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Finland’s experiment with giving away money shines a light on the idea of universal basic income

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There might be no free lunch, as the saying goes, but a bold experiment in Finland has renewed interest in the idea of money for nothing.

In January 2017, the country embarked on a two-year pilot program that gave 2,000 unemployed citizens the equivalent of nearly $700 a month, with no strings attached. The program will run through the beginning of next year after the government announced this week that it would decline to extend the duration of the program.

The idea of a guaranteed or universal income, often abbreviated to UBI for “universal basic income,” has attracted attention on this side of the Atlantic, as well. Mark Zuckerberg floated the idea in the speech he gave last year at Harvard University’s commencement, and Facebook co-founder Chris Hughes argued in an editorial earlier this year that working Americans who make less than $50,000 a year should get a monthly stipend of $500.

Alaska has the closest program to a UBI in this country: The Alaska Permanent Fund distributes an annual dividend based on oil and gas investment returns to every person in the state annually.

Social scientists say stagnant incomes, rising inequality and technological advances all factors in the growing interest in universal income. To combat the problem, Hughes co-founded the Economic Security Project, an organization that advances the idea of a universal basic income in the United States.

Alaska has the closest program to a UBI in this country, paying out an annual dividend based on oil and gas investment returns to every person in the state.

“Because of the extraordinary level of wealth inequality in this country we have to be thinking really big,” said Natalie Foster, co-founder and co-chair of the project. “Guaranteeing an income would pull millions and millions of people out of poverty and help stabilize the middle class,” she said.

“Recently, it’s attracted a lot of attention in large part because of fears of automation and that jobs will disappear,” said Ioana Marinescu, an assistant professor at the University of Pennsyl­vania’s School of Social Policy & Practice. “It’s an attempt to create economic security for all, and people don’t have to jump through hoops in order to qualify.”

Proponents say that no-strings-attached cash gives poor people more flexibility and autonomy to decide what’s best for them financially — an idea that makes the UBI appealing to those on both sides of the political spectrum.

How to define it?

“We have existing programs targeted to low-income people — SNAP, public housing, Medicaid, other types of what we call in-kind support,” said Damon Jones, an associate professor at of University of Chicago’s Harris School of Public Policy. “There’s one argument that if you give someone cash they can best decide what it’s used for,” he said.

For a simple phrase, there are a surprising number of variables. Some people propose that universal be just that — everyone gets a payment — even though this ultimately means that people wealthy enough not to need an income supplement will receive one anyway.

This could help make it politically palatable, though. “Sometimes when programs are universal, they’re more politically feasible and sustainable,” Jones said, pointing out broad support among Americans of all political stripes for Social Security and Medicare.

Tying a supplemental income system to the existing tax code or to a worker’s existing is another option, although experts say a universal payment system would be simpler to administer than one that phases out based on earnings or other criteria.

Another big question is what constitutes “basic.” Some supporters advocate for a level sufficient to live on — albeit frugally — although there are concerns about how much this would cost and where the money to fund it would come from. There are also questions about whether people in larger households, or who live in more expensive parts of the country, should get higher payments.

Critics of UBI say it discourages people from having jobs, but Facebook’s Hughes argued that the closest analogue we have — the Earned Income Tax Credit, which gives families up to $6,000 in supplementary income a year — hasn’t been a disincentive to work, and studies of Alaska residents before and after the state’s oil fund was established found that the extra money led to an increase in part-time work, but no falloff in full-time employment.

Some experiments with cash grants to poor people in developing countries have shown promise, but researchers say comparisons to the United States are limited, since the landscape of economic challenges and opportunity looks much different in the world’s largest economy.

“What I like about the UBI debate is it puts the spotlight for fiscal policy back on everyday people and why we don’t do more to address them,” said Rakeen Mabud, program director of the 21st-century economy program at left-leaning think tank the Roosevelt Institute. “Our economy is moving in a direction where that social contract is breaking down,” she said.

How to make it work?

Creating a universal income program here would also be much more expensive, and the question over how it would be funded looms large.

Although the idea of a guaranteed income has garnered support from economists on both sides of the political aisle, those on the left generally see it as a supplement to the existing safety net, while right-leaning analysts view it as a substitute.

“That’s a huge ideological divide,” said Michael Tanner, a senior fellow at the Cato Institute, a right-leaning think tank. “On the right, it’s seen as a replacement for welfare. On the left, it’s seen as in addition to,” he said.

Absent the elimination of big poverty-reduction programs like food stamps and housing subsidies — steps that still might not be enough to fund a true UBI — the government would need to raise taxes.

“In the short run, the most promising way to go about this would be to use a carbon tax. We need to reduce emissions anyway, then we can take the revenue from the carbon tax and give it back on a per capita basis,” Marinescu said.

Other proposals have suggested raising the income tax on the wealthiest Americans, or funding a UBI system with taxes on a particular commercial activity like data collection or financial transactions — ideas that are appealing to liberals, but anathema to conservatives. “On the right, that’s a nonstarter. There’s no support for higher taxes,” Tanner said.

Although this stalemate over funding could be an insurmountable impasse for policymakers seeking to implement a federal UBI, states and municipalities are putting their toes in the water with smaller-scale experiments. The San Francisco suburb of Stockton launched a pilot program this year to give $500 a month to some of its lowest-income residents, and a few Western states — California, Washington and Hawaii — have considered the idea.

“It’s a broader question of what we value as a society. As a country, we’ve been prioritizing the interests of the wealthy few for many many years.”

Advocates are hopeful that these efforts could serve as prototypes for an eventual national model. “As we move forward, the scope of the problem will become so clear and so big, people across both sides of the aisle will recognize something has to change,” Foster said.

“It’s a broader question of what we value as a society,” Mabud said. “As a country, we’ve been prioritizing the interests of the wealth few for many many years.”

Redistributive programs like universal basic income, she argued, would help level this playing field. “They’re taking agency and power from the top of the economy, corporations and 1 percent and putting it back in the hands of everyday people. All of these are allowing people to have more agency in their economy.”

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Joe Biden’s climate goals already have activists breathing a sign of relief | Climate News

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Environmentalists and those on the front line of climate change have told Sky News of their relief at seeing Joe Biden sworn in as America’s new president.

The inauguration of a new world leader who describes climate change as an “existential threat” is a lifeline for countries whose people and land are being devastated by global warming.

Analysis: Biden wastes no time in undoing Trump’s work

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COVID, climate and race top Biden’s agenda

Tina Stege is climate envoy for the Marshall Islands, a group of atolls lying just two metres above sea level in the northwestern Pacific Ocean.

She said: “For a country like mine which is really on the front lines of climate change, we now have optimism. It’s got to be cautious optimism when the challenges are this big.

“But with a partner like the US and with all the resources that the US can bring to bear, with this president we are at the start of a process that provides some hope.”

Immediately after taking office, Mr Biden signed executive orders to rejoin the landmark Paris climate agreement (which Donald Trump pulled out of), when countries came together in 2015 to pledge to reduce devastating levels of global emissions.

Mr Biden has also rolled back a host of executive orders put in place by Mr Trump which weakened efforts to tackle climate change.

They include revoking the presidential permit granted to the controversial Keystone XL pipeline delivering hundreds of thousands of barrels of crude oil each day from Canada to be refined in the US.

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November 2020: Joe Biden appoints first-ever US climate envoy

Joye Braun has been fighting the pipeline for a decade and was – as she calls it – “boots on the ground” from day one “until we were evicted”.

A member of the Cheyenne River Sioux Tribe and Indigenous Environmental Network, she said: “To have Keystone Pipeline XL go through is a climate changer – we’ve always said that. It’s an absolute necessity that the Keystone XL pipeline be stopped.

“Watching the inauguration, I felt a huge sigh of relief. For 10 years I’ve been working on this. We’ve gone cold, we’ve gone hungry. Thank you President Biden.”

Joye Braun (L) has been fighting the pipeline for a decade
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Joye Braun (L) has been fighting the pipeline for a decade

Throughout his campaign Mr Biden had promised rejoin the Paris agreement on “day one” of his presidency.

America will be back in the club in 30 days after notifying the United Nations.

Remy Rioux, the head of the French development agency, was a lead negotiator for the Paris agreement.

He said: “I remember in 2015 it was an executive order by President Obama which had the US joining the Paris agreement so there’s no need for Congress approval to join or to come back within the agreement. President Trump withdrew by a single executive order as well so it can be very fast.”

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While Mr Biden wants to be a global leader on the climate, his credibility rests on transforming decarbonising the US.

He’s promised a $2tn plan to create millions of jobs in clean energy and energy retrofits.

His climate strategy is underpinned by the belief that the climate is inextricably linked to America’s health, wealth and national security.

He subscribes to a global recovery from coronavirus being green and will likely announce net zero goals.

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Joe Biden takes oath of office to become America’s 46th president | US News

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Joe Biden has become the 46th president of the United States, after taking his oath of office in a heavily scaled back inauguration ceremony in Washington DC.

He swore to preserve, protect and defend America to the sound of cheers and applause from former presidents both Democrat and Republican – though Donald Trump decided to break precedent by skipping the event.

It came minutes after new Vice President Kamala Harris took her oath, too.

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Air Force One
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The outgoing president was whisked to Florida in Air Force One

Mr Biden stressed the fairness of last November’s election result in the opening of his inaugural address by declaring: “This is democracy’s day. The will of the people has been heard and the will of the people has been heeded.

“We’ve learned again that democracy is precious, democracy is fragile and at this hour my friends, democracy has prevailed.”

U.S. President Joe Biden delivers his speech after he was sworn in as the 46th President of the United States on the West Front of the U.S. Capitol in Washington, U.S., January 20, 2021. REUTERS/Kevin Lamarque
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Mr Biden delivered his inaugural address facing the National Mall

Mr Biden promised to “press forward with speed and urgency” during a “winter of peril” to tackle the “once-in-a-century virus that silently stalks the country”, also vowing to confront white supremacy and terrorism.

He stressed his prevailing focus after a divisive election campaign will be on “uniting our nation”, adding: “With unity, we can do great things, important things – we can right wrongs.”

And he said he wanted to “make America once again a leading force for good in the world”, seemingly in a snub to Mr Trump commenting: “Let’s start afresh… all of us.”

Inauguration of Joe Biden as the 46th President of the United States
President-elect Joe Biden and Vice President Kamala Harris during the inauguration of Joe Biden as the 46th President of the United States on the West Front of the U.S. Capitol in Washington, U.S., January 20, 2021. REUTERS/Brendan McDermid
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Kamala Harris was also sworn in as the new US vice president

Mr Biden urged people to “join forces, stop the shouting and lower the temperature”, for, he explained, without unity there will be “no nation, only a state of chaos”.

Speaking as he looked out on to the National Mall lit by a bright sunshine, Mr Biden continued: “Politics doesn’t have to be a raging fire destroying everything in its path.

First Lady Jill Biden places her hands on U.S. President Joe Biden during the 59th Presidential Inauguration in Washington, U.S., January 20, 2021. Kevin Dietsch/Pool via REUTERS
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Dr Jill Biden celebrated with her husband

“Every disagreement doesn’t have to be a cause for total war and we must reject the culture in which facts themselves are manipulated and even manufactured.”

Repeating a motif from his victory speeches in the days after winning the Electoral College vote, Mr Biden promised to be “a president for all Americans”.

Winding up his address, he struck an optimistic tone, saying: “Together we shall write an American story of hope not fear, of unity not division, of light not darkness.”

He ended with: “May God bless America and may God protect our troops, thank you America.”

President Joe Biden is congratulated by First lady Jill Biden, after being sworn-in during the inauguration. Pic: Patrick Semansky/POOL/EPA-EFE/Shutterstock
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The new first family will later head to the White House

Lady Gaga, wearing a large dove broach on her top and clasping a golden microphone, had just performed a rousing rendition of the national anthem – and Jennifer Lopez followed with an “American musical selection”.

Former presidents Barack Obama, George W Bush and Bill Clinton attended the event at the Capitol – and Mr Biden was greeted by cheers and applause as he walked up to the stage.

Jennifer Lopez performs during the inauguration of Joe Biden as the 46th President of the United States on the West Front of the U.S. Capitol in Washington, U.S., January 20, 2021. REUTERS/Brendan Mcdermid
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Mike Pence, representing the outgoing administration, watched J-Lo’s performance

Mr Biden shared a fist-bump with Barack Obama before the pair took their seats, and then a series of speeches got underway – all sharing a theme of unity.

But as the new president prepared to take the oath of office, Donald Trump was landing in Florida.

Mr Trump is the first outgoing president since 1869 to skip an inauguration ceremony, but departing Vice President Mike Pence was in the audience.

As the inauguration ceremony took place in a chilly Washington DC, where it was trying to snow, the White House was getting a deep clean that was set to cost $500,000 (£366,000).

Shortly before the ceremony began, Mr Biden declared on Twitter: “It’s a new day in America.”

Mr Trump gave a parting message before boarding Air Force One, telling a small group of supporters and family members gathered on the tarmac of Joint Base Andrews that “we will be back in some form”.

“I wish the new administration great luck and great success,” he added, before boarding the plane, which took off to the booming soundtrack of Frank Sinatra’s My Way.

Mr Biden is only the second Catholic to hold the office of president.

His team have already announced he will sign a series of executive orders reversing several of Mr Trump’s policies, including on COVID-19, climate change and racial inequality.

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Australian Open: Novak Djokovic says he is not ‘selfish, difficult and ungrateful’ for quarantine requests | World News

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Tennis star Novak Djokovic has insisted he was not being “selfish, difficult and ungrateful” after making a list of requests for players in quarantine ahead of the Australian Open.

The men’s world number one reportedly sent a letter to Australian officials asking for a reduction in the time players spend in isolation, permission to see coaches and for athletes to be moved to private houses.

His suggestions were firmly rebuffed by Victoria’s premier Daniel Andrews, who said: “People are free to provide lists of demands, but the answer is no… There’s no special treatment here.”

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State premier lays down law to tennis stars

A total of 72 players are in quarantine after 10 people who flew to Melbourne for the first Grand Slam of the year tested positive for coronavirus – leaving many forced to train in their hotel rooms.

Djokovic has since defended speaking out about the quarantine conditions, writing in a lengthy social media post: “My good intentions for my fellow competitors in Melbourne have been misconstrued as being selfish, difficult and ungrateful.

“This couldn’t be farther from the truth.”

He said his email exchange regarding suggestions for the quarantine conditions was an “opportunity to brainstorm” and he was “aware that the chances were low that any of our suggestions would be accepted”.

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“There were a few suggestions and ideas that I gathered from other players from our chat group and there was no harm intended to try and help,” he said.

While many players are under the strictest quarantine conditions and unable to leave their rooms, others who were not on the affected flights – including Djokovic – are able to train outside for five hours a day under COVID-secure protocols.

The men's world number one smiles from his balcony while in quarantine
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The men’s world number one smiles from his balcony while in quarantine

The star player said he wanted to use his “position of privilege” to help others.

“I’ve earned my privileges the hard way and for that reason it is very difficult for me to be a mere onlooker knowing how much every help, gesture and good word mattered to me when I was small and insignificant in the world pecking order,” he said.

He added: “Things in the media escalated and there was a general impression that the players (including myself) are ungrateful, weak and selfish because of their unpleasant feelings in quarantine.

“I am very sorry that it has come that because I do know how grateful many are.”

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Quarantined tennis stars train in hotel rooms

Going ahead with the tournament amid the global pandemic and harsh restrictions in Melbourne has caused some controversy, particularly as many Australians remain stuck overseas.

Three new coronavirus cases related to the tournament were reported on Wednesday, including a player who has been in hard lockdown since they arrived.

The second case related to another player and the third is a support person with the player.

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