Taxes or inflation unfortunately. The free market bit is giving the welfare direct as cash not dictating to people how it should be spent. Alot of people despise UBI because the amounts suggested are ridiculously high. I only would support something low that keeps people out of desperate dire poverty.
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No, sorry. Receiving stolen money, even 'directly', is not a function of the market.
We have UBI now, it's called Social Security, and it doesn't work.
Ignoring the source of the money is bad economics and bad politics. You're just trying to dress up the broken window fallacy again.