Universal Basic Income
igmchicago.org
igmchicago.org
A simplistic one-paragraph $13,000 UBI proposal was made, and the question was whether it was better than the status quo. Many of the economists chose "disagree" because they felt the details of the UBI proposal were unworkable; not because they disagree with the idea of UBI.
Here are some of the comments from those who disagree:
"And the children get nothing? The basic idea is sound but too simplistic as stated."
"A minimum income makes sense, but not at the cost of eliminating Social Security and Meidcare."
"John Cochrane proposes variants that would be better."
"13K is inadequate for anyone with no other income."
"The simplicity is attractive, but deceptive. Coupled with universal health care & tax reform it could work. but we are far from that."
First, 60% does not sound like too much (makes you think that 40% agree) until you see that only 2% actually agree with it.
Second, the question is not about UBI in general, but about a very specific proposal: "[U]niversal basic income of $13,000 a year — financed by eliminating all transfer programs (including Social Security, Medicare, Medicaid, housing subsidies, household welfare payments, and farm and corporate subsidies)".
Fittingly, that statement is not far from the truth. (Women are 28% of economics assistant professors in the US, 22% of associate professors with tenure, and 11-12% of full professors.)
"People disagree with implementing an idea in this specific way? They must not like the idea at all, in any circumstance!"
Of course, the only way you could finance a $13 000 UBI is by getting rid of all those other transfer programs, pretty much.
Most sane UBI proposals have taxes going up just enough so that taxes on the middle class go up enough to offset the UBI; resulting in no net benefit or cost to the middle class.
Really big numbers, but not crazy unworkable big.
On the other side, since there's no additional taxes high income earners would simply see their earnings go up by $13,000.
Also worth noting that this plan would get rid of things like renewable energy subsidies.
(e.g.: Eric Maskin: "A minimum income makes sense, but not at the cost of eliminating Social Security and Meidcare.")
People without money will tolerate it for a few years, but since it's 99% of Population it will eventually all explode and either slide into chaos, or some war. Don't need to look further than czarist Russia/Soviet Union to see what happens. 10/20% tax hike is peanuts in comparison to getting you and your family shot.
Also, defending the exploitation of groups of people with "they are probably not going to kill us yet" isn't a great line of thought. Just saying.
Also, how do you plan to compensate for the lower buying power people will have when their taxes are increased by 10%? Are we all going to live in government subsidized housing?
The idea that governments are going to close massive departments of staff due to 'efficiency' is extremely naive - and belies a misunderstanding of how that kind of employment works.
Governments are not efficient, generally. In some areas - more than others. 'Teaching' I think is fairly efficient, it's hard to screw up. Building roads, similarly. But other functions can get way out of whack.
Governments on some level employ as a means of redistribution. My sister in law works for Canadian government - there are 600 people to 'research' and 'strategy' for prisons etc. and yet we have no real meaningful reform, experimentation or thoughtfulness in our prison system. It's nearly as basic as it was 50 years ago. So why 600 people? Because they can.
Government unions are the most powerful entities on planet earth. Those jobs will be reallocated elsewhere and there will be no 'operational savings' from UBI.
More likely - they will increase the regulation/complexity of it so that it actually does require 'tons of overhead' to manage.
UBI is a great theoretical idea, that doesn't meet the test of pragmatism. It will be about as effective as other forms of welfare.
A cheaper experiment would be to simply allow people on welfare to have some kind of job/income. No need to re-write the book to see if that works out, which is one of the big things they are trying to find out with UBI.
Not at all. The main problem with social security/welfare is that getting and staying on it is basically a job in itself. And the fear of accidentally doing something that will get you kicked out is enough to make people avoid taking shorter term work, freelancing, getting further education etc. etc. Take away all the effort and uncertainty of getting and staying on those programs and people will be freed up to potentially make all kinds of changes to their lives that are currently not possible.
Not impossible at all. We've been doing it for over 200 years :).
Job losses due to automation etc. have been happening since the dawn of the industrial revolution, and there's not much happening now that is particularly different - that said - maybe the case could be made for outsourcing.
We need to diversify, make sure consumers are spending, make sure taxation is working, make sure governments are spending effectively, we have reasonable worker protections.
My grandparents never ate out. Ever. My parents now do, and I do quite a lot. The quality and quantity of restaurants has expanded. We eat food from all around the world, better quality, more variety, more consistently fresh.
We used to wear clothes until they wore out. Now they are almost seasonal throw aways!
500 channels of entertainers instead of 3.
Change your furniture every so many years instead of 'life long pieces'.
Off-road mountain bikes are actually a new phenom - now we have several different kinds. Amazing gym equipment.
There used to be 5 pilot crew in major airlines - now there are only 2 usually per flight. And yet are pilots out of work? Nope - more flying.
100 years ago everyone worked in factories, farms or in mines. Now hardly anyone does. How could this be?
We're mostly going to be ok.
Maybe. Just maybe. Something which makes the economy worse, might also be a good thing to do.
"Universal Basic Income – Poll Results from IGM Economic Experts Panel"
Previously posted on HN with 120 comments: https://news.ycombinator.com/item?id=12009562
A lot of economists work in finance, the industry that benefits the most from our financial system staying the way it is.
Here's a good place to start: https://en.m.wikipedia.org/wiki/Basic_income_pilots
On the other hand, I don't think my bar is set that high. Like I mentioned in another comment here, the biggest problem with these pilots is not the limited scope or the strings attached. The problem is that they are the exact reverse of the UBI version in question. Most of the pilots can be described as "rich giving money to the poor". The UBI version that we're discussing here is "poor giving money to the rich". Because that's exactly the net effect when you dismantle welfare programs and distribute the money to everyone - those who have been on welfare till now will receive less. Those who weren't will get more.
Could you provide some references?
New Jersey Graduated Work Incentive Experiment. https://babel.hathitrust.org/cgi/pt?id=mdp.39015018521420;vi...
PDF warning: https://ia800309.us.archive.org/14/items/PovertyAmidPlentyTh...
Unless your point is that people should have to work for work's sake to get that money, even if the work is useless.
People that are for a long time on unemployment have a hard time to get back on the market. By forcing them to work few hours here and there in exchange for benefits forces them to leave houses and actually do something instead of sitting in front of TV. It mobilizes them. And it serves public as they will work jobs that benefit everyone. So instead of taxing rich and giving handouts, rich could see this as an investment in better tomorrow and be more willing to pay up.
You have yet to respond to what I said.
Your proposed system is to punish people for being unemployed while not giving them any jobs. You can wax poetic about the benefits of working all you want, but without any jobs, people can't work.
Case inpint: communism is nothing like basic income. With basic income, you always are rewarded for working: people who work are paid in addition to their basic income. If you wish to disagree with me, please tailor your disagreements to what is actually happening, not straw men.
> "Bill Gates would get 13K, which is crazy. Raising taxes is costly and so redistribution should be targeted to those who need help most."
People like Bill Gates without a doubt would have to be taxed more (amounting to much more than 13k) for this to work. The current system works by redistributing and targeting those who supposedly need help most. As of now, it works somewhat ok for the most part but it's tremendously wasteful and promotes wrong incentives. A basic income can reduce that waste and puts everyone on an equal footing.
> "Total health expenses and risk will remain high for individuals. It might also shift the norm whether to work. Work = being part of society" > "Lots of conflicting incentives that can discourage work in the existing rules."
Because work is an end to itself? Opinions like these seem to be founded in Puritan ethics (work as penance in this life) rather than economic reasoning. If human work doesn't necessarily create value anymore what's the point in continuing to work by the current rules from an economic perspective?
> "What about e.g. national defense?"
Sure. Everything's up for discussion. Save for sacred national defence.
> "A minimum income makes sense, but not at the cost of eliminating Social Security and Meidcare." > "This is a dumb question. We are not going to eliminate Social Security and Medicare etc."
Why is that exactly? Are we that stuck in ideology that as a society we can't seem to think beyond concepts that date back to the first Industrial Revolution anymore?
Let's say distribution is an even division between the entire population. If the distribution is low, the obvious solution soon becomes "reduce population". The specifics of that can be pretty gnarly, even if it's a simple "attrition" policy. My imagination for what's possible goes to dark places.
I wonder "who" will make the policies, and I fear the power structures will change in very negative ways. I can see reactions to power structures changing to change to a blockchain type system ran by algorithms... but that has equally dystopian ramifications.
Though its defiantly a rosy picture, the old west I think appeals to a lot of people like me because old world capitalism allows for independence. As we scale society we're giving a way that independence for equality and comfort. The problem is there are always inherit problems in every system, and someone finds a way to exploit them.
E.g. William Nordhaus disagrees as follows: And the children get nothing? The basic idea is sound but too simplistic as stated.
Some of the comments seem quite shallow too. E.g. Oliver Hart (Nobel prize laureate) says: "Bill Gates would get 13K, which is crazy". You might object to giving the 1% $13K on moral grounds (but they profit from e.g. free infrastructure too, that is no problem?), but if the wastage is only 1%, it would compare very favorably with many other programs.
If you "double" the income of people living at or below the poverty line, you do not double their buying power. Mile that cost $2/L will now cost $4/L, rent will skyrocket, because more "welfare" will be available.
I wholly support the concept of UBI. But it can ONLY work if we restrict how much corporations can charge. Some things that would help in that regard: restrict the $ divide between the highest paid and lowest paid positions in a corporation.
So what happens to the middle class families that are looking to buy their first home when their taxes increase by 10%. If the household income is $150k, that 1000/month basic income check is going to be less than what is taken in the tax increase. Looks like that family can't buy that house now.
One tiny example, but central planning has a million trickle effects that have to be compensated for. It's too much to try and balance and get right.
Then we keep our current currencies right next to it. You can buy the same stuff but also other 'luxury goods' (or find a better nicer name for it)
I know that the Dutch government already makes this distingsion where we have 6% tax on food, art, medicine (and other stuff) and 21% tax on the rest. Since the distingsions is there and recognized, we can utilize it for other purpuses.
2. Secondary market will come: You either criminalize it then it will cost a lot, or not and you just give part of the money to the money changers for a service that could have been easily avoided.
Here is a very interesting article about all those major failed recent predictions by economists: http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html...
Why people continue to put so much stock in economists?
The only other profession I know of that is proven wrong so consistently but remain doggedly dedicated are religious institutions.
try editing the "UBI Benefit" and "UBI Tax Rate" to see the total budget effects.
* assumes no money from medicare, medicaid or SS, just existing welfare benefits.