Albuquerque’s “Universal Basic Income” success is meaningless

After a year of handing $750 monthly checks to low income and other struggling residents of Albuquerque, the Journal reports that ” young adults and teenagers have reported more savings in the bank and food in the pantry.”

This may be the least surprising finding in the history of economics, but it is utterly meaningless as public policy. You see, for a year Albuquerque has been handing $750 checks out to families and struggling teens. The money is from taxes collected on sales of marijuana and totals about $1 million annually.

The problem is that while a “free” $9,000 a year is beneficial to those who receive it, the idea of a “Universal Basic Income” is to replace government welfare programs with cash payments. It is something that many free market advocates have supported over the years. But, that’s obviously NOT what is happening here.

This program wouldn’t exist if marijuana hadn’t been legalized and taxed (suddenly creating a new pot of money). In fact, we’d go so far to agree that handing cash out to people is BETTER public policy than 90% of what government does with its welfare programs.

Finally, and most critically, the “pot” of money from legalized weed is relatively small. Are politicians going to impose new economically-harmful taxes to then hand out the money or are they going to reduce other government benefits and redirect it to cash payments (the better option).

We discussed the prospects for this program here over a year ago as the program got started. Also, there is no detail provided about the teen recipients staying in school as opposed to dropping out which was originally touted.