California’s ‘foreclosure capital’ seeks to remedy poverty problem by handing out ‘free’ cash

The California city once known as America’s foreclosure capital has decided to give out free cash to residents in an attempt to combat poverty.

Stockton will become the first U.S. city to experiment with Universal Basic Income, giving 100 residents $500 a month for 18 months – with no conditions or strings attached, Fox News reported.

(Images: screenshots)

The testing phase of the program, set to launch by 2019, allows recipients to spend the money on anything they want in the hopes of eventually ensuring that none of the 300,000 people living in the city lives in poverty.

Just 80 miles east of Silicon Valley, Stockton’s median household income of $49,271 is below the national $57,617, according to U.S. Census Bureau estimates with one-in-four residents living below the poverty line in a city that was bankrupt in 2012.

“We have a bunch of folks starting off life already behind, born into communities that don’t have a lot of opportunity,” Stockton Mayor Michael Tubbs told CNN, noting the “looming threat of automation and displacement.”

Programs similar to the Stockton experiment have been tried in Finland, Cambodia and Ontario Canada, according to CNN.

But how will a city strapped for funds afford to give away money? Wealthy Silicon Valley moguls apparently are filling the gap.

Facebook co-founder Chris Hughes contributed $1 million to the experiment through his Economic Security Project.

Homeless camp in Stockton, Calif. YouTube screen shot.

“It is such a fundamental idea behind America that if you work hard, you can get ahead, and you certainly don’t live in poverty. But that isn’t true today, and it hasn’t been true in the country for decades,” Hughes told CNN. earlier this year.

Tesla CEO Elon Musk recently tweeted in favor of the idea.

And Virgin billionaire Richard Branson thinks America must dole out free cash in order to combat income inequality.

“A basic income should be introduced in Europe and in America,” he indicated in an interview with The New York Times. “It’s a disgrace to see people sleeping on the streets with this material wealth all around them.”

“I think with artificial intelligence coming along, there needs to be a basic income,” he added.

Critics believe pay should be earned and the pilot program could actually increase poverty, taking away the incentive to work.

Many Stockton residents who spoke to Fox News indicated they would spend the money on bills and groceries rather than save it.

“I would actually take my kids on a trip to Disneyland,” one man said.

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