Universal Basic Income over the long term only benefits those closest to the money printer, mainly high net worth individuals, large corporations and government institutions.
Why?
Let's use Canada as an example.
The population is currently around 38.25 million Canadians.
To keep this simple let's assume that each individual was to receive $2000 CAD in UBI per month.
That's a total of $78.5 billion CAD per month or $918 billion CAD per year.
As per the following annual financial report for the period 2021-2022, total revenue for the government of Canada was $413.3 billion CAD.
https://www.canada.ca/en/department-finance/services/publications/annual-financial-report/2022/report.html
Without factoring any expenses and considering UBI as an add-on vs a replacement to welfare, the government would need to find another $504.7 billion CAD to pay for it.
Where would this money come from?
Deficit spending!
The government will issue bonds that will be monetized by the central bank. In layman terms, the central bank will buy these bonds from the government.
Where does the central bank get the money from?
It creates it out of thin air!
The central bank isn't a business, and as a result doesn't produce and sell anything. Their mandate is to oversee the monetary and banking system and to manage the supply of money within the system. Because of their monopoly on money, they also have the ability to create money.
What happens when the supply of money increases within the economy?
Assets, such as stocks, bonds, real estate, etc. go up in price. Why? When money is added to the system, the economy does not instantaneously create new goods to accommodate the surplus of dollars. More dollars are going after the same number of goods, and as a result the price of goods goes up. Those who own assets, usually the more privileged, will be better off in comparison to those that do not own assets.
To make things worse, newly created money does not reach everyone in the economy at the same time. Think of an empty cup that you pour honey into. The honey will concentrate in the middle before gradually making its way to the outer edges of the cup. New money is distributed within the economy in the same way. Those who are closer to the center, i.e. the central bank, will have access to new money earlier on. They have the assets and political connections that allow them to take out loans more easily and cheaply than the average salaried individual. They use the cheap money to buy more assets at pre-inflation prices. By the time the new money reaches the general population, the value of these assets has increased, making them unaffordable.
Over a long enough time horizon, UBI will only make life more expensive and unaffordable for the people it is supposedly trying to help.
UBI will amplify the debasement of the currency, wiping out the vast majority of the population's purchasing power.
#Bitcoin fixes this.
