Can free-cash handouts help society? | The Economist

Can free-cash handouts help society? | The Economist


Imagine paying people
no-strings-attached cash whether they have a job or not. There’s the need for a
new kind of safety net. It’s a utopian idea that some think could be the solution to a potentially jobless dystopian future. This way of automation is
coming and it hasn’t crashed over society yet but it’s going to. In California, two experiments are being planned that could point to a radically different future of work. Stockton, California. Just five years ago, the
city was declared bankrupt. Free haircuts today. Today, unemployment is almost double the national average and many people live paycheck to paycheck. Hello, how are you? Good to see you. But the city’s mayor,
Michael Tubbs has a plan to combat an increasingly
unequal and insecure jobs market. Starting this year, a hundred
residents will receive a guaranteed income of $500 per month. Whether they work or not. The mayor’s plan is
inspired by the radical idea of a Universal Basic Income, or UBI. An unconditional cash
payment for all citizens. The experience will measure
the impact of these payments on the recipients’ lives. Mayor Tubbs believes it
could be the key to helping the working poor. Those who have jobs but find
it hard to make ends meet. If Universal Basic Income
works out in Stockton you will see the poverty levels decrease. I do think there’ll be more
discussions about things like social safety net and
basic income, for sure. The truth is, one in two of every American can’t afford one $500 emergency. Which means the majority of the country’s not doing that well. I’m the first to say that for
three years worth of work, I ended up with nearly
half a billion dollars. That is not how the economy
is supposed to work. Chris Hughes is one of the people paying for Mayor Tubb’s experiment. He made his money as a
co-founder of Facebook. But the online revolution
he’s profited from could mean rising insecurity for
the workers of tomorrow. Now, he spends his time
looking for new ways to deliver a fairer society. We’re seeing massive growth in the number of part-time jobs, contingent
workers, in the gig economy, and with that instability comes a need for a new kind of safety net. $500 a month in the
background every single month for people who need it so
that in the great months you know that you’re gonna be good. And in the months when
work isn’t quite as stable, you know you’re at least
halfway to making rent. Skeptics argue no-strings-attached handouts could discourage
people from working. But Chris Hughes says
research to date suggests that top ups have beneficial effects. When people get modest amounts of cash, they use it to improve their lives and the lives of their family. They invest it in themselves. Most importantly, people don’t
drop out of work en masse. Our generation is gonna have
to deal with tens of millions of jobs replaced by automation like self-driving cars and trucks. Silicon Valley seemed
awash with billionaires eager to allay fears about
an uncertain future of work. Fears stoked by the very innovations that have made them their billions. Universal Basic Income
is one of these ideas that’s been talked
about and debated a lot. So we thought it’d be really
good, given what we think is gonna happen in the world
if we could get some data. Sam Altman is president
of a Silicon Valley school for startups and he
is about to launch the most rigorous experiment in basic income ever carried out in America. 3,000 people will receive
either $50 or $1,000 with no-strings-attached every
month for the next few years. Most economists argue a
basic income would be just too expensive for
governments to provide today. But Sam Altman claims
the rise of the robots could ultimately have an answer for that. If the AI comes, the good
news is the cost of goods and services come down
dramatically because computers can do them so inexpensively. In a world like that, you know,
we’d see effected GDP growth in terms of purchasing power skyrocket. In the world where the
AI really does arrive, there’ll be plenty of money. Supporters of a basic income even believe it can change people’s
attitudes towards work itself. We’ll definitely have to redefine what we think of this work. But we’ve had to do
that many times before. One of the things that we
learned in Silicon Valley is just how much potential
some people have. And if you can unlock
that, if you can free them from having to work a job that they hate just to be able to survive, we’ll create hugely more
value for the world.

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    Samir Sehgal

    People fear-mongering over Inflation must realise that UBI would replace, and not add, to Social Security, hence not adding to demand-pull inflation.

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    nancy wood

    easy money from others has a devasdating impact on human lives. the innate laziness will shadow the bright side of human which is the faith and determination of striving for a better life

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    Dane Reid

    The cost of goods will NOT go down with automation. Did airlines stop collecting baggage fees when the cost of fuel went down? NO!!!!!! Corporations don't work like that. They will absorb the savings into shareholder profit. You people are dillusional

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    dee Pea

    This is insanity … every talk on UBI blatantly avoids the reality of rising prices … especially in housing!
    If you give even just $500/mo to the bottom 10% of earners you have now qualified them to pay more in rent and all other necessities.
    Prices reflect what ever people are willing to pay … "The Economist" should know that, when people have more money they are generally willing to spend more.

    This is blatant stupidity, it will coddle and trap a 'useless' class.
    The soft bigotry of poor people is cruel and inhumane. This is the wrong side of history.

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    James Dillinger

    As much as I am in favour of eradicating poverty and hunger, this approach to UBI won't really work. Yes, there are leaps of progress done in the field of AI, but that progress is a result of capital investment and years of research done by companies. Since we live in a capitalistic society, there is no way most of the companies are going to simply part with that investment and agree to share the mentioned extra growth from automation. Those profits are going to flow into the companies and the technology will be behind a patent wall.
    And how was said earlier in other posts, more big-scale tests are needed before we can even consider the idea. In the States alone, such a system would cost over a trillion dollars a year. The economy can't really handle taking on such a huge deficit

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    shamanahaboolist

    The banks already make money out of thin air and create debt. It would be a far healthier economy if that money was created still but given to people as spending power. It's not rocket science. People who talk about inflation and ask "who will pay for it?" are ignorant about how money works.

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    Scotty Morris

    I think I got this… So robots will do the work people once did? People won't need to work because they'll have free money to spend on the inexpensive products that the billionaires robots made? And since the government doesn't make money, the billionaires will be supplying the free money to the unemployed in order for them to buy something from the billionaire? And when the billionaire receives the money, he'll give it back to the people as free guaranteed income so they can continue to buy his products, so he could keep giving it back to them. Makes sense : ).

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    Javier William

    What about free capital? There's no reason people are forced, Forced, to wait on the side of the road for a bus with autonomous vehicles killing people! thanks for+

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    C. Lincoln

    How about instead of giving people chump change, which won't really have a real impact because guess what, inflation will kick in and rent prices will go up, and the price of everything else will go up too. How about you reform the education system and you actually teach people WHAT capitalism is, how it works and how you succeed at it. Instead of promoting the old "go to school, get a job, start a family" dogma, how about you tell them "Get a trade/Learn a skill, Get a job… then invest into a startup as a founder/silent partner". The ONLY way to wealth is through business ownership and practising capitalism, yet we aren't taught any of that shit because the top 1% that own and control everything want to have access to cheap workers (including illegal ones). They don't want others to know what they know – i.e HOW TO GET RICH AND ACQUIRE POWER THROUGH BUSINESS SO YOU CAN CONTROL THE LANDSCAPE OF YOUR COMMUNITY.

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    Mohamed Hmini

    i think it's true !
    UBI isn't a burden to the government in a long run !, cuz people aren't meant to sleep, no one would like to spend his lifespan doing nothing !
    these types of aides will only boost their chances up so even though a portion of these people could stay still we will certainly have 70% or even 80% of hard-working people who only think of the Better not the Basic !

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    skinz

    if you have 50million in personal earning you should be forced to retire there should be a cap on a persons maximum. there is only so much money to go around

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    Gavriel Papas

    I'm against it. I have seen lot of lazy parasitic people. They would offer sexual favors just to get on the list, and will still continue on sxamming others, stealing and selling drugs.

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    Areeb Khan

    We will become over dependent on the Government if this happens. What if out of any situation the government stops the money? We will be ded

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    eselsea

    Good video, except for the worn-out Dire Straits lyric quote at :36. How about focusing on the significance of the band's name instead?

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    boson96

    Poverty is caused by a lack of skills, lack of money is only the side effect of that. If you want people to alleviate from poverty, provide them with free skills training, not free money.

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    Tim O'Brien

    There isn't really a question of whether these jobs are vanishing, just a question of whether there will be any income for the disemployed and inemployable masses – I don't don't mean unemployed, I mean cannot-be-employed.

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    Arjen van Hassent

    Before dishing this, I'd suggest you read Rutger Bregmann's "Utopia for Realists". ISBN 978-9082520347

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    James Wisrik

    it's not the answer…inflation will go high! companies will know you have an extra $500 and start increasing prices. Corp will layoff easier.

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    Pamela Rice

    This idea has legs for one reason only…. the Federal Reserve policies of ZIRP & QE…. begets asset inflation. Inflation from Fed policy caused all of this. Point the finger in the right direction. You're on the absolute wrong track with this. The Economist is off base… as usual, part of the problem, as usual…..

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    billy joe ness

    Dude what the fuxk you doing??? END THOSE IDIOTS FROM TRIBUNE SHIT I cant help you if you just dont fucking do shit more quick HAVE THEM BE KIDNAPP TORTURE AND DEATH AND SAME TO THE ELDEST SON OF THE 358 OF WHERE I LIVE HAVE HIS MOTHERFUCKING FACE BLOWN OFF BY A SHOTGUN OR A .50 OR A .45 slug make it 3 no open casket to that little faggot

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    billy joe ness

    Oh and let me clap Angoitia and Azcarraga personally cmon gimme that satisfaction I hate that son of bitch its kids those sell em in the black market as spare organs please

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    YooitsC BCE

    Andrew Yang 2020 PRESIDENT
    Andrew Yang 2020 PRESIDENT
    Andrew Yang 2020 PRESIDENT
    Andrew Yang 2020 PRESIDENT

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    Trade2 Win

    Ask drug addicts in mental health hospitals.
    They need mental health service because they are addicted.
    Their addiction is fed by free government money.

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    Snorre Morten Kjeldsen

    Why hasn't an interview with 2020 presidential candidate Andrew Yang who has sound arguments for UBI ("The Freedom Dividend") in America based on data and logical reasoning been included?

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    Andrew Giraldi

    This might be one of the most depressing videos I've ever seen. It's not because I don't believe a universal basic income can't work: It's because I'm left wondering WTF I could be doing with my life to create the value that is talked about near the end of this video.

    I earned a Master of City and Regional Planning degree in December 2013 and became a member of the American Institute of Certified Planners in June 2016 and yet I can't land work in this field. A line of work I fight against the powers that be to become a part of and which I'm competent in I'm denied the privilege of earning an income in. To have followed the rules and for this to happen to me has sent me reeling.

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    Zen Lee

    2:12 'I'm the first to say that for three years of worth of work, I ended up with nearly half a billion dollars. That is not how the economy is supposed to work.'

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    Highteckhobbies

    The best part of playing the board game Monopoly, its when you pass go and get your UBI check #YANG2020

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    chiyerano

    I would be all for it if the money given were sound and you don't have to worry about losing it if you somehow you increase your income.

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    Bane

    This will have to be done ! Otherwise we'll have a matrix like future where means of production (machines) will be in the hand of few trillionairs , living in a gated communities , with private armies (like they are not private already) and total control !

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    W L

    Work is overrated! people should pursue what their passion instead of droning on in life without a purpose.. UBI will be good for the population!

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    Victor Popov

    Well with people receiving more money they will also spend more of it, which is good for an inflation driven economy.

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    Oliver Silvan

    Look in these pilots UBI probably works… However if it's scaled and I as a real estate owner know, everybody gets 1k more than they did before i would just increase rent by $700… the greed will take full advantage of this and will funnel more money toward those with leverage (and those with leverage are usually already better off)

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    Undead Scoll

    1000 dollors a month for every adult would end homlesses and health coat in a america it would cost 489 billion but the cost would save lives.

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    Andrew Frolov

    Why not cut costs instead? Forbid cheap morgages and loans, deflate stock and real estate bubbles, pay off US total debt by selling everything, cut radically welfare and public expenses?

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    Jason Lee KY

    Wtff I thought of this idea when I was 9 because I knew jobs would eventually be taken over by automation and AI

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    Jason Lee KY

    I have an idea that when all jobs get taken over by AI, we would get a UBI which covers daily necessities and emergency with top ups based on selfless acts like community service, research and development and environmental preservation. That way, the people of the world would be innovation-driven, more empathetic and selfless instead of being selfishly driven by the pursuit of money, fame and success.

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    Travis Harger

    This is why Andrew Yang is so refreshing as a candidate. Would love to have a data driven, economically minded, business-experienced pragmatic visionary that doesn’t spew divisive rhetoric in the White House. The first Democrat I’ve ever been excited for and the first candidate I’ve ever financially supported.

    UBI properly implemented is one of the most effective, efficient, simple, fair, and cheapest ways to accomplish many of the progressive economic/inequality goals that truly benefits everyone.

    Don’t listen to the idiots on here that doing even know what socialism is. UBI isn’t socialism, it’s capitalism that doesn’t start at zero. People should definitively listen to Yang’s full interviews with Freakinomics, Joe Rogan, Sam Harris, Ben Shapiro, and Vox’s Ezra Klein.

    Some great articles/info on Yang and UBI in general.

    https://www.wired.com/story/andrew-yangs-presidential-bid-is-so-very-21st-century/amp

    https://medium.com/working-life/why-should-we-support-the-idea-of-an-unconditional-basic-income-8a2680c73dd3

    https://medium.com/basic-income/wouldnt-unconditional-basic-income-just-cause-massive-inflation-fe71d69f15e7

    https://en.m.wikipedia.org/wiki/List_of_advocates_of_basic_income?wprov=sfti1

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    flounder

    There are basically three outcomes to a universal basic income. 1) It would free-up talented, ambitious individuals from the gruel and drudgery of making ends meet, enabling them to focus their time, energy and efforts on creative projects, enterprises and endeavors. In doing so, they become the next Shakespeare, Van Gogh, Edison, Madonna, Bill Gates, Steve Jobs, Elon Musk, Got Talent or YouTube sensation. 2) On the opposite end, you'll have people who will simply sit back and watch TV all day, buy and eat more junk food, and have lots of children. 3) Somewhere in between, doing odd jobs or volunteering here and there.

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    Scout Dog

    "In the world where AI arrives there will be plenty of money". AKA plenty of someone else's money who you can bet won't be happy about giving it to someone else who did nothing to earn it.

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    adamshattuck1985

    "the costs of goods and services drop" BS. a 2 liter of coke costs more by a afactor than it did when i was born in 1985 and yet the process has been automated beyond when i was born. all good doers seem to forget that many who found bussiness or even in regular life operate on greed. we all do. a extra piece of cake, a second cig, another round with your significant other, etc. without taking greed into account all you do is give king pins in poorer areas more cash.

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    DaCoil 2089

    Oh! what generosity! what nobility! But you fail to see the full picture. What they see and hear 10, 20 or 50 years from now is the inevitable revolt of the jobless and the poor. They see an end when all is lost. They know that the system is broke yet they make no effort to fix it. Instead they propose handouts. Shameful!

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    Josef Safady Åslund

    Why would you wanna give tax money to working poor? That's basically subsidizing employers payroll. Make them pay a decent wage instead

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    Recreational Plutonium

    UBI is communism. enabling lazy parasites to live large on the costs of the productive.

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    Cameron Frye

    It’d help the economy and its socioeconomics, but society? I don’t know. Big measure of quality of society is also how entitled people feel, more sense of entitlement = shit. Less sense of entitlement = less shit.

    Now, that said, I’m not much one to buy on a whim that “free money” would make people entitled by default. Maybe it’d make people appreciative, feel cared for/regarded by their government, or fuck that, less stressed on a level large enough that they can take on those outlooks for themselves. I don’t know, it hasn’t happened.

    What has happened though is what we’ve got now, and have since we both invented money and (for some reason) gave it power that still continues today. Socioeconomic classes. Rich assholes – and as the “living standards” of many increase – more “rich” assholes. And yes, there’s much more to being rich than owning a car valued at $80,000 or more. Modern day, industrialized country “poverty” excluding homelessness but being of a direly tight or negative income while having housing is of a higher luxury than anyone else in history lived. What? Your house is cooled by a fan and not AC? Billions of people both went and still go without them both – I promise you you’ll live, spoken from one who’s been without AC for a decent bit of time and is still alive. I mean my god, go to a river, you don’t even have to jump in just sit on the bank and you’ll cool down. Low quality fridge from decades ago? That is rough, try salt had to mine, or digging a hole wide enough you can fit your body and a ladder into 20 feet underground, that’s how it was done before. I don’t know you, person reading this – I don’t need to, because this isn’t a personal statement. Your great-great-great grandparents who weren’t able to predict how negatively it’s molded society would look at your smartphone addiction and well-plumbed 30th story apartment, no matter how small, and fully HVAC’ed car with 140 on the dash, and kneel deeming you a god(dess) of the rich. And yes, it is in/to our heads. You’ve gotta be a person who deals with the common consumer customer for a single day to know the vastness of “I can pay you, so do what I want” as a mentality, while you sit there thinking “do you really need that soda?” “What’s the point in buying that jewelry?” “My god, a supercar, you must be fucking miserable or dissociated as all hell aren’t ya?”

    Who knows? Maybe no longer putting in vigorous, backbreaking (boring to the point you did nothing but sit there and be paid for it) work to get money will make for a lower amount of miserable 35 year olds who think because they’ve earned that money, that they “deserve” (hah) whatever it’s used on, and are seemingly validated in their behaviors to get said soda. (Or anything else, really. I’m looking at you, Black Friday/ Cyber Monday shoppers.)

    Might be the first step in abandoning money overall and going to a more purposeful means of exchange, like going back to barter but making it more peaceful and sustainable in that way this time around.

    Yeah, that does it. This UBI stuff has my support.

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    T M

    Its called "hush money"
    I will not become a bribed commodity.
    We will all be processed into oil to keep these machines moving.
    Afterall, we are just living dinosaurs

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    Rogue Cow

    Cash handouts sure help the USA military industrial compolex & Amazon when they want to build a warehouse; billionaires get cash handouts now for 'maintaining' their robots, so the 'cash handouts' since Reagan haven't resulted in more jobs for the middle class, but more cash handouts for corporations. Economist is way outta touch as usual, probably cuz they get cash handouts to stop thinking critically about what's happening to our world (plastic is killing our waters &oil wars are destroying the climate–pretty sure the average poor person will pay, with taxes & their lives.) It's called corporate welfare and anyone who knows anything knows that's the real welfare NO ONE TALKS ABOUT.

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    Quapadople

    4:27 Most economists argue that a basic income with be just too expensive for the governments to provide.

    Horseshit……cut defense budget(evil budget) and other unessential expenses and then you will see the amount of money that can be used for greater purposes than going to the moon or bombarding innocent people under the pretext of terrorism.

    You people haven't got the slightest idea of the government funds/budget…and their hidden expenses.
    Humans are so easily manipulative.

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    Adam Stokes

    Yeah umm… Anyone heard of equilibriums in economics? How about inflation? Give out free money = push up prices = all that free money devaluing. Sorry, but that's just how it works no matter how good the intent.

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    Ignacio Debortoli

    They should study Argentina's case. Here, gov gives money per children to the poor, only condition being that they should be sent to a (probably public, totally free) primary and secondary school.

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    Lewis C.

    Where in California is this being done? I am going to use several names and fake social securities and go and get as much cash as possible! I live in California!

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    Bobby Adams

    What is the catch?
    Nothing is ever free.

    How do you protect the citizens from those who want have their $500 and now we're going to take yours and everyone else's.

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    The WeedWeeb

    I can just tell those watching this: I make 1300 a month and my wife makes just a bit more than that at 1600 a month on minimum wage fast food jobs. Just receiving 500 a month for each of us would increase our income by a quarter. 1000 a month for a married couple sounds like a lot, but that's the equivalent of each of us earning about 4 bucks more of income per hour at our current jobs. A noticeable bump, but not crazy. It would allow us to actually be able to afford to buy new clothing, replacements for degrading furniture and tech, and food without having to pull out absurd and costly credit lines and loans. And in turn, it would allow us to reconsider our living space entirely – we're living in a 1000 a month 1-bedroom on the edge of Denver, CO right next to Aurora – not the nicest neighborhood at all. 500 more for rent (assuming rent prices didn't skyrocket to try and gobble up any extra income provided by the government) and 500 for other expansive things in our home would be a very sufficient boost. Neither of us nor our families can afford college expenses, so schooling is not an option unless a full version of basic income and/or free schooling was a thing. But these advancements are going to be long overdue by the time they arrive, and by then, a whole generation will be economically displaced.

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    Random Person

    It really depends on the culture and economy. In Brazil, they had a program called “Bolsa Família”, which was a cash handout. It really didn’t help unemployment and people actually used the money for personal pleasures more then they did for food or bills.

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    bartakin

    Lower the rents and freeze them. Provide city clean up jobs like the Mayor of New Mexico has done, it restores the pride of working for it..Create other income opportunities in farming local produce. Teach them to grow corn, this motivates them on the right path. Handing out corn is no incentive..

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    Charlton Blake

    Vote for Andrew Yang so every American can become a stock holder in the country and empower the working class and tax automation.

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