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Canada's Embrace of Universal Basic Income: A Precursor to American Policy?

Canada's Embrace of Universal Basic Income: A Precursor to American Policy?

Dec 27, 2023

Canada's Embrace of Universal Basic Income: A Precursor to American Policy?

As Canada flirts with the concept of Universal Basic Income (UBI), eyes turn southward, questioning if the United States will follow suit. The Canadian proposal, deemed the "guaranteed livable basic income," has found unexpected bipartisan support, with even the deputy leader of Canada's Conservative Party suggesting conservatives should "own it." This policy shift signals a potential sea change in social welfare, one that some have likened to the final stages of the "Fall of Rome sequence."

UBI offers a fixed sum—in the case of Canada, $2,000 per month—to all citizens, regardless of employment status, theoretically ensuring a baseline standard of living. Proponents argue that UBI will not disincentivize work; however, critics, including Peter St. Onge, beg to differ. Onge counters that UBI's promise to replace the welfare state is a hollow one, comparing it to past initiatives like the Earned Income Tax Credit (EITC) in the U.S. which failed to supplant existing welfare programs.

The financial implications of UBI are staggering; in the U.S., it could amount to an annual expenditure in the ballpark of $3 trillion. Critics fear that UBI could bolster a class of "permanently unemployed couch-surfing parasites," drawing parallels to the drastic reduction in job-seeking activities among recipients of unemployment benefits and the decline in work rates post-retirement.

The video highlights statistics on how unemployed Americans spend their time. The average unemployed American spends 30 minutes per day looking for a job. While retirees, understandably, demonstrate a significant work rate drop after the age of 65—suggesting that UBI could exacerbate these trends.

The broader societal impact, according to Onge, would hit the youth hardest, potentially discouraging them from entry-level positions and resigning them to a stagnant existence of minimal achievement and chronic dissatisfaction.

With the precedent set during the COVID-19 pandemic when governments worldwide distributed emergency funds, Onge posits that the next economic downturn could be the catalyst for UBI's introduction in the U.S. One would think that the stimulus checks provided to American citizens in 2020 and 2021 have provided the world with a lesson on what handing money out to Americans does to the prices of goods and services.

Canadian policy-making may be a bellwether for American social welfare, with the potential adoption of UBI representing a watershed moment in the relationship between citizens and the state. As Canada edges toward this policy, the question remains: will America take the leap into universal basic income? Let's pray it does not.


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