There was a lot of news discussion about a proposed plan in Canada to implement a universal basic income system where it seems like virtually everyone will get $2000 a month meant as a way to ensure people can afford the basic necessities of life. However, there is the perspective on how this will essentially destroy the economy as it would not give people incentive e to really work versus relying on government handouts.
I think the most recent example of the CERB here in Canada during the lockdowns would be a good indicator if this system actually works. Just from what I saw, it seems like in the end it made things a lot more expensive and there were many people simply buying expensive items with it. You could argue it was necessity for many during those times as people couldn’t work. But to that I would wonder isn’t it the environment of creating say that lockdown scenario and forcing people to stay home the main issue at the time? That would bring it back currently where if the problems is affordability and people not getting work shouldn’t that be the topic to address versus simply giving tax money?
It’s basic finance too where that money has to come from somewhere. As well, what’s stopping people from just increasing prices to the point where this $2000 is now the new $0 per se? One would literally be in the same position as before. If the money did just come out of thin air with no affect on inflation then I could see how it would be purely positive.
It almost makes me think of the examples of school grades and awards. Should every person always win with everyone receiving the same reward regardless of effort? Because like there I can imagine if everyone got the same grade regardless of effort or in sporting events everyone was always winner that in itself would probably create an environment where more people won’t even try to work harder. How would a universal basic income be different in that regards in terms of the long-term goal of ensuring people have enough to live while still encourage hard work and innovation?