Most Americans are sick of hearing about Hillary Clinton. Enough people didn’t trust her, didn’t like her, or couldn’t be persuaded to vote for her, which led to Donald Trump’s victory. After that, we expected her to fade away — to ride off into the sunset with Bill and enjoy retirement. She did fade away for a while. But now she’s back, with a book in tow containing many interesting tidbits about the election. One of the most interesting? The fact that Clinton — a major party candidate — had given serious consideration to a national basic income program.
The Clinton campaign had all sorts of plans, outlining what it hoped to accomplish in office. In terms of a basic income program, the goal was to help middle-class Americans pad their bank accounts. She brings up the basic income idea in her book What Happened and how her campaign wanted to make it a piece of her overall economic plan. Although it never actually came to fruition, it’s pretty incredible that a basic income — an idea that’s been mostly floated in far-left and libertarian circles — was nearly a major point for a major-party candidate.
In an interview with Vox’s Ezra Klein, Clinton said she “wanted very much to convey a commitment to trying to figure out ways to raise incomes. And so I looked at a couple of different approaches to what’s called UBI, universal basic income.”
How did she plan to do it, why didn’t it work, and what would it have meant for the average American had she been elected? Let’s dig in.
Hillary Clinton: A basic income plan
- Many Americans couldn’t grasp the idea, which ultimately led to its failure.
Clinton’s idea for a universal basic income for all Americans stemmed from what she had read about in a book, With Liberty and Dividends for All, she told Klein. The book, she said, “explored the idea of creating a new fund that would use revenue from shared national resources to pay a dividend to every citizen, much like how the Alaska Permanent Fund distributes the state’s oil royalties every year.”
The Alaska Permanent Fund is the basis of Clinton’s plan. If you live in Alaska, you get a check from the government. It’s mostly funded by sales of natural resources (oil and gas). This is basically what Clinton wanted to do on a national scale. Along with some additional taxes on financial transactions, implementing a national basic income appeared feasible.
Next: Before we push further into Clinton’s plan and try to decide whether it would have worked, let’s do a quick universal basic income overview.
The basics of a universal basic income
- Let’s take a step back and go over the basics of a universal basic income program.
Before we get into whether the plan would have worked, let’s get the basics out of the way. Basic income, or universal basic income, is essentially a cash payment to every citizen in the country — no questions asked. In theory, the cash payment replaces all other support programs, including food stamps and housing assistance. The idea is individuals can better gauge how and when to spend their money, and they will do so accordingly.
So if you get fired or laid off, you have some guaranteed income. Struggling to make rent? Basic income can help with that. The same goes for buying groceries and covering utility bills. If Americans have more money on top of what they’re getting from their paychecks, we’ll all be better off. Naturally, this should help the economy expand, too.
Next: How Clinton proposed to make universal basic income work in modern America
How would it have worked?
- The plan would have basically emulated Alaska’s format, with some tweaks.
As mentioned, Clinton’s plan would have taken the Alaska model and gone nationwide with it. That is, the universal basic income would have been funded by sales of natural national resources, with new taxes on things, such as financial transactions. She even would have called it “Alaska for America,” as she told Klein.
But unfortunately, the plan fell through. The Clinton team simply couldn’t make it work. “Unfortunately, we couldn’t make the numbers work. To provide a meaningful dividend each year to every citizen, you’d have to raise enormous sums of money, and that would either mean a lot of new taxes or cannibalizing other important programs,” she said. “We decided it was exciting but not realistic and left it on the shelf. That was the responsible decision. I wonder now whether we should have thrown caution to the wind and embraced ‘Alaska for America’ as a long-term goal and figured out the details later.”
So it didn’t work out. But that’s not to say that enthusiasm surrounding basic income is waning. And we can always try to figure out what would have happened had things worked out differently.
Next: What might have happened?
What would have happened as a result?
- A recent study showed a universal basic income would boost the American economy $2.5 trillion over the next eight years.
A study from the Roosevelt Institute took on the task of modeling out a basic income scenario. The results were surprising. According to that study, a $12,000 per-year basic income — a $1,000 check every month — would result in a $2.5 trillion explosion in the economy. That’s GDP growth of 12.6% to 13.1% by 2025 and a lot of money going directly into Americans’ pockets.
Next: The model did make some big assumptions though. So temper your enthusiasm.
Don’t get too excited, though
- That study makes a few big assumptions that might not be rooted in reality.
Although the Roosevelt Institute study does produce some exciting results, digging into the model shows there are some rather liberal leaps that make it all work. The biggest and most obvious? The model assumes all Americans would remain in the workforce and continue working after receiving their $12,000 per-year boost. While it’s most likely true that most would, it’s almost certain that some would drop out and instead live off of the cash handout. Plus, an increase in federal spending of roughly $12,000 multiplied by 320 million people is sure to cause some sort of economic shock wave.
Next: How, exactly, do Americans feel about this sort of plan — and Clinton, for that matter?
How Americans feel about basic income — and Hillary Clinton
- Hillary Clinton was unpopular before the election. And she remains unpopular afterward.
Not that it matters much now, but Clinton remains quite unpopular even after the 2016 election. According to a June 2017 Gallup poll, only 41% of Americans have a favorable view of the former secretary of state, senator, and first lady. This type of favorability number, of course, was one of the biggest reasons she lost to Trump. And interestingly, basic income is much more popular than she is, even though she’s the only major candidate to float the idea as a part of her platform.
Surveys show roughly half of Americans (it varies depending on the poll) support universal basic income in some form. It’s an idea that’s more popular than Clinton.
Next: Though universal basic income didn’t make it into Clinton’s platform, does it have a shot of actually making it in the U.S.?
Will a basic income ever get a real shot?
- There are plans to experiment with a universal basic income for 3,000 people in two states.
Seeing as how the idea of a universal basic income is fairly popular, it might be fair to assume the concept will get a try at some point. Experiments have been underway for some time actually. Internationally, several countries have tried pilot programs, including Finland, Kenya, and India. Stateside, a few small experiments have been enacted, including one that’s currently underway in Oakland, California, initiated by Y Combinator.
But as far as a nationwide basic income program? Don’t hold your breath — though the idea has never been more popular.
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