Opinion piece: Basic income worth honest study

The following article appeared in several news outlets including the Las Cruces Sun News on September 28, 2023.

The idea of a “universal basic income” (UBI) has been around a long time. Most supporters are broadly on the left of the political spectrum,  but many conservative thought leaders including Charles Murray as well as Reagan officials like James Baker and George Schultz, have also been willing to consider the idea.

The idea behind UBI is simple: replace welfare payments to the poor with cash payments to empower the poor to manage their government benefits. Welfare programs have a bunch of hoops and phase-outs that can often disincentivize going from welfare to work. One problem with UBI (as other conservatives often point out) is that politicians are unwilling to eliminate the welfare programs and pay them out in a cash equivalent.

Sadly, this has proven out. In recent years there have been experiments, supposedly with UBI concepts, but they never actually result in replacement of welfare with cash. Instead, these approaches simply result in more cash. A 2021 Santa Fe program along those lines suffered the same flaw.

Now, Las Cruces has gotten into the mix. A privately funded guaranteed basic income project allocated 330 families $500 per month and ended in January. Results from the experiment haven’t been analyzed yet. Now, another experiment is going to happen. Thanks to $1.7 million dollars of federal American Rescue Plan Act funding, multiple nonprofits in the Las Cruces community will provide $500 monthly payments over 18 months to 150 eligible Las Cruces families.”

Will the results of these experiments mean anything? Sure, most people, especially those with low incomes, will gladly take an extra $500 annually, but unless the UBI is a replacement as opposed to a supplement for existing welfare programs it will be rather meaningless in terms of broader welfare reform implications.

Mayor Ken Miyagishima, a Democrat, appears to be the only voice of reason in Las Cruces. He voted against the program and said, “I hope it doesn’t just turn into, hey, I got this money, this is great. And okay, it ran out, so what am I going to do now?”

The Mayor elaborated, saying, “We don’t have the money…people need to have an understanding of what it takes to run a government.” “It (money) just doesn’t come out of thin air. The reason why we are seeing a lot of inflation is because the country has printed a lot of money and there’s nothing to back it up.”

Miyagishima is right. And, while New Mexico is currently in the midst of an unprecedented oil boom that has brought in staggering amounts of money, politicians in Washington have driven the nation into debt and the situation shows no sign of improving. While the inflation rate has gone down, that inflation is piled on top of last year’s inflation, so prices continue to rise at a staggering pace that is harming New Mexico families.

Rather than piling on more debt to find ways to add more people to already overburdened welfare rolls the Biden Administration and both parties in Congress should cut spending and work to eliminate the scourge of inflation from our economy. That will do more to get people out of poverty than any half-baked “basic income” scheme, especially one funded by taxpayers.

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility