Without exact details answering such, do voters believe this is more than seeking voter-attention. Are there actual plans of implementation whose economics/numbers work?
I see people discuss such but never see answers.
edit: Back of the envelope math shows that 1000/month for the US population is about $4 trillion/year. The Fed has pumped more than that into financial markets since this pandemic has started, alone. That is why the S&P is back up to where it was in 2018, despite the world suffering the greatest demand shock in history. Pumping up the financial markets is doing nowhere near the economic good that a UBI would right now.
My guess is that it wouldn't cause much inflation, since much of the demand destruction we've seen will be permanent.
1. https://www.thebalance.com/consumer-debt-statistics-causes-a...
EDIT: Thanks to those who provided such insightful answers! Very helpful for a layperson like me.
The velocity has dropped rapidly in recent weeks. To not increase supply would be deflationary.
The real danger in times of low demand is a deflationary spiral. Those are fiendishly hard to get out of, as the last few decades for Japan have demonstrated.
How much does the US government subsidize the average US citizen in services, tax rebates, etc.? Is it more or less than what Venezuela offered its citizens in cash payments? I honestly don't know, but I've become more convinced lately that Venezuela's issues have less to do with the efficacy of their policies than they do objections to the nature of their intended distribution of wealth.
UBI is a giveaway not a loan.
Who loses out more under devaluation?
And not all inflation is created equal. With QE, the printed dollars never make it to Main street, they end up inflating asset prices, while the price of butter stays the same. Whether that's a good thing is an exercise for the reader.
He also talked about the actual implementation a lot during the campaign.
The DNC old guard, who mostly ignored Yang and ostracized and smeared Gabbard now seem to be slowly grasping some of these ideas and seeing how they could be tetrised into their status quo without disturbing too much...
https://gabbard.house.gov/news/press-releases/rep-tulsi-gabb...
In concrete terms, Andrew proposed a VAT, while also reorganizing existing social welfare programs, of which there are uncountable multitudes, each with highly specific eligibility requirements and screening and fraud machinery, into a more coherent, holistic delivery model that de-prioritized or eliminated eligibility.
His numbers "work" but at that scale they entail such an enormous reworking of federal and state machinery that they're in practical terms a non-starter. Cue up recent conversations about M4A, Obamacare, etc, but on an even larger scale. (disclaimer: I support the idea, but appreciate it is more conceptual value than concrete implementation.)
Right now, Fed govt takes in $3.8 trillion in revenues, mostly taxes, spends $4+ trillion, with two thirds of fiscal dollars going to human-oriented mandatory programs like social security, medicare, medicaid, various federally funded insurance programs, etc and one third going to discretionary, which itself is half military, then half everything else.
A VAT would essentially be a transaction tax that scaled to GDP, so from a model perspective, while GDP is $20T, a VAT would bring in $2T of new revenues, sufficient to begin a conversation about giving $10k/year to 200,000,000 people. In reality- who knows. A VAT would have huge implications and lots and lots of things would change.
A lot of the comments center around credit dollars that the Fed has created- basically large scale loans- to provide transitory liquidity to the financial system. Those comments misunderstand the nature of credit dollars, but IMHO they are not wrong. Credit dollars are a completely different tool than the above fiscal dollars generated from taxes. The US government has essentially infinite credit capacity.
To my eyes credit dollars are both a better and more appropriate funding source for something like UBI, particularly if UBI is tweaked to focus on the liquidity needs of children, women, and those whose current fiscal value is low relative either to future value or to the fiscal value of others. I would love Pelosi to consider that as a concrete option, the politics seem ideal for it.
Im suggesting that there is enough money when you think in totality so this is merely a question of how comfortable you are with redistribution. Your saying 2.5 trillion annually; ok thats only like 12% of GDP. It is also completely logical that in the 21 century that only about 10% of value generated is enough to keep everyone fed clothed and sheltered.
I'm saying there are not enough people with more than people less to provide that $12,000 transfer to each person in a way that benefits most people.
If you just took 20% of people making over 150k it would be enough to give 1k a month to the bottom 50%. (and yes i understand this is household)
And this of course is the silly idea that your giving people making 50k a year 12k more for some reason. This also doesnt include the real money up at the top top end. It also doesnt include any wealth transfers (scary)
I think (with respect) you just dont realize how much wealth is out there.
I think you are describing some system that is sorta some sorta economically inconsistent plan. Everyone gets 1k a month and nobody pays for it doesnt make economic sense.
The people that push UBI dont think in these illogical ways. They know very well that some people will have to pay for it. Some people wont see any gain. And some people will see gain.
Your confused about how this system is a win for everyone. Its not! Thats what I said at top ; its redistributive.
https://pbs.twimg.com/media/EQi8jWpWkAMQ_5d?format=jpg&name=...
Examine that graph and you'll clearly see you're taking $500 billion from net contributers and paying out $1.55 trillion to net beneficiaries. AND THIS IS ACCORDING TO HIS OWN CAMPAIGN. He's literally planning to pay out 3x what he's taking in.
In the fine print he admits that he has to pay for it with "future economic growth", i.e. debt. (you cant pay out cash for something now by hoping the economy grows in the future, it's physically impossible... you need debt to bridge the gap)
But explain to me how taking $1050 from the average person in order to pay $1000 to the average person grows GDP?
The simple fact of the matter is that this cannot be achieved without perhaps scrapping every other social program (Medicare, medicaid, social security) AND raising taxes in addition.
The policies of say Yang are not that interesting as for the most part he isnt really talking redistribution and I think he himself is ideologically opposed to it.
How I tend to think about the economy is very much like a game. If you have played say a game like "Banished" (https://store.steampowered.com/app/242920/Banished/) you can see how the economy works without the notions of money/debt/politics. Obviously it doesnt represent the real economy but it comes close to getting a taste. If you send me your Steam ID I will buy you a copy.
These are ideas seldom entertained by UBI proponents, because as soon as they are seriously considered, it becomes clear that there aren’t even nearly enough rich to pay everyone $1000 a month.
However, there are different degrees of "rich" (which, if you want to quibble, can include things like having a yard full of chickens and plenty of time to read [1]). The taxes to pay for expanded social benefits should fall progressively across that whole range.
https://en.wikipedia.org/wiki/Alaska_Permanent_Fund
https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...
I would even advocate taking it a step further, and replacing HSA's and Social Security with individual savings accounts, a la Singapore. Approved purchases (up to a certain amount of rent, food stamps like foods, medical expenses) qualify for tax free or subsidized purchase (this is mostly psychological, giving people a "discount" vs depositing more money in their account, but it can also steer their behavior.) The government invests a certain amount in each person, and then they can contribute an additional amount from payroll. Segregate the money into two tiers, allow money in the "long term" side of the account to grow through some kind of investment, but minimize or eliminate the choice of how it is invested. Cap per year spending on everything except medical. Make it closer to a CD than SP500 investment. Everybody gets the same glide, per a single factor such as age or retirement date. Returns are guaranteed. Allow certain penalized/taxed hardship withdrawls.
https://en.wikipedia.org/wiki/Central_Provident_Fund
Plan: America First Sovereign Fund (mineral/luxury/sin tax), deposits into Forced Savings Account at USPS, which includes a tiered account that subtracts the qualifying part of a purchase from Savings Account, the rest gets charged to a Debit/Credit card on file. Allow the reverse, where Chase, WF, BoA, Citi can link their cards to your Savings Account, and automatically deduct qualifying purchases from it. Allow opt in for digital receipt tracking, or receipt scanning a la expensify, so you don't have to maintain records of purchases for disputes. If you use your bank card, you control what records are forwarded and stored in your USPS account.
This does five things. It pays for the program. It gives everybody some individual responsibility to manage their account, while helping them save. It steers their purchases towards healthy. It gives everyone access to a public bank account that is tax exempt. It lets them not have to manage multiple swipes at the register.
Finally, I'd advocate for a hybrid FTC/AG managed consumer protection service. Sort of a Consumer Reports / Wirecutter service on steroids that's easy for everyone to track their purchases, warranties, and to comparison shop with. A single place for product recalls, safety warnings, price comparisons, and information regarding what the best purchase to make is.
What part of energy ownership don't you disagree with? I still wasn't advocating against private industry doing the extraction or creation. Just that if you pull something from underground, it gets taxed and benefits everybody, not just the person who bought it from the person who stole it 175 years ago.
What is the purpose of that tax? In public finance, we don't want to unnecessarily distort incentives by picking winners and losers. Taxing natural resource extraction for no good reason chases away companies in those industries and forces them to pursue other businesses, possibly leaving only the most profitable monopolies to survive. If we want to raise revenue, why not just raise VAT, corporate tax, income tax, or property tax more generally.
It would be akin to the government pulling eminent domain, and saying "the oil under the country belongs to the people, not who owns the deed."
This is basically what Alaska did. They said "if you plunder our natural resources, the profit gets shared with the people whos natural resources you are plundering."
Same holds true for universal health care, social housing, subsidies etc etc. They may sound absurd in beginning but governments do implement them.
You can't squeeze enough money out of the rich to give the middle class a free ride, there's not quite enough of it, and there's too much of a middle class.
Edit:
If you really want to tax the rich, don't tax their money, tax the things they own. Land value taxes. Taxes on stocks. The purpose of doing this shouldn't be to fund a social program, but to align the prosperity of the nation with their prosperity.
If the government were a passive shareholder in ~40% of the S&P 500, then the nation as a whole would directly benefit from 40% of the returns of capitalism. If we had land value taxes, then the nation would directly benefit from the high cost of land (Which currently is nothing but a cost, and a drag on the economy, and funds all sorts of rent-seeking, unproductive uses of land.) And would skim a good slice of the rent-seeking parts of the economy.
So if you can't completely start from scratch, then ultimately the only source of revenue for UBI would be to cut spending somehow (good luck convincing the Pentagon of that), or to generate additional taxation on businesses (which resulted in them moving crucial facilities to Mexico, Eastern Europe, India, China, etc)
At some point, the USA might be better off if we all have a dividend for every citizen based on our country's profit, like Alaska has currently.
This way it is not a guarantee how much you will make, but it is something.
If we dont do this, surely robots will replace most jobs.
Speaking of which, I googled Germany's VAT and it seems there are quite a few exemptions ("food, books, hotel accommodation, cultural services and other goods and services") that only get VATed at 7%, which is much closer to the 6% they apparently collect in practice. But sure, they probably do fail to collect quite a bit of what they theoretically could.
A lot of GDP is exempt from VAT by design. It's easiest to see if you look at the expenditure approach to GDP. For a simplest example, government expenditure is effectively exempt from VAT. Exports are VAT-exempt (though it only matters if you export more than import, because imports are subtracted in expenditure approach to GDP calculation). Another part of GDP effectively exempt from VAT is capital goods: when a business buys a piece of equipment, it technically pays VAT on it, but it also gets the same amount they paid as a credit for the VAT due on their own sales. The business gets to "consume" the capital good by utilizing it in production process, but doesn't pay any VAT for it on net.
Giving $1000 a month to 210 million people costs $210 billion a month, $2.5 trillion a year.
I believe that the annual federal tax revenue is about $3.4 trillion.
> Giving $1000 a month to 210 million people costs $210 billion a month, $2.5 trillion a year.
> I believe that the annual federal tax revenue is about $3.4 trillion.
If you're going to implement a UBI program (or any kind of large-scale social democratic benefits program), taxes will be increased to pay for it.
It also sounds a little circular: Increase people's taxes so that you can use the income to give money back to them.
Progressive taxation doesn't work that way. The whole idea is that some would pay in more than they take out; in some cases, far more.