Here’s a thought experiment: what if the United States Government gave every citizen a million dollars tax free when they turned 18?
Obviously, you’d have to give everyone over the age of 18 their million dollars right now, which would be a huge initial expenditure, but the cost should even out over time.
How much would that cost? The current population estimate is about 316 million American citizens, of which approximately 72 million are under the age of 18, so the immediate implementation cost would be about $242
million trillion dollars.
What would happen? The first thing that would probably happen is that a lot of people over sixty who currently can’t afford to retire would retire almost immediately, which would free up a huge chunk of the job market – jobs that could be filled at a lower pay rate by younger candidates.
The second thing that would happen is that people would pay off their debts – back taxes, student loans, small business loans, medical bills, mortgages, credit cards and car payments all over the country would be history. This would probably destroy the payday loan business and rock the markets that rely on debt, but I doubt that many people would really be all that upset if these things happened.
There would probably also be a massive surge in spending. People would buy homes and cars and invest in upgrades to their real estate. More people would buy luxury goods and overall spending would increase across the board. And more people would probably invest in stocks and bonds.
I’m sure that someone, somewhere would be incensed at the idea of everyone else getting a million dollars, even convicted felons. And where is the incentive to work? Well, a million dollars doesn’t go as far as you might think, especially for the younger citizens.
It’s one thing to have a baseline amount of money and it’s another thing entirely to thrive. That’s where work comes in – with fewer ongoing bills to pay, a paycheck would go a lot farther and provide a better standard of living. And less people would be forced to settle for lower paying jobs.
It’ll never happen, of course. There’s too much infrastructure wrapped around a working class of citizens that are unable to pay off their debts.