How to actually give people free money: The messy reality of UBI

Give a Buck is Mashable’s deep dive into Universal Basic Income — an idea gaining currency in a time of pandemic and mass unemployment. Now more than ever, our future depends on whether we can pay the bills.

Making universal basic income a reality in the United States will be a difficult process fraught with untold missteps, but perhaps not just for the reasons bandied about by talking heads on either side of the political divide. Like with so many things, it’s the details that get you. 

The idea of universal basic income, or UBI as it is more commonly referred to, is beyond just having a moment. Teed up by academics and policy wonks, driven home by real-world pilot programs, super charged by former presidential candidate Andrew Yang, and exploded by the coronavirus pandemic, the time for a stabilizing and unconditional cash payment made to every American adult is decidedly now. However, as the federal government’s attempt to distribute a one-time stimulus payment has made clear, the logistics of pulling off such a grand and encompassing policy are far from ironed out. 

To put it another way, how do you actually move that much money — reliably and repeatedly — into the hands of U.S. adults? How do you prevent such a system from being riddled with errors, glitches, and intentional abuse? How do you, in other words, make sure the damn thing works?

As more and more elected officials begin to take the idea of UBI seriously, it’s worth looking into what payment approaches have and haven’t worked in the past, what may work in the future, and how without the right foundation it could all come crashing down. 

The challenge of scale

The pandemic and corresponding economic collapse has revealed a number of truths about the capabilities of the U.S. government. One such revelation is that it has no way to effectively distribute payments to all Americans. 

This was made abundantly clear in the unequal timing of the stimulus payments, officially known as economic impact payments (and which technically are not a UBI scheme because of the temporary relief). Over 80 million Americans either already have, or are set to receive the one-time payment born out of the coronavirus calamity. Some of those whose direct deposit information the IRS already had on file from last year’s taxes awoke the morning of April 11 to find a much-needed cash infusion in their bank accounts. Those whose bank accounts are not on file, however, have to either input that information into an IRS website or wait for a paper check — checks that, according to officials, were “on the way” as of April 20. 

The almost two-week disparity between the two groups is not the only payment shortcoming revealed by the stimulus checks. Because all this, of course, assumes that your payment wasn’t stolen. 

The New York Times reported on April 22 that the IRS’s online payment system, which only required basic information in order to direct an economic impact payment to a specific bank account, is a dream come true for scammers. Eva Velasquez, the chief executive of the nonprofit Identity Theft Resource Center, summed it up.

“The scope, the scale, the speed and the efficiency of the scams is breathtaking,” she told the Times.

The Americans in need — struggling to get a check in time to make a mortgage payment, or logging into the IRS economic impact webpage only to discover their payment had already been claimed through some form of identity fraud — deserve better. 

If we are ever to make universal basic income a reality, a reliable and secure payment method will be a fundamental pillar of the entire enterprise. We don’t have to look far to see just that.  

On not reinventing the wheel

While unconditional cash payments to working and non-working adult