Roughly one third of Newark’s 280,000 residents live in poverty, and Mayor Ras Baraka wants to solve that problem by giving everyone free money.
During his state of the city address last week, Baraka said:
“We believe in universal basic income, especially in a time where studies have shown that families that have a crisis of just $400 a month may experience a setback that may be difficult, even impossible to recover from.”
Baraka announced the creation of a task force to study universal basic income and determine whether a pilot program in the city is possible, but did not say how the program would be funded or when it would start. Chicago is considering a similar program.
Baraka also welcomed Freedom Paper – a company owned and employed by former prisoners – and warned businesses to spend and hire locally. “If you have not hired Newark employees then you are missing the boat,” he said. “If you are not spending money with local businesses then your use in our town in waning.”
Baraka’s ideas are in line with ridiculous proposals introduced by New Jersey Senator and former Newark Mayor Cory Booker (D), who wants to give every child born in the United States a bank account with $1,000.
Universal basic income is a socialist program designed to eliminate poverty by providing income to all residents regardless of employment status. Recipients can spend the money on anything they want. The immature concept has failed in experiments throughout the world, but people get so excited about the prospect of “free money” that they ignore the facts.
Immediate problems I see with the idea include:
- The program, by definition, is not sustainable.
- The program will discourage people from working.
- Recipients could decide to spend their money in ways that do not benefit themselves or the economy.
Despite the facts, universal basic income is an idea that has been championed by Millennials and by Progressive Democrats such as Andrew Yang, a presidential hopeful who last week said he would personally provide income for poor families in Iowa and New Hampshire.
The money would help people improve their health, pay their debts, and reduce stress, he said.
Editor’s note: I remember seeing a well-attended presentation at an economic conference about 15 years ago. I couldn’t believe I was sitting in a conference room of over a hundred purported economists, and can’t do enough math to realize the ridiculousness of this.