Comment by mac01021 | Hacker News Reader

Comment by mac01021 | Hacker News Reader

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I don't think this adds up. Here (https://www.nationalpriorities.org/budget-basics/federal-bud...) is federal spending for 2015. It shows a total federal spending of 3.8 trillion dollars. This is all spending, including 0.5 trillion on the military, 0.2 trillion in interest on debt, and tons of other spending on things that are not welfare or social-safety-net programs.

Meanwhile, $13k * 300m people, results in an expense of 3.9 trillion. Greater than the entire federal budget.

EDIT: I AM WRONG. The spending proposal from the article does not exceed the entire federal budget, because people who earn more than 30k of income get payed a smaller UBI. I did a rough calculation using the best numbers I could easily find describing the USA's income distribution (good numbers are hard to find). The result was that this proposal would likely cost just short of 3 trillion dollars. Significantly less than the entire 3.8 trillion dollar budget, but still more than we currently spend on entitlements.

Spending on social security (most programs, minus food stamps...I think) is in the neighbourhood of $930 billion. Right now, that's delivered to 65 million people. Of 330 million people total, ~80% are over 21. And it would be safe to assume 50% would qualify (because 1 in three households make between 50k-100k and 1 in four make less than 24k).

That leaves 132 million people drawing from $930 billion, which means everyone gets $7153. For everyone to get $13,000, 71 million people would be allowed to qualify.

This doesn't take into account the taper at all, so it could be stretched to reach more people. But even if 60 million people receive 13k, which leaves ~2.5k for another 60 million, that's still less than 132 million and doesn't align with the author's 6.5k number.

All this is to say: I find the idea appealing because it reduces the cost of bureaucracy and creates autonomy, but I'm not sure if it's feasible.

Sources: https://www.ssa.gov/finance/2015/Overview%20SSA.pdf https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/i... http://www.npr.org/sections/money/2012/07/16/156688596/what-... https://en.wikipedia.org/wiki/Social_programs_in_the_United_...

There's another source of money not included here. The Fed creates money from nothing. That has to go somewhere. On top of the usual inflationary dollar creation of the Fed, they were doing "Quantitative Easing" for years to the tune of about $85-100 Billion per month given to banks in exchange for known worthless mortgages. So a good quarter of that $3.9 trillion could have been covered just by some "Quantitative Easing" programs for the poor.

Since the Fed stopped publishing M2, we don't know how much money is really being created. But it seems to me the logic of "Let's give money to the banks and they will loan it to the people" doesn't work. Here, the argument seems to be: Instead of giving money to the banks with expectations, we just give it directly to the people, cutting out the inefficient middle men entirely.

I'm more sympathetic to innovative monetary policies than most people that have studied the topic, but the monetary base isn't a money tree and unfortunately virtually every claim you've made is false.

The M2 growth figures are available and published by Fed sources. They're nowhere near enough to underwrite a basic income, even if none of that newly created credit was being directed towards useful economic activity https://research.stlouisfed.org/fred2/series/M2

M2 isn't created by the Fed anyway, it's created by private banks choosing to extend credit to entities they believe are on average productive enough to repay them at prevailing interest rates. It's possible to deter banks from making future loans of course, but I can't imagine doing that to make room for untargeted handouts being a good idea

The monetary base the Fed actually is responsible for issuing is much smaller and has actually shrunk since 2014. https://research.stlouisfed.org/fred2/series/BASE

QE was a temporary large-scale response to financial shocks which is designed in principle to be reversible so it's about the worst way of funding the steady stream of expenditure required for BI imaginable.

It also consisted of the Fed buying up swapping the cash for existing financial assets in the form of government debt. If they're giving away the newly minted money instead, the amount the Fed can inject into the economy without generating unwanted inflation is much smaller. That might be desirable for a well targeted short term stimulus programme, but a BI certainly doesn't fall into that category (plus you don't get the fringe QE benefit of shrinking the govt debt/interest burden)

>The M2 growth figures are available and published by Fed sources.

Sorry, typo. I meant M3.

https://en.wikinews.org/wiki/US_Federal_Reserve_ceases_to_pu...

He did specify certain caveats that would reduce the cost vs your estimate - adults over 21, and it would reduce as you made more, to a floor of 6500/yr. But yeah, probably still missing some piece.

I agree. (see my edit). I would love to be even more wrong - to the point where the proposal outlined in the article is clearly viable. So, if anyone has solid numbers demonstrating that, please do share.

You missed the part about people under 21, that should cut off another ~25% from your estimate. Medicare + Medicaid + Social Security is well over 2 billion, so I think it's pretty close.

I tried to get rid of people under 21 by reducing the population from 320M to 300M, but I guess I should look and see what the actual numbers are.

"People under 21 years of age made up over a quarter of the U.S. population (27.1%)" (https://en.wikipedia.org/wiki/Demography_of_the_United_State...)

So the population over 21 is about 230M.

Hmm... That's a higher fraction than I expected. It could be much lower 20 years from now.

Yeah, very well could be if the birth rate drops or life expectancy keeps rising.

Indeed, he's probably subtracting the revenue from the tax from the "cost", which is misleading.

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