Discover the reinvention of UBI.
Because of the COVID-19 pandemic, the world economy is falling deeper and deeper every day. To avoid collapse, the governments initiate Universal Basic Income (UBI) plans. But the implementation of UBI has serious drawbacks. Therefore, countries should reinvent the Universal Basic Income approach to successfully overcome a Financial Crisis.
According to the World Economic Outlook (WEO) forecast, global growth will be negative – 4.9 percent in 2020. Gross Domestic Products (GDP) of some countries will suffer more than average at the end of 2020.
The widespread shutdowns and quarantine practices caused by COVID-19 lead to GDP decrease. People from all over the world are losing part of the revenue or even jobs. So, households are cutting their spending. As a result, the world economy is going to collapse.
Due to The International Labour Organization, the virus spreading will decrease the incomes of billions of people. Moreover, due to economists, the slump in 2020 is just the beginning. The second wave of COVID-19 pandemic might have a more negative impact on households' spendings in 2021.
To overcome the consequences of coronavirus, the governments of the USA, Japan, Singapore, and some other countries have decided to implement Universal Basic Income (UBI).
Universal Basic Income is an income which should cover basic costs and should be given universally to every adult. The allocation of UBI must be unconditional.
Unfortunately, only a few countries (see the map below) applied UBI in the mid of 2020.
However, the governments of the above countries spend money on half-measures. The UBI approach they have applied bring money to people only once. Despite these "band-aid solutions”, some positive results could be reached.
Unexpectedly even such weird UBI allocations, described in the previous paragraph, might be beneficial.
By sharing money across the whole community, governments could decrease inequality. The money recipients could save more, invest more, become healthier, and more empowered. Surely, most people will continue to work as they did before or start getting additional education.
At this time of the global financial crisis and pandemic, UBI could potentially bring more financial security to the billions of people that need it. If governments would be brave enough to provide people with real UBI, we would all possibly see the long-term benefits. The real UBI is when a government gives money every month to every adult universally and without any conditions.
A “helicopter money” initiatives made in the USA, Japan, Hong Kong, and few other countries are aiming to urgently re-start the economy. But why all other countries don’t start giving people a universal basic income? The answer lies in the fundamental drawbacks of the universal basic income.
The realization of UBI requires a lot of funds. Unfortunately, these funds can only come from taxpayers. If it’s funded by money printing then the high inflation neutralizes all benefits. In case of funding by bonds, the future taxpayers will pay it with interest expense.
Moreover, the governments of import-oriented countries are afraid to provide UBI because money will flow to other countries. But worst of all the money will flow to the hands of big corporates with offshore (almost-zero) taxation and banks (again). Therefore, the rich will get richer increasing inequality.
Also, Universal Basic Income could lead to democratic erosion. Democracy is competition politics and elections. These are the forms of political engagement that have emerged in the taxpayer community - people who work and pay taxes, rather than receive UBI. The use of Universal Basic Income can lead to other forms of loyalty to the government, which pays money to its citizens in such a “wonderful” way. And this is very dangerous. It gives huge power to the ruling regime (party).
Is there an alternative solution similar to Universal Basic Income?
Fortunately, there is a ridiculously simple solution. Every enterprise should start paying to its potential customers directly.
The motivation for enterprises is obvious. By paying people for watching a company’s ads, a company decreases its income taxes. Simultaneously, a company increases its sales by attracting potential clients.
At the same time, by using blockchain technology, companies will ease the cross-border money flows and minimize transaction expenses. No banks and intermediaries – people will get money directly in minutes.
Moreover, enterprises don’t need to develop and support any software. There is a ready-to-use solution called YOUapp. The YOUapp developed by YOUengine is a decentralized, tokenized advertising platform. It’s a virtual place where over 200 million advertisers connect with 4 billion users who get paid to watch ads.
Enterprises of a small, medium and large size can open an account and fund it with YOUcash cryptocurrency. Once logged into the platform, they can use the power of the blockchain to target over 4 billion users globally. Whether they want to reach 10 people down the street or 10 million people around the world the YOUengine delivers real-time targeting and ad delivery for industry-leading ROI. Plus, it can execute exciting ‘airdrops’ for instant merchandise or token drops that can be geo-fenced and delivered via the YOUgo mobile game.
With the help of blockchain technology, people could get a reinvented Universal Basic Income. There is no need to print fiat money and increase personal taxes to fund UBI. Besides, there is no need to feed banks and governments’ bureaucracy. Instead, Enterprises from all over the world could increase their sales by paying to potential customers directly for watching ads. It could be the best alternative to classic UBI. Therefore, the global economy can successfully overcome a Financial Crisis caused by the coronavirus.