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Universal Basic Income Could Give U.S. Economy $2.5 Trillion Boost, Study Claims

Universal Basic Income.Adam Brown/Vimeo

There have been a lot of financial and tech experts supporting the idea of Universal Basic Income (UBI). Some are doing so to offset the job losses that automation will cause and others are promoting UBI for the economic benefits. According to a recent study, the latter case might be worth a $2.5 trillion boost to the U.S. economy.

The study was conducted by researchers from the Roosevelt Institute and according to their findings, UBI could be a huge boon to the U.S. economy if it was implemented. This could be done in three different ways, which all involve giving citizens money amounting to $1,000, $500, or $250 a month.

In their paper, the researchers noted that the $1,000 option would have the biggest impact since it would translate to a total of 12.56 percent in growth over eight years. That would then lead to an estimated GDP increase of $2.48 trillion.

“After eight years of enactment, the stimulative effects of the program dissipate and GDP growth returns to the baseline forecast, but the level of output remains permanently higher,” the paper reads.

The need for UBI is largely fueled by the expected explosion of unemployment in the coming decades, with some speculating that artificial intelligence could replace up to 50 percent of all human jobs in ten years. Of course, there are also those who believe that UBI is not the answer and some of them are huge names in the financial world, Futurism reports.

One such skeptic of the positive effects of UBI is former Economic Policy Institute economist Max Sawicky who believes that the proposal would only be a Band-Aid. To him, an increase in minimum wage and more support for unions is the right answer.

Other experts have also argued that what the government needs to do is increase skills training programs. The future requires different skill sets, which many Americans don’t have.

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