A Basic Income Should Be the Next Big Thing
bloombergview.com
bloombergview.com
And then, towards the end where it starts looking at numbers, it starts saying things like
> But by excluding 45 million retirees who already receive a basic income through Social Security, the cost falls to $2.7 trillion. And if the benefit is phased out for households earning more than $100,000 (that would be 20 percent of the U.S.'s 115 million households, or about 70 million people, assuming three to a household), the cost declines to about $2 trillion. You could confine the program to adults and shrink the price tag even more, possibly to as low as $1.5 trillion.
Yes, you can reduce the amount paid out by making it not a universal basic income scheme any more. But that rather misses the point.
(The correct thing to say here is: Yes, a universal basic income sufficient to keep everyone out of poverty would be really expensive. Taxes would need to go up a lot, which would leave wealthier people less well off than they are now. If you don't want a large-scale redistribution of wealth, then you don't want a BI scheme sufficient to keep everyone out of poverty. But you might still want to consider a BI scheme that's not sufficient to keep everyone out of poverty, to simplify and to reduce poverty traps. No one would have to be much worse off then. But it wouldn't be enough for anyone to live on, and would still need supplementing by other safety nets.)
Basic income is known to create a large disincentive for work. In previous experiments (Mincome) labor supply dropped by about 10% - double what happened during the great recession.
This means that fewer working mothers can find child care, fewer laborers to mow your lawn, fewer nurses, fewer teachers, etc. No matter how much money you give to people, fewer services provided makes us all become poorer. That's simple arithmetic.
Someone going out to work and paying a large fraction of their income for child care is counted, whereas someone staying home and looking after their children is not. Only the first has value in an economic sense. Is it the only work that has value in a moral sense?
It's a tenable line of argument to argue that the opportunity cost of child care - typically less than earnings foregone - isn't as high as the social benefit from taking care of one's own child, but I can't really think of a less efficient means than BI to try to redress that imbalance.
From a GDP-maximising point of view, it's better for everyone to contract out every aspect of their household than it is to do it themselves. An economy built on taking in each other's washing has a much higher GDP than one where each does their own. Stepping back from GDP makes that look nonsensical.
In contrast, the unskilled woman who might otherwise work in day care only produces $X value/hour.
By taking the unskilled woman out of the labor force, you've destroyed $Y - $X of value.
It's even a common trope that shows up in literature fairly often.
Which is one reason I think that basic income would broadly improve the level of care given to children. It would enable the people most qualified to give care--children's own parents--to provide that care instead of working excessive hours just to put food on the table.
On the other hand, empowering an impoverished woman to provide higher quality care for her children will significantly increase their upward mobility.
It was this exact calculation (and a high marginal rate) that led my own highly skilled wife to conclude that it wasn't worth working when we had our second child.
From http://archive.irpp.org/po/archive/jan01/hum.pdf
Meanwhile, other studies have shown productivity actually increased when basic income was instituted amongst extreme poverty - http://www.bignam.org/BIG_pilot.html
https://decorrespondent.nl/541/why-we-should-give-free-money...
Either way, whether it's 13% or 5%, it makes us all poorer.
The Namibia experiment is not remotely comparable. That was a) a transfer of wealth from outside the community into it (closer to imperialism than redistribution), b) poverty in Namibia is not remotely like poverty in the US, and c) a big chunk of the BI in Namibia was directed into investment.
The closest analogue of (c) in the US would be funneling money to rich people (who invest) rather than poor people (who consume).
With mincome didn't they determine that the work hours decreased was dominated by 1) young males entering the work force later due to increased high school completion rate and 2) females talking longer maternity leave?
If thats the case, then its possible that it made everyone richer if over the lifetime more educated workers and more cared for infants are more efficient.
*Note: I actually am a huge skeptic of basic income schemes as the math seems dramatic, but I think a simple "people work less hours" counterargument is overly simplistic.
However, it's a bit strange to expect that all the second order effects will happen to point in the direction of our preferred policy. The only quantified effect here - labor force disincentive - has been measured and agrees 100% with economic theory. It also agrees with other related (but not identical) results, namely that welfare/unemployment also has a huge labor force disincentive.
Why are we appealing to unquantified second order effects when the first order effects are measured and shown to be large, shown to be in 100% agreement with basic economic theory, and viewed by many proponents of BI as a desired feature [1]?
[1] https://news.ycombinator.com/item?id=11619712 https://news.ycombinator.com/item?id=11619690 https://news.ycombinator.com/item?id=11619691
FWIW I'm in favor of a UBI to replace almost all other assistance programs.
Look at the response to a higher minimum wage - McDonalds, which typically runs a store with 8 to 10 people at $7/hour discovered that most of those jobs could be automated (with better results) for the capital expenditure equivalent of less than $15/hour. So now there are McDonalds stores that run with 2 people instead of 10. People still get their hamburgers, but now orders are taken by a computer screen, hamburgers are assembled by a machine instead of a person, etc.
Lawnmowers, street sweepers, taxi cabs, factory lines, farms can all be nearly fully automated these days, but it's cheaper to put a person there right now.
This will produce a constant back-and-forth impact on labor markets as jobs are automated, then new jobs are created as a result, and then those jobs are automated. Having the basic income in place allows society to remain functioning while this happens and makes it more able to weather the changes and adapt.
If someone's doing an effectively-below-minimum-pay job at 30, I hope they just quit if universal basic income is introduced.
If the work is so valuable and necessary, compensation should then reflect a price that incentivizes people who are no longer completely desperate for food, housing or healthcare because of a Basic Income.
I speculate that a BI would bring compensation closer to labor's real value, rather than the stagnant wages we see now because people have no other recourse to negotiate higher pay. The elimination an underclass that absolutely needs exploitive work to survive would drive pay higher as well.
Many people never get a chance to discover a passionate relationship with work. Collectively, when we kick the habit of forcing people into doing things out of fear (with money) means that a lot of people are gonna be feeling like fish out of water. Generations of slaves don't just jump out of their chains eager to get working again.
Why are passion projects only ones that have no economic value?
I'm not holding a gun to my lawn guy's head to coerce him in any way. This is what he chose to do to make money, in the face of all other money making opportunities.
If he took another job or income source tomorrow, and simply didn't show up again and didn't let me know, I have no power or authority to get him back behind a mower.
If he's doing it out of fear, it's not fear I'm placing into him. He has plenty of other ways to make money, so if fear of doing those jobs is what's driving him into the lawn care business, then nobody but him is responsible for cultivating that fear.
There's nothing wrong with mowing somebody's lawn, he beautifies my property, saves me from working in the heat, and in exchange I pay him slightly more than what he asked.
There's innumerable other things he could be doing for money, but he chose this one. Since he's good at his job, reliable and reasonably priced, I and my neighbors benefit from his choice and he benefits from having blocks of contiguous neighbors all hiring him.
Bonus, he even has two employees who he keeps in the labor market.
but i guess that would make sense, .. since.. well, you know.
Somehow, you're assigning lesser intrinsic value to lawn mowing than you are to (eg.) jobs in STEM. Society may have assigned a lesser monetary value to it, but that's a function of supply and demand, and not a suggestion that the job is somehow "lesser" in some way.
It doesn't make sense to judge another person's job decisions using your own value system. Many (perhaps even most?) people see their job as a means to an end -- a way to make money to do the things they love. That's a perfectly reasonable and honorable way to live your life.
What we do need is equal access to the means to do other things. If you're interested, capable, and willing to have a career in (eg.) STEM, you should be able to do so without having to fight the socioeconomic conditions into which you were born.
Where do you read me assigning more value to STEM work? You're totally injecting that into what I wrote.
On the contrary, I'm saying that all work can be fulfilling, not just STEM work. But all work can also be degrading if it forces people to compromise themselves unreasonably.
All work can certainly be fulfilling, but more because of the reasons I described (it's a means to an end) than the reasons you're describing. Certainly, people shouldn't be forced to take particularly degrading jobs when they don't want to in order to survive. But do they find it degrading, or do you? Those are two very different things.
It's impossible that there are enough people in the world passionate about garbage collection -- allocated perfectly across the correct geographic regions, mind you -- to fill all of the available positions.
And you base this claim on what?
I'm not saying it's likely, but it's certainly not "impossible."
Also I think a side effect of Basic Income will be greatly increased quality of jobs, because I'd imagine for a lot of jobs, making them less shitty is a lot more attractive for the cost than a higher wage.
For example, a lot of service jobs have polices of putting up with extremely obnoxious behaviour, because it marginally increases revenue at the expense of the employee's sanity, which is effectively free. But if you're not quite as desperate for a job, you're much more able to price that in, and choose to work for less at the restaurant next door, that lets you tell jerks to GTFO.
I feel like your ideals are very far away from a gritty reality of the working arrangement for most people.
The foundation of society is people working for each other and for themselves, regardless of whatever so-called "economy" is imposed on top of that. Underneath the money (or in some societies the lack of money), what do you have? People doing work, getting in the flow of life, sharing and receiving with the people around them. That's the basis of living life.
Believe it or not, there are jobs that need to be done, but nobody in the world has a passion for them.
Employment isn't about fear or force. It's about two parties agreeing that they each come out better after the transaction of selling labor. I may not love what I do every day, but the sacrifice is worth it to have the benefit of the salary and other benefits that my employer gives me. And she probably isn't enamored with having to give up that money to pay me, but values the productivity I deliver (when I'm not on HN) more than that money.
The ability to trade labor for goods or money is the single greatest invention in the history of humanity. Without it I'd have to grow my own food and fibers, weave my own cloth for clothing (in the house I had to construct myself), sitting in a dark drafty room wishing that some altruist would come cure my illnesses.
But instead, we found that people can decide they value one thing more than another, and engage in voluntary commerce so that they can trade in kind.
I work a day job because the state will literally show up with police and guns if I went out into the mountains and lived off the land. Therefore unless I want to starve I must work. Even when it's on shit I hate.
I am lucky enough to have a skill that is sufficiently valuable that I can survive despite disabilities making it difficult to work.
If you imagine that the labor market is free because it happens to mostly be positive sum, you haven't lived at the bottom of the labor market for any length of time.
Why? Is it someone else's land that you're trespassing on, using up their resources, hunting their animals, etc?
Shall all of us who don't feel fulfilled do the same thing as you propose? When you hurt yourself and get an infection, are you going to crawl back out of the woods and expect there to still be other people to care for you, supply your antibiotic, and yes, clean your bedpan while you recover? What right to you have to expect the bedpan cleaner to serve you?
unless I want to starve I must work.
Who do you expect to plant, harvest, and distribute the food you want to eat?
When you want something from someone - food, medicine, etc. - you're going to have to offer something in return, else why should they provide it? For almost all of us, our labor is the product we can offer in trade. Only by all of us making this tradeoff does society survive.
What if the value of someone's labour is not enough for the things they need to survive? There's no function of the market that ensures it will be.
At some point, you either have to help people out without anything in return, or choose to let them die.
Sure, we can make a moral argument about that. But that's not what this branch of the debate is about. We were debating the proposition that "money itself tends to disincentivise work for a lot of people" and employment is force.
But since you bring it up, my biggest concern about BI is along the same lines as your moral question. Suppose that every year we hand out $X,000 to each person. Some people are going to waste that on booze, gambling, etc., and still be left with nothing to eat. What's our moral obligation to those people?
I think we can all agree it to be none.
Yeah. Just about every bit of land is owned by someone. In order to have my own land to live off of I need to produce some income to pay property taxes, lest the state confiscate it from me.
Fortunately, given your basic income in this scenario, you have more money to do so!
Anyway, per https://en.wikipedia.org/wiki/Mincome, this 5 year study has many qualifiers placed upon why the drop in labor, with the more interesting of these involving child care, education, and mental health: The results showed an impact on labor markets, with working hours dropping one percent for men, three percent for married women, and five percent for unmarried women. However, some have argued these drops may be artificially low because participants knew the guaranteed income was temporary. These decreases in hours worked may be seen as offset by the opportunity cost of more time for family and education. Mothers spent more time rearing newborns, and the educational impacts are regarded as a success. Students in these families showed higher test scores and lower dropout rates. There was also an increase in adults continuing education. ... Manitoban economist Evelyn Forget conducted an analysis of the program in 2009 which was published in 2011. She found that only new mothers and teenagers worked substantially less. Mothers with newborns stopped working because they wanted to stay at home longer with their babies, and teenagers worked less because they weren't under as much pressure to support their families, which resulted in more teenagers graduating. In addition, those who continued to work were given more opportunities to choose what type of work they did. Forget found that in the period that Mincome was administered, hospital visits dropped 8.5 percent, with fewer incidents of work-related injuries, and fewer emergency room visits from accidents and injuries. Additionally, the period saw a reduction in rates of psychiatric hospitalization, and in the number of mental illness-related consultations with health professionals.
Many here believe that if people weren't forced to work for income, they would be doing things that are more valuable but also more difficult to monetize (at least initially but perhaps generally), like open source development. There is an underlying belief that vast creative talents are untapped or wasted because of the need to work for money. It's the intellectual's dream lifestyle. One that used to be possible for writers and academics.
Other reasons are largely an afterthought. That's why basic job for example is not a convincing counterargument despite the numbers. This is not really about helping the poor, that would be an auxiliary benefit at best.
[1] https://www.chrisstucchio.com/blog/2013/basic_income_vs_basi...
As I noted in the blog post you cited, most of this discussion is just meaningless verbiage. No one even attempts to quantify the the effects they claim are so important. (In the HN comments on that post, many people suggested such effects; the minute you crunch numbers they turn out to be tiny.)
It's the intellectual's dream lifestyle. One that used to be possible for writers and academics.
It still is possible - go live in a rural area, consume very little, and survive with bad internet (still vastly better than the no internet of previous eras). People just don't like to do it because of the low status it entails, and because they've grown used to modern consumption that they'd need to give up.
Perhaps I didn't phrase that strongly enough but growing the economy or making it more efficient is not the point. It's at most a rationalization.
go live in a rural area, consume very little, and survive with bad internet
That's not a realistic advice. It's extremely difficult, puts having a family largely out of reach, and places you away from potential collaborators. Even Joey Hess[1][2] has to resort to crowd funding and grants.
Also, the only reason it "puts having a family largely out of reach" is due to women's sexual choices - most women prefer a man who lives a higher status lifestyle. Sorry, but you aren't entitled to a wife; if women prefer a different lifestyle, that's their choice.
And again, what fraction of people who stop working in the for-profit economy will actually be as productive as Joey Hess?
It's a weird observation that going off the grid would price you out of the dating market. Plenty of "starving artists" and outright bums have more success with women than salarymen.
And again, what fraction of people who stop working in the for-profit economy will actually be as productive as Joey Hess?
That's the direct counterargument to most BI hopes. Of course, it's very difficult to verify empirically and mostly depends on what you already believe about human nature. We don't even know if Joey Hess is more or less productive than he would be otherwise.
It's literally how it was done. Go west, steal some land from whatever non-white people are there. Have many babies and bootstrap civilization on the empty land.
yummyfajita's is missing that this isn't possible now because we're out of land to steal, and the state gets pissy about building a log cabin in national forest service land.
https://en.wikipedia.org/wiki/Fermi_problem
It's also about knowing what facts need to be true for a BI to work. Then we know what facts we need to verify to determine if it's true, in contrast to all the meaningless verbiage in this thread.
Also, Scarmig's comment was quite valuable. It showed exactly what the driving effect is - that's precisely why you should do a back of the envelope calculation. And as all the non-quantitative comments show, it's also why any comments suggesting an effect but not doing such a calculation are worse than useless.
And the driving effect turned out to be a disputed premise that we already knew about from our directional, non-quantitative discussions. The quantitative side is just a meaningless overcomplication (the monte carlo part especially), especially when none of the parameters was empirically validated. You wouldn't value a company you were thinking about investing in that way.
A quantitative examination would be valuable if we agreed on the premises, or if we disagreed on conclusions but weren't sure where the disagreement on premises that was driving this was. Neither of these scenarios is the case for basic income. We know what the questions under dispute are; it's time for empirical experiments.
That's exactly how you value an early stage company - back of the envelope calculations and monte carlo.
Isn't this the exact effect you would want, if you are instituting basic income partly as a response to structural unemployment as a result of automation?
> fewer working mothers can find child care, fewer laborers to mow your lawn, fewer nurses, fewer teachers, etc.
Maybe these jobs start paying more. How is that bad? With basic income, more mothers would be able to stay home with their kids, more people would care for their own homes, and the nurses and teachers we need would see bigger paychecks.
Net, I don't see how society is worse off under that arrangement. It sounds a lot like how life was in this country before huge income disparities made hiring servants normal for people with means.
> It's not just wealthier people who will be worse off - it's everyone.
You assert this, but your comment doesn't successfully back up your assertion.
If we don't have robots providing child care, cleaning houses, and all these other services, then "structural unemployment as a result of automation" is not actually a problem we have.
That's not how our economy works. Only a small percentage of the population can afford to hire maids, nannies and gardeners, and even the wealthiest people will only hire a certain number of them. Just using simple logic should show that if 1% of the working population were all able and willing to maintain a staff of 5 full-time servants, this would only be able to absorb 5% of the unemployed population.
Structural unemployment has nothing to do with these servant-type jobs, and there is no way that these kinds of jobs can absorb unemployed workers laid off in other industries.
This is true because we live in a situation of scarcity. In other economies (e.g. India) where labor is not so scarce, far more people can afford help.
If people were actually willing to work, but simply couldn't find work, prices should drop so that a much larger percentage of the population could afford maids and nannies.
Also, the unemployment rate in the US is 5.5%, i.e. the natural rate of unemployment. We simply don't have the problem of not enough jobs.
> We simply don't have the problem of not enough jobs.
I would argue that the proof of the emergence of structural unemployment is not in the current rate of unemployment, but in how long it took for us to return to this level after the housing crisis. Structural unemployment will manifest itself in longer and longer recovery times, always returning to near full-employment as the economy adjusts, until the point at which demand collapses and recovery becomes impossible.
Like the tipping point that climate scientists talk about with regards to climate change, we have to implement a solution before we get to that point, because it might not be possible after. Basic Income, above all, should be embraced as a mechanism to stabilize consumer demand during the periods of radical realignment in the labor markets that will be brought on by robotics and AI.
I would argue that the proof of the emergence of structural unemployment is not in the current rate of unemployment, but in how long it took for us to return to this level after the housing crisis.
So your claim isn't that jobs don't exist, but merely that it takes people time to find them.
How is a massive labor force disincentive like BI a solution to this problem at all? We already know that unemployment benefits make this problem worse: https://www.nber.org/papers/w20884 Why would BI - essentially permanent unemployment benefits - help?
If anything the solution to this problem is just making labor markets more flexible. E.g., NGDP targeting, making it easier to hire/fire workers, eliminating employer mandate in Obamacare, discouraging home ownership, etc.
[edit: here is non-paywalled link: http://econweb.umd.edu/~davis/eventpapers/ManovskiiEntension... ]
No, my claim is that it will take more and more time for new jobs to be created, and for laid-off workers to retrain for them. At the beginning of a recession, the jobs don't exist because they have been destroyed, and they are only re-created because the persistence of demand for goods and services--driven primarily by consumer demand--compels it.
I believe that at a certain point, in some future recession, that process will take so long, and will be so expensive, that supporting the levels of consumer demand necessary for economic recovery will be infeasible without government intervention at a scale even larger than what is envisioned with regards to basic income itself. That is, unless basic income is instituted first.
First of all, even if the people in positions like this were only working for sustenance and UBI provides it for them, it doesn't mean some wouldn't want to continue working to make even MORE money. UBI is a baseline, not welfare. If previously a lawn mowing job was only enough for rent and food, maybe now with UBI it'd be enough for rent, food, and the occasional dinner and a movie. Ain't nothing wrong with that.
But you're right, at least some people would definitely completely exit the work force. Well, that just means the salaries of the rest would go up. Simple economics. Does that mean that some working families can no longer afford to pay a new immigrant bottom dollar to mow their lawn and instead have to pitch in themselves? Maybe so. Is that so bad.
Okay, you say, but what about those working mothers that are barely making enough money to be able to afford the most basic child care while they make their income? Good news - UBI also helps THEM too so either they no longer need to work if all they're doing is getting by to keep a roof over the child's head, or they have enough extra to pay for the increase in child care.
I'm not saying "don't worry about, it'll all sort itself out". This is a very complex policy with millions of consequences to our societies - intended and unintended. A lot of research must be done, and also experimentation. But to say that with UBI everyone would be worse off is ridiculous bordering on propagandistic.
Yes, it's bad because now we are all poorer. We have fewer goods and services to go around. The fact that salaries (paper) go up doesn't change this fact.
Okay, you say, but what about those working mothers that are barely making enough money to be able to afford the most basic child care...
I'm referring to highly productive women who should be designing self driving cars, automating business processes, and other such valuable things. Instead they are stuck at home changing diapers.
We, as a society, lose the value of their output.
This is absolutely true in a free market with no labor distortions (BI, tax, etc). However, we already live in a world with distortions (taxes, welfare, regulations) that drive a wedge between economically optimal and actual choices. How would adding an even bigger wedge help?
Also, due to women's sexual choices, most likely the father is also highly productive. So your "fathers change the diapers" is not really a viable solution - it just means you lose his output rather than hers.
Later: Which is not intended as more than hand-wavy thinking out loud. Regardless of the impact, a basic income is a political pipe dream in the US. More immediate improvements in quality of life might come from better aligning incentives in the healthcare system and fixing cliffs in existing programs.
The current market is not free because people are forced to offer their services if they don't want to starve. That's a huge distortion that you would remove with basic income.
At the margin this will certainly cause people to drop out of the workforce. Heck, as I get closer to having enough assets saved to be able to require, I'd probably choose the pull the trigger on that decision sooner.
So we may be removing other large disincentives at the same time.
As costs for services go up, costs of products go up as well. For example, if I'm in the beer business, and the cost for me to bottle a single beer is $.10 per bottle on my assembly line. If labor costs increase under UBI to double that ($.20/per bottle) (because cheap labor is now harder to find), I must increase my sale price by at least the same or go out of business.
Now somebody buying my beer has to pay $.60 more per six-pack, potentially wiping out that fraction of new income UBI was providing them.
The government could come in and say "the price of beer may not increase at all" and set some kind of price control. So now I need to cut $.60 of cost somewhere else in my product.
But wait, it gets worse!
Bottling isn't the only cost for me to make and sell my beer.
- Grain harvest is more expensive - increasing my cost
- Transport costs are more expensive - increasing my cost
- Blank bottles are more expensive - increasing my cost
- Brewing is more expensive - increasing my cost
and so on...
So to prevent inflation I have to cut costs everywhere else. Cheaper glass, worse grain quality, worse brewing methods, worse water supply, and so on. If I can't balance the cost equation I simply go out of business, decreasing the supply of products in the economy and increasing unemployment.
In effect, nobody gets paid more because everybody gets paid more, which drives up prices, which is the definition of inflation. If inflation is artificially capped by price controls, then product quality either goes down, or I go out of business.
It's basic economics.
Sounds more like fantasy than economics.
https://news.ycombinator.com/item?id=11619803 https://news.ycombinator.com/item?id=11619677 https://news.ycombinator.com/item?id=11619716 https://news.ycombinator.com/item?id=11619722 https://news.ycombinator.com/item?id=11619700 https://news.ycombinator.com/item?id=11619538 https://news.ycombinator.com/item?id=11619598 https://news.ycombinator.com/item?id=11619476 https://news.ycombinator.com/item?id=11619477 https://news.ycombinator.com/item?id=11619730
> AND it will decrease so substantially that all markets will have to increase prices to a 1:1 ratio with the new UBI.
No, all money will devalue with the increase in supply and increase in labor costs. That's pretty basic economics.
They will, and I never said they wouldn't. The problem with your "theory" is that they are going to decrease at a 1:1 ratio with increase in labor costs from the UBI resulting in an overall "0 gain" from the UBI.
> No, all money will devalue with the increase in supply and increase in labor costs. That's pretty basic economics.
True, but that's not the argument you are making. You are arguing that nobody will be better off because the decrease in available labor will be entirely offset by the increased costs in goods/services based exclusively off of labor losses from the UBI.
That is a nonsensical argument. There is ZERO evidence to support it. The overwhelming likelihood is that the price goods will increase, but no where near enough to offset the UBI. The remaining difference in the economy will come from wealth redistribution.
Actually, I never said 1:1 ratio with UBI. I just claimed the labor markets would decrease and monetary supply would increase.
> True, but that's not the argument you are making.
No, that's exactly and precisely the argument I'm making. I'm not an opponent of UBI for wishy washy wealth redistribution reasons, but because of the lousy labor markets it would create and the inflation it would create.
The models for what would happen under UBI are not clear, but there are not positive economic models under a UBI scheme by major economists.
UBI proponents have failed to provide any model whatsoever and fall back on vague handwaivy feelings that seem to always only show extremely positive outcomes with no possible negatives and a reliance on magic automation technology that doesn't exist.
But that is what you said:
> In effect, nobody gets paid more because everybody gets paid more, which drives up prices, which is the definition of inflation.
Emphasis is mine. That's a pretty clear indication that they will entirely offset each other.
Fact is, labor is not 100% of the cost.
If UBI makes HALF of the worforce quit -which is not very likely- salaries wouldn't go up 100%. So it's not a 1:1 ratio.
e.g. When the Fed raises and lowers rates, it's using inflationary models to inform that decision. With a desired goal of sustainable and controlled minor inflation.
The potential for number 3 is the reason I think UBI is a macroeconomic necessity. Currently, our monetary system is based almost entirely on debt; only if that debt (private+public) grows is there an incentive to invest and further grow the economy. When the country and its citizens reduce their debt load, the currency deflates, which distinctivises investment and growth---a depression. With UBI, we could potentially replace this system with a much more stable and robust one, while simultaneously eliminating poverty and poor working conditions.
Capital gains taxes only occur if money is made from investments, and there's lots of wonderful ways to show losses or get around that kind of tax system by reinvesting or working the books over to show losses.
You don't want to tax asset ownership too much, because then you'll be taxing people's stock and bond ownership and their retirement accounts and it produces a disincentive to invest in businesses that would need that money to produce the kind of automation revolution that would make UBI work (your #2). A great many assets also only have value and not intrinsic worth. For example, Donald Trump is on record saying that he believes his personal fortune can vary by billions of dollars on any given day given how he "feels" about his brand image. We all know about VC valuations. Do we tax paper billionaires who are pulling down $100k in real income? How can they possibly pay that?
Consumption taxes have been demonstrated to have an outsized impact on the poor.
and so on.
A notion that "well we'll just close all the tax loopholes to make UBI work" is quite frankly a fantasy.
I agree that UBI would stabilize boom bust cycles, but it's not clear that that's a desired end-state. Boom cycles are often when major innovation happens.
An amazing amount of work is not mindless factory work.
Suppose country A consists of 99 peasants and 1 plutocrat. The peasants work full-time and the plutocrat consumes their entire economic output living a life of fabulous luxury. Country B consists of 100 people who work part-time and live simple lives that they can afford. Country A produces more goods and services and has a higher GDP than country B - let's say twice as high. Nevertheless it is reasonable to consider country B better-off.
Edit: The above is probably conflating some unrelated issues, so let's just simplify: country A works full-time (40hrs/week) and spends their leisure time expensively, country B works part-time (20hrs/week) and spends their leisure time cheaply. Country A's GDP is twice that of country B in the obvious way. Is country A really better off than country B? (If you're going to make a revealed preferences argument about working hours then bear in mind that there are very few less-than-full-time jobs on offer, partly an artifact of the way current regulations treat full- and part-time jobs)
The blue waters and great snorkeling of the Caribbean, the rugged landscape and Northern Lights of Iceland, the various cultures and climates across Europe, the stark differences between rain forest and desert. There's a massive variety in the world and I'd much rather experience that (and share that with my wife and kids) than to stay in my ultra-luxe Cambridge/Rt 128 bubble world.
"... found that only new mothers and teenagers worked substantially less. Mothers with newborns stopped working because they wanted to stay at home longer with their babies, and teenagers worked less because they weren't under as much pressure to support their families, which resulted in more teenagers graduating."
And that does not sound bad at all and it rather counters the lack of supply of nannies (if there was such).
(Quotes from wikipedia: https://en.wikipedia.org/wiki/Mincome)
So what? Those people spent their time on things they valued more than the money they could earn by selling it. This just shows that they were underpaid for the value of their time through the threat of imminent pain of starvation or homelessness.
The market will adjust and pay those people more if the value they create and the profits reapable from their labor make that paid labor worth it.
Low value jobs will go away.
Some of that freed time will be spent on consuming, no doubt, but much will be spent on longer horizon value adding activities like schooling or starting businesses or more efficient uses like taking care of children.
You also gloss over the fact that it allowed mothers to stay home with their children. The benefit to society and productivity of stronger families shouldn't be understated.
Finally, you assume that people would stop cutting lawns, nursing, and providing childcare – why?
1: The Rise and Fall of American Growth: http://press.princeton.edu/titles/10544.html
Not sure where you got your numbers from. Wikipedia suggest that it was not even half that.
>The results showed an impact on labor markets, with working hours dropping one percent for men, three percent for married women, and five percent for unmarried women.
This is, in fact, precisely backwards. There are plenty of jobs that people simply cannot do because they cannot make a living at them both through lack of money as well as lack of stability. Social workers, elderly healthcare support, child care, etc. are all very poorly paid and basically not worth doing if you have any other choice.
With a UBI, people can work those jobs for very small amounts of money knowing that they are covered.
Having children for financial benefits is a real thing.
It's not just something people accuse the poor of for the purpose of hate (although it is commonly used in such a way).
It's usually not as direct as "let me have this kid so I can get my rebate check", but it's certainly a consideration for many people who are poor. The mentality is more along the lines of "I can't make it by myself, but as a family, we might be able to sustain ourselves".
Most people are aware that it will probably end up costing them more in the long run, but people do crazy things in desperate times.
Edit: yes, I do, but I am unsure if it will stand the test of Hacker News readers :)
https://www.jstor.org/stable/2172480?seq=1#page_scan_tab_con... http://www.iqtestexperts.com/iq-family.php
I see you haven't met my mother. Count yourself lucky.
Those people exist – there's some quite generous child benefit programs in some EU countries, and the math seems to be simple –, but they're far more rare than the "OMG WELFARE PARASITES" would want you to believe. (And in many cases child protection agencies intervene and get the kids off to safety, because as it turns out, people using kids as money presses tend to have a screw loose or five.)
And honestly, I don't see the problem. People get kids for all the wrong reasons, people abuse their kids for all the wrong reasons; that won't get significantly worse. At the same time, fewer kids will grow up in crippling poverty and have their lives ruined before they turn 10 because their parents can't afford to give them any useful education outside the bare minimum provided by public schools.
For what it is worth, I don't think anyone sane would have kids to get money. In fact, you couldn't pay me to have children and raise them. I know what a shitty brat I've been and I'm sure if God or karma exists, I'll get an equally shitty child or worse I'll make a very shitty parent. (Parents: yes, people without kids also have nightmares about fucking up as parents)
Thankfully though many if not most people want children even though it makes no sense. This is good for me because these are the kids who will build and maintain roads, hospitals, and electric lines when our generation can no longer walk without a cane.
I don't think we need to encourage people to have many children. Those who want multiple children should find alternate ways to fund their lifestyle.
Edit: I assume above that basic healthcare for everyone exists with $0 out of pocket even if it is some couple's 99th child.
It's well cemented in the public consciousness as a result, so you'll see it trotted out whenever monetary benefits are proposed to help children.
No idea at all how to do that though.
Man, that kept me up many a night before my kid was born! She turned out to be amazing, though. Definitely didn't get it from me.
We had to rely on EBT (food stamps) and Medicaid when she was little and we were both in college. Medicaid was amazing, at least for someone who couldn't afford to go to a doctor for a decade or more beforehand, but besides that perk the welfare benefits for having a child basically balanced out the increased costs of raising one. Can't say how well this would scale with n+1 kids though.
It is not just money for formula. WIC has a potential to be so much more to new families. I know I sound hypocritical now but I'd like to think of it as being practical. Sorry, I'm not very articulate.
What I've picked up from 'rule-making' so far is that rules in general are OK for 80% of the users. It's the 20% that is the exception (to the rule) and that requires additional rulings. And then the problem starts: of this 20% again only 80% is fixed by the extra rule, so more rules are needed. Then the third rule to fix things actually allows some to profit extra, so... well, you get the idea. Wherever there are rules, some people suffer, and fixing it breaks things...
You're seeing pitfalls in rolling this out, that's great, we can fix those. But saying it shouldn't exist at all (like many commenters are in this thread) because of potential problems here and there is nothing but defeatism.
If you don't like it, attack it at the principal. If you do like it then let's make it happen. None of this in between bullshit.
There shall be no back pay. If you could have gotten basic income but didn't accept it last year, you can't get that money this year. (You might still get this year's distribution.)
For "true" criminals, I believe that's economically fair, but it raises terrible questions about incentives for the guy caught with a joint.
Edit: my mother had me checked - I am not insane. Anyway: while you are right that keeping two unhappy people together might be much worse than them splitting up, I can imagine that a big organisation like the church (any church) will be a force opposing this idea once they figure this one out.
Is a family that's only together for the money worth keeping around?
Might as well make divorce illegal again. After all, something nicer might come along.
If the only thing holding your marriage together is needing to pay the bills or a judge, being forced to stay together only serves to make people like you feel righteous.
Your comment makes me wonder about what other unhealthy ideas about relationships you want to force upon others. Perhaps you should spend less time on r/MRAs and r/TheRedPill.
> So with everyone getting free money, including the children, there is no need for a father to take care of the family when he decides to diforce, right?
Having to pay child care costs and alimony above the poverty line are things that exist now and will have reason to exist even if a BI is implemented.
It certainly would mitigate the social harms caused by deadbeat abandoning parents, but since neither child support nor alimony are currently limited to the amount necessary to provide basic survival necessities, a UBI mature enough to provide basic necessities would not seem to be a basis for eliminating existing child support and alimony provisions.
Obviously, even with existing formulas, the fact that more of the family's income wouldn't be leaving with the prime breadwinner would reduce the amount of support and alimony orders.
> So marriage will no longer be a bond forever
Marriage, in the US, is only a "bond forever" now to the extent that the parties decide to make it one; divorce is readily available, and frequently chosen.
Honestly, I'd rather see families split up, if by "split up" you mean "find independence from someone with whom you do not want to spend your life". There's levels here- children are a responsibility that someone needs to shoulder (and emphatically not just Mom), but if the alternative right now is being trapped economically in an emotionally traumatic relationship, that's not good either.
> But by excluding 45 million retirees who already receive a basic income through Social Security, the cost falls to $2.7 trillion.
These retirees can be excluded from the calculation because they are already being paid, they wouldn't add any additional cost to the system.
It is not being set aside for me to use when I theoretically begin to draw Social Security in the future.
Theoretically the system could be justifiably stopped at any second and simply drained by the current pensioners (which would probably happen almost instantly). But good luck explaining that to people raised under the false assumption that the public pensions are "safe" (as politicians like to announce so frequently).
Our best bet would probably be "universal basic income for everyone below retirement age" but pensions are "topped up" to parity with basic income. A not-insignificant portion of pensioners already gets pensions below social security levels (meaning it is topped up to social security levels -- not that they get welfare on top). You could then fade out the pension system and replace it with basic income.
Once a system like that is in place, it's very hard to stop the pipeline.
I honestly don't see the purpose of that type of system either.
Why create this pipeline of money anyway? Why not just take the contributions that everyone makes and put them into individual retirement accounts?
Assuming the system is stable (which it's probably not), it seems there would be virtually no difference between me paying for the current retirees (and expecting my children to pay for my retirement) vs. me paying into my own retirement.
I'm not too familiar with these concepts, so maybe someone will school me.
Because after WWII, there were no retirement accounts in Germany (simplified and not completely correct, but you get the point). Should they have let old people starve?
It seems you're now stuck with a program that was designed to address a problem of 70 years ago.
I'm especially curious about the history of Social Security in the USA. I can read about this on my own time, though.
It does seem like it was a tool used for polotical gain.
Also, the pay-as-you-go systems allows the politician to hand out money straight away. Making the programs instantly popular and entrenched.
The reason that it's not done that way is three-fold:
(a) People's contributions are not enough to cover their social security. Instead, they depend on the current workers paying in more than the previous generation did (in a perpetual cycle).
(b) Liberals oppose the idea of personal responsibility. If you don't save any money for retirement, they think society still has an obligation to fund your retirement.
(c) It's a benefit which goes to old people and old people vote a lot.
In reality, it's just a cleverly marketed way of stealing money from the youth and giving it to old voters.
Wealth transfer is not necessarily a bad thing.
In fact, most liberals I know are very much about personal responsibility - including towards society and the environment.
First, SS is universal rather than means tested in order to garner enough support to keep it in place. It's ridiculous that someone with millions in assets will receive a relatively small SS payment each month once they turn 70, but if the system had any decision making in it, it would eventually be gutted by those who "only want it to go to the deserving", with all the misty, hoop-jumping etc that you get with welfare assistance. Essentially money is wasted on the wealthy in order to make sure those who really need it get it.
Second: "they paid into the system" is deliberate propaganda. We all "pay into the system". Dollars are fungible -- one marked "social security" on your paystub is no different form the one marked "federal income tax" any more than the electrons in your GPU are the same as the ones in the CPU. And we are entitled to the benefits of air traffic control, food safety, schools etc. And in practice the SSN money does work that way: how do you think it's "invested"? It buys government bonds.
It's a cumbersome fiction, with rich kabuki elements (I myself appreciate the wasteful "statements" that some idiotic congressman decided should be sent to every recipient). Claiming you paid for it so you were entitled to it was a clever idea.
This crazy system arrived because the model people had was private pensions; many people didn't or couldn't invest in them so the Roosevelt administration developed "a pension fund for everyone" in the face of stiff opposition. It was very similar to the difficulty of implementing Obamacare: the whole ludicrous infrastructure was designed to bring insurance companies into the system rather than sit beside them. So SS is much more efficient than Obamacare because the opposition wasn't as effective back in the early 1930s.
This whole "you paid for it" scheme has other pathologies as well: the tax is regressive. The people who need it pay a higher proportion of their income than the people who don't. That's just cruel.
Imagine if you put money into your 401k, and then the government came along and decided that you didn't need that money so they just took it all away from you. Do you believe THAT would be OK?
Because if SS is a retirement system, that's effectively what the government would be doing.
I described why it was advertised that way and it is operated to resemble that, but that is not in fact how it operates.
In fact I do think it is ludicrous that the US government will pay me SS money when I get old, even through I certainly won't need it. But I am glad they will do so because people have a screwed up model of how things work, so if they have to pay a bunch of people who don't need it in order to make sure those who do need it get their money, well, it's worth the cost. But what a waste. How much better not pay Bill Gates an SS payment and give it to someone else who needs it more?
You should be more outraged that a huge chunk of your taxes is wasted on beating up random people in other countries rather than fixing the bridges or giving it to people who are suffering. You should be more outraged that you are told that ISIS is some sort of existential threat to the republic, which is of course absolute nonsense.
How about the fact that the US created and underwrites all the "conforming" mortgages (i.e. essentially all of them outside a few pockets like the Bay Area and Manhattan). Another program from the 1930s that is taken for granted today with a cover myth a private mortgage market.
Look, I'm no flat-earther, gold-standarder, or conspiracy theory loony. I am hugely in favor of SS payments, welfare, Obamacare, FDA, etc etc -- in fact I think they should be stronger. But if you read history and some of the original debates and documents from the Roosevelt administration it is clear they are good medicine wrapped in a sugar coating of fakery in propaganda in order to get them implemented.
No it isn't.
> The money you put into SS is used to pay the benefits of the people drawing on it today.
That doesn't make it a pyramid scheme.
Because it is. What you're missing is what the word entitlement means. They paid into the system, they are entitled to get those checks, i.e. they have a right to it. Calling it an entitlement is not an insult.
You get $700 / month from the government for basic income. Your social security, welfare, unemployment, disability, etc is reduced by $700 / month. Reducing all of those programs by the first $700 would effectively gut each of them enough to finally make some reforms without inducing panic in everyone who uses them.
If you were to implement the Fair Tax, which includes a stipend for basic needs, you'd get bipartisan support as well. The only difference is that you increase the stipend to the level of the BI.
For kids, you give the parents their basic income until they hit school age and then the BI goes towards funding their school. This would also enable people who wanted to utilize private schools a much easier choice by essentially becoming a voucher.
No loan could utilize the BI as security...except for student loans. That would allow driving down of interest rates as well as default aversion too. Payments could be automatically extract from the BI since student loans would finally be secured against something other that expected future earnings.
An 18 year old these days is still a child. Give them a couple years into the drinking age to get their bad decisions out of the way.
My main point is that a few years should go by after a child enters into the adult world before they have access to a fund left for them.
There's usually a short "reckless" period immediately after graduating high school and college. However, this usually calms down after the initial shock of having sudden freedom wears off.
I have two friends who inhereted $20,000+ sums of money from relatives when they were in their late teens, and both of them pissed it away in under a year. Looking back, both of them seem to regret it.
(Me and my friends are all around 25 years old).
Would they have learned that lesson without making that mistake? Are you even sure they really wouldn't do the same again?
To quote Time, "About 70 percent of people who suddenly receive a windfall of cash will lose it within a few years, according to the National Endowment for Financial Education."
Just to make the anecdotes match the statistics, I inherented roughly 30k. It remained in my education fund until I finished undergrad. At 22, I opened an investment account. It's been paying dividends for the better part of a decade now.
It's hard to say. However, I think one really learns the value of money after having been in the work force for a while. I think that experience may have had a positive impact on their decision making had this happened later on in their life.
[To quote Time, "About 70 percent of people who suddenly receive a windfall of cash will lose it within a few years, according to the National Endowment for Financial Education."]
I believe it. But I also believe that the likelyhood of making good financial choices increases with some time spent in the work force. In this case, they had been living a nice lifestyle under their parents when they received the money.
[Just to make the anecdotes match the statistics, I inherented roughly 30k. It remained in my education fund until I finished undergrad. At 22, I opened an investment account. It's been invested in the TSX60 for the past 6 years now.]
You are also on hackernews, a website which consists of generally well-educated people. I'm not trying to sound snotty here, but there's a good chance that you have better judgement than most people.
Perhaps you should consider using that as your criteria rather than discriminating based on age. I'd still disagree, but that policy would deprive fewer people than your current proposal.
It is my opinion that this huge collective distrust towards youth is one of the biggest hidden problems of today's society. If it was up to me, kids would get a basic income from the age of 14.
In the end all society's have a baby-elder process with many stages. We let 15 year old's risk their and others lives driving multi thousand pound vehicles at 70+MPH. We keep prescription medication behind many additional hoops even for well educated 60 year old's.
IMO, the real difference is how much education people need. A 15 year old can dig a ditch just fine, but cancer research takes quite a bit more. In the end society simply values 15 year old's time less.
It's not the children's fault, either. It's just a fact of the times. More schooling is required than before, and continuous schooling shelters people from having to make many real world decisions. It's easy to live a "don't care" lifestyle during college, only to be hit with reality hard once you graduate. I've personally experienced this.
There is a major difference in meltalities of someone who's been in school their entire life and someone who's been in the "real world" for a few years.
I'm not sure of your age, nor am I suggesting that it would have any negative impact on your perception here, but we seem to have different perceptions of the youth of today. I am 25 years old and I can only speak on my experiences.
And my experience shows that there's not much of a difference in maturity between an 18 year old senior in High School and a 22 year old Junior in college.
However, there's a huge difference between a 22 year old Junior in college and a 24 year old who's been working for a year.
Don't stereotype.
I don't see what's wrong with my stereotype in this case. Most people under 25 are not financially independent, and it's mainly due to the society we live in, not the children themselves.
When my Dad was growing up, people had full time jobs at 16 years old and were married with kids by 25, where as today, the average person doesn't even graduate college before 23.
I'm not blaming the children for that.
First of all, you are in fact wrong. The majority of young adults do in fact live independently. [0]
Second of all, if you think that adulthood isn't reached until 25, why would you be advocating for reinforcing this supposed infantilization?
[0] http://www.pewsocialtrends.org/2015/07/29/more-snake people-living-with-family-despite-improved-job-market/
[How very convenient that the cutoff of adulthood is your own age]
I chose the number 25 because it is usually a few years after most people have graduated college and have entered the work force. The number 25 is used in many places as a "special" age. Insurance companies, rental car companies, hotel bookings, etc...
[you're going to insult vast numbers of functional adults, at least insult yourself in the process. Silly child.]
I don't know about your peers, but from my graduating class of ~1000, I would guess there were less than 100 who were completely independent by 23.
[First of all, you are in fact wrong. The majority of young adults do in fact live independently.]
I'll do some research on that.
By that measure, I reached adulthood two weeks short of my 25th birthday. That, of course, was when I was laid off for the first time, just after signing a year-long lease on a new apartment.
That's probably just coincidence, though. I'm sure that many people realized the real world sucks earlier than I did.
Um, has that url been through this?
https://chrome.google.com/webstore/detail/millennials-to-sna...
I eventually ground out night classes while working and job-hopped my way into industrial automation and a halfway comfortable life, so I understand the appeal of passing judgement from a high and mighty place - but don't. It's a particularly pernicious intellectual weakness.
Most people at the age of 23 are not in a position to support themselves yet, which is kind of off-topic w.r.t my original point anyway.
The fact that there are people like you who were able to work hard and make good things happen at a young age doesn't nullify the fact that the average 23 year old is still dependent on their parents.
This can be learned at any age (as pointed out by my comment about my Dad working at the age of 16). However, many people today are not exposed to these types of desicions until after they get done school, which is usually at the age of 23.
An outlier can't be treated like the center of a distribution. Your own experiences don't mean that most 18 year olds aren't still children. It's not like the government is going to start maturity-testing people to decide when to start dispensing a basic income. They're more likely to test a "representative population" and set the age to the point where 2/3 test as "adult", or use one of the traditional age-cutoffs like 18, 21, or 25.
Prior to school it would allow parents to pay for daycare, diapers, food and subsidize paternity/maternity leave.
That said, agree with your main point that making BI deductible from [mostly] retained existing benefit entitlements is the least messy way of introducing it, but it also makes it more politically difficult since it's paid for purely by tax increases.
Now perhaps a consumption tax combined with a large capital gains tax and inheritance tax -- to keep taxes going in the oligarchs economy AND the regular economy, and prevent capital from being tied up between generations in the least productive way possible, then you might get some of them on board.
What about the tax of inflation that serves to redistribute wealth from savers to debtors? (middle class -> government)
Also interesting how you know better than others how they should arrange their financial lives. Would like to hear your thoughts on the "productive ways" the "oligarchs" could better deploy their capital.
The broader they are, the more likely liberals are to oppose them, and oppose expanding them. Replacing the progressive income tax system with something regressive isn't something that's going to get support on the left.
> Gas tax? Hugely regressive.
But very narrow.
> Wouldn't liberals support additional carbon taxes?
Many liberals support the concept of carbon taxes as a behavior control mechanism, but not as the main way of funding government, and many raise concerns about the regressive impact. But, with them, the goal is to limit the thing being taxed and fund efforts to improve our ability to avoid it, not be the primary funding method for government.
> Value-added tax?
Virtually all the support I've seen on this in the US is on the right (often competing against flat tax proposals.)
> What about the tax of inflation that serves to redistribute wealth from savers to debtors? (middle class -> government)
While the classical middle class (e.g., Marx's petit bourgeoisie) are net holders of assets, the "middle class" as the term is used in modern discussions in the US (which is largely the middle income segment of wage laborers) aren't really net savers.
Apparently obesity and diabetes hit lower-income families disproportionally as well http://www.livescience.com/37923-type-2-diabetes-low-income-... (who would have thunk), but we can always create a government program to conduct more research on causes.
I will oppose a 'sugar' tax because I don't think the government should be deciding what foods I consume, especially when I think taxes should be for raising money.
I am aware it's not the full picture and I haven't explained it well but I hope I got a little bit of my view across.
With the goal of eliminating carbon use (and through this, eliminating the carbon tax), yes. The key understanding is that destroying the environment is a significantly worse problem than a regressive tax.
And destroying the environment also has a highly regressive impact; The impact on livability is not uniform, and people that can afford to relocate will have a much better time of it.
What liberals aren't likely to support is replacing the current federal tax system with a consumption tax. Making it much more progressive and including a consumption tax alongside, they might, but probably not (just because that might look like what exists in some more leftish European states, there are path dependencies.)
I just want to make one glib comment here about liberals and regressive taxes.
The Northeast is generally thought of as the most liberal part of America (aside from coastal California maybe). So why is it that I've seen far more toll roads and bridges there than in any "red state"?
I think some liberals make some good points about regressive taxes, but in practice, it seems like the liberals who actually get to power just love them.
Because the Northeast was also the most heavily developed area of the country before the Interstate Highway System came about with a funding system that made non-toll roads the norm for new limited-access highways (funding rules which have since changed, weakening the financial incentive against new toll roads.) Modern political orientation has little to do with it: outside the Northeast, the people trying to introduce toll roads where they haven't been in the past are conservatives, the people opposing them are liberals.
I sure don't think of the northeast that way. I see it as fairly conservative both in politics and business. One data point is that it wasn't anywhere in the northeast that first legalized weed. It was Colorado and Washington, followed by Oregon and Alaska. Another data point is that people wear jeans or shorts at work in Silicon Valley (or Socal, Oregon, Colorado, etc) whereas they're far more likely to be required to wear suits in the north east.
The northeast is very urban, which has some overlapping effects with but is still very different from actually being liberal. Change is mostly driven by the west. It's just that the change reaches the dense cities of the northeast more quickly than the rural areas in between.
But agreed, there's absolutely a huge difference between west coast liberals and east coast "liberals".
The marijuana issue is an interesting thing to look at too, when you compare to red-vs-blue state maps. The "liberal" northeast still hasn't legalized weed (not even Vermont), whereas Colorado was one of the first two, and CO is a rather purple state (CO Springs is a ridiculously conservative place), and Alaska is very much a red state, being the place that elected Palin governor. It really seems to come down to social libertarianism versus authoritarianism. The "liberals" in the northeast want to ban sodas for your health, whereas the liberals in the west want to legalize drugs.
Then, when you realize that toll roads are correlated with population density, perhaps you could realize that toll roads are then only also correlated with politics of state, not caused by them.
For example: If liberals loved toll roads, then California, Oregon and Washington would be full of them. But only the NorthEast is, right?
So your hypothesis falls apart here anyway.
BTW, the population density of metro areas in California is higher than most places in the northeast.
So the proposal is to combine something like VAT with a basic income.
Doing that would cause low income people to have a negative effective tax rate (basic income exceeds taxes), low-middle income people to have a near-zero tax rate (basic income equals taxes), high-middle income people to have a moderate tax rate (taxes exceed basic income by a little) and high income people to have a higher tax rate (taxes exceed basic income by a lot).
In what sense is that regressive? It's the purest form of a progressive tax system. It even has a built in social welfare system for low income people.
The fallacy which is usually put up against this is that the super rich don't spend as much as they earn. The problem is, that's not how income tax works either. Bill Gates doesn't have to pay tax on the appreciation of Microsoft stock until he sells the shares and he doesn't have to sell the shares until he wants to spend the money. "Super-rich don't pay tax on money they don't spend" is the status quo.
And consumption taxes benefit debtors at the expense of creditors. Income tax makes the debtor pay back the debt with after-tax dollars. Consumption tax causes the creditor to be paid in pre-tax dollars.
Only if you ignore estate taxes...which FairTax eliminates.
For the rich (defined here as anyone with enough wealth that, if they don't spend it down, they will face estate taxes) they either have to realize the gains (and be taxed) and spend down or leave an estate which will be subject to estate taxes, giving them a maximum time window on taxation equal to their lifespan.
With "FairTax", which eliminates estate tax and goes to a strict consumption tax, there is no such maximum window.
> And consumption taxes benefit debtors at the expense of creditors. Income tax makes the debtor pay back the debt with after-tax dollars. Consumption tax causes the creditor to be paid in pre-tax dollars.
Because it also changes the cost structures on which debt is occurred, this only is meaningful as a one-time effect on debts that exist at the time of the transition to a predominantly-consumption-tax system, not as durable feature.
It would be if not for the "estate tax holiday" we have periodically which together with a bunch of other ways of avoiding the estate tax is why it only constitutes a negligible amount (0.6%) of federal revenue.
The fundamental problem with the estate tax is that it's a huge tax that happens with semi-unpredictable timing, which induces rich families to do estate tax planning to avoid having liquidity problems when it happens. But "estate tax planning" means paying fifty million dollars to tax lawyers and lobbyists to avoid paying a billion dollars in estate taxes.
In practice what it means is that rich families will do much more to avoid and lobby against the estate tax than they would against a tax that collected the same amount of money from them but more predictably over a longer period of time. Which makes it a losing proposition if your goal is to get the rich to pay taxes.
> Because it also changes the cost structures on which debt is occurred, this only is meaningful as a one-time effect on debts that exist at the time of the transition to a predominantly-consumption-tax system, not as durable feature.
It applies equally to the interest paid on the existing debt. And given that the total interest generally exceeds the principal (and exceeds it moreso for poorer people paying higher interest rates), the "one time effect" would be with us for a generation or more.
Well, yeah, it would be much simpler and more effective if inheritances were just taxed as income to the recipient with provisions allowing them to be split and recognized over several subsequent tax years (e.g., if the total inheritance received in any year is greater than 1/10 the pre-inheritance AGI, the excess can be recognized for tax purposes in subsequent years, with a minimum per year amount equal to the lesser of 1/10 the pre-inheritance AGI in the year received or 1/20 the total amount of the inheritance.)
Also how is taxing labor in any way liberal?
And for your last question:
1. What is your working definition of liberal(positive vs. Negative freedoms)? 2. Income tax taxes... Income. Not labour. Ideally not discriminating between capital and labour income.
The rates for long-run capital returns and dividends are such that they are very beneficial to owners of capital, and they like to keep it that way. The upper-middle class folks who are working have their labor and ordinary income taxed at increasingly higher marginal rates. The rich often fund demagogues who talk about handouts for the poor while ensuring that "progressive" tax rates remain high on their potential rivals who pay high labor taxes.
>1. What is your working definition of liberal(positive vs. Negative freedoms)?
Today, I think the word "liberal" means "someone who thinks that the poor should benefit at the expense of the rich, through government coercion"
>2. Income tax taxes... Income. Not labour. Ideally not discriminating between capital and labour income
Why tax income? Why not your bodyweight? Or height? Why not tax consumption? If the answer is "to punish those with high _incomes_" you are in violent agreement with the ultra-rich.
Consumption tax paired with a BI would significantly raise the offset at which it starts to affect people.
Things that hurt the middle class much worse than a consumption tax are an income tax that is a percentage and continually increases in that percentage until the percentage caps at the point that most people would call "incredibly wealthy" (IMO).
The perk to something like a Fair Tax is that it's also an economic solution to illegal immigration. If you're in the country, you're paying taxes. If you're legal, you're getting the BI/stipend. If you're illegal you are basically paying to be here. It guts a big portion of the cost argument.
A FairTax + Basic Income hybrid solution could solve a vast majority of hotly debated issues in this country.
That's not rebranding basic income to appeal to people on the right. That's rebranding "FairTax", a right-wing proposal, with fairly niche support on the right, despite a small group spending lots of effort trying to promote it, as basic income. Presumably, to gain some support on the left for FairTax. But Basic Income is also a fairly niche idea, and the people that do support it tend to have a fairly specific idea of the features they support and why, and not just be attached to the BI brand, so rebranding FairTax as BI probably won't get you support from left-wing UBI fans, for whom the tie to a progressive income tax is pretty central to their support (though there's probably some on the left who support UBI who would prefer moving to a Georgist Land Value Tax.)
There's nothing there getting you bipartisan support.
> Things that hurt the middle class much worse than a consumption tax are an income tax that is a percentage and continually increases in that percentage until the percentage caps at the point that most people would call "incredibly wealthy" (IMO).
How does that hurt the middle class? (And, incidentally, are we using middle class in the common modern media sense of middle income workers or are we using it in the classical sense of the petit bourgeoisie? Because it makes a pretty big difference in evaluating claims about what hurts them, and to how important that is -- how it affects the latter will, of course, vary from person to person.)
> The perk to something like a Fair Tax is that it's also an economic solution to illegal immigration.
No, its not. (OTOH, the 2001 and 2009 recessions, and the poor distribution of the gains between and after them, was an economic solution to illegal immigration. But a solution worse than the problem...)
> If you're in the country, you're paying taxes.
True without the hilariously misnamed "FairTax".
> If you're legal, you're getting the BI/stipend.
Without the "FairTax", if you can establish that you are legally present (and, for some of these, legally eligible to work, which aren't the same thing) you have access to a variety of public benefits, perks, and, well, the right to work that aren't available if you can't establish that.
Basic income is a conservative proposal (now gaining support among us liberals). My trog relatives are pimping the idea to me, a screaming pinko socialist hippie.
The conservation appeal, rationalization of BI is fairness. It lifts the floor for everyone, doesn't reward cheating, doesn't thwart personal initiative, etc. Being easier to admin is a bonus.
Uh, what? In general conservatives consider basic income as welfare/wealth redistribution and hate the very notion of it. Just because some of your conservative relatives like it doesn't make it a conservative thing, it's very much a liberal policy, not a conservative one.
"The idea isn’t new. As Frum notes, Friederich Hayek endorsed it. In 1962, the libertarian economist Milton Friedman advocated a minimum guaranteed income via a “negative income tax.” In 1967, Martin Luther King Jr. said, “The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” Richard Nixon unsuccessfully tried to pass a version of Friedman’s plan a few years later, and his Democratic opponent in the 1972 presidential election, George McGovern, also suggested a guaranteed annual income."
Lincoln for example was a republican, but by today's standards he's a liberal. Basic income is a liberal policy in today's world, not a conservative one by any means. It is very much a liberal policy.
Completely aside from the other response, this point is just...wrong. The vast majority of hotly debated issues in this country are not hotly debated because people share a concern but are divided on the best way to address it, such that there is some policy solution that exists which could "solve" the issue. They are hotly debated because people disagree on the first principles of what goals we should seek, not the mechanics of how to address them.
As well as the obvious culture-war issues where this is the case, this is true of much of the immigration debate, many economic debates (where fundamentally clashing ideas of what constitutes "fairness" that should be sought exist), and so on.
This hasn't been true in decades. The people ("millionaires") who make ~150K/year pretty much spend all of it. It's the multi-millionaires and billionaires who make millions a year and don't spend that much, but those are the same people whose "income" is mostly unrealized capital gains. Switching to a consumption tax wouldn't materially reduce their taxes because they're not paying hardly any taxes as it is. (And getting rid of capital gains tax would increase economic efficiency because it currently prevents people from selling shares in order to buy better shares unless the advantage of the new shares can overcome the taxes due from selling the existing ones. Which would grow the economy and increase government revenue.) It's conceivable that a consumption tax would cause the super-rich to pay more taxes, because if you want the yacht you have to pay the tax, but there are currently a lot of tricks you can play to convert stock into stuff without paying tax, like selling only the shares that have decreased in value.
The best way to think of a basic income is as a fixed tax refund. A middle class person who pays $10,000/year more in taxes to fund a basic income and then gets the $10,000/year basic income it isn't actually any better or worse off than before.
Getting rid of capital gains tax to encourage reinvestment is kind of silly. Heck, you could tax capital gains as regular income, and still eliminate any drag on reinvestment by allowing deductions for investment so long as the investments for which such deductions were taken were treated as having a zero basis value.
> It's conceivable that a consumption tax would cause the super-rich to pay more taxes, because if you want the yacht you have to pay the tax
Not really. You just structure the transactions to avoid what is taxable, e.g., you buy the yacht at a low nominal price and simultaneously (and completely coincidentally) by some financial investment not subject to consumption tax from the same party at an inflated price.
Anyone who can avoid paying taxes on their income in an income tax system can avoid paying taxes on it in a consumption tax system. (If you have an "unconditionally tax every transfer of money between two parties" system, it gets harder, but that has all kinds of downsides.)
> but there are currently a lot of tricks you can play to convert stock into stuff without paying tax, like selling only the shares that have decreased in value.
Sure, if you only ever sell shares that have lost value, you can avoid paying the (low) capital gains tax, at the expense of always losing money.
That's not a way to maximize your net, after taxes, utility, but if you want to lose money just to avoid paying a small portion of the gain in taxes...
> The best way to think of a basic income is as a fixed tax refund.
I think you mean "fixed refundable credit" rather than a "fixed refund".
Which is a de facto consumption tax because it means you only pay tax when you sell securities without buying other securities, which you only do when you want to spend the money.
> Not really. You just structure the transactions to avoid what is taxable, e.g., you buy the yacht at a low nominal price and simultaneously (and completely coincidentally) by some financial investment not subject to consumption tax from the same party at an inflated price.
As opposed to the current system where you work for somebody for a low nominal wage and simultaneously (and completely coincidentally) they "sell" you a car for one dollar. Which in either case will get you prosecuted for tax fraud.
> Anyone who can avoid paying taxes on their income in an income tax system can avoid paying taxes on it in a consumption tax system. (If you have an "unconditionally tax every transfer of money between two parties" system, it gets harder, but that has all kinds of downsides.)
This is not actually that hard. You make the amount of the consumption tax based on the market value of the purchased item rather than the amount you nominally paid for it, with a presumption that the amount you paid is the market value, which the IRS can easily rebut when you're claiming the market value of a yacht is $20.
> Sure, if you only ever sell shares that have lost value, you can avoid paying the (low) capital gains tax, at the expense of always losing money.
It's not actually losing money. You invest in a diverse portfolio of stocks, some go up, some go down, some stay the same. When you want to spend some money you sell the stocks that have underperformed rather than the stocks that have performed well, which (at the risk of selling low) is plausibly what you want to do anyway, and then you pay no taxes because you realized no gains.
Even if all your stocks went up and by the same amount, if you want to spend 1% of the total assets then you still only pay tax on 1% of the gains because the rest of the gains are still unrealized. So it's already effectively a consumption tax as long as you can avoid changing what you're invested in.
Except that it's a consumption tax that taxes only the spending of interest (and earned income) but not principal, which seems to be to the benefit of people with more wealth.
With that said, the FairTax is bad for other reasons -- by concentrating all your taxation on something that's relatively easy to hide, you massively increase regulatory and compliance costs. Imagine the blooming industry in recharacterizing consumption purchases as investment purchases! (For the rich, "sufficiently advanced investment is indistinguishable from consumption".)
I thought the idea was that it be enough to live on.
No, it doesn't. Social security isn't a fixed amount, its based on prior earnings, adjusted by a wage index since the time they were earned, put through formula to get a base benefit amount in the year you start drawing them, and then inflation adjusted after retirement.
So calling a UBI "Social Security for everyone" does not, in fact, tell you what the benefit amount would be -- if the benefit amount is calculated anything like Social Security, the program is nothing like a UBI.
To be more specific, I'd set UBI at a level that everyone who is currently getting Social Security based on age would rather switch to getting UBI instead. Then I'd discontinue SS and call the UBI program "Social Security", and pretend that I didn't get rid of the entire SS program. Wrap that change up as a package deal along with taxes to fund it, and call it "Social Security for Everyone".
No, you wouldn't. Flat tax proposals and national sales tax proposals like the "FairTax", have support almost exclusively on the right (and each particular such proposal has minority support on the right.) You won't get bipartisan support for any of them.
Most of the issue with support for Fair Tax is that it's enough of an overhaul that people believe it to be an unrealistic pipe dream, which is may well be.
One of the big perks of the Fair Tax is that it makes it easier for people to pay off debt and would actually encourage it. That gets a lot of support from many different angles.
The very rich spend less money relative to how much they make, which puts higher burden on the poor than with our progressive tax.
Flat fax is bad, because 40% of the guy making 20k per year is going to severely change quality of like. 40% from the guy making $40 million has much less impact on his quality of life. This is the whole reason for having a progressive tax... Impact of money on quality of life doesn't work on a linear scale, so neither should our taxes.
That's the missing element, not paying. As much as IN THEORY I agree with these ideas, in practice, rich people find all sorts of ways to not pay tax.
What happens to Medicare under that scenario? Some medical procedures, particularly for old people, can exceed that.
Current federal government revenues top out at $3 trillion. Dividing it by a rough population number of 300 million (and ignoring the fact that portion of it comes from corporate income tax, excise taxes, etc.), the revenues collected stand at $10,000 a year a citizen. Distributing $8,400 a year back requires rather deep cuts to every single entitlement program and then some (defense, USPS, air traffic controllers, national parks, etc.)
In a system with UBI, we'd really need to have universal healthcare ("Medicare for all"). Someone making only the basic income isn't going to have any money for sky-high Obamacare premiums, and would likely be on Medicaid. But that whole system is a complete mess, with a lot of people unable to afford Obamacare because their state didn't expand Medicaid enrollment. And now with one of the biggest insurance companies pulling out of the Obamacare exchanges, rates are going to skyrocket even more. There's only two solutions to this: 1) repeal Obamacare and change to a system where people who have no insurance are denied healthcare and are left outside the ER to die on the street, or 2) universal healthcare.
The way politics are going in this country, I predict we'll see #1 before we see #2.
It seems like we currently have 2 buckets:
- living money for people who, for whatever reason, have no source of income
- publicly funded medical insurance
It doesn't seem totally unreasonable to classify medical expenses separately from routine living expenses.
The amount of spending in the routine-living-expenses bucket is enough to pay about $350 per month to each of the country's 320M residents.
I think a good proposal is to instate that $350 universal half basic income, replacing social security and unemployment insurance, and then reduce the minimum wage to $0. Even with the rise of a robotic workforce, just about anyone should be able to find work that will pay the remaining 350 if they're allowed to work for little enough.
[1] https://www.nationalpriorities.org/budget-basics/federal-bud...
Edit / Afterthought: No one currently receiving social security or unemployment will support this proposal because they are all receiving way more than that. More than 700/month, and certainly more than they need to survive.
What would work, I think, might be a phase-out: for anyone who's getting less in SS payments than the UBI, just replace their SS with UBI. For everyone making more, they don't get a UBI, they just keep drawing SS. (Or, you could say they get UBI plus the difference between SS and UBI.) Then eliminate the SS portion of the FICA tax and stop everyone from paying into it going forward. Then there'll be some math involved in figuring out how much people who partially paid into it get, but the end effect is that SS will cost less and less money until finally everyone's aged out (to the point where the amount they'd draw is less than UBI so we can just cancel SS altogether). It'll cost a bit more in the short term to do it this way, but it's more fair to people who paid into the SS system and it won't get the AARP voting against you.
>Edit / Afterthought: No one currently receiving social security or unemployment will support this proposal because they are all receiving way more than that. More than 700/month, and certainly more than they need to survive.
Again, you'll have to phase it out. Unemployment is an insurance program that people have paid into, just like SS, so of course they expect it to be there if they need it. And it may (or may not, depends on the person and their income) pay more than they need to survive, but if they have a lot of expenses like a big mortgage then that's irrelevant. They've been forced to live in a society where having a job is basically required for survival unless you get on the dole (which prevents you from working, so it's a trap), so unemployment is something the society has created to mitigate risk.
But like SS, it could be phased out (and the taxation from that eliminated). It could probably be replaced with privately-run unemployment insurance though, but it wouldn't be as necessary with UBI.
But your $700/month sounds low to me. I know it's supposed to be a bare minimum, but even that seems too little to me to live on with today's rent prices. I do think the government has a responsibility to do something about that; rents have been driven up far too much by Wall Street, foreign investors, speculation, etc. UBI needs to be enough for someone to live on with roommates (and not more than 1 per bedroom at market rates), in an average cost-of-living area, plus reasonable grocery store bills and a bit extra to cover transportation costs. If it isn't enough for that, it won't work, and it needs to be jacked up until it is. If that means instituting a big tax on Wall Street, then so be it, since they're largely responsible for the cost of living being what it is.
But I also think a system that requires taxpayers to fund more than basic living expenses for non-taxpayers is unjust.
Everyone should be able to stay warm and dry, safe and clean, with a soft bed and a healthy diet. Anything beyond that is luxury.
In particular:
- Just because you don't have enough income to pay your big mortgage doesn't mean others should have to pay so you can live in a massive house. Regardless of your previous income, you should sell it or let it be repossessed (and continue to live safely and healthily elsewhere). Otherwise you're asking people who live less extravagantly to fund your own extravagance.
- Likewise, many hardworking people take a roommate to save money. Should they have to pay for other people to live more extravagantly? There is nothing unhealthy or unsafe (in general) about sleeping in the same room with another person, or turning a room that fits 2 people into two smaller rooms.
I think in an average cost-of-living town in the US, you need 300 to 350 to rent a room (all to yourself!), 250 for groceries, soap, razor blades, etc. That leaves 100 or 150 to get around. Certainly not enough for a car or taxi rides. But I think just about everyone should be able to find a place within walking/biking/city-bus distance from the grocery store, though in some sprawly towns it might take a couple of hours to get there.
The definition of "luxury" changes over time. Today, you should include internet access in the list of basic needs since it is needed for many forms of social interaction.
A more normal number, I think is $50.
If you couple that with the fact that people with out income most likely need to share housing and might as well share in internet connection too, you're already down to $17 per month for broadband.
Also, you're assuming someone has internet service where they live and a stable enough situation to sign up for long-term service. I was thinking more like mobile internet service, which is how people in developing countries use the internet (and they don't pay the ridiculous monthly rates we do either).
Yes, they should. This is the way it is right now. That's how unemployment insurance works: you pay into it as you work, and then draw from it when you're unemployed. (Of course, a lot of people don't bother because it's a huge hassle, but that's beside the point.)
Do you also think that someone who has full insurance on their $90,000 Mercedes shouldn't get a full payout when someone crashes into it?
I do think that unemployment insurance (since it's a government program and not optional) should be phased out under UBI. But "phased out" is the key phrase here, just as with SSI.
>- Likewise, many hardworking people take a roommate to save money.
>Should they have to pay for other people to live more extravagantly? There is nothing unhealthy or unsafe (in general) about sleeping in the same room with another person, or turning a room that fits 2 people into two smaller rooms.
This is illegal. Most municipalities have codes which prevent more people from living in a place than a certain number, based on the bedrooms (usually 1 per bedroom, except with kids). And yes, I think asking people to have roommates (in the same bedroom) is going too far. Housing is this country is cheap: it's cheaply constructed, with cheap materials, and land is plentiful outside of downtown metro areas. There is absolutely no reason for rents to be as high as they are. Instead of trying to force people into unsafe living situations with strangers, the government needs to fix the housing problem. They're not going to do that as long as people like Hillary are in bed with Wall Street and allow speculation on residential real estate.
>I think in an average cost-of-living town in the US, you need 300 to 350 to rent a room (all to yourself!), 250 for groceries, soap, razor blades, etc. That leaves 100 or 150 to get around. Certainly not enough for a car or taxi rides.
This is what I'm proposing. If that's enough for someone to get by in an average location in the US, that's what the UBI should be set at. And $150/month for a car is actually doable: you can get a pretty decent used car for $5k, and if you're mechanically handy (buy tools at Harbor Freight) you can maintain it yourself for next to nothing, and then as long as your commute is short, and with liability-only insurance, the monthly cost for your transportation should be in that range, even better once you get the vehicle paid off (which you can do by doing some extra work for more money, then after it's paid off you can relax and not work as much or at all). But really, affording a car shouldn't even necessarily be part of it (though as I pointed out, if you're frugal and able to do your own maintenance, it's not that expensive; insurance might blow the budget though). There is public transit in places (though it mostly sucks and needs serious revamping; see SkyTran), and people at the minimum could just get by with a bicycle.
The whole point of UBI is so people can get by and not have major financial stress; it literally kills people, by shortening their lifespans. Sticking them in a room with some stranger and not allowing them any privacy at all is not the answer. So the UBI should be set so that they can afford to rent a room (the whole room), buy groceries, and have a little extra (maybe riding a bicycle) so they don't feel completely miserable, and then can go seek employment as they wish for more money.
I do think unemployment insurance and SSI should both be phased out, and maybe unemployment insurance can be a private matter instead, and I also think universal healthcare needs to be instituted. I also think the UBI should be the same for everyone; it's too complicated otherwise, and I don't think people who want to live in Manhattan or other high-rent areas should be given that luxury and funded by the rest of us (otherwise, we'll all move to high-rent locations). People living in high-rent places like that now with government benefits will have to move under UBI; too bad. If $700/month is enough to make all this work, then great, let's set it at $700/month.
If you were to implement the Fair Tax, which includes a stipend for
basic needs, you'd get bipartisan support as well
It's called the FairTax, and it would replace nearly all federal taxes with
a 30 percent national sales tax. That on its own is a regressive idea —
low-income people spend more of their incomes than the rich do, so would pay
a greater share of their incomes in sales tax — so the FairTax would give
each household a "prebate" equivalent to the sales tax they'd pay on
poverty-level spending. For example, in 2013 the FairTax "consumption
allowance" for a family of four (two parents, two kids) was $31,020. If you
spent that much money in a FairTax world, $7,135 of it would go to federal
sales taxes. So the FairTax provides a $7,135 annual rebate to families of
four, distributed monthly.
Make no mistake: this is a basic income. There is no work requirement. You
get it regardless of whether you make any money. It is a straight-up basic
income. FairTaxers object to this characterization, saying that because the
prebate is meant to compensate for taxes you pay on necessities, it's "your
money being returned to you." But if you live below the poverty level, you
come out ahead from the rebate. It's just a cash transfer program.The 'amount' of money in the system stays the same and therefore inflation stays the same.
Also, at least recently everyone has been talking about how inflation is too LOW not too high.
Now obviously, if what you have isn't actually a free market but an oligopoly with government protections, price fixings etc., this won't work. You'll have some of these problems in some markets, but that would just have to be next thing to concentrate on.
You are entirely correct.. but I think you're missing the point.
Think of that first description as the marketing pitch to the general public. By saying it is universal and "free" to administer, it gets people behind it who don't think through the consequences.. which is a large chunk of the target audience. They are also the people who could put amicable politicians in power and keep them there.
But a "no-strings-attached" basic income would force politicians to give up the one thing they desire more than anything: power. So the second description with the actual mechanics of it, is for those people who actually get to administer the "free" program and tie their strings to groups, situations, and behaviors they want to punish or promote.
I am as free market as they come and find myself intrigued by the UBI... but the thing that prevents me from supporting it is that politicians and political systems DO NOT give up power so the "we can get rid of everything else" line is obviously a lie.
I tend to think the exact opposite is true: a universal basic income is conceivably one of the most massive power grabs imaginable.
If this comes to pass in America, you're going to have a large chunk of the population COMPLETELY dependent on the government's teat. And ultimately, a population that's dependent on the government for their means of survival (even if its spun as "no strings attached") is indirectly under total political control.
However, I think it will be nearly impossible to succeed in spinning it is "no strings attached" unless everyone really can continue to exercise all of their current rights (to free speech, to the democratic process, etc) without losing the benefits.
You make it sound like the state will be able to say "Don't speak in opposition to our policies or we'll let you starve". I'm skeptical.
You won't, without substantial productivity improvements, because economics; UBI at any level that would, in the short term, make people willing to accept it and not seek outside income will rapidly lead to inflation from the increased cost of labor from the mass workforce exodus, rendering it no longer adequate to such lavish support.
In the long-run, with massive improvements in productivity and automation, sure, its conceivable that a well-designed (I mean this in terms of sustainability and stability) UBI could eventually result in a large portion of the population relying on it for their main source of income, but that's essentially a post-singularity economy by that point.
Does anyone advocate giving it to everyone?
What about children? Does a child get the same as an adult?
What about non-citizens who are in the nation legally?
What about non-citizens who are in the nation illegally?
What about citizen children of non-citizens who are in the nation illegally?
There are consequences to saying yes to any of these we need to think through, but perhaps more importantly, is there even a chance of passing some of these (could you imagine the Republican attack on answering yes to either of the last two?).
[What about children? Does a child get the same as an adult?]
Yes, but the funds are stored in an account and are inaccessible to them until a certain age is met (or they qualify as an independent, similar to how the FAFSA (doesn't) work).
[What about non-citizens who are in the nation legally?]
No.
[What about non-citizens who are in the nation illegally?]
No.
[What about citizen children of non-citizens who are in the nation illegally?]
Yes.
> What about children? Does a child get the same as an adult?
Maybe; if so, the child's allotment goes to the legal guardian (and, like the guardian's own UBI, is treated as income for tax and other purposes), but you also eliminate child-care related tax deductions and credits.
> What about non-citizens who are in the nation legally? What about non-citizens who are in the nation illegally?
I would lean toward saying citizens and legal permanent residents (green card holders) get UBI. Others do not (note that this includes non-immigrant work visa holders, like H-1Bs), though in the odd case of a non-UBI-eligible (but legally present) parent with a UBI-eligible child, the parent would be eligible to draw the child's UBI, just as a parent with their own UBI eligibility with a UBI-eligible child would.
> What about citizen children of non-citizens who are in the nation illegally?
That's...trickier. My preference would be that the citizen child would get an allotment, but that the guardian would have to normalize status to draw that allotment. The details of that are more for a discussion of immigration policy than UBI policy though.
An even trickier question is non-resident citizens, and particularly non-resident U.S. citizen children of non-resident non-citizens.
If by year 10 the economy still functions as desired, we keep UBI. Otherwise we taper it off again.
Otherwise, it will be nearly impossible to taper "off" in the event of a failure.
It's easy to start giving people money that they never had, but once they have a taste, it's going to be hard to take it away.
You can't dismantle those until you're at the 90+% range of any reasonable UBI payout.
For most goods, the ratio of the new to old price should be less than the ratio of the post-distribution to pre-distribution income of the group demanding the item, though this may not be the case for, e.g., goods where there are monopoly rents being extracted.
Yes you can save money by cutting these programs, but that argument doesn't add up for me yet because you still have to pay EVERY person in the country. (or is it every adult)
In this sense, it can be seen as an application of the DRY principle.
> your next dollar earned still means more money in your pocket at any point
This is critical as well, I've known people who get trapped in welfare because they are so far into it that going to work isn't really advantageous.
Thanks for your input!
A flat tax (or even just a decrease in progressivity) directly works against the purpose of adopting a UBI.
EDIT: Changed "all" to "most"; I've definitely seen right-wing proponents advocating varieties of UBI + Flat Tax schemes and UBI + National Sales Tax schemes, which are not funded by progressive taxes; also added the note about no-new-funding programs.
I have seen some proposals involving replacement of taxation generally with a flat tax coupled with a UBI - sold specifically as being able to still produce an overall progressive curve with the simplicity of a flat tax. While I think those are both positive things, I find this oversold - most of the complexity of taxation has little to do with brackets, and while the resulting curve is progressive it is only a particular family of curves and it's plenty possible that the optimal curves (by whatever metrics we assign) are not in that family.
I have seen some proposals that involve a progressive increase in taxation; these have been (in my recollection) fewer and less detailed than the first category - mostly, I expect, because they are a bit harder to analyze.
Actually you can pay for it. Exactly because any regular ordinary person can pay for it. Exactly because abundance is inherently free. (For the rest of the comment I'll redefine the label "you" to be one single ordinary person who wants to make a basic income happen IRL.) [0]
Abundance is free because it defeats the fundamental condition required for a scarcity-allocating market. That fundamental condition is: there is not enough for everybody. For example, try selling stray kittens in a neighborhood overrun with stray cats. No scarcity, no market price. In contrast, basic income requires abundance otherwise you have no business trying to universally share something you don't have enough of. Everybody can't have formula one race cars and red bottom heels. So just to be explicit:
With a universal basic income, you should only seek to share only those things you have in abundance. And since abundance is free, you are merely
**seeking to share free shit**.
**Abundance cycles**B) You give the tiny house to a handy builder-type who redirects the savings in rent towards spending more time building, you guessed it, more tiny houses. You use the remaining $10K to cover materials for the initial THOWs that the builder builds from scratch.
**Ride free** **Gotta eat** **Zap that** **Highly contagious** **Umm, water?** **No fossils** **Better markets** **Zero net cost** (nee Shit's free yo!) **tl;dr** tl;dr($tl;dr) Because abundance cycles
*p.s.* =====
[00] precedent https://www.reddit.com/r/BasicIncome/comments/3m8x3d/hey_guy...
[01] http://www.tumbleweedhouses.com/pages/plans
[02] http://www.tumbleweedhouses.com/products/amish-barn-raiser
[03] http://www.mrmoneymustache.com/2016/01/28/the-man-who-gets-h...
[04] http://www.mrmoneymustache.com/2015/08/31/electric-bike-revi...
[05] http://www.lowtechmagazine.com/2012/10/electric-velomobiles....
[06] http://www.mrmoneymustache.com/2014/10/20/aquaponics/
[08] http://www.mealsquares.com/faq.html
[09] http://static1.squarespace.com/static/52524dbbe4b0b242f8ce4c...
[10] http://defyingnormal.com/blog/2014/08/26/tour-solar-setup-va...
[11] http://simonthorpesideas.blogspot.com.au/2015/05/science-and...
[12] http://science.howstuffworks.com/environmental/green-tech/re...
[13] http://www.lightsail.com/
[14] https://myriadrf.org/projects/novena-rf/
[15] http://www.technologyreview.com/news/516571/build-your-own-i...
But, the big problem is the idea that the UBI should initially be sufficient to lift everyone out of poverty. The immediate goal should be to have a UBI which reduces poverty and addresses the fact that capital increasing takes the reward of economic growth, rather than it being broadly distributed. The long-term goal should be to displace and go beyond existing means-tested anti-poverty programs in lifting people out of poverty, but the best way to do that is to build a system that grows naturally.
As an example: eliminate preferential treatment of capital income in income taxation, maintaining otherwise general structure of the existing progressive income tax system, and set aside a portion of the total income tax revenue equal to the initial increase in tax revenue for the "Common Welfare Fund".
90% of the new money in the fund is distributed as UBI by equal division among qualified recipients (e.g., all citizens and LPRs, if that's the group defined to receive the UBI), the remainder is retained as a stabilization fund (with returns on the stabilization fund treated as "new money" in future years, and rules providing for some distribution from the stabilization fund to current benefits to reduce calculated benefit declines.)
Each year, reduce the actual minimum hourly wage from its nominal level (which I'm presuming gets inflation-indexed before this) by 1/2000 of the annual UBI level (for wages covered by overtime mandates, the minimum overtime wage is calculated first, and then reduced for the UBI) -- over time, the UBI displaces the minimum wage.
Other (e.g., means-tested) benefit programs aren't directly eliminated (immediately), but income from the UBI is treated as normal income for both income tax and benefit calculation purposes, so (assuming economic growth such that real tax revenues pre capita increase faster than inflation), even with eligibility criteria indexed for inflation, growing UBI will reduce the proportion of the population eligible for any such programs, eventually to 0 as the UBI crosses the maximum threshold for each program, allowing the programs to be retired.
Its unacceptable that food in the US is 2x the cost of that of china, for instance.
http://www.numbeo.com/cost-of-living/compare_countries_resul...
There needs to be solid evidence to justify a 2x increase in the cost of food.
Productivity decreases costs, not the other way around.
Did you mean to say the value of unskilled labor?
If you consider as a method to introduce an income floor it makes sense. At 100k+ I really don't need any sort of basic income. A senior citizen getting paid social security is already getting the money out of that bucket (arguably that bucket should be phased out and everyone should be entitled to their basic income instead, perhaps with extra breaks for seniors).
I really don't support just giving out 30k a year to everyone. I can see the logic in giving out money to get everyone to that level (or whatever sensible number). I also think it's sensible to say that the benfit doesn't just go away if you start a job making 35k a year, but it does start to reduce as your income goes up. This gives you an incentive to work, even if your job isn't that high paying, but makes the program cheaper by not giving out money to people who really don't need it.
As soon as you give people as little as 100$/month you will see some people tweeting about all the tricks they found to make it enough. Of course it wont be enough to bring most from poverty and those who can live off that will often start off some possessions, but the goal is to lower the bar of entry into that situation.
Only under these conditions can we transition from the bullshit-job economy we have and make sure that the general automation of production will benefit most instead of a few.
The idea that the people employed in the bureaucracy managing the current mess of programs losing their job is a silly concern. Why should we keep paying people for unnecessary bullshit jobs? Why should we employ people to check and ensure that other people aren't secretly working? Let those people do something more productive.
I would like Basic Income to be a bit more than $10,000 per year, though. Ideally, especially when the number of jobs available falls due to increased automation, I'd like the Basic Income to provide a comfortable income. People can and will still work to increase their income further, but when robots do more and more of the work for us, there's no reason to punish people for being unable to compete with robots.
These used to be major expenses, and much more expensive than today, adjusted to inflation (stuff got cheaper partially due to globalisation & partially greater automation).
Because human services jobs employ thousands of people (a state like New York has 40k+ people in public sector social services and at least that many private sector) and control thousands of votes.
Democrats will have a hard time supporting it, because those unionized workers will get them voted out.
It's also very telling about what "basic income" really is. Conservatives don't give a shit about social welfare, this is just another scheme to enrich their pals and undermine the social safety net.
Huh?! That makes no sense: how is giving everyone a sufficient income to survive undermining the social safety net? How is increasing taxes on the wealthy enriching their pals?
If you study the history of social welfare at all, you'll find that handing out cash was tried before and failed dismally for a variety of reasons.
Additionally, poor people often deeply resent cash handouts and the recipients of them. Housing aid, food stamps, etc are seen as a help vs a handout.
Anecdotal experience. My anecdotal experience is the opposite where the liberals I know believe increasing the minimum wage is that "next big step forward." They won't even give the idea of Basic Income a chance.
UBI proponents have a lot of work to do putting together and coherently articulating a realistic, plausible route from where we are to where UBI hopes to get us. Most have been good at articulating a great picture of why a mature UBI system would be great, but much less good at painting a picture of how you get from here to there in a believable way.
While enough to live on would be great, I think people underestimate the benefits of a smaller UBI. Even if it doesn't completely solve wage slavery, it can still ease the pressure, letting people work fewer hours, save money, and waste less of their savings between jobs.
Well, that's one of the major problems with this scheme: a whole lotta people will as well. In much the same way that we currently hear "I can't raise my family on minimum wage!" we will hear "I can't raise my family on my UBI!" Anyone who can't see how UBI increases will become a promise of every presidential hopeful hasn't been paying attention.
When the people realize they can vote themselves money... something something, I can't remember the rest.
---
I also get a kick out of how people think welfare programs will be eliminated by UBI, and that's why it won't be so expensive to implement. So what happens when someone on UBI has their car break down or, as will often be the case, just flat-out doesn't budget properly and now they can't buy groceries? We're just going to let them starve? Of course not. There will be a safety net below the UBI.
Myself I don't really see any long term social solution other than UBI as well. But there are plenty of rough corners like that..
Japan did (does?) have a problem they couldn't print themselves out of called a liquidity trap. https://en.wikipedia.org/wiki/Liquidity_trap It happened to us in 2008 and continues to be a problem.
Disclaimer: Not a real economist.
Media is advertising supported ( mostly still ) and it's therefore targeted at the New World, which breeds this curious resentment. But if one of these Worlds is to be the Second, I'd think it would be the New World.
Since you mentioned Germany, I'll use that. A Czech earns about a third of what a German earns. But everything costs more or less the same (except for housing, but the difference certainly isn't multiples). Gasoline costs the same (and much more than in US), vast majority of consumer goods costs the same, food seems to be cheaper, but that's because it's of lower quality.
Yeah, education is "free". As is government free to take more than half of what people earn.
By "2nd world" I mean "1st world prices, 3rd world wages" (yes I know 3rd world is something incomperable).
I'm sure you'd like the $10k/yr + working option better if rice and dog food don't sound like appealing staples.
It always amuses me when I hear something like "10k USD is below the poverty rate". Do you think the living expenses are notably different?
It is the same for the poor here. I know, I grew up experiencing it.
Would you be happy with that life knowing that the opportunity for more was available and within your reach?
Not many would be content with such stagnation when they could (relatively) flourish.
Well...yeah. That's the point. American "poor" is the average here. Or a little below average, to be precise.
I get the sense that liberals and conservatives have wildly different conceptions of what a Basic Income would mean in practice.
Conservatives and libertarians may like the idea of giving a single no-strings-attached check every month to everyone and anyone and sending them on their way. Liberals I imagine expect a basic income will be enough to guarantee food, clothing and housing and perhaps some means of allocating portions to those categories, which is more or less what we have now.
There are plenty of campaigners on the left - the UK Green Party is an example - that openly campaign for a BI in addition to most of the state benefits that already exist. And when it comes to implementation details, it's quite hard to believe that many left wing proponents actually would take the "well if the BI isn't enough for you to afford your social housing once we sell it off, maybe you should just move" route.
I don't dispute that many liberals would like to have UBI and the existing benefits (despite that being economically crippling). They're just extremely unlikely to get their way.
Don't pretend you can legislate around that problem-- if payday loans against UBI were illegal, the black market (loan sharks) would fill in the gap.
You can read the detailed proposal at: https://policy.greenparty.org.uk/assets/files/Policy%20files...
In short: they're proposing to abolish ~£37bn of targeted subsidies for working age adults but retaining ~£67bn of them. Pensions and child benefits get totally replaced, but by new subsidies that cost more than what they replace. I think this is a much better approach than eliminating all or nearly all the existing benefits as is often favoured by right wing BI proponents, but it leaves untouched or simply renames more than it eliminates, and ultimately they're proposing to balance their books far more from offsetting tax increases than by eliminating traditional targeted welfare subsidies.
For instance if you currently get $1100 a month from benefit X then you would get $700 BI and $400 from benefit X.
A legislative mandate neatly solves that problem. The analogy doesn't hold.
Basically, the reason he sees Basic Income as something of particular interest to conservatives is that he's hijacking the term to describe conservative policies of trying to punish people into work regardless of how realistic it is for them to find a job.
Don't forget that public sector unions (ie. the people administering all the existing entitlement programs) are a major liberal constituency.
> I would like Basic Income to be a bit more than $10,000 per year, though. Ideally, especially when the number of jobs available falls due to increased automation, I'd like the Basic Income to provide a comfortable income.
There are plenty of places in the country where $10k is more than enough to live on. One of the biggest benefits of UBI would be that we can start moving more people to the massive areas of our country where there's low COL and few jobs.
That's not basic, though. I don't think there are many towns (maybe none) in the USA where you can't stay warm, dry, safe, and clean with a soft bed and a healthy diet for $700 per month.
The Fed can raise interest rate to shrink the money supply for banks and borrowers while give more direct cash to expand the money supply via basic income. This can be in addition to the government's budget spending on basic income.
An interesting outcome is the deflation of the asset bubble as rate increases. The money supply expansion via direct cash counters the deflation in economy. This should reverse the trend of the great wealth transfer to the asset holders in the last 20 years.
Next, the Fed avoid targeting zero inflation, because it's currently impossible to hit that number so exactly, and they desire to avoid deflationary spirals. The past 150 years has shown across hundreds of countries that the current solution is vastly better than the boom and bust cycles previous, and has also demonstrated the benefit of fiat over commodity (like gold). There are ample papers showing this in the econ literature, and is the primary reason not a single country tries to use previous methods.
Next, new money is added through asset purchases, not giveaways, so it's erroneous to think this money can just be handed to individuals as cash, unless perhaps those individuals were selling assets to the Fed of equal value.
Next, the target is usually around 2%, and the money supply is around 2T, resulting in 400B a year, or, 2K a year per adult, which is nice, but hardly a basic income. It's more like a tax break. It's hardly going to change wealth transfers, since most people will just consume it, and the wealth would go back to companies, mostly the ones you decry above.
Finally, when the Fed targets low inflation, that would dry up the basic income, and I don't think giving people such a variable and uncertain income would do well for planning and stability. Soon people would clamor and elect politicians that guaranteed the Fed would pay X per year, defeating the entire mechanism the Fed uses to stabilize markets.
Let them eat cake?
> ...they desire to avoid deflationary spirals.
I've never really understood this. Dropping prices (see the recent changes in oil prices) are really good for the impoverished, at least in the short run. If we are really talking about a post-scarcity economy, wouldn't deflation indicate efficiency and be a good thing?
It also encourages hording of money and doing nothing with it as it becomes more valuable over time.
As for hoarding, what's the argument? That people will make Scrooge McDuck bank vaults and take baths in their gold coins? People will still need to buy things eventually, right?
Also, hoarding would theoretically only be a problem for the middle and upper classes since the working classes can't afford to save. But the middle and upper classes already hoard, more or less, when they buy and hold real estate.
So what's the risk exactly?
Yes, increased productivity and efficiency are deflational in nature. You can create N more things now with the same cost. The extra N things push price down if the amount of money in the system stays the same. That's why central banks inject more money into the system to "soak" up the extra economic activities, to maintain a constant and slightly upper price pressure.
When people see the price is not decreasing despite increased efficiency, they will spend the money since it worth less tomorrow.
If a man walks up to a microphone in a crowded room, and everyone seems him up there, and he could say anything he wants, so that the whole room will hear it - and he says nothing -
has he said anything?
spending money is 'speaking in the formal language of money'
saving money is holding your tongue.
https://medium.com/@MarkPXuNeyer/consider-money-as-a-formal-...
Besides FOMC, loan is a bigger money creation mechanism. With 10% fractional reserve, the banks can lend out 10X of what they have. In that case interest rate dictates how much loan actually lent out and how much money actually created. By raising or lowering interest rate, the Fed increases or decreases the overall loan amount. Lowered interest rate encourages bigger loan amount, vastly increases the money supply for assets, leading to the current asset bubble.
Basic income can become another mechanism for the Fed to inject money. The Fed can buy less treasury, raise rate, and give out more in basic income.
People spending the extra money and companies earning them are good. Companies earning money via products and services are good. This encourages more products and services, and more employment. Instead the new money created now are given to the asset holders and locked up in assets.
Edit: QE was another money creation mechanism and it hugely benefited the banks. The Fed bought assets at inflated price from the banks with created money.
Everybody in the US has treasuries. SS is the biggest holder of them, so when their value goes up, everyone with a SS account benefits. Next, most pension/retirement plans give another large class of adults benefits (50%+ of adults hold such plans).
Remember, Fed buys from the Open Market (the "OM" in "FOMC"), which has an effect on pricing for all.
> With 10% fractional reserve, the banks can lend out 10X of what they have
And they also have an offsetting 10X in liabilities. It's not some free money giveaway any more than lending money to my friend does not create new money - it gives him more cash and an exact same amount of debt.
Plus, if you think fractional reserve creates money (in the sense that the gain is not balanced by a matching debt), then paying it back "destroys" the exact same amount. Fractional reserve is zero sum.
>Basic income can become another mechanism for the Fed to inject money.
All other Fed injection mechanisms swap assets. And the amount needed for even a tiny UBI is massive compared to any other amounts added. This is not even remotely plausible.
Lending out loan creates money circulated in the system. Paying off debt destroys money from the system. By controlling the interest rate, the Fed controls and levers the up and down of this huge money supply.
That's why the Fed went into the QE programs. The increasing bad loans at the banks was choking off the money circulating. By buying non-performing loans from the banks, the Fed removed the liability off the banks' books so they had more room in their fractional requirement and be able to lend again, thus restoring the money supply.
No, a bank cannot lend out 10X of it's deposits. That's simply wrong.
Say a person deposits $1. The bank owes the person $1. If the bank thinks this $1 is unlikely to be withdrawn soon, it can lend out $0.90 (assuming a 10% reserve rate). End of story. This bank having received $1 cannot turn around and lend $10. Note that this point the bank has $0.10 of the original persons assets, owes that person $1, and is owed $0.90 by the borrower. The net position of all this is zero for the bank.
Now, the borrower can deposit the borrowed 0.90 (assuming it's not spent somewhere else) into that bank, or some other bank. The process repeats.
The net value to society is zero. Liquidity is added, debts are added, they balance to zero.
If a bank lending money is creation of money, so is all lending. I lend Bob $10, he lends $10 to Fred, he lends $10 to Joe, and since we don't have fractional reserves, this is an infinite multiplier. However the chain of debts and assets still is zero sum. There is no difference between this and banks, except banks are required to hold some cash on hand to handle normal business transactions.
>By controlling the interest rate, the Fed controls and levers the up and down of this huge money supply.
Not quite - a bank will loan any money it has at the highest rate it thinks is profitable (as would any actor in the economy). No bank loans are at the target rate the Fed sets.
The Fed does not control the interest rate, they set the Federal Funds Target Rate, which is a target. They do not lend money at this rate [1]. Nor do banks, except to each other, and only overnight.
Banks lend money to each other overnight to meet reserves, and each pair of banks sets a rate it thinks is worthwhile, like any open market transaction. The weighted average of these loans is the "federal funds effective rate". The Fed wants this number to be the Federal Funds Target Rate, and they use FOMC to buy/sell assets to try and get banks to lend to each other at the target rate. This has almost no effect on the multiplier, since it does not change the reserve requirements, and the usual fluctuations are tiny.
Nowhere does the Fed set a rate and lend at that rate, or even force others to lend at that rate. It's a target.
And no where does this force banks to lend or not lend to others. Banks decide to do this at whatever rate borrowers will pay.
See https://en.wikipedia.org/wiki/Fractional-reserve_banking#/me...
Fractional reserve plus debt do create money. The accounting cancels out on the book but there are money circulating in the system. If accounting balanced to 0 means no money is created, then FOMC buying and selling treasury creates no money at all since it's net zero on the book at the end. Yet FOMC has the stated purpose to create/destroy money for the Fed.
The debt among friends example doesn't create money because it's the same $10 passing from friend to friend while the IOU issued is not very liquid. It would work if you hand $10 to Bob for safe keeping and he gives you a deposit slip while lends $10 to Carl. Now you have the deposit slip valued at $10 and Carl has $10 in his pocket. The deposit slip is very liquid since you can get back the money at any time.
Accounting does balance to zero. Debt and money are added, and they sum to zero. Proof:
Let bank start at 0 (or pick any value).
Bank receives X dollars from entity A. Now bank has X dollars in reserves and owes entity A exactly X dollars, so net position of bank is zero (X dollars in reserves - X dollars owed = 0). A started with X, gave it to the bank, and the bank owes A X. So A has the same starting position.
Bank lends 0.9X = Y to B. Now B has Y, but owes Y, so B net position is 0. Bank lent Y, but is owed Y, so net change here is 0.
This happens every step. It's most certainly every single time a net 0 transaction.
If you care to continue to claim it's not net 0, please clearly demonstrate as I just did how it is not net 0.
>Ok, may be not quite 10X. It's 1+.9+.81+.72+... which ends up about 9.4X.
No, in the limit it is exactly 10X. Proof:
Let S = 1+0.9 + 0.9^2 + 0.9^3 + ....
Then 0.9S = 0.9 + 0.9^2 + 0.9^3 + ....,
Subtract (S-0.9S) and all terms cancel except the first 1, so (S-0.9S) = S/10 = 1, so S = 10.
>The debt among friends example doesn't create money because it's the same $10 passing from friend to friend while the IOU issued is not very liquid.
It's exactly the same thing. The bank lending is no different from any entity lending. The bank does not print up new money each time - it's the same money as you put it.
Bank IOUs are completely liquid either. All 10X money cannot be withdrawn at the same time - one is lent from someone else's assets, and this is only possible as long as everybody does not try to withdraw their assets at once. This is why there is a certain reserve needed - it allows normal withdrawals and deposits, which are around that fraction (10%) of needed assets.
If everybody in the 10X wanted to withdraw their money, there would not be enough money. All the banks would need to call in all loans, and that is chaos. It simply is money that sits in zero sum on balance sheets.
Ever wonder why there is a reserve? This is why. It's the expected amount of cash needed to let people with savings in the bank do day to day transactions. Bank runs used to happen (and still could) when reserves get too low, because all that 10X is not money that can be pulled out at once. The Fed provides a buffer against bank runs because it can provide liquidity as needed.
But the money multiplier is not some magic source of money any more than lending money from friend to friend is. It's exactly the same process.
Let me pose the question again. Your statement is since accounting balanced to 0, no money has been created. In that case, FOMC's account balance is also net zero when buying treasury or selling treasury. Therefore FOMC doesn't create or destroy money. So what is the purpose of FOMC again?
Edit: Instead of arguing with me, look up Money creation by the commercial banks in the wiki https://en.wikipedia.org/wiki/Money_creation
No. Nowhere have I written "no money". You have written it a few times. I have stated that the money is balanced by a matching debt. You also keep mixing fractional reserve and central bank purchases. These are entirely different things.
And FOMC is also zero sum - the dollars they inject are backed by debts they hold.
>look up Money creation by the commercial banks in the wiki https://en.wikipedia.org/wiki/Money_creation
Yes, I am quite aware of this, even having been involved in many discussions and papers on exogenous vs endogenous money. If you want to really blow your mind search those terms and read academic papers on them.
What you seem to not understand is that the money is offset by matching debt. Your link states this in the first paragraph: "A central bank may introduce new money into the economy (termed "expansionary monetary policy", or "money printing" by detractors) by purchasing financial assets or lending money to financial institutions"
The Fed traditionally purchases debt to put more current into play. As more dollars are in the economy, the Fed carries more debt, the same as any bank when it loans out deposits. The difference is the Fed can purchase as much as it wants, but the sum is still zero.
Look: the fed has a balance sheet. Here are many snapshots of it [1]. It sums to zero. Take the last one from March, 2016 [2]. Look at page 6, Table 1. There is a line titled "Federal Reserve Notes in circulation". It is 1385B. There are other assets and debts. They are summed. The sum is zero.
Next - this has zero to do with fractional reserve, since you could have either without the other. We (and most of the world) had fractional reserve before we had a central bank.
So yes, there is more money. There is also matching debt. This is what I have stated since the beginning. You don't seem willing to note that the debt matches the money in every case, whether it's Joe loaning Bob, it's a bank and fractional reserve, or it's a central bank purchasing assets. The central bank has unlimited reserves, is the issuer of currency, and can take on unlimited debt.
If it helps you think clearly, assume the central bank has 20 quadrillion dollars. They decide to add X dollars to the economy, so they buy X in assets. Now they have 20Q - X in cash, X in assets, we have -X in assets, X in cash.
Where the economy increases is when the people buy goods (say Treasuries), and their value in dollars goes up through market pricing, then they get sold to the Fed. The Fed didn't add the value, market pricing did. The Fed simply traded some of it's (unlimited) reserves for assets.
This is also why the Fed traditionally purchases at open market prices - it helps them match inflation since the market, not the Fed, decides prices.
So - are you still claiming all these stages are not zero sum? If so, please detail which step is not zero sum.
[1] https://www.federalreserve.gov/monetarypolicy/quarterly-bala...
[2] https://www.federalreserve.gov/monetarypolicy/files/quarterl...
You were the one using the friend lending example to say there's no new money created when debt is created.
You keep saying I wrote no money is created. I did not. From every single post in this thread:
My first post in this thread: "new money is added through asset purchases, not giveaways,"
My second: "if you think fractional reserve creates money (in the sense that the gain is not balanced by a matching debt), then paying it back "destroys" the exact same amount. Fractional reserve is zero sum"
Third: "Accounting does balance to zero. Debt and money are added, and they sum to zero"
Fourth: "I have stated that the money is balanced by a matching debt"
Literally every single post I wrote in this thread stated that money is added, and a matching debt is added.
Every. Single. One.
Have fun.
Uh, no. Quite the contrary. Since the abolition of the gold standard, our economies were prone to fluctuations like they haven't been in decades. Because then the (central) banks can meddle with the quantity of our money to their liking.
The Great Moderation [2], a period of such low economic volatility that even economists find it amazing. Did this happen before or after the gold standard was removed?
IGM poll of around 100 of the top economists in the US the following [3] "If the US replaced its discretionary monetary policy regime with a gold standard, defining a "dollar" as a specific number of ounces of gold, the price-stability and employment outcomes would be better for the average American."
Every single one either disagreed or strongly disagreed. 100%. Not a single dissenter.
Want to really see what a gold standard would have done over the past few decades? Here [4] is gold prices for the past 100 years.
The price was 220 in 1970, 2000 in 1980, 369 in 2000, 1600 in 2010, and now has dropped to 1200, with a lot of intermediate fluctuations. It's all over the map. These fluctuations are far larger than any business cycle or inflation over the same time period.
If gold were the standard (i.e., the fixed value), then, since the dollar has fairly small fluctuations and more important quite stable predictability, this graph is what living costs would have done as the rest of value fluctuated this wildly.
Simply put, gold is vastly more volatile than almost any economy, and certainly more volatile than the US economy. The gold standard is terrible.
Finally, here [5] is a paper that follows the gold standard across 24 countries around the Great Depression, and pretty conclusive shows a strong divergence in economic health (employment, wages, growth) between those countries on the gold standard and those off it. Such effects, seen at the time, pretty much killed the gold standard as the deflationary effects became clear.
Now, present your fluctuation metric before and after a gold standard and demonstrate your claimed increase. It simply is wrong. These multiple methods conclusively show it.
[1] https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit...
[2] https://en.wikipedia.org/wiki/Great_Moderation
[3] http://www.igmchicago.org/igm-economic-experts-panel/poll-re...
[4] http://www.macrotrends.net/1333/historical-gold-prices-100-y...
For instance, why would landlords not raise rents knowing that everyone now has this cash?
You honestly think they care about "losing business" in a market that they absolutely control and have extremely high demand?
This leads me back to my original question - EVERYONE now has "enough free cash to afford a security deposit on a different place", so if EVERYONE goes and does that, we're right back to where we came from within 1 year -- the lowest class still has the lowest quality apartments with the lowest class slumlord landlords!!
Nothing changes except less people think they have to work (which causes society to further cave in on itself)!!
If anything, this damages the supply side, because now you have higher demand in the form of 20-somethings attempting to escape their parents/grandparents homes, as well as anyone who thinks they no longer have to live with roommates. Nothing but distorted perceptions.
And now, we also have the side effect of fewer people working and being economically productive in society, thanks to you telling your shitty boss to shove it. Meanwhile, anyone who was making something equivalent (or a bit more) than the new base salary can just say screw working altogether.
I don't see how any other outcome prevails. The cons continue to outweigh the pros, and you have no clue what other unforeseen side effects will unfold.
but the previous lowest class slumlords have been run out of business, because no everyone's trying to move out of their apartments and no one's trying to move in.
In markets with structural vacancies (more units available for rent than households wanting to rent them), you might see of the migration effect you describe due to increased mobility.
(To be clear, I believe that UBI will cause an increase in household formation, not a decrease.)
As for landlords specifically: the renters already have $x they are not using for rent, so why don't the landlords get that? If there is no good or service that absorbs all the money right now, there's no reason to think there would be one for the marginal money of a basic income scheme.
Rent increases now, due to inflation. The general public have to give more despite not getting the created money. Landlords got the benefit of rising rent due to inflation and rising housing price due to lower interest rate to create more money.
Basic income just shifts the inflated money to everyone instead of just the asset holders.
I don't see how basic income doesn't create more unforeseen problems than it solves unless there are some serious strings attached to that money.
Anybody is allowed to buy bonds from the U.S. Treasury. In exchange, you get the "new money" as you call it. At no one point is anything given to the banks or asset holders.
The interest rate is determined by the rate the fed sets and buys these notes from the US T. This is the key and primary tool at which a PRIVATE, non-governmental organization, determines interest rates. However..you can also buy these notes directly from the Fed. China does all the time along with many other countries. Yes...other countries hold the "debt" of the American people... If that's not crazy enough...it gets better. This organization..the Fed...gets to tell banks how much to hold in required reserves. Another primary tool they use to control inflation.
Rent is not some basic formula derived from the average income.
What would happen (if you funded this by printing money rather than taxation) is that the value of the dollar would fall by (monetary value of basic income payment) / (total number of circulating dollars), creating a redistribution effect similar to that of a taxation scheme, but less planned out.
So lower-income housing landlords do raise their rents. Grocery stores raise prices on their beef. Low-end used cars get more expensive. More dollars chase the same quantity of goods and services.
But basic income continues into the long run. It becomes a business opportunity to undercut those inflated prices, to capture more of the basic income flow for yourself. An entrepreneur builds lower-income housing and charges lower than the prevailing rents, immediately poaching business from the opportunist landlords, who now have to compete with one another to keep tenants.
As additional competitors enter the market, the economic allocations change to match the newer distribution of incomes. More businesses that serve lower-income people become viable, so more economic activity occurs to cater to that sector. Fewer businesses that serve higher-income people remain viable, because they are taxed more. It slowly becomes more expensive to be rich, and less expensive to be poor.
In the long run, wealth distribution flattens and is less self-reinforcing. More than a few people would be willing to walk a higher wire if they were given a stronger safety net, choosing risky entrepreneurship rather than safer employment. Prices only remain high if existing businesses are protected from competition.
I would strongly urge that we carry out smaller scale experiments / split tests before anyone commits nationwide.
I envision a deepening of the social divide, as the uneducated and unskilled further separate from the educated. Within very few generations you would be left with an unrecognizable society.
Everyone here is looking at it from the lens of the intelligent hopeful tech entrepreneur. That's lovely, but we are the extreme minority.
At minimum, the UBI provider would have to supply food, water, housing, sanitation, electricity, and network, along with the cash. Otherwise, between those necessities, incumbent suppliers could capture all the excess cash and send it right back to the owners.
Some not-very-intellectual jobs (plumbers are everyone's favourite example, which makes me suspect there aren't many others) pay pretty well. But most don't.
Some jobs that usually pay pretty well: Software developer. Lawyer. Doctor. Quant. Corporate executive.
Some jobs that usually pay pretty badly: Cleaner. Waiter. Shop-floor sales person. Bank cashier.
I think these are more representative than comparing adjunct professors with plumbers.
It's hard to disentangle the effects, since many of my age peers who went the blue-collar route weren't exactly responsible... but those who were, and some who weren't, still did very well for themselves. Theoretically, maybe we white-collar workers would do better after 20 years - but not if our blue-collar friends invested their savings in the meantime (which many do).
In the long run, any menial task is supposed to be automated away completely. In short term, what you described already happened in area like Post-doc and game industry (or humanities degree, if you will ...).
Can you imagine what kind of autonomous robot would it take to be able to do regular plumbing work, in cramped spaces, with low visibility, requiring relatively significant physical efforts? The software side of it can definitely be solved (though not easy at all). The hardware side would require significant breakthroughs, if the device is going to be cost-effective even compared to a highly-paid certified plumber.
Same applies to electricians, and in certain degree to car mechanics, too. We have large swaths of infrastructure built with maintenance by humans in mind. These humans are not exactly easy to replace with robots.
Remember, part of demand is the amount people are willing and able to pay.
Overall, I'd argue that by increasing a person's ability to pay for anything you increase their ability to walk away from all kinds of bad deals. One of the best examples of this is given by Terry Pratchett:
The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.
A beef carcass might have 500 pounds of meat on it, but only 5-10lbs of that is tenderloin. If we all have enough money to buy tenderloin it doesn't immediately follow that cows are then made up of nothing but tenderloin. So the price of tenderloin will go up until the demand balances the supply again. You can take this and apply it nearly anywhere in the economy and find it'll be approximately correct for a great many situations.
And there's the rub. Even if we could make 500lb all-tenderloin cattle you wouldn't see people buying hundreds of pounds of beef tenderloin for themselves every day. Billionaries like Bill Gates can already afford millions of pounds of tenderloin yet you don't see him eating that.
Basic income might cause the price of tenderloin to go up a little bit but so what? It's not going to do anything to the price of corn or rice or wheat. Maybe the price of an apartment in Manhattan will go up a little bit (I doubt it) but not a house in rural Wisconsin.
First off, we can't make an all tenderloin cow. And second, that's the problem! If filet cost 1/4 of what it did now consumption might go up 100x. And obviously, it can't. But people would try. Until the price went up enough that the market for tenderloin started to clear again. But people have this extra money, right? So they can afford to spend more on hamburger. Congrats, we've raised prices!
Look at the headlines about solar panels! Demand for solar panels is much higher today than it was 20 years ago and yet prices are dramatically lower.
In the second scenario, he receives BI, but the same market forces would apply and he would only be able to charge more as long as there are no competitors. Additionally, since everyone will receive BI this will grant people more potential free time. Time they could use to make their own bread in case the baker raises prices. In this scenario the baker would have less incentive to work but would also have more potential competition in case he raises the prices.
Note that it is not merely a question of competition of perfect substites. An apartment competes with a house, but also with a shared apartment, with living with family, with leaving the area. And note that a Basic Income quite directly increases the supply of "housing near some source of income".
This idea seems to be built on a notion that there are needs and that their are wants, and that we are only going to give enough to supply needs. But there are two major underlying problems with this.
First, even if we assume that needs and wants exist, you aren't going to have agreement on what falls in what category. For starters, is having children a need or a luxury? Is a clean place to live a need or a luxury? Is having a healthy food a need or a want?
Second, I'm not sure the division between needs and wants is even real. Yes, you'll die without food in a few weeks, die without water in a few days, and die without air in a few minutes, but what about something that increases ones likelihood of dying in a few years, but not any shorter? For example, a starving person can survive off a very poor diet for a much longer time than with no diet, but if they are missing vital nutrients, they will still eventually die. Or look at loneliness and the negative effects it has on people. You won't die within a year from lack of human contact, but your overall life expectancy will drop greatly (except for infants, who will die from lack of human contact, as shown in a few experiments which scientists are ethically banned from reproducing).
This is really why I want this to happen on a large enough scale to see if it really works or not.
In the US, we could already make great strides with removing the hard floor by simply implementing universal, primary health care coverage, free/low-cost higher education and wages that keep up with inflation. I feel that BI in some form is inevitable and the next logical step of civilized society, however, given the incredible resistance to providing universal health care, I do not see BI happening in my lifetime.
With a basic income, now most of these people have more money. So I can charge $3 per apple, and even if I only sell 4 of them I still make $2 more than I made before. I eat the last apple myself, and the person who only has the basic income doesn't get an apple at all.
I think universal welfare makes more sense.
Your $12 in case B has a purchasing power equivalent to $8 in case A.
In general terms, UBI seems sane. I see two implementation problems. First, worldwide society competition: Can my society support UBI and compete with China? Second, automatic system balancing. What is the correct UBI level? Can we leave it out to be hashed by politicians?
I don't see any moral justification for a software engineer earning more than someone collecting waste [1]. In fact, it is normal that as our society gets more educated and the supply of unskilled workers goes down, a lot of hard manual labor will become expensive. This is already the case with mining, for example. The fact that we software engineers do a job that we like and is well paid at the same time is a very lucky (for us) historical accident.
On the other hand, I see in basic income an opportunity to also do unalienated work. For example, I'd very happily use BI to take buy some time off and to do a kinda "libre software retreat", hacking on free projects for a while without needing to bargain with an employer that owns everything that comes out of my head.
[1] Excluding the cost of education, let's assume university is free as in a few places in Europe.
In general I agree. However, besides education costs (I have quite many friends who have a sizeable loan), software engineers also enter the workforce quite a bit later. E.g., taking Netherlands as an example:
- Waste collector: age 12-16 VMBO
- Software engineer: age 12-18 VWO, age 18-23 BA+MA university
Also, very few students actually finish university in time. So, they are usually 24 or 25 when they are on the market. So, there would be less opportunity to build up a pension at equal wages.
That's because moral justification isn't at the center of our society. The market is. Many attempts have been made to switch from the market to something else, not many were brilliant.
The "lucky historical accident" you cite isn't one... It's just the way our society was built.
Also you could argue on many different levels. To me, long studies meant delayed enjoyment of life, less freedom until 23, etc... You get less immediately, more later.
In the end, the question is really: "Do we want to use social engineering (as it's called) and try to build a brand new society, when all other attempts lead to poverty and war?"
> If those crappy jobs are necessary, they will have to improve, either by making the jobs more fun or interesting, or increasing the pay.
You make this sound as if an employer simply can raise the pay of his employees without taking into account the realities of the market.
Some services or products are worth less precisely because there is no customer available willing to pay more for it.
> Some services or products are worth less precisely because there is no customer available willing to pay more for it.
And for some services or products there simply isn't a viable market. If it's necessary to keep people in poverty to keep it viable, then I say we're better off without it.
These people are free to live in a tent and dive into trashcans for food if they don't like to work, which isn't nice but this certainly isn't death! It's just a crappy lifestyle.
It's just they don't want to live in a tent and they want to have a smartphone, a car and enjoy all the things that the working population enjoys.
It took me literally five seconds of searching to find a study [1] that notes that homeless people in the UK have a death rate that starts at twice that of people with homes and increases up to six times that of people with homes with age.
[1]: http://www.crisis.org.uk/data/files/publications/Homelessnes...
The reason why their death rate is higher is their state of mind.
It causes them to not take that crappy job that barely affords them a normal life and can potentially open up new perspectives for the future and instead choose to do nothing and hang out with the wrong people until it is too late and they end up on the street.
I don't see how giving them free money will in any way change their psychological condition. (of course there are always exceptions)
But you are obviously not interested in a normal discussion since you just try to read something into my statements to attack me.
Of interesting note in this domain, BI is often advocated as an alternative to minimum wage (such that in a mature BI system, there would be no minimum wage, though in some models there'd be a transitional period as the BI ramped up and the minimum wage wound down, at least in real if not nominal terms.)
So, while BI removes economic duress that forces people to take low-wage jobs, that also allows it to remove regulatory barriers which, while they exist to prevent abusive profiteering from economic duress, also have a side-effect of preventing generally mutually-beneficial arrangements that happen to have low wages (but where the low-wage earner might benefit from experience that increases future potential, etc.)
So how much do you pay your friends to hang out with you? I've been going with $20 a visit, but I've heard that might be a little on the low side these days.
edit: at least that's what i assume they're talking about.
You seem to suggest letting these American-style gangsters go unchecked. Why though?
You also seem to be suggesting that studying until 23 is less enjoyable than working 9-17 from 17/18 onwards.
This all leads me to think you have a very upper-class, down-upon, shielded from trouble perspective.
The moral argument is that the market is more fair at setting prices because it is a more fundamentally democratic mechanism than price controls. That is, all of us together, compared to a handful of easily-lobbied people, are better at finding sensible prices.
The point is that you couldn't have been a software engineer if you'd been born 100 years ago. And demand for software engineers might tank in the future. People who currently enjoy their jobs as software engineers are lucky to be living in a time when it's possible to make a good living doing that. If you'd been born in another time, there might not have been such a good match between what you're good at, what you enjoy, and what's profitable.
What do you think life is like if you choose to skip postsecondary education? In most cases, it's straight into a factory/manual labor job that is much more physically (and in many cases mentally and emotionally) draining than your standard white-collar coding job.
To characterize those who choose education as having less in the near term seems to ignore what modern universities have become: in America at least, it's basically a secular rumspringa, wherein students dabble in drugs, sex, and other "counter culture" in addition to their studies. This may not be the experience of every CS student (perhaps due to the field's gender inequality and the number of introverted personalities), but it's just a gross misrepresentation to state that choosing further education means less freedom and enjoyment of your life and you should be rewarded thusly.
"You'll do whatever you want but get a degree first": tell me you've never heard these words. Maybe this education-then-life approach is counter-productive: education should be a life long journey, and life shouldn't start after your studies. "Finish your homework first, then you'll get to play" may be related...
Also, I suffered a stroke at 32 because of my job, so I'm not sure IT is as safe as you think. YMMV.
And I didn't study in the USA. Free education in Europe is not always as sexy as some may think. I often think that maybe this difference is what makes Europeans boring, and americans so creative and innovative. It's like we're trained through higher education to be obedient (white collar) workers, and you're trained more to achieve whatever you really want.
Lastly, it's been studied/proven/observed/shown that children who can delay immediate gratification for a better future outcome will perform better at school and in their lives (cf The Stanford marshmallow experiment).
Garbage Disposal people earn over $100k. Software engineers earn about $80k. A job that can be outsourced or automated is not valuable. http://money.cnn.com/2016/02/24/news/economy/trash-workers-h...
Garbage disposal is at this point a lot closer to automation than software development.
Do you see a moral justification for paying a doctor more than a receptionist? I see none for paying them the same.
I don't see that happening to be honest but I do see something worse...
Won't the price of everything go up for those that don't currently need the welfare system? Is this a sort of stealth tax increase on the middle class?
I live in the UK and pay a lot into the system but I am by no means rich. I don't claim anything except child benefit (dunno how I qualify but I do... for £80 a month or something).
If you remove the need for someone currently on welfare to take a min-wage job then that means the job either doesn't get done or the salary for it must go up. So, if it goes up, then that company's price will go up or they face going out of business.
If they manage to stay in business, I will need to pay more to use their service than I did before but if they go out of business because I am not willing to pay it, they end up claiming welfare and my tax goes up to pay for it.
Honestly, I don't see an upside for anyone except those that can't/won't work!
I'm in favour of bringing back the Education Maintenance Allowance, and making it very slightly performance-related.
However, I am not in favour of Government handouts. How much money did it cost to give me £80 back? £100? £150?
Would it not be better to reduce my tax so I pay £80 less each month?
Straight handouts appear to be by far the most effective way of reducing poverty and its negative effects. It's rather like the War On Drugs; you can choose a system that moralises at people or one that improves their outcomes, but if you want to improve outcomes you have to give up moralising control.
It all makes sense if you think about welfare not as "these slouches are rewarded for the laziness" but as a price you pay so that unemployed people are not forced into violent property expropriation from you.
When large swaths of population don't have an access to money-making jobs, it significantly affects middle class well-being.
Of course you can "get yours" and double down on police and live behind electric fences South Africa style, but that's not pretty.
What do prisoners get while in prison? Basic necessities, like food, shelter, warmth.
A kind of basic income, if you will.
Government should provide every citizen with basics should they falter: Food, clothing, shelter, education etc. I absolutely believe that is a basic human right.
What I don't want is to fund anything other than a safety net: Welfare should be a helping hand to get you back on your feet or to give you a start - Nothing more.
It should also come with an expiry date!
> What I don't want is to fund anything other than a safety net: Welfare should be a helping hand to get you back on your feet or to give you a start - Nothing more. It should also come with an expiry date!
These two statements completely contradict one another. There are plenty of people who aren't going back on their feed any time soon due to disability or mental health issues.
I believe in a kind of 2 tier system but I didn't get that across.
e.g. You lose you job and the welfare system keeps you going at your current burn rate (you will likely have to make some adjustments but you won't lose your house!) until you can get back on your feet. Let's say 12 months (pulled that figure out the air!)
After that, the basic welfare system comes into play where you will be given food, shelter, clothing, education etc.
That's the basic human right part I meant.
I am glossing over the details but at a high level you are kept afloat at your current level for a period, then you are given the basics for as long as you need them.
As for disability, that would be kind of basics+ (Not trying to make light of it but it's easiest to put it that way). I believe that it's every citizens duty to take care of people that just can't help themselves through disability. Their case be slightly different e.g. a house may need modifications, special transport etc.
Does that make sense?
(It's more complicated once you consider immigration and asylum, but hardly anyone not subject to that system understands it)
"Dirty" jobs being paid more certainly does sound a little more ethical than today, where those with little options have to work those dirty jobs to keep their house and to eat, and they are paid low.
Labor supply = Labor servicing consumption + labor servicing investment
Rearranging this implies:
Labor providing investment = labor supplied - labor providing consumption
Simple arithmetic shows we now have less resources devoted to investment. So how will this innovation actually occur? I realize demand for it might go up, but if supply doesn't increase correspondingly, so what?
That's a natty turn of phrase but I'm calling bullshit.
Rich people invest with the excess financial wealth they have after they've consumed hugely more than a poor person.
Give me more money and I can afford to eat better (reduced healthcare burden), can repair my house (reducing total resources needed over the lifetime of the building; and again there are health implications). Give that money to someone rich and yes, they will invest - sucking more value away from the populous without producing more value - but they'll also do things like buying a private jet which consumes/pollutes hugely and wastes resources.
Perhaps some of the wealthy won't be able to have private islands and maintain their more liquid assets, for shame.
Why not cooperatives and micro-investment? Why does a rich capitalist have to be the investor and suck all the value from the system?
There is no particular reason investment has to come from rich people. That's just how western economies seem to work. As I noted, in Namibia, poor people do seem to invest new wealth.
Redistributing this would allow poorer people opportunity to take part in investment which in turn should lead to more redistribution.
Tax increases for the rich in recession would (with a similarly naive analysis to the one you proffered) reduce the tax burden on the poor and allow then to become richer, increasing their consumption. Millions can buy a new TV instead of one person getting a yacht.
You just twisted my words and acted disingenuously.
I said, for the third time, the rich consume. The rich consume far more than the poor. The rich invest more than the poor, but that's because the poor don't have money to invest. Take all the money from the rich and give it to the poor and consumption and investment will shift. The people holding the money aren't as special as capitalism would have us assume.
You are unfortunately in the situation that the stated reasons for your preferred policies contradict each other. That's quite strange - it's almost as if those stated reasons are post-hoc justifications and not your real motivation.
Basic Income makes "vote with your wallet" a meaningful concept, instead of a hollow joke.
Most developed countries have unemployment permanently somewhere between 5-10% or even more during recession. Some, like Spain, have closer to 25%. Reducing labor supply may be the only answer.
It's not that I don't agree with you in principle. But you can only gain productivity if there are things for people to do. The fact of modern society is that we are running out of jobs.
There are lost of things to do. We have a situation of labor scarcity, not a surplus.
Complaining about a labor surplus right now is like a 350lb man eating french fries on the theory that he might starve in the future.
Some jobs aren't paid enough for people to do and still afford to live. Basic income actually fixes that by giving people a baseline to live off, upon which their salary can build.
A much better solution than BI would be a guaranteed job and/or an expanded EITC. These solutions - while not sounding as cool and hipster as BI - have no labor disincentive and cost a lot less.
India is filled with a ton of misery. It's the only country in the world where I saw dead people just lying in the gutter. The Mumbai slum was one of the worst places I've ever been and you want to hold that up as some sort of ideal? That people should just live down to that level instead of striving for better? If it wasn't for the Indian government welfare programs, that slum would be filled with rotting corpses.
You seem to think I'm endorsing having very few goods and services. I'm not. On the contrary, I oppose policies like BI which will reduce goods and services available.
Humans are needed to actually invent those innovative things. But in the BI world, we have fewer humans actually devoting their time to this. (See simple arithmetic above.)
Certainly the latter can enable the former, but the point made above is that Basic Income can do that as well.
So who will do the dirty jobs? I presume ways are found in which to make them less distasteful. They are not about "dirtyness" per se, but about application of high dexterity manual labour on various tasks.
Lovely.
Everyone, without exception, has to pitch in and do them - to a reasonable standard, with doubled time for slacking, and serious punishments for avoidance - for [very small number of days a year].
If that sounds authoritarian, consider that's how work already functions for most people - except they're compelled to do it all the time, not just for [very small number of days].
I met a retired Toyota engineer who was an expert in the hydrogen fuel-cell technology that is now in the Toyota Mirai. When I met him, he was volunteering his time to keep Atsuta shrine clean and feeding the local roosters, something he does whenever he feels like getting out of the house.
What I have learned in Japan is that if people feel like there is a chance of doing a good job together, it becomes a pleasure (not a chore or an imposition or an exploitation) to contribute. I believe this is universal, but Japan happens to have touched the magic ring (for the time being).
Second, if you go to places like Netherlands, Norway and Japan you'll see that it's not about money. Higher education prepares workers to do more complex, more efficient and more productive jobs.
Also, the society is more conscious about not having someone to do stupid things for them like collecting their trays after they eat at the McDonadls, this is YOUR responsibility as a member of a society, to look for others as well.
So in Amsterdam for example, street cleaning and trash collection are done with specialized vehicles. In Denmark, subways are autonomous.
I like to believe that as you increase education and income, the people that would be considered "dumb" in an very unequal society will spend their time developing technologies to automate tasks no one likes to perform and increase productivity.
Some jobs, such as cleaning, and collecting waste, literally deal with dirt. I don't think he was using "dirty" as an insult.
That strikes me as an extraordinary claim.
Also, while I've never been to Norway or Netherlands, I think you're underestimating the number of "dirty jobs" that support you. Who's tilling the land? Mining the minerals? Excavating land? Driving the garbage trunks? Emptying the lobster traps? De-greasing the engines? Tending the public spaces?
I'm not against legalized prostitution, but I think its a strong strike against any claims of higher responsibility towards society.
Yes, many of these things might be automated one day, but that seems far away (a century at least). Your parent's question is valid and, as far as I'm concerned, there's no place on earth that comes remotely close to what you seem to be describing.
Its why a pit deputy (coal miner) in the UK can charge £2k for a single weekend shift.
http://www.theguardian.com/environment/2015/dec/18/kellingle...
To play devil's advocate, why? If my time is more valuable than a McDonald's worker's, why should I be wasting it on cleaning up trays?
Your argument could easily be extended to saying that restaurants are in general frivolous. Isn't feeding yourself a fundamental responsibility as a member of society? Except that destroying restaurants would actually be quite economically negative.
More costly dirty jobs encourage automation and they will be automated away. The trend has started long ago. It used to take 3 people per garbage truck to collect trash, one driver and 2 people physically pick up the trash cans. Then it was 2 as better trucks came along. Now it's one driver per truck, as the truck has mechanical arms to collect the trash.
With driverless trucks in the horizon, it is not far fetch to have one driver overseeing 2 to a small fleet driverless trucks to collect garbage on a street in parallel.
"Worst" case scenario. You end up having to import a bunch more foreigners to do those jobs at the lower wages.
As to "who would do the dirty work." You probably didn't mean it this way, but the question implies that we have to keep people down in order to do the work that "we" need them to do.
When something is in short supply, you compete for it. UBI would bring competition to employers, especially at the lower incomes. Part of that competition would be with "not working," but it would also be with other employers, as it would then be easier for people to look for or prepare for other jobs, and it would make it easier for people on the bottom rungs to expect better treatment.
I doubt either one. To compare a full-time employee's hourly wage to an hourly billable rate you will generally want to multiply the hourly wage by about 2.
Being a big inefficient government and redistributing wealth are not mutually exclusive.
My comment is not about the efficiency or admin overhead of printing checks. It's about trust in government to deliver an outcome.
Basic Income is interesting because (a) it removes the requirements for administration of social security and policing of fraud, and (b) because some people think increased automation/AI will create increased unemployment so a different approach would be beneficial.
I'm not aware of evidence to support a view that poor implementation of particular social security programs is a driver.
I don't think the problem with basic income is an ideological one, its a numbers one. There simply isn't enough money to implement it without massively increasing taxes.
But if people could decouple income from location, people could move to cheaper housing. There are free houses in Detroit and Baltimore because there are no jobs and that area sucks. In a UBI-topia, people would leave Sf and move to Baltimore.
That just brings another problem. You will have two kind of countries: some with BI and some without BI. How are you going to convince the people from the countries without BI not to move to a country with BI?
I live in Scotland and they love the fact that they can raise taxes here now... they openly talk about it and very few people I know bat an eyelid!
But it's the curse of socialism imo: As long as you tax people earning more than me then I am fine with it.
Sadly, something I have heard too often
Edit: Spelling
... Do I understand correctly that you consider raising taxes to be in this category?
Who honestly wants to pay more tax? Really? I ask you in all seriousness.
I am well-off but up until recently I earned enough to keep my head above water. I had a disposable income after all bills were paid of around £100 a month: One burst tyre in my car and that was it but I had no debt (apart from my mortgage) as I lived within my means.
I work hard, I get up early and study and so on and I am a contractor now, earning good money.
That being said: I have no issue with taxation. I believe in taxation but I do not believe in constantly increasing it nor do I believe that it is a moral issue like it has been made recently.
For as long as I can remember, no Government has decreased taxes in the UK. None. They shuffle them around but they never decrease them.
I read something a year or so ago (can't remember the reference, maybe Taxpayers Alliance) that showed over 60% of my money is taxed now through income tax, stealth taxes etc.
Enough is enough!
> they love the fact that they can raise taxes here now... they openly talk about it and very few people I know bat an eyelid!
which looked to me (and still does) as if you were expressing surprise that people openly talk about raising taxes and that others aren't surprised they're doing so.
> Who honestly wants to pay more tax?
Me. More precisely: all else being equal I prefer to pay less tax, but all else is not equal and I think increasing the taxes paid by people like me and using the resulting revenue to increase funding for (e.g.) the national health service or benefits for disabled people would, overall, make the country I live in a better place.
> no Government has decreased taxes in the UK
Well, according to the graph here https://en.wikipedia.org/wiki/History_of_taxation_in_the_Uni... tax revenue in the UK was a smaller fraction of GDP in 2005 than in 2000. It's a little under 40% (which already makes it quite implausible that 60% of your income gets taken in tax).
Finer-grained comparison is really difficult because the tax system is complicated (income tax, National Insurance, VAT, capital gains, ...); over the last few decades income tax has decreased substantially for most people but other taxes have increased.
> over 60% of my money is taxed now
This is not something you should be believing or disbelieving on the basis of something you read from an anti-tax campaigning organization. You should have all the information you need to work it out.
I don't know whether I'm paid better or worse than you are (I would guess fairly similarly) but I do not pay anywhere near 60% of my earnings in tax. Adding up all the taxes I can think of, I reckon I pay either about 30% or about 40% in tax; the lower figure is if I count capital gains (largely untaxed because most of my assets are in tax-efficient things like ISAs and pension funds) as "income" and the higher figure is if I look only at salary.
(Maybe the numbers look worse for contractors than for salaried employees? I am not counting, e.g., corporation tax paid by my employer; neither do I see any reason why I should.)
If Scotland was really keen for tax rises the SNP would implement them given they are currently focusing on nothing but winning sufficient support for a second Independence Referendum.
Neither the SNP (by far the most powerful political party in Scotland) or the Conservatives (who look likely to be the 2nd most powerful party) are advocating tax rises.
Of course, there are people advocating tax rises - Labour, Lib Dems and the Socialists - but they are, of course, quite free to do this and the public will no doubt be just as free to not to vote for them.
(For the avoidance of doubt, an ideological problem can be a serious real problem. If a basic income can't be implemented without a tax increase that voters would never tolerate, that's a good reason not to do it. If it can't be implemented without a tax increase that would wreck the economy, that's also a good reason not to do it, but I think that would rightly be called a numbers problem rather than an ideological one.)
There's nothing infeasible about spending $10 trillion a year. The US can quite literally print and spend as much as it likes in dollar terms. The only limiting factor is inflation.
As soon as public spending starts causing ~> 12% inflation year on year you need to start worrying about "can the country afford this?". Not until then. The government certainly wasn't worrying about the total dollar number during the war or the last bank bailout.
Other approaches (e.g. minimum guaranteed income for the jobless and tax credits for the working poor) look like a far better use of resources.
You'd still need fraud prevention--people faking identities. You'd still paper pushers who coordinate payments and customer service.
I can't believe this really would create all that much savings when averaged out over 330 million people.
That number sounds higher than it would effectively be:
1) The population is ~320m, but ~65m of those are under the age of 16 (add on another 8m if you say under 18), who presumably don't need the same $2600/month right from when they are babies. That shaves of $2.8trillion
2) Some people currently on benefits will get to keep all of the $2,600, some people will break even receiving $2,600 and paying an extra $2,600 in tax, and at the richer end of the spectrum they will receive $2,600 and pay more than $2,600 back, to balance it out across society. Even before you start counting the extra money you get from taxing the rich with more than the free income they receive, if you draw a line at the median of society and say that everyone richer than that pays back the $2,600 they receive each month in tax (i.e. saying the richest half don't need this basic income) then that's $3.8trillion that is technically being given out but immediately bein taken back by the Government. (Hopefully they negotiate good bank fees! Obviously the benefit to this seemingly pointless giving out and taking back of money is not having to deal with the legwork of judging who deserves benefits.)
So that's cut almost $10trillion down to ~$3.8trillion that's actually being given out.
3) Now take off current welfare costs. Wikipedia says "Total Social Security and Medicare expenditures in 2013 were $1.3 trillion" and I'm too lazy to find a figure that doesn't include Medicare. Let's imagine that it's split 50/50, we have $3.2trillion left to find.
And this is when you start moving the line we drew down the middle of society and figuring out what % of the $2,600 different levels of society should get to keep or have to pay back in tax or have to pay extra in tax. If you think the rough amount of welfare spent on society currently is right then you can balance it so that less people get supported and less taxes are needed. If you think more people should receive more support and richer people should pay even higher taxes to cover that then it can be pushed in that direction.
The simplest way to logically think "can it be balanced?" is to imagine that 100% of the population gets given $2,600 (or whatever amount) each month, and 100% gets taxed that exact same amount. Everyone is receiving that basic income, and (other than relatively small admin costs) the program is break even. Then you just play with numbers, always balancing both sides, to redistribute wealth from richer people to poorer people (which is already what the welfare system does).
Bear in mind that the current US budget is $3.8 trillion dollars. So even in this best case scenario we have to nearly double our budget. There just isn't enough income to make this work.
There is also no way this would work if 50% of the country doesn't really get the income because you raise their taxes to take it back. Middle class taxes are a third rail in American politics. Even socialist Bernie Sanders won't raise their taxes.
You'd be better off just raising the earned income tax credit.
As to raising taxes - if a UBI were ever to exist this would have to happen to the middle class, because the middle class (or most of them, might depend on how defined) do not need $2,600/month on top of their current situation and if they get this then certainly it wouldn't be affordable. It's not nearly as hard a sell as a normal tax raise though, you just explain that for X people under a certain wealth level the "new basic income tax" will be capped at the same amount they receive as basic income so that they don't lose any money in real terms.
Yeah and, for sure, it won't pass... considering how conservative we are, plus the legal side of the proposal is not so clear in where the money will come from.
Though this might be part of the whole "Everything is better in Switzerland" psyche prevalent in France (streets are paved in sheets of gold, etc).
It's not some kind of endorsement of it as a good or feasible idea, unfortunately. As you point out, most pro basic-income people I've talked with here tend to hand-wave the "how do we pay for it" question as "implementation detail" or some idealistic rhetoric ("tax the rich more!") which is not encouraging me to vote in favor.
I would be happy to give my vote to a proposal that included a budget proposition, or a rational analysis of feasibility. The current one doesn't (http://initiative-revenudebase.ch/initiative/)
https://www.youtube.com/watch?v=0Z760XNy4VM
What happened next is absolutely astonishing. When the mice had nothing to do and nothing to work for, their society collapsed upon itself. Females stopped caring for their young. Betas began guarding the elite females, despite them not breeding with anyone. Fights broke out for no reason whatsoever. Mice stopped eating.
Their population peaked at 2200, and then died off extremely quickly.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1644264/
It was a big, fat, giant mess. And it's exactly what will happen to us if we don't have something to work and live for. Hell, it's already happening.
I don't think humanity survives with basic income as planned. We fall apart when we have nothing to do. We're no better than mice - we are still just animals with a larger hierarchy.
I'd rather see unproductive humans digging and re-filling holes in the ground than getting paid to do nothing. Or something like the biking experiment in Black Mirror.
Yet we need to do something as automation grows. Society is in for some serious decisions, and no country currently has the leadership to be able to tackle them.
This is why I feel any democracy is eventually doomed to fail. People will vote themselves more and more free stuff, but "free stuff" ultimately defeats the will of the human spirit.
It's worth researching more, but everybody just seems to focus on the economic impact and not the social one. If you think this will end crime, then I have a bridge to sell to you.
In order for it to have resulted in a "complete end of civilization", you'd have to have first actually created a mouse civilization. Which would, actually, have been a more interesting result.
And in order for it to say anything about UBI, it would have to actually be in some way analogous to what UBI provides. Which, it isn't. Even aside from the fact that mice are not humans (they are occasionally good models for humans biochemically, but basically never good models when it comes to politico-economic behavior.)
> If you think this will end crime, then I have a bridge to sell to you.
I don't think it will end crime. I don't think it needs to end crime to be a good thing. (OTOH, it can substantially increase the expected marginal disutility of defection from social norms that results in incarceration -- especially when the perpetrator is relatively poor -- which should reduce the rate of economically-motivated crimes committed by relative sane people, which is a significant chunk of crime, but very far from all of it.)
Also, in that experiment isn't there a complete excess of resources? We certainly don't have that, opulence would still be expensive and out of reach of a BI.
You seen the obesity rates in America?
The people who truly enjoy "Exploration", "Cultural enrichment", and "Scientific endeavor" are not those that I'm worried about in this world. Most of the world does not operate like that, nor do they use (or even understand!) such phrases.
Obesity to me is about lack of resources for better nutrition (though companies push junk pretty hard), lack of education, and lack of will power.
FWIW I'm substantially overweight despite being poor enough to need to miss meals in the past couple of years.
So give people BI and they'll just get blazed/drunk all the time, and make other mischief, is that your assessment?
Not everyone, but the noisy few will far outweigh those that are "culturally enriching" themselves with "art" and "scientific exploration".
Just look at what's happening in the western welfare class already. How does this not become an extension of that?
I'm so absolutely unconvinced by this thread. I fear for the future of this species. I have a feeling this is why guys like Elon Musk are in such a hurry too... they see it happening too.
There's nothing in your mouse anecdote which justifes this conclusion. Humans are, as I'm sure you're well aware, quite different from mice.
Of course, anecdotal.
So much blind optimism in this thread. I really need to get out, I'm clearly older and more jaded than you kiddoes
(I'm 43. 'Kiddo' is slightly insulting and, dare I say, condescending.)
Yup, all those bored teens and violent criminals are going to be playing crossword puzzles and composing symphonies all day now that their rent is paid and bellies are full.
I gotta get out of this thread. I may be bitter and pessimistic about humans, but you people are beyond delusional if you think free money solves more social problems than it creates.
Edit: Don't forget that all those bored inner-city teens, who no longer have a reason to go to school (they're gonna get a lifetime of free money and free stuff, after all), now have zero education. We can't keep half of them in school today, what's going to make them stop in the free money future? And they're going to breed even dumber kids. A few generations of this and you have caused devolution and lost everything human civilization has worked to achieve. Bad, bad, bad. Collapse-worthy bad.
People are still going to want money for buying gadgets, going out, a better living space, cars, clothes, vacations, impressing girls, buying toys for their kids, etc.
Also I'd bet that a significant percentage of trust-fund babies work, and their trust funds generally provide them much more than a UBI would.
YES. That's exactly the point. Look at the welfare class currently collecting disability in American states like WV. They aren't doing anything productive!!! Maybe more drugs, though... sounds great for society. Let's expand that.
Will Everyone drop out of the workforce? Of course not. But a substantial portion that will become an ever-increasing, ever-breeding strain on society? I'm absolutely positive of it.
We're ok with those who are born rich not having to work. Why should it be different for poor people? And if society can function perfectly fine without these people working, why does it matter if they don't work?
Also, it's one experiment, that I haven't seen replicated, done in an age when you had to show up those darn commies, that Capitalism is the best.
Umm yeah, that's exactly what they gave to the mice.
The fact that it hasn't been replicated is extremely concerning, and makes me wonder why.
Yes, without any opportunity to get involved in anything more than that.
"Here, live in this box forever, you get all the food pellets and water you want, but you can never leave and don't get anything entertaining to do" would drive any animal insane. Take a look at animals behaving pathologically in boring zoo enclosures, for example.
A study actually analogous to basic income would have, for example, unlimited generic mouse food and a comfortable home environment, but also have a large exterior environment available to explore, wheels and toys, and a steady supply of puzzles/mazes/etc fitted with tastier treats that the mice could engage with or avoid as they wish.
I'd rather people get paid to do nothing than people getting paid to do pointless tasks. I've seen some amazing things people made in their spare time, but I can't imagine anyone making something worthwhile digging and re-filling holes.
The usefulness we'd get out of the creative top 1-5% of the population is far outweighed by the chaos that'd be caused by the bottom/criminal 10% of the population.
Don't see how criminality would increase with basic income, if anything I'd expect a decrease (fewer people in hopeless situations = less crime).
See socialism. Chavez made all these same promises for free stuff, etc. It didn't work. It never works. Venezuela is now beyond doomed and are weeks if not days from total devastation.
Reproducing the 1972 study in a field environment on humans would take too long, but I'm confident that if you had a similar utopian tribe of 60 men and 60 women, the experiment would have to be terminated in less than a year due to whatever mularkey broke out. Scale that up and you have pure Venezuelan chaos on your hands.
We've had societies that had infinite food and water provided to them in a limited space?
>pure Venezuelan chaos
Pure hyperbolic nonsense.
Accepting for the sake of argument that this is true (which, a single, non-replicated experiment on mice is far from sufficient to establish), it has nothing to do with Unconditional Basic Income, which does not provide unlimited quantities of anything, or otherwise make it so that humans don't have "something to live and work for".
All I'm saying is this: Before we start throwing free money around everywhere, maybe we should do some legitimate research on the human condition. I'm obviously confident that you won't like what you find, but at least you'll find out before it's too late.
You mentioned it and it's still inaccurate. The study gave mice everything they could ever want, in excess. This was food, space, and mates. The needs of mice are not complex. Basic income is just enough to let you sleep indoors and eat. If you were to create a utopia for people it would be fine food, entertainment, extravagant living arrangements, a complex and fulfilling social scene, opportunities for academic engagement, etc. Free food and rent is not a utopia for people by a long shot.
I can't see how they could believe this. First of all a minimum wage becomes unimportant as you should hypothetically have enough money to support the kind of lifestyle a minimum wage job would provide without working. Secondly, as it's no longer financially critical to them, people won't be as inclined to take on minimum wage type jobs - which will force the wage up anyway so that the business can attract employees. So it should take care of itself. As for paid family leave (I presume they mean maternity/paternity leave?) you won't need that as your basic income will ensure you still have money coming in. And if the company wants to retain your services after your leave they will offer it anyway. The key point in these examples is that even if you don't get a higher minimum wage or paid family leave it's no longer going to have a big effect on you as you have your UBI to rely on.
Also, it doesn't seem to me like there is a left/right split on this elsewhere in the world. This leads me to believe that the problem is the highly partisan US political system. The right is obviously going to support UBI as it would significantly reduce government size - the left can't be seen to be agreeing with the right. I think it's a kind of childishly schoolyard thing you see a lot in US politics (he likes that so I don't).
I think there are lots of ways to adjust current spending and make it work. My personal idea would not fly with the American public though (reduce defence spending by 80% and raise taxes - especially for higher earners).
So rather than 0%-20%-40% income tax bands, we are talking about 20%-40%-60% tax - which looks ridiculously high on the face of it, but has no effect on after-tax income of the average earner after the UBI.
Because of the shocking sticker effect of the taxes, my view is that it is a lot better to position UBI as "negative income tax for low earners" if you want to get it adopted...
I don't see how that's true. Isn't the UBI supposed to replace ALL of those programmes with a single number for everyone that is sufficient for everyone? If the UBI provides enough for food and shelter you shouldn't need housing benefits. Disability may be different I suppose but if you cannot meet your needs with UBI due to a disability I think that's something you could probably roll into the NHS where equipment you need but cannot afford is provided to you by them (I haven't really thought that through though it's a very good point you've brought up).
Otherwise you need a flat subsidy much higher than £550 per month to properly replace the existing subsidy in all parts of the country, which would cost an awful lot more in taxes and make it a very comfortable living in other parts of the country.
Of course, there's an argument that subsidising people that clearly couldn't afford to live in the area they grew up in isn't a particularly good use of funds (compared with subsidising gap years, early retirements and stay at home partners?) but I can't see the left buying it. Or anyone on the right being keen to find the extra gross £140bn pa you still need to find even once you've reduced disability and housing spend to zero.
It's considered a distraction because it's a political pipe dream that has a very low chance of being implemented.
The reason the left doesn't like it is fourfold:
* The pretext for basic income presumes that we have a lack of spending because we've run out of things to spend money on. This couldn't be further from the truth. American infrastructure is crumbling and yet politicians still want to restrict necessary spending, choking off demand and killing jobs.
* The pretext for basic income also presumes that we have a wide variety of cheap goods that don't need much US labor because of efficient markets and automation. We don't. We have a wide variety of cheap goods not requiring US labor because China intentionally undervalues its currency. China can pull the plug on that at any point and trigger a torrential level of inflation in the US.
* The last time the US faced this problem of high unemployment due to artificially suppressed demand (in the 30s) it was successfully fixed with federal job guarantees that ended up providing useful employment and getting a huge amount of useful infrastructure built that we still use today.
* However much you try to deny it or dress it up, people actually want jobs - for more than just the income.
For example, say I'm a landlord. If everyone all of a sudden had an additional "base" income, why wouldn't I increase my rents to absorb at least a portion of that? Then, only people who had a job would still be able to afford to rent from me, while those on the basic income would be unable to afford it. I'm not out either way.
So you would say you need to introduce legislation to stop me from doing that, but the free market would abhor that and likely accuse you of being a communist. So you can't. So I'm failing to see the point of the whole exercise?
The whole reason the debate is becoming so prominent now is just because minimum-wage jobs and even non minimum wage jobs will be replaced by robots/ai. The goods may even become cheaper.
A large dose of cost-push inflation will drain that wealth, causing them to sell off their property, causing the price of it to drop.
That's the opposite of what's being proposed: the minimum income comes from the government, not employers. Minimum income can replace minimum wage.
For example, say I'm a landlord. If everyone all of a sudden had an additional "base" income, why wouldn't I increase my rents to absorb at least a portion of that? Then, only people who had a job would still be able to afford to rent from me, while those on the basic income would be unable to afford it. I'm not out either way.
Sure, but now that you've raised the price, there's an opportunity to undercut you that didn't exist before. The result ultimately depends on the supply and demand of housing. Just think of it like a bunch of slightly-richer people moving into the neighborhood. Prices will rise, but not enough to take all the new residents' extra money.
The point I'm trying to make is that it's not as simple as some might like to think.
Would you expect the average rent for a room in Hundredsixton to be $10,000/month higher than the average rent in Fortyville? That isn't what happens in practice; rent doesn't go up one-to-one with income.
If you live in an area where there is a housing shortage, then yes, the market will drive things higher, but then a UBI lets people be a bit more mobile so people may move out of high rent areas more easily, also potentially driving up wages because less people are around to do needed work, but then as everyone gets pushed up, the tax will start to pull things back down. The whole point is income redistribution , especially in a society thats starts getting more and more automated.
What if I spend my basic income on drugs and hookers? are you willing to let me starve? what about my kids? If not, then the basic income can't actually replace the existing social programs.
If nobody need to work, then if employers want employees, they have to pay more to get them, which makes prices rise, which makes your 'basic' income insufficient again.
I don't get it.
Its like the Alaska Permanent Fund[1], but with a broader -- and by design growing with the economy -- revenue base.
> What if I spend my basic income on drugs and hookers? are you willing to let me starve? what about my kids? If not, then the basic income can't actually replace the existing social programs.
Sure, it can still replace existing social benefit programs. For your kids, well, we already have provisions for taking children from the care of parents that abuse or fail to provide for them, and putting them in the care of the State with the parent responsible for support costs; allowing either redirecting the children's basic income from the parent to the new support provider (in a system where children have basic income) or diverting some defined portion the parent's basic income (in a system where children do not get allotted their own BI) to pay support costs is quite natural; this doesn't create an additional social benefit program.
As for you, some BI supporters would let you starve. Others might support having transitional food/shelter programs (which would be an additional short-term benefit program) available to avoid people falling through the cracks, but make the beneficiary responsible for the cost (possibly diverting some share of future BI payments until that debt was paid).
> If nobody need to work, then if employers want employees, they have to pay more to get them, which makes prices rise, which makes your 'basic' income insufficient again.
Under realistic assumptions about elasticity, Basic Income would have some effect on accelerating price inflation of goods demanded at the low end of the income distribution, which would mean that the quality of life any level of UBI could sustain with no outside income would be somewhat less than one would expect with the same amount of income before the UBI became available. But overall, those receiving the UBI would be able to afford more than without it.
Further, UBI can cut employer costs (while it reduces economic duress to work, it also reduces the need for a minimum wage and many UBI proposals have it replace the minimum wage; it also means bad-fit employees will have less resistance to moving on, and that people will generally have more freedom to seek optimum job fits -- which are good for workers, but also most productive for employers.)
And most people don't just work enough to meet basic necessities if they are capable of getting more, so most people able to do economically useful work probably would even with a UBI that met basic needs -- people like luxuries.
My guess is UBI is going to help very few people, most people's troubles are going to continue anyways. Unless you are seriously ill, or physically disabled, or stuck in warzone Africa you need to accept the fact you are responsible for yourself. In fact merely acknowledging this fact is likely to do more to fix your problems can free cash from the government.
If and when UBI happens, Rich won't need it, those middle class people with some responsibility will get some marginal upgrade on their income. Most people with no responsibility will spend it away on things they don't as always. They will continue to blame rich people for their problems, and consider rich people as evil for not endlessly doling out free cash for their parties.
* Only the cost of labor will increase, the cost of other inputs to making goods or providing services will not.
* The cost of labor will not increase uniformly, but rather it will increase most at the low end (people who are more likely to refuse employment due to basic income) and less at the high end. A software engineer making $120k is not likely to decide to stop working because he now gets $10k from the government. However a part-time fry cook making $6k a year might.
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."'
:Rudyard Kipling [0]
Take for instance the amount spent on the bank bailouts, which were supposedly done to help stimulate the economy. If you'd just let the banks fail, you could have spent the same money giving everybody a check for somewhere around 20K (the number is debatable).
Hate poverty? The U.S. has spent more than 5 Trillion on it over the last few decades. That's another 20K or so per man, woman, and child. The national debt is closing in on 20T. Would you rather have a balanced budget and a check for 100K? (I understand the math is way fuzzy here. It's to make a point.)
We're reaching the point where the average person who supports helping the poor can figure out that we could have just set up an endowment for each poor person when they were born and spent less money than this. And at the same time we would get rid of a lot of folks doing useless overhead simply because the system is so complex.
For those reasons and more I like the UBI idea.
But ideas are worthless. Execution is everything. We need about a thousand different experiments -- ran for 10 or 20 years -- before we can begin to start saying what might work or not work. When I look at other charitable causes (aid to Africa comes to mind first), the rhetoric got way out ahead of the actual results for many, many decades. Tons of time, effort, and money were spent on strategies that didn't work but sounded pretty cool. We'd be idiots not to recognize that this is the danger here too.
The first question we have to ask is this: What is UBI? Is it a reliable income in place of a bunch of other services? Or is it in addition to a bunch of other services? The difference matters. Once that's defined, I sure would like to see if a majority of people doing nothing "rubs off" on ambitious, driven people. Or maybe it works the other way around. Maybe a small percentage of ambitious, driven people, in a society without external pressures, can persuade more and more folks to find meaning in helping others. Beats me. Sure will be fun to learn more.
Slogans are great. Results are better.
The recent Freakonomics episode on the topic talked about a Canadian experiment "Mincome" from the 70s. There were some interesting results. Worth a listen.
"FORGET: One of the findings was that high-school completion rates had increased, and we discovered that boys, in particular, in low-income families had been under a fair amount of pressure to become self-supporting as quickly as they could. When mincome came along, some of the families decided that they could allow their sons to stay in high school just a little bit longer. So instead of quitting school at age 16 and getting their first full-time job, these boys stayed in school until they were 18, until they graduated from high school and took their first full-time job a little bit later."
The bailouts were asset swaps, repaid with a gain for the taxpayer [1]. They were not cash giveaways. Comparing this to simply giving cash to people is ludicrous.
The most at risk was about 2T, with only 650B actually out at any time, which at your claim of 20K per person, only pays for 32 million people. You're off by an order of magnitude (completely ignoring that the bailouts were asset swaps, not giveaways).
>Hate poverty? The U.S. has spent more than 5 Trillion on it over the last few decades. That's another 20K or so per man, woman, and child
Over the course of decades. It's not 20K in a year. It's more like 1/40th ($500) of that a year. And the only places I can find a number this large includes Medicare/SS payouts. Are you going to remove these programs (especially Mecicare/Medicaid) with your conversion to a once in a lifetime check per person?
> The national debt is closing in on 20T. Would you rather have a balanced budget and a check for 100K?
That's nonsense. Adding massively more to spending via UBI is not going to balance the budget or reduce the debt, and I don't know what magic lets you take 20T of debt (the biggest holder being SS, and large amounts to the Fed and loans to US investors, such as retirement funds) and simply divide by 320M people to get 100K (actually, this is 62.5K) in a check. Nothing in this line of numerology makes any sense. These uses are nowhere near exchangeable.
>(I understand the math is way fuzzy here. It's to make a point.)
The math isn't fuzzy. It's simply wrong, from the starting values, to the calculations, to the conclusions.
>The reason UBI has such broad appeal is that, well, people are able to do basic math.
Unfortunately this basic math is not coupled to reality, ignores very important and well tested economic ideas backed by 100+ years of empirical data, and is ignores the downsides and costs involved.
And so far, I fail to see many UBI proponents that are able to do basic math. A few can, but mostly they are full of numerology and ignoring the meaning of various amounts.
I've yet to see a UBI that doesn't either require massive tax hikes to the point of possibly destroying the economy or leave those needing assistance now in much worse shape.
>Slogans are great. Results are better.
Intellectually honest claims checking is better, and it helps avoid chasing impossible or unlikely or destructive plans.
Yes, the math is plain wrong. No, it does not change the point. I am not writing an essay or presenting a white paper on UBI. Heck, I'm not even supporting UBI except in terms of "let's experiment"
So that was a wonderful tear down of my math, which I expected, but it doesn't change my thesis any: whatever amount of money you would like to provide for good causes, a good case can be made to eliminate the middleman and provide that money directly to everybody -- no qualifying, no overhead, no gaming the system, no complex system of administration.
I'm not in favor of massive tax hikes. I'm also not in favor of bandying around the slogan "UBI". As I said, until there's some real policy there, it looks attractive on the surface. I outlined the reasons why it looks attractive. That's about all we can say about it right now.
This is my main disagreement with UBI. Resources (money) is limited, and providing the same social help to all regardless of need necessarily hurts those most in need and helps those in the least of need.
Your argument to make a simple system can be applied to many places it makes life worse - should we everything and all at the same rate? Experience shows that progressive taxes is probably a big benefit overall, and certainly tax incentives can and do have benefits. I think providing basic assistance, since resources are not enough to simply give everyone goods, should be targeted to minimize human suffering, and providing free cash to those that can work in lieu of providing it to those that honestly cannot is inhumane.
You dislike the middleman, but again, middlemen are vastly beneficial in many cases, and likely are here too, to distribute limited resources in a way to do the most good. And the overall cost of the middlemen is small compared to the amount passed out. UBI would also require a decent amount of administration, so it's not completely without admin.
>I outlined the reasons why it looks attractive
Sure, free money untethered to reality is attractive. The problem is the attractiveness fades when one is tasked with explaining how the money is obtained.
1. How do you implement this whithout border control - if you create a basic income that is higher than ~1/2 the world's income the amount of illegal immigration will be huge
2. Will we really have the will to tell people who are starving because they lost their stipend to drugs or gambling "too bad"?
2. It's at least no worse than today for those people. Support groups will still exist. If you distribute money frequently (e.g. weekly) it might help a little in preventing catastrophic situations where people lose it all. My concern here is that the payday loan industry grows instead of shrinking (tough to predict these types of things).
2. many current programs today limit what can be bought (SNAPS) or provide the service directly (low income housing), that's not to say there are not ways around this or that dollars are not fungible, but I do think there is difference
One smart bread merchant will probably say "Hey I used to sell this for $1.50, I can do better than $100" and prices it at $90. Now everyone buys bread from him.
The other merchants feel the price pressure and the cycle continues, with the price settling down to something likely higher than $1.50 (to reflect the increased price of labor input as a result of basic income) but not so high that it totally eats the increased income.
So yes, things will cost more after basic income (after all you'd likely need some sort of inflation to find the money to give away). But in an efficient market they will not cost so much more than people are not still effectively richer than they were before. It does not change the intrinsic value of most things, it just makes certain inputs (namely labor) more expensive.
So while it's very likely that the cost of housing will increase in this situation, again I think people will still be better off overall. People will have increased purchasing power for non-housing goods and still pay the same percentage of their income for housing, even if that is now a percentage of a larger number.
Anything that isn't provided by a freely competitive market can be like this in the long term, and anything where the supply side can't quickly respond to demand-side changes can be like it in the short term.
No, its not. Real estate -- including housing -- is very much driven by value, and for most real estate -- and definitely housing -- and key component of value is location.
> That's why in SF it seems that housing prices rise in lock step with wages in the dominant industry (tech).
Convenience to work of a given pay is a key component of the value of housing; its not priced according to what the buyer can pay, its priced according to value, and the buyers are the ones who can pay that value.
Yes, UBI in most of its incarnations is a deliberately engineered inflationary spiral - a one way ticket to Venezuela. Everyone simply ignores the issue.
There's the 10% for each entitlement that need the full entitlement, and there are dozens of entitlements, hundreds, so 10% of hundreds of programs will just be too many people to allow a basic blanket income to cover their entitlements.
All that said, my favorite version of this is the "negative income tax". We have something kind of like it already, but the EITC would have to be expanded significantly before it was actually something like a negative income tax, and that means cuts to other programs.
Money is not the universally effective solution to health care in this country. We already spend double, as a percent of GDP ,compared to any other country.
I think we're going to run into some problems on the supply side with a universal basic income. Some prices will rise due to increased consumption. This will make capital investment (e.g Research and Development, New Factories, Upgrading Production Equipment) more costly. Eventually you'll burn the furniture to heat the house and then things will start to fall apart and get into an inflationary spiral. It does have the benefit going for it that it is less complex to administer though, while our health care system is enormously complex and grows ever more complex with the more money that gets spent on it.
Note that the poor will obviously get fewer benefits if BI is only funded from cuts to programs the benefit the poor.
Example: lets say we eliminate program X that currently has a means test limiting it to the poorest 20% of the population. If we, as the article suggests, use that money to fond some fraction of BI for the poorest 80% of the population, then one can trivially see that we have distributed 3/4 of the money for program X away from the poorest 20%.
Now there are significant savings from reducing overhead, but unless program X is 75% overhead, it's still a net loss in realized benefits for the poor.
In order to make BI palatable to the US left, you will need to fund it at least partly through raising taxes.
1. What should UBI be in San Francisco? 2. What should UBI be in Detroit? 3. Should they be the same? 4. What happens if they're not the same? 5. What happens if they're the same?
Yes, you may only get enough to live awesome in "the middle of nowhere" or whatever. So what? If you want to live in San Fran, find a way to get the money to live there.
No it won't, no more than today.
>With basic income you no longer have to live where the jobs are and can move around freely.
Poor people are already "free" to not live in places they can't afford, and instead live in places with poor access to education and healthcare and jobs, and as such have reduced life expectancy. Your plan to use UBI to re-locate and segregate poor is no improvement compared to the current situation.
What may be less obvious is that I also support universal education and in Canada we also generally have that, at least as far as K-12 goes. If I were a parent, my children would have access to the same quality of public education in a small rural town as they would in a rich area of Toronto.
Is this true in reality or just in principle? An area with more students can naturally better afford to offer programs that are of limited interest, because they will still have lots of students that are interested. An area with less students probably can't spend money on things that are only of interest to 1 or 2 students.
It's not true in either sense in the US, localized funding for schools is presented as the more fair solution.
And in this situation there is nothing stopping land owners from absorbing the basic income. This means that revenue generated by land owning (not necessarily land owning itself) would have to be heavily taxed. Maybe even taxed progressively to avoid economies of scale in land owning and prevent a very few from owning all the land.
Or we could terraform celestial bodies in the Solar system.
It is important to note that land itself is limited, not housing. As long as we can continue building even higher and deeper housing is not actually limited.
The whole "exempt" thing needs to go.
The idea with UBI is that you no longer make the government assistance a merit based assistance and instead everyone gets it equally. For those with large incomes the small amount of UBI will be a pittance. For those with little or no income it will be a lifeline. In both cases the amount would be exactly the same.
One counter-argument is that by freeing up people to pursue their interests, there will be more good businesses opened as well, which will be profitable in the long run. The other is that a person would not pursue a project that is not well-received for a long period of time due to negative feedback.
Neither of these fully answers the problem though of what the system would do to stop people falling off the economic grid and the impact on GDP/taxable income this would have. Any thoughts?
How is this any different than what we have currently? It could be argued that many employed persons are currently destroying wealth through unethical practices encouraged by profit/rent seeking that is prevalent in contemporary economy.
A basic income as you have noted will also allow for people to open 'good businesses' without as much of a pressure to turn a profit. Ideally society would start to look down upon the "I work for <expletive>'s people/companies because I need to pay the bills" attitude that is pervasive today and people would start taking their responsibilities to themselves, their community and our greater environment more seriously.
The ethical net gain might be good, and society's impression of jobs may be altered but that doesn't answer the economic problem of how to encourage people to work in fields that are fiscally meaningful
Unless those jobs can be automated completely, of course. But then, GDP is fine, taxes will probably focus more on corporations, and people will be freed from the degrading bullshit jobs, free to look for something better. And that, I think, is also a good thing. Let the robots do the stupid work, while we're off doing more fun stuff.
Make sure technology makes everybody's lives better. Isn't that the entire point?
I think you're making a lot of assumptions here. Does the pressure to make money force a venture to be good? Certainly some products are not good, and we have many examples open source projects that are fantastic. Plus there is still social pressure to be doing interesting things with your time, but it's my guess that very creative people don't even need any outside encouragement.
Think about the consequences: Even if it was proven financial suicide for the country (Governments can always print more money I suppose and let the next generation deal with the fallout), what political party would have a manifesto abolishing or reducing it? It would be political suicide.
Overall, tastes are infinite, I'd love to drive a tesla and live in a (multi?)million dollar mansion, but I can't. They are too expensive for me - meaning my work and labor doesn't produce enough value (or may be not valued appropriately - but this a whole other topic) to exchange for those things I want. If we want more people to drive teslas and live in mansions, everybody who will be getting UBI needs to get productive to increase the amounts of teslas and mansions in existence.
Image everyone has $10 on island A. Island B sells coconuts and the going rate for a coconut is $1. Based on other bills the islanders need to pay for, $1 fits the average budget and is what people are willing to pay for coconuts.
Now make everyone on island A have $100. The demand for coconuts rises but people on island B soon realize they can make more money by raising prices even though they sell less units. They eventually increase the price of coconuts to $10 because that ends up being the price point at which the Island B people are making the most money.
Therefore by increasing the income of everyone by a factor of 10, you end up increase the prices by a factor of 10. There is some lag time where prices will balance out though, so if you just kept doing this every month you might have a period of faux prosperity but you would also be creating runaway inflation.
I try hard not to be cynical, but I wonder if this isn't a ruse to accomplish exactly that.
I mean the US is known for being "frugal" when it comes to helping people. See the medical system for example, or the treatment that veterans get. Why the sudden surge in generosity, why the sudden desire to redistribute income?
Weren't these anathema just recently, even to some democrats?
Also the fact that it keeps coming up in the media makes me slightly suspicious.
Why is this being promoted so much right now? I bet there are PR firms out there calling newspaper reporters and bloggers, to promote coverage of this idea on behalf of who knows which group or organization. [1]
In most developed EU countries, a "social" income is given to unemployed people. In Belgium, it varies between 550€/month and 850€/month, depending on the situation. People lose this income as soon as they start to work, that means that a part-time job with an income of about 1000€/month is really unattractive. With a basic income, unemployed workers could be stimulated to accept this kind of low-pay jobs, as the pay will add up to their basic income.
With the increase of productivity we got in the last 50 years, the hours worked by low-skilled workers must be lowered, or we will face endlessly increasing unemployment rates. An universal basic income can stimulate this.
America has about 11 million people who legally are forbidden from having a job. Many get black market jobs paying less than minimum wage, and still have money left over to send back home.
So yes, 10k a year would still leave people below the current poverty line. But over 45 million americans already live below the poverty line. So evidence suggest it actually is enough to survive by some standard and may be a good place to start since it's likely that people will be able to find some supplementary income through work.
In the long term the goal would be to significantly increase quality of living for all and hopefully change the horrifying numbers I just presented.
Additionally, if you wanted to live a middle class lifestyle, you would have a job. That's the incentive to keep working. The basic income is to keep people at an above-poverty income level, not to keep everyone at middle class. In fact, the mere definition of the term means you couldn't have everyone at middle class.
You are free to fend for yourself in many parts of the world. But not if you like that blue passport.
- I want a job, but I have no transportation
- I want a job, but I have no skills
- I want the money from a job, and I'm willing to show up to a job, but I never actually do the work. If you fire me, I will go get another guaranteed job.
- I show up to the job and do the work, but my manager hates me and fires me. I guess I will go get another guaranteed job.
- I show up to the job and do the work, but all the managers in this town have an unspoken agreement that they will report people of my (skin color, gender, orientation, whatever) as not doing the work, so I have been fired multiple times.
- Bureaucracy managing the guaranteed jobs program replaces the bureaucracy managing the programs eliminated by Basic Income.
I'm in favor of more spending on maintenance and public works, but I don't think a guaranteed jobs program will work as well as basic income.
For example: rent. Wouldn't landlords managing properties at the low end of the market price, raise those prices knowing people both 1. have more distribution control over their money (cash vs. coupons for things) and 2. More people in their target market have cash to pay.
Compulsory basic income requires throwing people who refuse to hand over currency they receive in private trade in prison, where they are kept in small enclosures, and often develop mental illness, and suffer physical and sexual abuse. Techies should not support such a dark, authoritarian vision for the future.
That was 100% government employment to the exclusion of the private purpose.
It was a centrally planned economy where the government determined what everyone should do at all times.
A Job Guarantee, on the other hand (which I'll explain because you obviously didn't look at any of the links I posted in my initial comment, but rather went off your pre-existing opinions) is a guarantee by the government that if the private sector will not or can not employ someone, they will be given a good job by the government.
I won't bother providing additional links, you're obviously only interested in dealing with straw men.
When you give everyone in the economy a $10000 basic income you drive demand without driving supply. This graph[1] demonstrates how we estimate the relationship between the two, as well as price. As you'll notice, an increase in demand without an associated increase in supply results in an increase in prices. Essentially we might expect that over time the $10000, with market forces as the causation, will become the new N=0 point. Your basic salary becomes worthless. Any economic freedoms that you have created are fleeting in nature.
A stricter socialist approach seems to be the better one: instead of investing that money into people's pockets, you invest it in job creation in services that assist these people. For example: aggressive funding of soup kitchens. The poorest of the poorest might not have money in their pockets, but it might be possible to provide even advanced (e.g. internet) services to them in such a way that they don't require money. This solution conveys no economic freedom - an ingredient for misery.
Point is: I don't know and honestly, we don't know.
Helping the impoverished is one of the most important goals of our race; but racing into poorly thought out solutions might result in the impoverished being no better off in the long run. I'd love to hear some counterarguments because the basic salary, at least superficially, has the attractive quality of being simple to implement.
[1]: https://upload.wikimedia.org/wikipedia/commons/thumb/7/7a/Su...
In both cases you're driving up demand, which is what in turn drives up supply. Supply doesn't magically materialize - either someone pays for it with money, or someone pays for it with time not spent earning money, to provide those services or products. As your own graph demonstrates, quantity goes up regardless. What's your "new N=0 point" on the graph?
My point here is not that there aren't issues with funding demand for services with inelastic supply (where large increases in price only lead to small increases in quantity, meaning little good was done.) There are such issues. Instead, my point is that these are not UBI specific issues. They're valid concerns with housing programs and rent controls today, for example.
The real difference of consideration between UBI vs other social welfare programs (when taken as a whole), is how demand might change (lowering in some places while increasing in others) when the ones actually consuming the services get to direct where the dollars are spent, instead of government policymakers.
In theory, replacing social welfare programs with UBI might drive demand away from elastically supplied goods and services, towards inelasticly supplied goods and services. It's far from a given, though - we have plenty of existing government programs for such inelastic things as housing. If you see some fundamental flaw of UBI that would cause demand to shift this way, I've missed it, so please do share.
I'm more concerned by the other factors:
On the one hand, those in need of services in many cases the ones in the best position to know what they need, so the money for those services may be spent more efficiently - especially if there's less waste in red tape bureaucracy, from government organizations unfettered from the pressures of capitalism.
On the other, if you haven't learned how to manage your money, don't know about the things that could best help your situation, or are in the grips of addiction, it may be difficult for you to spend your money wisely.
My understanding is that direct cash influxes to the poor in 3rd world countries has worked pretty well. It's not perfectly analogous to helping out the poor in 1st world countries via UBI, but I'm fairly hopeful it's analogous enough.
In essence I meant that, in a construed way, the buying power of $10000 would approach the same buying power as the pittance that the impoverished have today. Your argument was very educational so I have to do some more thinking about this and may discard that point. Thanks for the food for thought.
Again: the solution is to talk to someone. There are many who go through what you do, and there are many people out there who can help. You're not alone.
I mean, by all means, do it, experiment on your society, take all the risks foreseen and unforeseen. if you manage to make first 50 years in glory (or 100 to be sure), you have my attention. just please, please don't shove it down my throat in country where me or my family lives. Please. Thank you.
where is the push for better education and more accessible healthcare? Fixing those guarantees a brighter future for mankind, period. this is roulette where you can lose a lot, gain a lot too.
It's just the new generation of kids flirting with communism.
I've no idea what (if anything) you would accept as evidence. Here's the first paragraph of the Wikipedia page on communism; feel free to check that the [...]s don't hide anything that changes the meaning.
> [...] communism [...] is a[...] ideology and movement whose ultimate goal is the establishment of the communist society, which is a socioeconomic order structured upon the common ownership of the means of production and the absence of social classes, money, and the state.
Does a universal basic income cause, or require, common ownership of the means of production? Nope. The means of production stay largely in the hands of businesses (or, as the communists might say, of Capital). Does it involve the absence of social classes? Nope. Successful lawyers (say) will continue to have much, much more money and much higher social status than anyone who's largely dependent on basic income. Does it involve the absence of money? Nope. It depends on the continued existence of money. Does it involve the absence of the state? Nope. It depends on the continued existence of the state.
Well, who cares what those pinko loons at Wikipedia say? Communism is whatever they had in the Soviet Union. How about that?
Well, in the Soviet Union they had a centrally planned economy where the government told factories how many of everything to make, etc. Does a universal basic income cause or require that? Nope. Businesses continue to decide what to make and what to sell at what prices; individual consumers continue to decide what to buy. ("But a basic income would require a big government!" Well, kinda, in that the government would be taking in more tax and handing out more money. But that's got nothing to do with central planning. A basic income wouldn't mean that the government would do more of the work; if anything, it should be less because the BI would replace a bunch of other more complicated benefits that require more administrative work to make sure they're going to the "right" people.) In the Soviet Union they had a totalitarian state with secret police, gulags, etc. Does a universal basic income require that? Nope. Obviously. The Soviet Union had undemocratic politics where the Communists were always in power. Does a universal basic income require that? Nope. Obviously.
"Communism" does not mean the same as "anything vaguely leftish that I don't like".
Confiscating money from everyone, and then distributing it equally amongst the population (Regardless of whether they need it or deserve it) doesn't sit very well with people.
Then the vast majority of the population are rejecting basic income for the wrong reasons. Nothing about basic income invalidates meritocracy. In fact I would say it strengthens it. No longer is the rat race composed of a hodgepodge of willing, unwilling, and incompetent workers. All the unwilling or incompetent workers drop out. Those that still work have reasons to work besides filling a seat for 8 hours so they can continue to afford a meal .
Is critical thinking no longer a thing?
The government has no money of its own. So, in order to fund these programs, it must first appropriate said money from the people who earned it in the first place.
This appropriation (taxation) is non-voluntary, and enforced by threat of violence (force of law).
When someone takes something from me by force that I would not otherwise be willing to give them, it is by definition theft.
Therefore, it would seem to me that taxation/theft is an intentional attempt by the government to reduce the rewards of my own personal merit.
The recent poll I've seen has 54% oppose to 34% support, with the remainder not sure, with the "Social Security for all" phrasing. [1] That is majority opposition, but its not the "vast, vast majority", and its on something which while its gotten some media attention, its been very little in mainstream media, and certainly no big public sales effort in the US. (Same sex marriage took about 10 years to cross a similar, net 19% oppose, gap -- and that's with firmer opinions [fewer unsure].) [2]
[1] https://today.yougov.com/news/2014/01/09/poll-results-guaran...
Meritocracy still persists under a UBI, just like meritocracy persists alongside our welfare system.
> Confiscating money from everyone, and then distributing it equally amongst the population (Regardless of whether they need it or deserve it) doesn't sit very well with people.
Yes, that is a massive political hurdle that will need to be overcome. A large problem is that the way we tax isn't ideal. A land value tax would be easier to justify from a moral standpoint, along with being economically superior to an income tax.
We detached this subthread from https://news.ycombinator.com/item?id=11619113 and marked it off-topic.
Good luck with this basic income fantasy. Might as well try to negotiate reparations for slavery.
How about you finish what was started FIRST - and don't give me this "we can do multiple things at the same time" nonsense. This is six years later. The need for health care is pretty much universally understood. Giving people free money would never get out of congress.
2. https://en.wikipedia.org/wiki/Basic_income_around_the_world provides impetus to https://en.wikipedia.org/wiki/Social_mobility
3. https://en.wikipedia.org/wiki/Dominant_minority will OPPOSE UBI because they fear you'll NOT be subservient to them
4. UBI is prudent distribution of cash, not wealth