Covid crisis shows value of Universal Basic Income
I have long argued for a global recession, since reduced consumption is vital climate action — but of course a planned one. And for UBI, universal basic income, even if it had to be initially funded by quantitative easing (QE).
In this light the release of $30 billion by the Reserve Bank is more than welcome, though their motives are misguided.
To support the economy — wrong. It's to support people. To maintain inflation and employment objectives — wrong, especially now. It's to enable people to buy food. To avoid a “worse” than 3.1 percent drop in GDP — wrong. A greater drop in GDP would be better, not worse, considering that GDP measures costs, not benefits, and much economic activity is actually unproductive or environmentally and socially destructive. (My guess is more than half, but that's just for argument's sake. There's an analysis that economists don't bother to do.)
Likewise the Government, in trying to protect businesses, and then belatedly finding they've left out a lot of needy people. It has coped brilliantly with trying to dole out money directly through employers and indirectly through appealing to the banks but not commanding them: a highly detailed procedure that keeps throwing up omissions and inequities, and requires people to go cap in hand when they're trying to stay at home.
The uncontrolled banks continue to exact interest far in excess of the OCR. For businesses to do nothing should cost them nothing, if only debt repayments could be frozen, and employees have other support.
Making $30 billion available gives three million households $10,000 each, or $500 for 20 weeks.
By the time of the next unforeseen crisis, a straight UBI, as per a long-running worldwide movement and current Green Party policy, will prove simple and fair. As with superannuation, those who don't need it will still get it, but pay back in taxes.
Meantime, people looking for entertainment, go for humour. Knock knock. Who's there? Donald. Donald who? See, you've forgotten him already.