United States: Alexandria Ocasio-Cortez calls for basic income as a response to the corona virus crisis

United States: Alexandria Ocasio-Cortez calls for basic income as a response to the corona virus crisis

by | Mar 28, 2020 | News

Alexandria Ocasio-Cortez. Picture credit to: Fox 32

As the corona virus crisis unfolds, the political atmosphere heats up in the United States. At the Capitol, a 2 trillion dollar bill is in the making, specifically to deal with the economic downturn caused by the epidemic.

Alexandria Ocasio-Cortez (AOC), the Democrat Representative of the Bronx constituency in New York City, already called for measures like paid leave, debt relief, waiving work requirements, guaranteeing healthcare, universal basic income (UBI) and detention relief. She has recognized that the current bill under discussion is, indeed, partly unconditional (around 500 billion dollars), although she has shown concerns that this money may not reach those more in need of it, but go to large corporations which are seeing their profits plummet at this point.

AOC had already shown simpathy for the basic income policy in the recent past, although in an ambivalent manner. In the face of a “systemic [economic] shock” the corona virus crisis is creating, however, she has again reached for the UBI, at least as an emergency economic measure. That idea, in fact, has motivated more than 500 academics, public figures and (basic income) advocates to call for such a policy, which was manifested in a public letter.

Even on the Republican side of Congress, this kind of approach is getting support. Republican Senator Mitt Romney has said that “urgent action on additional coronavirus response measures [are] aimed at providing economic relief for working Americans and families.” Others, like Congressmen Tim Ryan and Ro Khanna, plus Tulsi Gabbard, have also very recently proposed legislation that will allow the distribution of (unconditional) checks onto people’s hands, resembling the idea Andrew Yang had been proposing for most of his Presidential Campaign. The Congress Financial Services Committee, as a matter of fact, is aiming to release legislation, as part of the 2 trillion dollar bill rollout, that would put an immediate 2000 US$ in the hands of every American, with an additional 1000 US$ for every child. Even when people are able to slowly return back to work, there is always that worry about contracting the virus and people not accepting social distancing regulations. This is where helpful business software from companies like Axxerion come in, they can help manage meetings and workspaces during this time to keep in line with the guidelines, reducing the chance of contact and preventing an outbreak which may cause people to stop working again, affecting their income massively.

Even as the crisis unfolds, critics worry that the basic income policy, even applied over this context, maybe too expensive, while remaining senseless to pay a 1000 $/month for the duration of the contention/recession to billionaires. AOC replies to both those fears shortly and concisely: that (given the situation) it should really be more, and that there is no need to means-test when it can be taxed back (from the relatively more wealthy) in the next fiscal year.

More information at:

CNN Politics “AOC’s message to young people on coronavirus” video

MSNBC, “AOC on coronavirus rescue bill” video

Zachary Keyser, “AOC: We need universal healthcare, basic income to fight coronavirus“, Jerusalem Post, March 20th 2020

Soomi Lee, “Why an emergency Universal Basic Income makes sense during the Covid-19 pandemic“, London School of Economics (US Centre),

Abby Vesoulis, “‘I’ll Be a Very Happy Man.’ Will the Coronavirus Outbreak Turn Andrew Yang’s $1,000 Promise Into Reality?“, TIME, March 17th 2020

“Why more than 500 political figures and academics globally have called for universal basic income in the fight against coronavirus“, Letter published by the Independent, March 18th 2020

Common Arguments Against Basic Income Don’t apply to the Emergency BI

by | Mar 27, 2020 | Opinion, The Indepentarian

‘Most economists will agree that the economy needs injections of cash right now.’

The economy needs injections of cash right now

The Guardian newspaper asked me to write an opinion piece about the Emergency Universal Basic Income (UBI). They changed my headline but otherwise, printed it as I wrote it.

America is in crisis. We need universal basic income now. By Karl Widerquist, the Guardian, 20 Mar 2020

I’m reprinting it here in full:

A few members of Congress recently have suggested that the United States government institute an emergency Universal Basic Income (UBI) in response to the twin crises of coronavirus and the stock market collapse, which many economists believe could signal the start of a significant recession. UBI provides an unconditional sum of money from the government for permanent residents whether or not they work. Proposals for an emergency UBI vary. One common suggestion from lawmakers is $1,000 a month for adults and $500 a month for children for four months or more if the coronavirus persists. This amount would be an enormous help in this crisis.

 

I’ve studied UBI for more than 20 years, and I find that opposition to it usually comes down to two main arguments: that everyone should work or that we simply can’t afford it. Whether these are valid or invalid arguments against UBI in normal times has been debated for decades, but they simply don’t apply to the emergency UBI during the current situation.

 

Right now, we don’t need everyone to work. In fact, we need a lot of people to stop working. We don’t want food service and healthcare workers who might be sick to go into work and infect people because they can’t afford to stay home. In an economy where millions of people live paycheck-to-paycheck, an emergency UBI would give non-essential employees the opportunity to stay home during the coronavirus outbreak, slowing the spread of the disease. The more people we have who can afford to stay home the better off we’ll be, at least for the duration of the outbreak.

 

Most economists will agree that the economy needs injections of cash right now. When economies slide into recession, there is a “multiplier effect” as people lose their jobs and businesses contract, they spend less. Other people then lose their jobs or contract their businesses, and this multiplier effect continues. The economy shrinks, income declines, and money literally disappears from circulation.

 

Governments can help stop this process by creating money and injecting it into circulation. After the 2008-2009 economic meltdown, the United States government and governments around the world created trillions of dollars worth of currency out of thin air and injected it into the economy, usually by buying back their own debt, in an effort to stimulate demand and reverse the multiplier effect. Buying back government debt isn’t necessarily the best way to stimulate the economy, however. The money goes mostly to people who are already rich, and they have very little incentive to invest that money when everyone else is losing income.

 

An emergency UBI is just about the best economic stimulator that exists in modern times because it gets money in the hands of everyone. No one’s income would go to zero due to stock market-related layoffs or corona-related precautions. That income helps people maintain some of their spending, which helps prevent others from losing their jobs through the multiplier effect.

 

Congress should act now. An emergency UBI, providing $1,000 per adult and $500 per child, per month, for four months or as long as the outbreak lasts, can help everyone get through this critical time. The sooner our government acts, the sooner we start to recover. We don’t know how bad coronavirus will get. We shouldn’t have to worry about how we will be able to buy food and pay rent as well.

 

 

The economy needs more money and less labor.

 

We need people to spend money.

 

And we don’t need them to work for it.

 

 

Italy / Europe: Petitions for basic income, in the face of the Corona virus pandemic

Italy / Europe: Petitions for basic income, in the face of the Corona virus pandemic

by | Mar 26, 2020 | News

Two new petitions have been launched in Europe in response to the Coronavirus emergency.

One has been launched in Italy on Change.org platform and is addressed to Prime Minister Giuseppe Conte, asking for 10 €/day for all Italian citizens as the fastest and most effective way to secure them against loss of income

Another appears on the YouMove.eu website and is addressed to Ursula von der Leyen, Head of the European Commission, Christine Lagarde, Head of the European Central Bank, Mário Centeno, President of the Eurogroup and Finance ministers of all European Member States, asking for a “Quick introduction of an Unconditional Basic Income as an urgency measure [given the corona virus pandemic economic consequences]”.

Daniel Raventós and Julie Wark: “Covid-19 and the Need, Right Now, For a Universal Basic Income”

Daniel Raventós and Julie Wark: “Covid-19 and the Need, Right Now, For a Universal Basic Income”

by | Mar 25, 2020 | Opinion

The pair Daniel Raventós and Julie Wark have analyzed the corona virus outbreak and consequent economic downturn and call for an immediate implementation of basic income in each country, truly a global response to a global crisis. It can be read, from the onset of the article:

Apart from the medical threat revealing a brutal class divide in healthcare, the coronavirus pandemic is creating social and economic havoc among non-rich populations. If ever the need for a universal basic income was evident, it is now. But governments, trying to save the neoliberal system, and making the most of the disaster to lay the foundations for a new round of disaster capitalism, won’t see it. To give a couple of examples of this catastrophe profiteering, laissez-faire entrepreneur par excellence, Sir Richard Branson, wants a £7.5 billion government bailout for his airline, and Trump has proposed a $700 billion stimulus package in which industries will be “stimulated” at the expense of Social Security and, once again, the poor. So much for the free market.

More information at:

Daniel Raventós and Julie Wark, “Covid-19 and the Need, Right Now, For a Universal Basic Income“, Counterpunch, March 19th 2020

CNBC Interview of Karl Widerquist on Emergency Basic Income

by | Mar 24, 2020 | News, Opinion, The Indepentarian

Annie Nova, “How the Trump cash infusion would help millions of Americans: Interview with Karl Widerquist.” CNBC, Mar 18 2020

Coronavirus precautions in California

Empty streets in California

Annie Nova, of CNBC, recently interviewed Karl Widerquist to ask about proposals for an Emergency Universal Basic Income during the twin crises of the coronavirus and the stock market meltdown. Some people have seen the latter as a positive thing, however, with intrepid sorts jumping onto the market after reading some robinhood app reviews and learning the way it works.

To prevent millions of Americans from running out of money amid the coronavirus, the government has announced plans to send out checks to them soon.

When Treasury Secretary Steven Mnuchin made the announcement about the cash infusion on Tuesday, universal basic income proponents felt validated. Now, the group of those calling for such a policy, if only in a temporary rendition, is quickly growing. Already some 1 in 2 Americans say they support a program in which the federal government sends out regular checks to everyone, regardless of their earnings or employment.

Tech entrepreneur and former candidate for president Andrew Yang centered his campaign on a $1,000 universal basic income. He dropped out of the Democratic primary last month, but now the hashtag #YangWasRight is taking off on Twitter.

As the pandemic forces schools and businesses to empty, Democratic senators, including Cory Booker of New Jersey and Sherrod Brown of Ohio, have called for immediate $2,000 payments to adults and children below a certain income threshold. Meanwhile, Sen. Mitt Romney, R-Utah, proposed giving every American adult $1,000.

CNBC spoke with Karl Widerquist, an associate professor at Georgetown University-Qatar and a founding editor of the journal, Basic Income Studies, about how a cash infusion could help Americans. (The interview has been edited and condensed for clarity.)

Annie Nova: Why do you think the Trump administration is considering sending cash directly to Americans?

Karl Widerquist: Some people have no other choice but to go to work, whether they’re sick or whether their child is sick, and it’s really not good to keep this threat over the heads of our entire working class. But the economy needs money and it needs money to go into the hands of people who will spend that money.

AN: Why is this policy preferable to the payroll tax cut the administration was also considering?

KW: The payroll tax is slower to take affect and it only effects formal workers. Informal workers, contract workers, the self-employed, single parents, children and the homeless need this money more than anyone else, but they’ll be left out by the rebate.

AN: How would a cash infusion make this less of a crisis?

KW: In very important ways. You’ve got a bunch of people who’ve been told, ‘Don’t go to work. Stay home. We don’t need you to wait tables and cook meals.’ And these people need to eat. That’s the first line. But it also has ripple effects across the entire economy. The stock markets are tanking, in such an enormous and rapid rate, that it implies we’re going into a very steep recession right now. During a recession, not everyone can find work, but we need them to keep up their spending because when they don’t spend, then the businesses where they buy stuff, they lose money and they go out of business. That increases unemployment. It’s what we call in economics a multiplier effect. So a universal basic income is going to keep people working by keeping people spending.

Annie Nova

Annie Nova, CNBC

AN: These proposals often call for giving children money, too. Why?

KW: We give money for children because that’s why parents work. Parents have to go into work because their children need food, shelter and clothing. They need to pay the rent for the rooms in which their children live. If a bunch of people are having to stay home from their jobs, if they’re unable to pay their rent and if they’re unable to buy food, their children are going to suffer.

AN: Sen. Romney recommended a $1,000 payment. Some Democrats up to $4,500. How much is enough?

KW: Replacing people’s entire income is not necessarily what you want to do. That preserves existing inequality. If I’m staying home from my $100,000 a year job as a university professor, and the person next to me is staying home from their job as a minimum-wage dish washer, I shouldn’t get any more than they do. What you want to do is stop income from collapsing, and the best way to keep it from collapsing is to make sure everybody has a minimum amount.

AN: What could go wrong with the payments?

KW: I’m a little worried about the conditions. When you put conditions on at a time like this, when we’re in an emergency, there are problems. You waste money on figuring out who’s eligible and who isn’t and then you make mistakes. You’re going to give it to some people who don’t deserve it, and you’re going to deny it to some people who do.

AN: You have politicians on the left and right getting behind this cash infusion. Does that surprise you?

KW: The increasing polarization in this country is really sad to see. Hopefully, once in a while, we still can pull together. Both sides of the aisle are recognizing this is really a double crisis, with coronavirus and the stock market collapse happening all at the same time.