Comment by SilasX | Hacker News Reader

Comment by SilasX | Hacker News Reader

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You have to be really careful about generalizing from "personally getting regular free money" to everyone getting it. Under a UBI, everyone, unconditionally[1], gets the free money. That has significantly different dynamics than you alone getting it.

What happens to rents, for example? If everyone's income goes up, so does the rent. If everyone wanted to live in the same places, for the same reasons, and suddenly has higher incomes, they would bid up the rent, just as they do in well-paying urban areas. Would you be so comfortable if everyone used that free money and it established the bare minimum for living expenses?

And before you say it -- yes, I know, the core problem there is actually rent eating up everyone's discretionary income, their "slack" -- hence why I advocate dealing with that problem first (not just rent, but every such eater -- healthcare, education, etc) before letting those things leech the UBI too [2].

[1] yes, yes, up to the age/citizenship eligibility requirements, you get the point

[2] My earlier elucidation of this point: https://news.ycombinator.com/item?id=22604788

I'm not saying that rent won't go up, but depending on the UBI scheme it probably won't go up 1:1.

Rent goes up because there are more people looking for a limited resource in urban areas: if you want to work in the city you must live near the city. A UBI that isn't tied to location makes it easier for people to live elsewhere, which reduces demand.

On a smaller scale, we should see where older folks on Social Security live. They have a form of UBI and also usually don’t or can’t work.

Or we could look at Germany. Our welfare system is largely unconditional. You're asked to find a job to pull your own weight, but you're not pushed too hard. You'll get an apartment, TV, utilities, health insurance and a few hundred euros a month for food & what ever you want to spend it on.

If we did cut out the theoretical work-requirement and possibly stopped paying the rent and instead paid out money (but then quite a few people would fail to pay rent and we'd need another social program to cover them), this would be UBI.

So far, I haven't seen the explosion in creativity, entrepreneurship, volunteering etc that's usually promised. On the other hand, we're up there fighting about the top position in OECD countries for total tax rate.

>So far, I haven't seen the explosion in creativity, entrepreneurship, volunteering etc that's usually promised.

That's because most people don't have the ambition and discipline of Elon Musk or Jeff Bezos and if given the chance would rather bum around their whole life instead of work.

I see the same thing in Austria and so do my friends living in other wealthy European countries with strong social nets.

Most people, if given easy access to welfare, would rather lower their standard of living to fit in that small sum of money and not do anything all day rather than use their free time to hustle, learn a new skill or build a business that will permit them a higher standard of living later on.

Shocking. People would rather enjoy life not working as hard as hustling (code for taking big risk without much payoff) to get more money to buy more stuff.

Problem is, we'll never cure cancer if no one is motivated to solve hard problems.

I'm not sure what your experience is but research is vastly different to commercial enterprise and there is a massive motivational difference between curing cancer and making CRUD apps to get your 'side hustle' on.

In my experience in highly funded research groups that run outside out of traditional management (translation annoying and wasteful tertiary education administration) researchers that make an impact get on just fine and produce excellent results on a liveable wage and being given the space to do their jobs. In my mind, the highly masculine and overly aggressive capitalist mindset that competition == results is either untrue or false and discounts a wide range of motivations, personalities and skill sets which do things of interest or worth in intellectual jobs.

But why would you get into unpleasant endeavors if they are not gratifying and you already have everything you need to live a basic life? This is ideology.

> Our welfare system is largely unconditional.

ALG II is pretty far from unconditional. You only get it after you burn through all your savings, and it forces you to look for work. TV costs 17€ a month per household even if you don't have a TV. Health insurance is pretty far from free, though it matches your income.

Don't get me wrong, it's generally a pretty good system, but it's not unconditional.

> it forces you to look for work

Yes, in a theoretic sense. Not practically, it does not run out and you have to be pretty combative and purposefully i-wont-work to be sanctioned.

> TV costs 17€ a month per household even if you don't have a TV

Which is waived for anyone on social benefits.

> Health insurance is pretty far from free

It is for anyone on social benefits, paid by taxing those that work.

Again, those social benefits only kick in after you have burned through your life savings, including your retirement savings. If you are on ALG II, you don't have so much left. You are also expected to report to the job center, and act on the help they provide you.

It's not just "stop working, get free things".

If you are not a citizen, it's also going to ensure your visa doesn't get renewed. The government had to make an exception this time for COVID-19.

Yes, as I wrote, you're expected to find a job, but it's not like they'll toss you a broom stick and tell you to start sweeping.

As for savings: true, but less relevant. With a high net wealth you're already free to do whatever you like. 41% of Germans have less than $10.000 in personal wealth, which will be pretty much the so called Schonvermögen (which you do not need to touch to be eligible for Hartz-4; retirement savings are not taken into account for this, and only applied to private retirement savings, while the super majority relies on the public retirement system in Germany).

So yeah, it's not "stop working, get free things", but it's pretty close to it. Close enough that we should see all the huge benefits that are promised by UBI proponents. But we don't.

> If you are not a citizen, it's also going to ensure your visa doesn't get renewed.

That's not accurate. About 2 million non-citizens are receiving Hartz-4 benefits, the trend is pointing upwards, it does not affect their legal status.

But also have interesting factors of health concerns (more likely to need nursing care, or need a home without stairs) and on the other side, many are more likely to have large savings. There are other factors like some wanting to live near children/grandchildren who are more likely to live in a high-cost area due to jobs. I'm not sure if all the balances out, but those on social security have plenty of different concerns than working-age folks.

> But also have interesting factors of health concerns (more likely to need nursing care, or need a home without stairs) and on the other side, many are more likely to have large savings.

US statistics:

https://www.washingtonpost.com/business/2020/05/04/baby-boom... (Millions of baby boomers are getting caught in the country’s broken retirement system)

https://www.cnbc.com/2019/04/05/these-people-are-on-the-verg... (48 percent of American households over the age of 55 still have no retirement savings)

https://www.cbpp.org/research/social-security/social-securit... (Although most of those whom Social Security keeps out of poverty are elderly [14.8 million], 6.9 million are under age 65, including 1.2 million children)

For our purposes, it's important that you scope to only those who are collecting only Social Security, and have no other retirement savings to closely model your average citizen collecting a potential UBI.

If there is UBI, you can move to places where rent is cheap, you don't have to be where the jobs are.

If there's tax progression, everyone's net income does not go up. That UBI money has to come from somewhere, and it comes from taxes. To fund the UBI, taxes will need to increase.

So at some threshold level of income, flicking the UBI switch doesn't affect your net income. You get a same size of increase to your tax bill as you gain from the UBI benefit.

Below the threshold you get a net increase, above it you get net decrease. Opinions differ on where that threshold would settle at (because with UBI the state could shut down some other benefits that are currently funded with tax money).

Unless this is applied only to the richest 1%, majority won't support UBI. I think that true UBI is something that is given to everyone (even the 1%) and everything else is abolished (unemployment, paid sick leave, pensions and all other social security benefits).

UBI instead of welfare is a libertarian theoretical that isn't gorunded is people's real life concerns or particularly relevant to realpolitik.

This, and the other comment about rents going up, is why you should tax rent and not income.

I have never heard of this concept, but I kind of like it on its face. Can you elaborate?

Just an extension of the land value tax really.

See https://en.m.wikipedia.org/wiki/Henry_George

Yes, this is the gap between "I wish everyone had this", and "UBI is a great idea". I don't know if the economics can scale to an entire population, but I really wish it did.

Isn't it the case that if you earn over some minimum threshold you don't receive UBI? In which case it raises the bottom not the entire scale.

We could always make renting above cost of construction and maintenance illegal and have the state build public housing, but this is unpopular with landlords and aspiring landlords.

The worked out super well in the Soviet Bloc and with section 8 housing.

Housing was one of the successes of Soviet system. Tall apartment buildings surrounded by parks.

It's hardly surprising that people would object to what amounts to a public seizing of [the economic value of] their private property.

Well now that clarifies the contradiction between solving the housing problem for the majority of people and the interests of private property. :-/

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