I'm looking for feedback and critiques of an idea. Universal basic income is an increasingly popular idea, but most agree that it would be terrifically expensive. Assuming that the goal of UBI is to provide everyone with enough liquidity to participate in the economy, would a universal basic loan work just as well without costing as much on paper?
Specifically, the government would make available a no strings attached personal loan to every citizen, to be paid back at some future date (e.g. 12 months in the future), with the interest rate set according to whatever monetary policy makes sense at the time. The interest rate may also carry with the size of the loan, the term, previous good repayments etc.
Optional follow up: could this also replace the tax system, in that the interest rate could be set high enough to be used as the money drain in the economy instead of income tax?