Ray Dalio, founder of one of the world's largest hedge funds, estimates that it would cost the U.S. roughly $3.8 trillion to institute universal basic income.
"Universal Basic Income is one of several ideas floating around for dealing with the income/opportunity gap," the Bridgewater Associates founder wrote on LinkedIn on Thursday. "I won't give you my conclusions because I don't want to bias you. I'd rather you form your own opinion after you are informed."
Because "UBI has never been implemented (unless you count the extremely generous payments Gulf States make to their citizens), we do not have a true case study to stress test the arguments for and against it," Dalio writes.
Even the various "pilot schemes" in Canada, the United States and other countries "will take years to report their findings,” leaving only "the results from numerous experiments looking at the impact of unconditional direct cash transfers to poor households (i.e. no-strings transfers to cover basic needs for a period, but that weren't universal or long term), both in the developed and developing world."
The firm estimated the cost of giving each and every American citizen $12,000 per year, which is the current poverty threshold, and found that it would cost about $3.8 trillion, which is 21 percent of the U.S. GDP, or 78 percent of U.S. revenue from taxes.
"Even the most generous welfare states would struggle to cover the cost of a poverty-line basic income,” Dalio notes. "Not to say it isn't possible – just that incremental change in our social/taxation systems wouldn't get you there."
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