In addition to the temporary universal basic income (UBI) proposed by several prominent outlets. Let’s also immediately give all Americans a $3,000 investment account they can’t cash out until age 70 (those older than 70 can have the money now). This will give all Americans a stake in this country’s businesses, put money into these businesses and stability in the markets, and encourage us all to keep an eye on the future.
Calls for a fiscal stimulus that grants all US adults $1,000/mo and children $500/mo, until the COVID-19 pandemic has stabilized:
- Wall Street Journal | Opinion: The Case for a Big Coronavirus Stimulus by Jason Furman
- New York Times | Opinion: We Need Real Economic Stimulus by Steven Rattner
- Rep. Tulsi Gabbard Introduces Resolution Calling for Emergency Universal Basic Payment as Direct Coronavirus Pandemic Relief; House Resolution 897 (H.Res.897)
- Fast Company: To stop a coronavirus quarantine recession, economists say send everyone cash—now by Talib Visram
- CNBC: Andrew Yang, AOC, Harvard professor: Free cash payments would help during coronavirus pandemic by Catherine Clifford
Universal Basic Income (UBI) advocates like myself are saying, “it’s about time.”
The beauty of cash transfers like these is their inclusiveness, simplicity, and dynamism. Millions of Americans will struggle to pay big ticket bills like mortgage, rent, student loan payments, or car payments in the coming months. Maybe they need extra money for food and Netflix.
Entrepreneurs and independent contractors will not fall under traditional financial assistant programs like unemployment. Think Mom & Pop Airbnb proprietors who invested all of their savings into three units that now have all bookings cancelled, Lyft drivers with fewer rides, other contractors, and the millions of people running small businesses. UBI helps all of these people, whereas other programs for assistance may be complex to qualify for, and fall short.
Let’s do UBI, And We Can Do More
UBI is a brilliant safety net and will be a new economic floor for Americans, and we can do more. What if an additional supplemental form of UBI was married to our markets? I propose we give all Americans $3,000 as a birthright. There’s a catch though, that money cannot be accessed until a person turns 70 years old, in the meantime, it must remain in the US’s financial markets.
I’d like to call this investment account the Corliss Federal IRA – I mean I came up with it, so…
There’s magic in that $3,000. It would be mandated that for all people under the age of 18, the $3,000 is held as index funds for the US’s major financial markets, NASDAQ, the DOW, and the S&P 500. There are 72 million people under 18 in the US. This would be an immediate market investment of $216 billion! Talk about a stimulus!
From 18 to 70 people would gain control of their funds for all but the ability to cash it out. They’d have the ability to move the money into the investments they want similar to what people can do now with a Roth IRA, traditional IRA, and 401ks.
At 70, people can cash out, or let their investment ride. At a modest 5% return, from birth to 70, the $3,000 will grow the $91,000. If a person could hold off until 80, they’d have $148,000.
It’s not just the money though. Helping all Americans participate in our financial markets will make us a more inclusive society. It will disrupt us versus them mindsets because everyone will have a piece of Wall Street to their name. It will help people think long term.
Cash now in the form of UBI is critical for millions to get through the hardship caused by COVID-19. Giving all Americans an investment account will help Americans look ahead to an even brighter future that awaits us, and help markets rebound (and then some).
You left out a lot of information, like how all of the economic gains of the past 40 years have gone to the richest 1% while wages for the people DOING THE ACTUAL WORK have been stagnant for those 40 years. Adjusted for inflation, the average wage slave makes less now than they made in 1973!
Hi John, your data is accurate. With this in mind, how would you update the approach. Universal Basic Income, new tax structure, what else?
Glad to have innovative minds thinking and talking about these issues.
Me too. 😉 Thank you, Perry!
Very interesting discussion. Glad to hear your thoughts.