The 2020 presidential election is well underway with Democratic politicians declaring their candidacy almost daily. There may be 20 or more Democratic candidates by the time the race is in full swing this spring. (There may be one or two primary challengers to Trump, but they won’t get far.)
We know where Trump stands on most issues, so the campaign will mostly be shaped by the policy positions offered by the Democrats. The Democratic Party has moved solidly to the left since Trump was elected and many of their candidates’ positions are already well-known, including higher income taxes, Medicare for all, student loan forgiveness, free tuition, open borders and more.
Yet one of the most dramatic policies has not been much discussed, although it’s certain to be at the center of the presidential debates. This is the issue of basic income, also called guaranteed basic income or universal income.
The idea is to give every American an annual minimum income of about $20,000 to use as they please, regardless of whether you have a job or are seeking one. Some plans would give this income to every household member, including children. Some plans would require that the basic income be in lieu of other benefits or entitlements. What all of the plans have in common is that there is no work requirement or conditionality; you just get the money.
This article provides some background and history on basic income plans. It refers to “eight giants,” which might be defeated by basic income (debt, anxiety, inequality, etc.). The “giants” to be attacked are less important than the plan itself. It’s gaining in popular appeal and will be advocated by Bernie Sanders, Elizabeth Warren and others.
Historic evidence suggests that basic income plans won’t solve the problems intended to be solved. The only certainty is more spending and larger deficits. Investors should prepare for the consequences of that.
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