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May
16
2022

Guaranteed Income Idiocy Easily Scales To Infinity,
Actual Free Money Doesn't
Mike Shedlock

A free money trial is underway in Chicago. Expect an obvious failure to be touted as a huge success...

Free Money Chicago Style

Chicago Mayor Lori Lightfoot reports 90,000 Chicagoans Apply for Chicago’s Guaranteed Basic Income Program in 24 Hours

More than 90,000 Chicagoans applied to be part of the city’s study that will test whether a universal basic income could reduce poverty in the city in the first 24 hours after applications opened, Mayor Lori Lightfoot said Wednesday.

The $31.5 million program has enough funding to send just 5,000 Chicago families $500 per month for 12 months, officials said. Applications opened Monday.

Lightfoot said that makes it clear that the demand for help in Chicago will far exceed the city’s capacity. “People in this city are hurting badly,” Lightfoot said. “This is an emergency.”

To be eligible for the cash assistance program, participants must live in Chicago, be older than 18, have experienced “hardship to due to COVID-19” and live in a household that earns no more than 250% of the federal poverty level, or $69,375 for a family of four, officials announced.

Rigged Test 

The test will see if free money makes people's lives better.

Of course it will. 

Take 5,000 of the neediest people and give them $500 in free money every month for a year, and of course their lives will be better. 

Three Problems

1. The money isn't free. It comes from taxpayers.
   
   
2. The programs do not scale and never will. 
   
   
3. Government Idiocy is infinite, taxpayer money isn't. 

Chicagoans in Poverty 

The Census Department says 17.3% of Chicago lives in poverty. 

The Lightfoot proposal extends to 250% of the poverty level. I will take a stab that's about half the city. 

Nonetheless, let's go with 17.3%

Crunching the Numbers

The 2020 census estimate is 2,746,388 persons.  17.3% of that is 466,886 persons. Let's assume the average household size is three. 

That would be about 155,629 households. 

155,629 * 12 months * $500 per Month = $933,774,000

Who is going to pay for that? 

Meanwhile, Lightfoot brilliantly allocated $31.5 million for her trial program. And that trial will no doubt be labeled a success because idiocy easily scales.

In reality, government Idiocy has no bounds, but allegedly "free" taxpayer money does.

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Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management.

Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

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