A guaranteed income is popular and cheap.

Yet others have  that, in order to make a guaranteed income efficient, the transfers should be targeted only to those who are economically disenfranchised — a policy often referred to as minimum guaranteed income. Some economists, for example, have  that households earning more than $78,000 spent a very small fraction of the payments they received from the second stimulus package compared to low-income families. Moreover, evidence that increasing the relief that reached underprivileged households while reducing that of higher-earners would have allowed for the same stimulus effect at a much lower cost. 

While it might be some time until the United States adopts a guaranteed income program, there are reasons to remain optimistic. In March 2021, Senate Majority Leader Chuck Schumer  pushing toward making the expanded Child Tax Credit from the American Rescue Plan Act permanent. The temporary expansion, which  the credit per child by more than $1,000 depending on the child’s age, was also made fully refundable for the 2021 fiscal year. This means that if the credit amount exceeded taxes owed, families could receive the difference through monthly payments starting in July 2021 — essentially creating a “guaranteed child allowance” for low and middle-income households. 

The high nominal cost of this one-time policy has  concern that extending it beyond this fiscal year would be too expensive, but research has  that these expansions in transfers are self-financing to a significant extent. By leading to lower crime, better health and better outcomes for children in the long-term, cash transfers practically “pay for themselves” by reducing future government spending in areas like incarceration and healthcare. While making this extended child tax credit permanent is still far from a true guaranteed income, it would be an important first step. 

We often joke that the government’s solution to any given problem is to simply throw money at the issue and call it a day. However, when it comes to extreme poverty, homelessness, and lack of social mobility, investing directly in the American people is the best course of action. A guaranteed income program would reduce the unjust financial burdens of our most disenfranchised and give people power over their own futures. And while the on-paper cost of large transfer payments seems large, the aggregate benefits of reducing poverty at its root will pay for itself in the long run. Whether such a system should end up being universal or targeted is still up for debate, but it is clear that guaranteed income is the most effective way the government can uphold its promise to give every single person — regardless of their economic background, race, or residence — an equal shot at pursuing happiness.