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With the unforeseeable arrival of the coronavirus and its unprecedented effects on both health and the economy, it has shed light on an already growing idea of universal basic income (UBI) in the form of stimulus packages to allow people to survive during a severe economic downturn. This period of economic difficulty has caused over 40 million jobs to be lost in the United States alone, and with no other source of income for a majority of people, basic necessities such as rent cannot be met. For this reason, the government stepped in and passed a 2 trillion dollar stimulus package under the CARES Act that would see eligible individuals receiving 1,200 dollars to be able to cover basic necessities and to stimulate the economy.

Further research into the effects of the stimulus package reported that individuals that had more than 3,000 dollars in their checking accounts had no response upon the deposit of their stimulus checks; while those who had 500 dollars or less in their checking accounts spent more than half of their stimulus checks. Individuals with high checking accounts balance did nothing to stimulate the economy while individuals with low checking balances circulated about half of their checks back into the economy. It has also been observed that since there was already a prevailing issue of job loss before the CARES Act was passed, households already began digging into their savings in order to stay afloat. Thus once the stimulus checks were received, many simply replenished their saving or paid of existing debt instead of pushing the money back into circulation.

With the prevailing economic downturn and high unemployment rates, universal basic income is making a comeback. Kamala Harris has proposed a new stimulus package where eligible individuals will get 2,000 dollars every month for the duration of the pandemic. The reason being “bills will continue to come in every single month during the pandemic and so should help from government.” Major issues that universal basic income brought up was to do with inflation, lack of incentive to work and cost. Inflation and cost could be avoided because money supply would not change if the universal basic income was funded by negative income tax. Lack of incentive to work can be easily debunked due to the data shown in the previous stimulus package that most individuals used the stimulus checks as a supplementation on previous income to increase savings or reduce debt. With feasible implementation and promising results with the stimulus packages, universal basic income is set to be included in future economic planning. 



Nikos-Rose o, Karen. “Did the $1,200 Stimulus Payment Boost the Economy?” UC Davis, 19 May 2020, Accessed 20 Sept. 2020.

Rose, Jeff. “Monthly Recurring Stimulus Checks Could Be Making A Comeback.” Forbes, 12 July 2020, Accessed 19 Sept. 2020.

Weber, Emma. “Nine Arguments against Basic Income Debunked.” Adam Smith Institute, 2 Aug. 2018, Accessed 19 Sept. 2020.

Ziv, Shahar. “$2,000 A Month Stimulus Check Plan Faces Insurmountable Odds; Move On.” Forbes, 12 June 2020, Accessed 19 Sept. 2020.


Written By:  Paul Mugo

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