> Don't let basic income advocates evade the question of who pays for their utopian scheme.
Have you witnessed this?
Have you witnessed this?
* focusing on the wealth/profit generated by a surge in entrepreneurship from the millions suddenly motivated to start successful businesses
* focusing on the unlimited wealth created by robots/asteroids/solar in space which will fund any program we wish
* focusing on how we can't afford not to try BI, i.e., the default system is a financial failure anyway so comparison is pointless
* taking the position that BI is only replacing current welfare programs (until it's pointed out that current programs would not support anyone if spread around)
Occasionally, someone will admit that they are proposing a 100% tax rate, which is about what such a system requires. Even more occasionally, it's admitted that every country must implement a 100% tax rate at once to avoid mass emigration of anyone earning more than ~$20k/year.
I think almost everyone would want to work on $13-$15k a year. However, they'd work part time.
And tbh, for our current welfare system, that is essentially what happens already. They work minimum wage jobs, part time, on call.
If you abolished every single government program and fire every single government employee, right from the DoD down to your local playground, from congress to the schools, never mind every single existing welfare program, assuming that tax revenue somehow managed to stay at the same level, what with no IRS to collect it and 22 million newly unemployed public sector workers, you could barely afford to pay a UBI at the minimum wage, never mind attending to the people who might legitimately need more help (also, no roads or schools).
UBI is either going to require cuts of a depth never proposed, much less enacted, in any western country, ever -- or be too small (perhaps a hundred dollars a month) to live up to its promises.
Every time you want to raise enough revenue to give the 99% another $1,200 ($100/month), you need to raise taxes on each single member of the 1% by $120,000. And that's on average incomes of a million.
It's kind of silly to discuss the details when there aren't any. People need to be open to giving cash to the poor to even begin thinking about how best to implement it, and the US at least has been going in the opposite direction since the original Clinton welfare reform, which emphasizes employment assistance over direct monetary assistance, with mixed results.
Personally, I think it's throwing money away without also addressing healthcare costs, including nutritional reform. Sugar is only cheap when you ignore the costs of obesity we all bear in increased premiums. This is the only way of which I can conceive to implement some form of cash relief without cutting into benefits.
Lots of naive idealists support UBI - but I also frequently see UBI advocates who purport to be "evidence-based" and "rational", and yet who fail to provide even a back-of-the-envelope calculation of how they propose to fund their scheme. Instead they do 1 of 3 things:
1. Provide evidence countering non-essential arguments, e.g., will basic income recipients be motivated to work? This implies they've addressed the opposing side, while simultaneously ignoring the essential counter-argument, i.e., where the money comes from.
2. Hand-wave about reduced administration costs. (This is nowhere near sufficient to cover the huge increase in spending). Or automation (yeah, we have better deep learning algorithms, but machine vision, robotics and natural language processing are advancing glacially slowly, so most jobs will require a human in the loop for the foreseeable future).
3. Propose a low (subsidence-level) basic income, which represents a major cut in benefits to pensioners and the disabled. Since those two groups receive the bulk of current welfare spending, redirecting their benefits is the only means by which a UBI can be feasible.
With a small amount of research I found numerous counter-arguments to UBI, including a paper by the New Zealand government finding what I stated in point 3, i.e., UBI would imply benefit reductions to pensioners and the disabled and still require major tax hikes.
I see many people becoming full-time advocates and researchers into UBI, claiming it to be a rational, scientific, evidence-based policy. And yet they miss these basic issues. (It's no mystery why. After realising that current welfare systems don't work, and that a UBI can't work, the logical next step is to question wealth redistribution itself, but that's too far for most). The 20th century saw many intellectuals proposing "scientific" utopian schemes while blatantly ignoring reality, with well-known results.
http://igps.victoria.ac.nz/WelfareWorkingGroup/Downloads/Wor...
http://thespinoff.co.nz/featured/31-03-2016/i-love-the-idea-...
https://www.bloomberg.com/view/articles/2016-06-06/universal...
For example 320 million Americans * 15K/year in basic income = 4.8 trillion dollars that has to come from new taxes and spending cuts.
But if it all comes from tax increases than somebody currently making the average income will see their taxes go up by exactly amount as their BI payment. Is that actually a tax increase? And if we can get cost savings from simplifying welfare, then their BI payment is more than their tax increase.
4.8 Trillion is completely unfeasible, but the real cost is in the order of hundreds of billions. A heck of lot, but it is feasible.
This one for instance (~$13k) that argues it will save money:
http://www.wsj.com/articles/a-guaranteed-income-for-every-am...
Its pretty clear the entire savings comes from cuts to Medicaid & Medicare & Agricultural subsidies.
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> 3. Propose a low (subsidence-level) basic income, which represents a major cut in benefits to pensioners and the disabled. Since those two groups receive the bulk of current welfare spending, redirecting their benefits is the only means by which a UBI can be feasible.
That one one went with a clear option #3.
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As for your solution, it works-ish, but ultimately requires maintaining Medicare & Medicaid which inflates the cost beyond what you propose or admitting you are doing #3 also.
So you'd need to actually raise ~$5.8 trillion to make your system work. It can work, you'd just need to basically double the current tax levels.
Many people who are into BI are unwilling to admit its a very expensive proposition that they insist will be fixed with "economic growth". Its the same handwaving the GOP does.
Perfect example:
There are 242,470,820 adults in the US.
http://www.wsj.com/articles/a-guaranteed-income-for-every-am...
> In my version, every American citizen age 21 and older would get a $13,000 annual grant deposited electronically into a bank account in monthly installments. Three thousand dollars must be used for health insurance (a complicated provision I won’t try to explain here), leaving every adult with $10,000 in disposable annual income for the rest of their lives.
https://en.wikipedia.org/wiki/Personal_income_in_the_United_...
~55% of people make $30k or less and would get the full grant. He proposes b/t 30k and 60k it drops to 50%. So lets just drop it for the other 45% to 7k (instead of $6500) to keep the numbers simple.
($13,000 * 242,470,820 * .55) + ($7,000 * 242,470,820 * .45) = $2.5 trillion
https://en.wikipedia.org/wiki/United_States_federal_budget#/...
The current budget is $3.7 trillion.
Healthcare + Social Security + Nondiscretionary Defense = 937+882+585 (billions) = $2.4 trillion. So you are already roughly at the same budget (despite his argument that isn't the case). Yes, he wants people 18-21 not to have access but that won't work in practice realistically some people get kicked out in this country at age 18 and have access to welfare.
The argument he makes is:
> The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare. As of 2014, the annual cost of a UBI would have been about $200 billion cheaper than the current system. By 2020, it would be nearly a trillion dollars cheaper.
Despite his age assumption & numbers being borderline unrealistic...
https://www.cms.gov/research-statistics-data-and-systems/sta...
NHE per capita is ~$9,523. He wants insurance to cost $3,000, even if we magically assume 100% of that goes straight to payments. That extra $6,523 has to come from somewhere for people on Medicaid.
If you get a $13,000 grant, you basically lose (realistically) access to medical care with basic income beyond very basic care. (i.e. If you get cancer, no one will cover it so you die. If you get a possibly deadly chronic disease, you can't afford it, you die.)
http://kff.org/medicare/state-indicator/per-enrollee-spendin...
That is worse for Medicare enrollees which is ~$10.3k So they lose ~$7.3k worth of care.
Yes it is cheaper (using his math) but he doesn't explicitly explain the impact.
It pays for itself by:
1) Cutting income for those on social security to ~$1000. ( Realistically, for the elderly, with overhead for private insurance you are spending probably ~$12 for equivalent care)
2) Cutting medical care for those on welfare currently to $0. ( Realistically, you can't pay for the current level of medical care for the average person on this BI. )
3) Food costs will go up without subsidies, which will likely add $240 in annual costs (conservatively).
So its basically cutting Social Security to ~$750/year for the elderly and cutting medical care for those in poverty to the bare essentials. Similarly, at the rate of medical inflation, the "cheaper" is almost entirely sourced from killing Social Security or Medical Care (depending on how you look at it) but it'll get worse (assuming you are adjusting BI on the CPI).
And this is the most concrete article with numbers I could find in like 5 minutes of Googling it.
The rest were all hand wavy.
If you don't kill Medicaid/Medicare on that same proposal, and just reduce the subsidy by $3k:
($10,000 * 242,470,820 * .55) + ($5,000 * 242,470,820 * .45) = $1.88 trillion
If you drop Medicare/Medicaid the budget they can take the money from is only $1.467 trillion. So now its obvious where the money came from to save those billions.
A mature BI (one providing an above-poverty-line benefit) is an expensive proposition, but you don't need a mature BI, or one that replaces all the programs you'd like to replace with one, to get net social benefit from it. So you start with a small BI, and phase out the things it is eventually planned to phase out only as the BI benefit makes the existing program irrelevant. (Until then, you just treat the BI as income when calculating benefit for the existing programs.)
To do this, you establish a funding stream that is expected to grow with economic growth, and let the funding stream (basically; using a formula that cushions fluctuations so that short-term downturns don't lead to BI cuts), including prior year savings from reductions in other programs due to the BI along with tax collections in the "funding stream" calculations -- determine the BI level.
That was below-poverty-line benefits as defined by existing law. Its $10k income with a $3k mandatory payment for the equivalent of Medicaid/insurance.
The poverty line at the moment is ~$11k + Medicaid.
https://www.healthcare.gov/glossary/federal-poverty-level-FP...
Its way above the poverty line for any household size greater than 1. ($11,880 + $4,140-4,160 per additional member) [0]
http://kff.org/medicaid/state-indicator/medicaid-spending-pe...
That is ~$6k of benefits per person.
So lets say two adults for $26k with $12k in lost benefits is ~$14k.
The poverty line is $16k.