives. Heavy irony here - this idea was first posited by none other than Milton Friedman and was called a negative income tax. Needless to say, he is not getting any acknowledgement for it. As it is being discussed, for example as a solution to poverty in India, there are two important elements being neglected.

1. It was never intended to be, and can never be, a policy for obtaining economic growth. It is not an instrument for growth. One proponent on the BBC suggested that with everyone having a basic income, increased spending would stimulate the economy and make it grow. Ugh. Rather it is a scheme for alleviating poverty as a safety net. It is expensive and it will inhibit growth compared to no welfare policy. But..

2. It was originally proposed by Friedman as a replacement for ALL of the welfare programs now in place at all levels of government. It implies a massive downsizing of bureaucracy, waste and inefficiency, and in that sense it would be cheaper and more conducive to growth. There seems to be a vague realisation that it should replace current programs. But this implies that it should not carry any increase in taxation. The income subsidy should be limited to the amount that can be afforded under current conditions. This is not recognised and there is talk of dramatically increasing taxes (in India!!) to implement it. That would be a disaster.