This is Part 2 of a two-part series. If you haven’t read Part 1 yet, click here.
The Critics: Can We Afford It? Will It Cause Inflation?
The most common objections to UBI are concerns about cost, inflation, and work incentives. Santens tackles each head-on.
Regarding cost, Santens argues that many misunderstand UBI's true financial impact:
"A lot of people misunderstand the cost of universal basic income as its gross cost instead of its net cost."
The gross cost would be the UBI amount multiplied by the number of recipients. But this doesn't account for the tax side of the equation. For many people in the middle class, increased taxes would offset their UBI payment, resulting in a neutral impact. "You can't count that as part of the cost because there's nothing happening there," Santens explains.
The true cost of UBI is the difference between what net beneficiaries receive and what their taxes are. Depending on the details, the net cost is roughly a third of the gross cost.
Santens also emphasizes that implementing UBI would allow for reforming or eliminating some existing welfare programs and tax expenditures, reducing the overall cost. One proposal he mentions would provide a $500 monthly UBI to everyone—adults and children—funded by just a 7% income surtax.
Most importantly, Santens asks, "What does it cost to not do a basic income?" Poverty, chronic insecurity, and extreme inequality generate enormous costs in healthcare, crime, lost productivity, and human potential. "If we're spending $4 trillion on the downstream costs of poverty as a whole, and the net cost of basic income is $1.5 trillion, then that's a net benefit."
On inflation, Santens acknowledges this as the strongest critique of UBI. "Inflation is definitely a concern to have, and you should plan around that in any implementation," he advises.
Several factors influence potential inflationary pressure: the UBI amount, how it's funded (through taxes or deficit spending), which existing programs it replaces, and supply-side policies to ensure adequate housing, food, and other necessities.
"You want to make sure that we do give people money to afford rent and mortgages, but then we've got to make sure that there's enough housing or else prices will go up," Santens explains. He suggests pairing UBI with policies like zoning reform to increase housing supply and land value taxes to encourage development.
Steelmanning the Opposition
When asked to present the strongest argument against UBI, Santens points to inflation concerns as the most legitimate critique—but one that can be addressed through careful policy design.
The argument about work disincentives, however, isn't supported by evidence from UBI pilots. Research consistently shows minimal impact on work, with any reductions coming primarily from secondary earners (like parents of newborns) and young adults pursuing education.
"If you look at Sam Altman's pilot, which showed about a 2% reduction in work, that works out to people working 15 minutes less per workday," Santens explains. "You can think of it as an 8-day paid leave per year, which still puts us below every other developed country."
Alaska's Permanent Fund Dividend, running since 1982, demonstrates the long-term effects of a UBI-like program. Studies found a neutral impact on full-time employment (decreases balanced by job creation from increased spending) and a 17% increase in part-time work.
In the Stockton, California pilot, recipients actually increased their full-time employment compared to non-recipients. "It costs money to work," Santens explains. "Maybe you need to buy a suit or take time off for an interview. With that cushion, you can take that job interview and hopefully get a better job."
Beyond employment, UBI pilots have shown surprising benefits: Finland's experiment increased trust in government, institutions, and fellow citizens. In Canada's 1970s experiment, researchers measured an 8.5% reduction in hospitalizations, a 15% decrease in overall crime, and a 37% decrease in domestic violence.
Can We Get There? The Politics of UBI
Despite growing evidence supporting UBI, implementation remains a political challenge. Santens points to the failed effort to extend the expanded Child Tax Credit in 2021 as an illustration of the hurdles.
"We had six months of the enhanced child tax credit. The average payment was going to about 90% of kids in the country, around $440 per month. It reduced child poverty by 40%," Santens recalls. "It should have been a no-brainer with child poverty costing as much as it does."
Yet the program ended because of opposition from Republicans and Senator Joe Manchin, who expressed concerns about parents using the money for drugs—despite evidence showing parental drug use actually declined during the program.
The core political obstacle, according to Santens, is a deeply held belief that assistance should be conditional on work. "Their logic is, if you're not doing anything to help yourself, then you don't deserve any help," he explains.
Yet this principle is inconsistently applied. "It's not like they're trying to attach a work requirement to stock dividends or savings earned from giant piles of money," Santens points out.
"If you have a bunch of money, you can put that in the bank or into stocks and earn all kinds of passive income, sit on the beach, and just have a great old life not doing any work at all. They don't care about that."
The Future of Work—and Life—in a UBI World
Looking toward implementation, Santens believes the logistics of administering UBI are straightforward. "We saw the IRS roll out the child tax credit immediately and highly successfully," he notes. "Social Security is always the other choice. They're very good at getting monthly checks out, and of course it'd be even easier if everyone's monthly check was the same amount."
One innovative funding approach Santens suggests is creating a sovereign wealth fund that receives a small percentage of public company stocks each year. "Each company would put 1% of their stocks into this fund each year," he explains. "This fund would grow, and we as American citizens could actually benefit from stock market growth. We'd have skin in the game."
This approach connects to Santens' view that all citizens should be seen as stakeholders in the economy, particularly as AI advances. "Who trained the AI? Our data did. It was all of our data—all the stories and text and every usage of all these platforms, images, books, songs, videos. We all made it," he argues. "That was our capital that we put into making this possible. We should see ourselves as stockholders."
As we stand at the threshold of an AI-accelerated economy, Santens urges immediate action rather than waiting for mass displacement. "Are we going to wait till then to actually have a policy in place? I think that's unwise. We should get ahead of this and start doing this now."
His final message is clear: "AI could double or triple productivity, but if we don't redesign how gains are distributed, we'll see even more concentration of wealth and power. Universal Basic Income isn't a utopian dream—it's a practical response to the world we're entering."
 | Scott Santens has been researching and advocating for unconditional universal basic income (UBI) since 2013, helping shape the thinking of leaders like Andrew Yang. Since 2015, he has lived with a basic income floor through Patreon, allowing him to focus full-time on advancing the UBI movement. He is the founder and CEO of the Income to Support All (ITSA) Foundation, host of The Basic Income Show, a board member of the Gerald Huff Fund for Humanity, and editor of Basic Income Today. His debut book, Let There Be Money, explores UBI and how to fund it—it’s available on Amazon or as a free podcast. Connect with Scott on LinkedIn, X, and through his foundation, Income to Support All. |
