Free money for all? Garcetti hopes guaranteed income test brings big change | Hacker News Reader

Free money for all? Garcetti hopes guaranteed income test brings big change

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20 pointslxm67 comments

UBI is such blatant bribery by the existing governance structures, in order to ensure conformity to their ever increasing dictats.

I don't see how anyone things this action is a good thing - it's inflationary, it's bribery. How will people voice alternative opinions, when to do so will risk loss?

UBI is just a trick to have everyone willingly sign up into assimilation into the government's citizen-borg.

While I'm not a proponent of UBI I'm not sure it's a trick. It's coming from a lot of different people and places. I think it's an idea that people want to try and think it might work. Personally, I think it's an idea that will ultimately be abused by corporations and the government.

The point is that it makes peoples survival dependent on the whims of politicians. In the future, if they choose to disqualify you from UBI for any reason, what recourse do you have? We should not be giving politicians direct coercive control over our lives.

And to people who say "if they disqualify you, then it's not universal, ha!": legislators don't let things like simple semantics stop them from enacting laws. If they really need to, they'll just re-define the word.

Paying your debt to society by walking into the photo booth for your last 'flash', turned into soylent green, escape the machine!1!!

> It's coming from a lot of different people and places.

I don't see that at all - all the proponents of UBI have the same political alignment. I don't see any cross-demographic support of UBI.

I've read Ayn Rand lived as 'Welfare Queen' in her later years. Seems to have worked well.

shrug

garcetti is on his way out to be the US ambassador to india and he's trying to use a grand gesture of literally giving away money to paper over how utterly he's failed as mayor, particularly on the twin problems of homelessness and housing construction here.

and to top it all off, he's doing it with ubi, a program to lock in structural disparities that inhibit social mobility under the guise of being egalitarian. i don't know whether to laugh at his impotence or cry at the mess he's leaving behind.

> $24 million guaranteed income program to give 2,000 poor families $1,000 per month

This is really missing the "U" in "UBI". That aside, how does UBI (combined with a progressive tax system) "lock in structural disparities"?

Not the OP, but in general when there is high socioeconomic mobility in society, high taxes disproportionately impact high earners who are not yet wealthy. If you're already wealthy you can draw a subsistence income from investments and be taxed at a low rate, while paying 0 rent since you own property. If you're not wealthy, you need to make enough to pay (high) rents and also build up your wealth, which means you get doubly screwed by high tax rates.

Presumably UBI would be funded by increases in taxes, so this logic would apply.

We can argue about whether the US has high socioeconomic mobility but the majority of millionaires in the US are self-made [1]. It is perhaps questionable whether 20th wealth percentile poor can make it to the 99th percentile, but I think it's much easier for a 60th percentile person in the US to make it to the 99th percentile compared to Europe.

[1]: https://www.businesswire.com/news/home/20120719005724/en/Fid...

Your criticism is about the tax system, not UBI. If you want to change the tax system to target those issues, that sounds like a good idea. It's sorta orthogonal to the conversation about where those taxes go, though.

Like I said, UBI would be funded by large tax increases, so instituting UBI would directly fuel those inequalities.

By your logic, any tax increase will fuel inequalities. This is a reasonable line of thinking (although I do not know its validity), but serves nothing more than to derail a conversation about tax-funded benefits.

The conversation is whether UBI will fuel existing inequalities or remove them. I argue it will exacerbate inequalities because of the taxes needed to pay for it. How is this any more derailing than the OP's comment about Garcetti?

The healthy thing to do is focus on simple problems that the chimp troupe has a track record of solving. Everything else is just noise.

For anything too complex, it doesnt matter who gets propped up or what they say, do or think, the chimp troupe is going to blunder and then blame, hide, defend, spin their attempts.

The trap is believing complex problems, above everyones pay grade, just requires pointing at it and finding the right chimp. That is not how the universe handles complexity and neither should we. Focus on the simple stuff. Complexity is for the clueless and the crazy.

I'm against UBI, but at this point, we should just pick a low-risk state and do it, just so we can all see how it realistically plays out. Maybe I'm wrong and it's amazing and solves many problems. Or maybe it is disastrous, but at least it will be isolated at the state level, and we'll have an example to point to.

Would be nice to hear why are you against UBI.

For starter, here are my main doubts:

0. The most important one. The true UBI - not the one-year-hundred-bucks-pilot-projects - but a true lifetime promise of some significant money will be extremely hard to roll back. Once the djinn is out of the bottle it will be close to impossible to squeeze it back in. We have to think twice before cutting.

1. There are a lot of talks about wealth inequality. What are we going to do if UBI actually increases it? Which actually has great chances of happening, because the money paid to poor will eventually be pumped into more wealthy pockets. Are we suddenly going to change the narrative and conclude that wealth inequality is okay as long as everyone is fed and has roof above their heads?

2. Are we going to get UBI ghettos? This is the question to which temporary pilots won't answer. In twenty years of UBI are we going to get neighborhoods where children don't go to schools, because - well, because why would they?

Actually, the question is not even whether we gonna get these ghettos. In a country with 350 million of diverse population we will get a bit of every possible outcome. The questions are (a) how many and (b) what are we going to do with them?

3. Who gets the UBI? All the citizens, but not the aliens? Something seems wrong in a situation when some people - by the virtue of being born in a specific place - don't work and rely on foreign workforce for all their needs. It's not exactly slavery, but looks ethically wrong.

4. We have enough trouble funding retirement pensions. Funding UBI will be double that - at least. What's the plan here? What do we do if the country literally runs out of money?

Any thoughts?

Fire up the printers, lads!

We have had a sort of UBI with the pandemic and a sizable portion of people have chosen not to work. I think if you have healthcare, your rent paid for, and free food then there could be 15 to 30% of the population that will just watch Netflix and hang out all day. It’s enough to erode support for the entire program.

I think the number of people that would FIRE would grow exponentially. I know I would if I had healthcare and enough income for all the basics ($1000 per month).

FIRE is financial independence. It implies you worked hard, scrimped, and lived frugally to earn an early retirement.

Getting free everything is not FIRE. It’s reliance on the welfare to eliminate any requirement of productivity.

I’m not even saying that’s a bad thing, I’m just stating what it is.

But people who FIRE today do depend on things that are publically funded. If you read blogs about it, people talk of free library programs, subsidized public transit, tax credits where you get more back than you paid in - net profit, etc. I didn't include Social Security or Medicare since they are supposed to be single payer systems, yet the way they are funded today doesn't exactly jive with that. All I'm saying is that they would FIRE sooner with the extra income.

You are right but IMO the difference is that the government is enabling people to “retire” without ever working a day in their life. If you have enough money for food, shelter, and free healthcare from cradle to grave with zero requirement of ever working a single day in your life, I think society will change.

"FIRE" is more accurately described here as not being a productive member of society, which is fine if you've contributed your fair share for 20 years, but not so fine if you're 22 and just out of college.

Somehow I doubt that these people are going to use their free time to get education. Without the pressure of parents/society to get good grades (i.e., achieve mastery of the content, although I recognize in some schools classes are poorly taught and tests don't reflect mastery) most college students would cruise through their classes - just talk to any student who took classes P/NP this past year.

"which is fine if you've contributed your fair share for 20 years"

I wonder what defines fair share. It seems that one could inherit, win, or take advantage of others to accumulate enough wealth to FIRE just as often (maybe even more so) than people who actually earned it by working. I say working because making it through capital ownership without participation doesn't seem like earning it in a way that is beneficial to society.

In the end, I don't believe that people who FIRE actually worked so much more and provided so much more for society than those who do not. Many socially beneficial jobs pay the least (teacher, social worker, etc).

A "fair share" simply means that you have contributed to the society more than you got back. Money is not an absolutely perfect way measure this contribution, but all other measures are even worse.

Considering the national debt, most people would not meet your definition since we are all using these services that have not been paid for, right?

Right. Most people would not meet this definition.

The person who brought this up was implying that people who FIRE today are paying their fair share.

Makes sense: those who FIRE don't comprise the most of people.

How does that make sense based on the definition above? FIRE doesn't really have anything to do with whether or not they paid their fair share.

People who FIRE don't inherit money. The entire point of FIRE is that you are _saving_ for early retirement. You can certainly argue that these people might not have useful jobs, but I don't think you can argue that they've contributed less to society than someone who has _literally done nothing_ since they were 22. A futures trader on Wall St. is still making it easier for a farmer somewhere to sell their crops with a guaranteed price by making the market more liquid and lowering slippage.

"People who FIRE don't inherit money."

This is blatantly false. There are plenty of people who become Financially Independent and Retire Early (FIRE) once they inherit money.

Do you think futures traders are contributing enough to society to warrant early retirement? How about the oil futures issue last year? Was that beneficial to society? These people are more about greed. They do not produce anything for society and their facilitation "benefits" are limited and can be wasteful in the name of making more money.

That is entirely dependent on your idea of "benefit" to society. Accurate pricing of futures means farmers benefit from a price that accurately reflects the supply and demand of their product. Strong liquidity means farmers can sell large volumes of product without much price slippage. If you take the time to understand what these traders do you'll understand that trading is not parasitic but actually generates value for both sides. What IS parasitic is hedge fund managers that charge fees but deliver subpar investment performance compared to index funds.

You refer to the oil futures issue last year as being negative for society but I argue it was actually positive for the productive members of society: because traders bought oil futures, the oil producers themselves were able to get guaranteed buyers for their oil even though there was very little demand. In effect the traders subsidized the uncertainty of pandemic ups and downs and the producers profited off the traders' loss. This is an example of futures working well because that oil otherwise would've been dumped or burned since the price was negative (just like wind farms stop operating when the price is negative or oil drillers burning natural gas because it's too expensive to transport).

Without futures farmers would have to buy price insurance through some sort of middleman insurance company, which is almost certainly more expensive than the market.

"...farmers benefit from a price that accurately reflects the supply and demand of their product."

But does society benefit when it's cheaper to let the crops rot than take delivery?

"This is an example of futures working well because that oil otherwise would've been dumped or burned since the price was negative"

The whole reason they weren't dumping oil and tankers where making bank was because you can't legally dump it. That is why rates were negative - you had to put it somewhere and many of the contract holders where speculators with nowhere to put it.

"Without futures farmers would have to buy price insurance through some sort of middleman insurance company, which is almost certainly more expensive than the market."

They already have crop insurance, which includes price issues...

Your #1 is something I have thought about as well. Specifically, if the higher income people don't need the money, they will invest it while the lower income people are spending it. Although this might be offset by the increased tax burden (who knows how that will look). If everyone is getting this money, then I would also expect some inflation, which would likely hit the lower income people harder than the wealthy.

For #4, they will never run out of money. It will be worth less from inflation. Or they will take it from the people that have it.

Agreed, I cant imagine people not just voting in the politician that promises them the most money once that train leaves the station.

UBI has the fundamental problem of not addressing inequality, but further fueling greater inequality. It is essentially a free license for those economically abusing employees and anonymous others to continue unchecked, and, frankly, double down because now their economically captured serfs have their guards down and their employers can push more healthcare expenses their way, and there will be a huge jump in multi-level marketing within UBI communities, and several more eyeball rolling developments.

The answer to all our woes is that unpopular Education Funding issue. No UBI would be needed with a nation of educated self-actualizers, rather than the nation of marginally educated workers with blinders on and kids that need far more attention they they can give. That's the society we have created thus far. If UBI were in a form such as "free room and board and spending money as long as one is in school, thru a PhD if one wants", I might think differently. As it is being formulated now, it is a recipe for Mr. Obvious to say "look, UBI does not work, it created this giant worse than before mess".

> Education Funding issue

I understand you're talking about college education. But I can't avoid mentioning my beloved Baltimore School District. Awesome funding. Shitty results.

[1] https://foxbaltimore.com/news/project-baltimore/baltimore-ci...

[2] https://www.forbes.com/sites/adamandrzejewski/2021/03/30/bal...

[3] https://educationdata.org/public-education-spending-statisti...

I had a friend who worked at the Baltimore Aquarium. The workers there had college degrees in stuff like biology and were only paid about $30k per year. Yet they had about a dozen executives making salaries that were 10x higher. Your link with salaries made me think about that.

I understand glassdoor.com [1] data should be taken with a grain of salt, but from what I see there $30k is a fairly junior position and most exec salaries are around $100-150k.

It doesn't strike me as something being completely out of whack.

[1] https://www.glassdoor.com/Salary/National-Aquarium-Baltimore...

Seems pretty terrible for a position that requires college and is not the cheapest of areas to live in... safely (he needed roommates and still lived in an area with crime, including a guy getting shot a couple houses down). That's $15/hr. You can earn that working at Lowe's or Walmart and not take on $60k of debt. At that wage, you're basically just paying interest.

He also said there's basically no mobility. A guy he knew was there for closet to 20 years, got good reviews, etc, and was still only making about $45k as a supervisor who also filled other roles.

> If UBI were in a form such as "free room and board and spending money as long as one is in school, thru a PhD if one wants", I might think differently.

Yes, you'll have a society filled with gender studies[1] graduates.

[1] Or any other coaster program.

We just witnessed what happens with UBI (covid relief). Everyone sits on their ass and stops working. We heard the testimonies from small business owners that couldnt compete with the govt paychecks and hire people.

I think part of the problem is that any localized UBI that doesn’t include everybody within an actual immigration border (ie the whole US, whole Schengen area, etc) will either 1. have adverse selection as people who want the UBI will move to go get it 2. need to means test somehow (eg live in the state for at least two years) and thus not be universal.

And you think this won't be an issue on the national level?

If it's truly universal, then I would expect substantial illegal immigration to occur. Seems like a valid/realistic experiment in that case.

What's more is that there appears to be a huge overlap of UBI proponents and anti-border proponents. So it is 100% a realistic scenario that any experiment should take into consideration.

I think a big problem with current UBI proponents (and in general in the last ~2-3 years, Democrats) is that they don't understand how supply and demand work. When you see Biden touting the Child Tax Credit as a response to decreased purchasing power from inflation you know something is wrong [1] (increased income at constant supply will only increase prices). Same thing with minimum wage increases - the real purchasing power of minimum wage workers stays the same no matter how much you raise it; you can see this effect played out over the last 5-8 years in the SFBA. I strongly believe if you institute a UBI it will have the same effect and just dilute everyone's purchasing power. UBI experiments that are localized to a few thousand people don't encounter this effect because they aren't big enough to impact the economy.

I am all for UBI once we know that 1) it won't just get sucked up by landlords, since housing is highly inelastic and a de facto local government-granted cartel 2) people won't just fuck off and play video games/watch TV all day.

[1]: https://www.bloomberg.com/news/articles/2021-07-25/white-hou...

Raising real income for workers by taxing capital holders and high income individuals does not necessarily cause inflation.

One could argue that many ailments of the US economy are due to the skewed income distribution. UBI schemes are a blunt method of altering the distribution.

Sure it does. By redistributing it from people that don't use it to people that do, you increase the velocity of money. Inflation is a function of velocity * supply, ergo redistribution causes inflation.

But I'm not talking about that kind of generalized inflation, I'm talking about inflation specific to rent prices. If landlords hold an oligopoly, any increases in real purchasing power will be absorbed by rents. That is what has happened in the SFBA and what will happen if UBI gets implemented.

A common thing both sides of the UBI debate don't consider is "Should UBI normalized to a local cost-of-living" I think the default assumption a lot of people make is "yes" but having an unadjusted UBI can have a LOT of benefits.

There will be inflation, but it won't 1-1 undo the benefits. It will be distorted by demand. It would basically let us re-colonize low cost of living areas that are currently getting abandoned because the only hope of income without capital is in urban areas. "UBI ghettos" won't happen simply because they will be too expensive, if you want to survive on UBI you will have to move to a low cost of living areas in order to escape the inflation of urban cost of living and the US if FULL of low cost of living options, they just lack demand because they don't provide hope of financial advancement like high-demand urban areas. UBI would first allow us to utilize all that space better and then the presence and distribution of those colonists would provide the potential for economic advancement that rural areas currently lack.

Would people decide just to "live off the system"? Sure they will, let them! The reality is they probably were not producing much more than a narrative of power for their employers anyways. This way we don't even waste the effort of that lie and they get to have better lives. The only loser is the person who needs to command others for their source of life-satisfaction.

At the end of the day, all the benefits of UBI are secondary to the one reason we MUST have it. Automation increases efficiency, but when the automation is not owned by workers, it just lowers their negotiating power. The result, is that as the value of labor lowers below the costs of living, nobody with power has inventive to fix it until the starving proletariat shows up with guillotines. UBI or a system like it will be the only way to avoid the inevitable self-destruction of our capitalism due to short-term incentives being followed to a dead-end.

People talk about the pandemic financial support (payments or unemployment ect) causing labor shortages, the problem isn't that we don't have labor, normally we have a labor surplus! The problem is that our economy is predicated on labor costs so low that they only interest a desperate and starving worker class. This is what happens when workers get negotiating power like UBI would give them!

Here's a wild question.

If UBI was implemented, would it be possible to collect it and just move to a low cost of living country.

If I was 18 and guaranteed 1k a month it's not out of the question to move to Vietnam or another cheap place.

Sure you won't be rich , but you'd never need to work.

I will agree Garcetti is a truly horrible mayor. But he's basically the first mate taking over a sinking ship. Nothing can be done to fix LA.

Case and point, when I was young you could still fine a 600$ studio apartment in LA. It wasn't glamorous, but for a kid who was evicted multiple times it was practically a mansion. That's all gone now.

No one on their right mind should live in LA. Almost anywhere else in America will be a better choice

> Case and point

"Case in point".

Seems like handing out interest-free money would be a more democratic mechanism for managing the money supply, which, as near as I can tell, is a public good currently managed by a private cartel.

i'd personally reframe this point to say that money should be injected directly where value is created, i.e., with labor. economic value is intrinsically a human endeavor, conjured into being by creating (or at least finding) value, not cornering and gatekeeping it. the moving of the injection point from greedy bankers to value creators (i.e. laborers) is one of the few points in favor of ubi, but of course, that could be done in a myriad of other ways absent of ubi.

The private cartel would never give up that power. So common sense tells you that if they ever appear to willingly give up that power (by use of the media propaganda, etc), there's a major catch to the whole thing.

I'm aware guaranteed income isn't the same thing as collecting unemployment, but the fact there's major employee shortages (at restaurants, etc) the moment the lower classes are given some money (via Covid bailout money adding to unemployment benefits) certainly doesn't bode well for the basic-income argument.

Is it representative to hand out $1K or $500 a month? It doesn't sound like it would change much for most people, though I'm sure there's someone on some margin who gets pushed over into being able to do something they want.

The other issue is if it's not permanent, is it representative? Even if I was getting $100K a year, if it was just for a couple of years I'd behave differently from if it was guaranteed.

Thus UBI is one of those things that's hard to test by dipping your toes in.

Idk, man - even an extra $300 a month can be the difference between having/not having a car that gets you to work every time.

This point shouldn't go overlooked. It's even more important in a country like the US where public transportation and walkable cities are non-existent.

Minimum full time pay in the US is generally in the 20-30k range for most locations. An extra 1k/month is a 50% pay increase for such workers.

A knock on effect is that if push came to shove I could live in my current city as a single individual off of 800-1k a month. It would be unpleasant, but not being under threat of losing your apartment gives you greater negotiating power and freedom to find better work.

that's ignoring the overwhelming likelihood that rents (and inflation) will rise to gobble up that extra $1k/mo, and then you're back at square one, but now locked into being another $1k behind, and the wealthy landlords (like reits and hedge funds) will have an extra $1k from every renter in the state.

Peg the UBI to a set of cost-of-living indexes that include rent, trigger hyperinflation, suddenly everyone's paying a hundred billion per month in rent and the fortunes the ultra-rich are sitting on vanish, I see no problem here.

that's heedlessly (and appallingly) justifying runaway inflation. the end state of that game is that ubi would become our only income, which would sap all economic incentive away from any creative endeavor, as we all become serfs to a governing elite (who'd of course pay themselves way more because they deserve it for doing all the hard work).

I call bullshit on your prediction.

When my grandmother died she left me enough money to not have to work a day job for most of a decade. I spent this time using my creative skills to draw whatever the Muses dictated, instead of what a corporation would pay me to do (and instead of doing other things corporations would pay me more to do). I built a modest following that is large enough to fund a Patreon campaign that covers my needs, and allows me to keep on drawing pretty much whatever the heck I want to draw.

This effectively amounts to the claim that low end workers are not living in a market economy. If they get raises landlords/other rent seekers will take their wages, if the government gives them money - then The same will occur.

If we have such incontrovertible proof that we are not living in a market economy, then many non market interventions become palitable. After all why should landlords be the favored gentry vs the power company or any other firm.

Landlords and hedge funds will be much more displeased with this set of outcomes.

If you're homeless and unemployed it sure would make a hell of a difference.

If you're stuck working three shitty part-time jobs that refuse to give you enough hours to get anywhere near crossing the threshold where they have to start paying insurance, it'd make a hell of a difference.

Even if it's "permanent" people with any degree of forethought at all would act differently, because it ain't gonna be "permanent" until the Republicans stop trying to tear it down in the interest of having a permanently unstable workforce that's easy to force into shitty, underpaying jobs with the threat of homelessness.

An extra $1000/mo is like adding another working adult's income to a family at/below the Federal Poverty Level.[0] That kind of cushion can keep the power on, food in the fridge and even allow you to save money! by purchasing necessities in bulk.

[0]https://www.healthcare.gov/glossary/federal-poverty-level-FP...

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