The Pros and Cons of the Basic Income Theory

“Economic growth comes from entrepreneurs risking their own money, not from politicians risking your money.” ~Burt Folsom, Professor of History at Hillsdale College.

The basic income theory is a term I use to describe the idea that as technology grows, eventually we will get to a point where the only people that have a decent life are those who inherited wealth from their parents. As the theory goes, the wage gap will continue to widen until we get to an Animal Farm-esque world where the rich are super-rich and the poor are super-poor and the middle-class is non-existent.

Do now we get to the pros and the cons.

Pro #1: If a basic income was combined and offset by getting rid of Social Security, Medicaid, and Medicare it would actually cost less.

Pro #2: There is evidence that it would be more effective than the current welfare state.

Pro #3: There also is some evidence that it would produce more enterprising citizens.

Now we move to the cons. SIDE NOTE: If you think there are more pros or cons just contact me.

Con #1: It’s still so expensive!

Con #2: It’s just common sense that giving people free money doesn’t produce a good work ethic.

Con #3: A basic income would move America in a socialist direction.

When people talk about “free money” and a “basic income” what they forget is that it has to come from somewhere. If it’s from the government it comes from taxes. Your taxes. I’ve already talked about the Broken Window Fallacy (you can see it here) This is one of the BEST examples of that fallacy. The economic downsides to subjecting everyone to higher taxation in the name of economic growth are astronomical. Can anyone really believe that the rich will stay in America when faced with 70 to 90% tax rates?

As you can tell, I am against the idea of a basic income guaranteed by the government. If you disagree or have an opinion I would love to hear from you either in the comments or in private by heading over to the Contact Me page. However, my church is going on a group camp and so I won’t be able to respond to anyone for at least a week. Thank you in advance for your patience!

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2 thoughts on “The Pros and Cons of the Basic Income Theory

  1. Good piece. I think your analysis is correct under current conditions, but with increasing mechinazation and automatization putting a wide range of jobs at risk, from low level service jobs to skilled manufacturing positions, I wonder if a Basic Income will become more popular or even more practical. I was hoping to write an article generally about the rise of the mechanized workforce, I may have to incorporate its impacts on the debate over Basic Income.

    Liked by 1 person

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