Week 08 -- Reflection -- Universal Basic Dividend

This week Dr. Steve Trost @trostparadox presented The Libertarian, Conservative, Progressive, Communist, (Not Socialist) Case for a Universal Basic Dividend to the Free Enterprise Society at Oklahoma State University. This presentation detailed Dr. Trost's idea for a way the United States government could replace welfare programs with a universal dividend of the country's gross domestic product. This plan, Dr. Trost states, has elements that adhere to Libertarian, Conservative, Progressive, and Communist viewpoints.

By taking 16% of the United States' GDP, all citizens would be taxed at a 25% flat rate and receive $9,000 in funds they can use however they see fit. This means that at an income level, pre-dividend, of $36,000, the net tax level is zero. Any person making above this level is a net benefit to society.

The way I see it, this plan would inevitably raise the floor of poverty, which is a positive thing and a large focus of the topic anyway. Mentioned in the presentation several times, is the idea that this flat dividend would allow more free citizen movement, Trost says in accordance with Libertarian views. While it would be easier for lower-class citizens to move to cheaper areas of the country, over time the country would become more homogeneous, cost of living-wise. The idea of individualism in the Libertarian ideal is not fully supported. See each citizen over $36,000 is a net benefit to the UBD, and therefore providing for others as well as themself. Also, citizens would not have freedom of association in this plan.

I also have worries about inflation in this plan. While the UBD is tied to gross domestic product, how could it be protected from rising price levels on imported goods? Under Dr. Trost's proposal, I can see how it would be beneficial for the U.S. to raise its GDP. However, the U.S. is still a net importer of goods, making the country vulnerable to foreign inflation.

Another concern of mine is unproductive members of society. When given this universal basic dividend, the free-rider issue would be quite apparent. Given a lump sum and the opportunity to now move to a cheaper part of the country while receiving the same benefit could hinder those areas. Unproductive members of society moving to rural areas would fill those areas with unproductive members of society. And while this would still raise the poverty floor, struggling areas would only be burdened further.

Alaska implemented the Permanent Fund Dividend in 1976 based on its oil economy. This was done in an effort to draw in citizens and further boost Alaska's productivity. If this program has worked on the state level, why haven't more states done this? Many states want to keep their cost of living down. States do not need congressional approval to try it, as opposed to what was mentioned in the presentation.

While there is still plenty of kinks in this plan, as there is with anything government-related, opening the door of conversation and deeper thinking is one of the best things this proposal has done. No plan can appease all groups, but I do like how this plan relents the freedom to use the money as citizens see fit, further making them responsible for their decisions.

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