My thoughts on funding a Universal Basic Income

A UBI falls within the realm of communism. It is generally understood that people would receive an equal amount of money universally. This means the very rich would receive the same amount as the very poor. The reality is that for the very rich, $1000 per month is meaningless. It is a rounding error on their investments. For the middle class, it means they can invest a little more or buy a slightly larger tv or a slightly better vacation. For the poor, it opens up a world of opportunities. They can receive better education, have a healthier lifestyle or even be able to afford to buy a vehicle allowing them to drive to a better job.

Criticisms of the UBI include that it takes money away from one person and hands it to another. There is also the fear that some people take the money and squander it on beer and drugs. If we can satisfy the first condition, and make it self-funded, it should satisfy one fear. The second part is unavoidable. Some people will abuse themselves but perhaps with a UBI, this will reduce their anxiety and allow them to regain control over their lives.

While my solution is not the only solution, perhaps it will generate a discussion to reach the best solution.

Our Canadian Pension Plan is funded by workers who pay a little throughout their working career. It is administered by an investment board (https://www.cppinvestments.com/the-fund/our-performance) and has an average of 10.8% return for the last ten years. Instead of limiting this to working adults, I feel that everyone should start investing in this from when they are born. I suggested a $100 per month payment into the system and that 1/2 of the return on this investment is reinvested and the other half would be paid out as a dividend. Initially, the recipient (the baby) would only receive $5 per month but by age 18 the recipient would receive $140 per month. When the recipient is age 65, the monthly dividend would be $2283.

The rationale is that when you are a child, your parents can support you so $5 per month is immaterial. Once you reach 18, you should be able to start working and supporting yourself, but $140 per month will at least ensure that you have access to food. Once you reach retirement age and unable to support yourself, is when you need the maximum benefit. One reason that poor people remain poor is that they do not have the skill or ability to build equity. By using the abilities of the Investment Board (which already exists), all members of society will be able to benefit. This is also something that is intergenerational. As one generation dies off, their investment could be distributed to their children or grandchildren.