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This is GAI Stage II, home to a small but vocal number of GAI enthusiasts. It’s a very comfortable place to be: you can spend your career campaigning for a GAI and writing about the benefits of a guaranteed income for low-income households (it’s almost always about low-income households) and for society as a whole. And fairly convincingly, too: the benefits are certainly real enough.

Finally, if you take the idea of a GAI seriously enough, you start working through the mechanics of how it would work. For example, suppose we want to send $2,000 a month to every Canadian — an amount approximately equal to Statistics Canada’s Low Income Measure — so that no-one would have to live in poverty. How much would that cost? The answer is $800 billion a year.

You’ve entered GAI Stage III when you grasp the implications of that sort of number: $800 billion represents roughly 40 per cent of GDP, or the entire take of all levels of government, including the public pension plans. (You’re still in GAI Stage II if I could have written “800 parsecs” instead of “$800 billion” without changing the effect or indeed the meaning of that estimate.) Unless you’re willing to try and persuade Canadians to accept a doubling of their current tax burden, you’re going to have to back well away from the sort of GAI that lights up everyone’s imaginations.

Some compromises are in order. There are three elements we’d like from a GAI: moderate cost, generous payments, and a low rate at which benefits are clawed back as income increases. (That last point refers to the welfare wall and the disincentives to work.) The UBC economist Kevin Milligan poses the problem as a trilemma: you can only have two of these three wishes. As we have seen, generous benefits with a zero clawback rate are hideously costly. You can have generous benefits at low cost, but only if they are focused on those with low incomes and are rapidly clawed back from those with higher incomes. And finally, you can have universal benefits with low cost, but the payments will be very small.