Could a socialist-style government handout actually help the American economy? A new study from the left-leaning Roosevelt Institute claims universal basic income could boost the economy by trillions, but conservatives are pushing back with data showing minuscule benefits and concerning side effects.
At a glance:
• The Roosevelt Institute claims UBI could grow the US economy by 12.56% to 13.10% by 2025, adding $2.5 trillion to GDP
• A conflicting study from the National Bureau of Economic Research found people receiving $500 monthly only ended up $100 richer and smoked more cigarettes
• Part-time workers receiving UBI showed a 13 percentage point decrease in labor market participation
• Conservative critics argue economic growth and job creation are more effective solutions for lifting people out of poverty
• The Roosevelt study’s assumptions are highly contentious, with many economists questioning its validity
Roosevelt Institute Makes Bold Claims About UBI Benefits
The Roosevelt Institute, a progressive think tank, released a controversial study claiming that implementing a universal basic income of $1,000 per month for every American adult could dramatically boost the economy. The researchers suggested this program could potentially add $2.5 trillion to the GDP by 2025 if implemented without raising taxes.
And before you say anything…we think this is crazy too, but we wanted to bring you the story and let you make up your mind.
Their model examined three potential UBI implementations: a full UBI ($1,000/month per adult), a partial UBI ($500/month per adult), and a child allowance ($250/month per child). The study’s authors claim that UBI would increase consumer spending and create economic demand, potentially creating millions of additional jobs.
Conservative Research Reveals UBI’s Failures
A more recent study from the National Bureau of Economic Research paints a starkly different picture of UBI’s effectiveness. Their research found that participants receiving approximately $500 per month only ended up about $100 richer overall, raising serious questions about the program’s efficiency and value.
Even more concerning, the study showed that part-time workers who received UBI payments had a 13 percentage point decrease in labor market participation. This finding directly contradicts claims from UBI proponents like Ioana Marinescu who stated, “Our fear that people will quit their jobs en masse if provided with cash for free is false and misguided.”
The study also revealed troubling behavioral changes among UBI recipients. Researchers found “moderately strong evidence of increased tobacco consumption” among those receiving the payments, suggesting that free government money doesn’t necessarily lead to better financial or health decisions.
While recipients did show reduced credit card debt and increased food security, the overall financial impact was minimal compared to the program’s cost. The average non-housing debt balances declined by $2,190 over 18 months compared to a control group, though researchers noted this was not statistically significant.
Conservative Solutions vs. Socialist-Style Handouts
Conservative economists point to fundamental flaws in the Roosevelt Institute’s methodology, however. Their model assumes the economy suffers from what liberal economist Larry Summers calls “secular stagnation,” a controversial theory suggesting that a lack of consumer demand is holding back economic growth.
Critics argue that implementing a full UBI would require unprecedented tax increases on both the middle class and wealthy Americans. The Roosevelt Institute even acknowledges this reality in their study, admitting that funding a full UBI through taxation would significantly reduce the promised economic benefits.
Conservative policy experts maintain that economic growth and job creation represent more sustainable and effective approaches to poverty reduction. Rather than creating government dependency through monthly handouts, conservatives advocate for policies that stimulate business growth, reduce regulations, and create meaningful employment opportunities.
The NBER study’s findings ultimately align with conservative economic principles that have consistently shown socialism-inspired programs fail to deliver on their promises. Instead of redistributing wealth through government programs, conservatives argue for creating conditions where Americans can build wealth through work and business creation.
Surely this is all madness – but in a world where AI replaces human workers, it’s hard to imagine what we’re all going to do for work one day…
