Once again no answer to the main Question: What to do with people that blow their UBI by the 2nd of each month on SAAS Startups?
Let them starve? Go without Shelter?
Let them starve? Go without Shelter?
Also the only way to make a basic income work is through a land or land value tax. Else you get massive inflation.
Second, under UBI a proportion of the population stops working and this increases over time as robots replace workers. Reducing earned income, lowering UBI cash availability. Solution? Print more money = inflation.
With a land value tax you get a known relatively unchanging set amount of $ based on land value. Balancing the inflation/deflation curve.
This is... not really correct. It's true that expansionary monetary policy is often practiced in times of economic recession, but that's not really because there's 'less income to spread around'. And the reason expansionary monetary policy is practiced isn't to give people more income. (Printing money doesn't give individuals more income - if you want to do that, you need expansionary fiscal policy - that's the goal behind tax cuts).
So what does printing money do? Expansionary monetary policy reduces the costs of loans and investments. The goal is to spur long-term investment projects by making capital cheaper, which serves to jump-start the economy. But that has no direct connection to people's personal income. They're interconnected, sure - everything in the economy is, at some level. But the connection to inflation (and the connection to printing money) are completely different things.
With land tax the system is self correcting and balanced. With the taxes you mentioned you'd eventually get the inflationary spiral as a market correction.
Maybe, but that's very different from what you said, which is that '[difficult times] means less income to spread around, the solution, print more money = inflation'.
> With land tax the system is self correcting and balanced.
Er, no - if anything, a property tax would reinforce inflation.
> With the taxes you mentioned you'd eventually get the inflationary spiral as a market correction.
Maybe you meant to respond to someone else? I didn't talk about any taxes. I only mentioned tax cuts as an actual example of expansionary fiscal policy to address the 'less income to spread around' problem, not as a proposal for funding income redistribution.
How does it do that? Suppose I want to borrow $1M to build a factory, but nobody (banks, venture capitalists, whatever) can afford to invest in my endeavor.
So the fed prints a bunch of money, causing 5% inflation. Now the bank can more easily afford to loan me $1M, because that $1M is worth less.
But now I need a $1.05M loan to build my factory.
By lowering interest rates which encourages borrowing and thus spending and thus economic activity.
> So the fed prints a bunch of money, causing 5% inflation.
Printing money causes monetary inflation, but does not directly cause price inflation so you don't need 1.05M to build your factory. Printing money can eventually lead to price inflation if too much money is printed for too long, but that doesn't mean all money printing causes price inflation as that lever can be turned both ways. Lower interest rates to spur spending and get the economy moving again and then once out of danger raise them again.
> Some people will still behave irresponsibly and be in need before that deposit arrives, but the UBI will radically change the social framework within which they seek help: Everybody will know that everybody else has an income stream. It will be possible to say to the irresponsible what can’t be said now: “We won’t let you starve before you get your next deposit, but it’s time for you to get your act together. Don’t try to tell us you’re helpless, because we know you aren’t.”
Only if we want to continue to have addicts and the mentally ill homeless, abused, and taken advantage of.
This will result in millions of vulnerable seniors and mentally disabled individuals being scammed out of their money each month. Whether it be "tech support" scammers or local fraudsters or even simply not being able to budget money (at a basic level) these folks will be in trouble.
I live with (and care for) a mentally disabled individual (IQ: ~60) that receives benefits through Social Security, Medicaid, and other government programs. If it were not for our help in managing these benefits she would spend her money (which is supposed to be for food/living expenses) on Amazon on $100 anime-themed coffee cups and similar widgets the moment she receives it.
Not to mention the fact that she will never understand how to sign up for such services or know who to trust when receiving services. If someone in a lab coat told her they were a government doctor and she "had to pay" for her upcoming appointment she'd likely just hand over all her money. There's no way to "educate" her out of this problem. I've taught her all sorts of things... many times and I'll have to teach her again and again.
It's not so dissimilar to walking an old person through accessing a web app/site over and over again ("no, that's the search bar"). Handing vulnerable people money every month won't solve their problems.
It's a great idea for the economy in general though! Just don't do away with government services for the needy. Especially medical care.
All in all, the Social Security Administration has a huge amount of experience with all the details and problems involved in efficient day to day administration of a massive payments program like this, so there's no reason not to just reuse the existing bureaucratic infrastructure and just swap out the eligibility rules.
SSA spends just a fraction of a percentage point of the benefits it distributes on administrative costs (ie, the existence and operation of SSA itself). But even the vast majority of that is for the means-tested SSI Title 16 program, not the simpler Title 2 SS programs. Since a UBI is much simpler than either of those, SSA could easily save even more -- there would certainly be plenty of consolidation and maybe downsizing possible after passage of UBI. But there's no reason to throw away the common infrastructure for payments that already exists.
If you want to stay near family and friends, find a nice cheap place an hour or two away, if you want a shorter commute that's a luxury, not a necessity, and you should work for it.
Basic incomes are for the minimum needed to live a decent life, living in a specific expensive location is a luxury you should have to work for.
That's exactly how it should work, even in a system with no UBI. Sadly, people see the state as the grand fixer and enabler of everything.
Eventually, we'd all realize that certain places simply cost more to live in due to reasons outside of everyone's control. E.g. maybe it's hard to create affordable safe housing in a very earthquake/tornado prone area. Or hard to deliver fresh healthy produce to a city in the middle of nowhere like a desert. I exaggerate, of course, but these minor details still affect prices to a certain extent. We can't have cosmic-justice.
There are already neighborhoods now where most people, including me, cannot afford to live, and I don't see it as a tremendous injustice.
So ideally we'd avoid this and everyone would get the same amount of money. But, if we continue to let city prices shoot up, we might end up in a place where people want a job but can't get one because they live somewhere cheap and can't afford to move to the city where all the jobs are on their smaller basic income payment.
With or without basic income, we're clearly on an unsustainable path of letting cities get so much more expensive so quickly.
Many existing welfare systems fail in this same scenario. For any feasible welfare plan it is possible to invent scenarios where someone can torpedo themselves. The goal should just be to make it harder for external forces to hurt people, and maybe a bit more difficult to torpedo yourself.
At some point welfare programs must say something along the lines of "if you take help we give you and set it on fire, that's past the line, go find a charity or psychiatrist to help you"
Ideally, social service workers could still help these folks.
Well, if it's being paid for by eliminating programs which do provide food, shelter, and other necessities, then it's not really out of scope to ask how we're going to provide those.
My biggest concern is how you logistically provide money to people. What do you use to distribute it? Some sort of state owned bank? What about identification?