Basic income improves GDP and the overall economy - more important IL to economy than business confidence

The first one is that it is an economic stimulus. I mean business can only hire in response to increasing consumer demand or purchasing power. If we want to grow the economy, we have to make sure that enough people can participate in the economy and buy things so that new businesses and the vibrancy of new startups, all that can be maintained. Quite simply, there’s been research shown that programs that put more money in the hands of those who have the least generate five times more return to the economy than corporate tax cuts.

The velocity of money in the US has been drastically affected since 2008. I think I saw Nick Hanauer put up a slide that the average dollar was exchanged 17 times in the year before 2008, and now it’s only exchanged five times in a year because wealth has been so concentrated in the hands of a few. Maybe it’s time that we engage in a demand-side stimulus like a basic income that directly brings people up to a livable level and stimulates the economy.

There’s real evidence now that this would work. There’s a program in Canada called the Canada Child Benefit. It’s something that even some Republicans in the US were suggesting that we do something like that in the US, which is encouraging. The Canada Child Benefit is an unconditional, no-forms-to-sign cash transfer program for families. I think it ranges from a hundred dollars a month all the way to $530 a month per child per household depending on their income level.

Imagine that a family in poor circumstances with two children could be receiving over a thousand dollars a month, no strings attached, from the government and which helps them make ends meet.

This program not only has it brought– it was launched in July 2016– not only has it brought 300,000 children out of poverty according to Justin Trudeau, the Prime Minister, but the Governor of the Bank of Canada, Stephen Poloz, said on record that this program resulted in a 0.5% GDP growth in 2017. That’s pretty amazing. Half a percent of GDP growth. As you know, GDP measures the exchange of goods, production of goods. Obviously, if there’s more goods being exchanged, more jobs are created.

I’ve noticed personally that when looking at unemployment graphs, the five-year graph of unemployment in Canada, the unemployment rate was pretty flat for three years. Literally the month after those payments began, you can start to see the lines starting to go down. Now we’ve had two years of non-stop decrease in unemployment. Now that’s happened in the US as well, so there might be something going on, but it’s unusual how those payments seem to correlate to dislodging a flatline in unemployment.

So it is an economic stimulus. I’m sure your readers know the Roosevelt Institute in the US did a projection that the US economy would grow by at least 13% within a few years if there was a basic income, adding two and a half trillion dollars to the annual economy, creating over four and a half million jobs.