Question

HOW and WHY can the Universal Based Income affect the economy?

What are some examples that Universal Based Income can help the United States?

Answer 1

Universal Basic Income (UBI)

The idea behind Universal Basic Income (UBI) is to provide all citizens some kind of money payment irrespective of their income, employment criteria or kind of resources they have. Since in the present age of technology, globalisation and automation, there is a growing consensus that majority of work force face the risk of unemployment due to technological advancements.  Also concerned by the income inequality picture where few people are getting richer by the day and majority of them falling in the darkness that is poverty, major economists (from Thomas Paine (Founding father) to Milton friedman) have argued and strove towards providing citizens some kind of social security.
The question that how and why Universal Basic Income affect the economy can be given by stating that
1) it may work wonders for the welfare states by helping in redistribution of income.
2) The unconditional cash flow to everybody may help in increasing demand in the economy.
3) It may help the work force to feel safe and secured while looking for better opportunities for work and wages knowing they have some minimum income to go by during the period.
4) It can also lead to increase in inflationary pressures and decrease in work participation.

Universal Basic Income and United States.
It is normally argued that 1 out 3 Americans are in the danger of losing their employment to technology and automation. These views are publicly expressed by major figures including Mark Zuckerberg. The concept of Universal Basic income has been hailed in the United states since the beginning. In fact major economists including Friedman has argued for a negative income tax. The idea such as a guaranteed income flow to everybody can in fact help the United states' economy like:
1) In the world's most affluent nation, the peek about income inequality says a lot. It is estimated that incomes of top 1% Americans have increased 7 times than incomes of low income group of American since 1979. In this case, the guarantee of minimum income can help redistribute some income and give relief to bottom low earners.
2) Around 80% of Americans feel extremely stressed about their job security (Attitudes in the American workplace- survey). So when they will have the provision of Basic income, this may come as a relief and people may feel secured which would help them look for far more better opportunities and better income prospects.
3) In instances of low economic activity and unemployment, some basic income would help in stimulating aggregate demand and would boost up the economy.