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Comment by brightball | Hacker News Reader

Yes, with caveats.

1) It can’t be enough to desirably live on. It must essentially be “survival level” so that there is still an incentive to contribute to society with your work. Unlike unemployment, this means that if you get a job you just make more money rather than trade unemployment for a paycheck.

2) You have to strictly prevent increases due to inflation or inflation will spiral further out of control than it already is, perpetually increasing the UBI to accommodate the increases in costs for everything leading to a death spiral for the currency. Otherwise, it is impossible.

3) You must reduce all other benefit programs by the amount of the UBI to help pay for it.

4) It can only be done in a way that most people will be paying it back with reasonable income levels or it will be a perpetual drain.

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It's a myth that spending money causes inflation. Printing money causes inflation. If the government can run a basic income program without increasing the monetary supply then no, there will be no impact on inflation. In fact it will be the best economic stimulus in history.

It’s a myth that printing money causes inflation. Raising prices causes inflation.

And supply and demand will naturally raise prices when money is printed.

Depends how the printed money is distributed

The supply and demand for something with change regardless of how it’s distributed. If you’re spending the money on food and housing, demand for better food and better housing will increase.

If it’s all going to a bunch of really wealthy people then the it will be focused on the types of assets that they would spend money on (businesses, yachts, whatever).

No matter the supply of money, there’s a limited supply of everything else.

My understanding of marginal propensity to consume is that it decreases as wealth and income increase. The wealthier you are, the less you tend to spend as a function of the next dollar. So the inverse would imply that there would be more spending overall with UBI. We sort of saw this experiment play out with the COVID relief checks.

Given that increase in demand, I'm curious how UBI would affect the supply side. My first thought is that it would negatively impact supply since there would be less efficient allocation of people to supply-related jobs. Unless I'm off here, I struggle to see how increased demand and decreased supply wouldn't impact inflation.

It's not like all of the extra wealth is frozen in some account. People hold the wealth in assets and investments.

> Unless I'm off here, I struggle to see how increased demand and decreased supply wouldn't impact inflation.

We're rapidly approaching the situation where 10 factory workers can be replaced by a single worker supervising some robots.

At some point the decrease in employment will not significantly impact productivity for a large sector of the market.

A properly implemented UBI scheme will be significant enough to allow a large part of the population to seriously reduce their income, either by working way less, or not working at all. Only that way can the amount of dollars in the economy stay relatively the same.

I think therefore the assumption that supply would diminish while demand increases is wrong.

Given that, would you argue that the main condition needed for UBI, or wealth transfer in general, is increased productivity?

Agreed. Running it without increasing the monetary supply is critical or the whole thing will collapse under its own weight.

> Yes, with caveats.

> 3) You must reduce all other benefit programs by the amount of the UBI to help pay for it.

This isn't a caveat. A caveat is "something that is possible". This is about as possible as asking a human to flap their arms and levitate as a result of that flapping.

Firstly, there is no way, on this earth, that you are going to convince the population that a healthy young male who wants to only play videogames gets exactly the same amount as a crippled mother who is unable to work.

Secondly, you have to be prepared to let people starve to death in the streets. If that non-insignificant chunk of people who have gambling/alcohol/sex/drug addictions blow their entire income on the first day of the month on slots/booze/prostitutes/drugs, any funds you set aside for them means that what you have is UBI + existing welfare, not UBI instead of existing welfare.

> Firstly, there is no way, on this earth, that you are going to convince the population that a healthy young male who wants to only play videogames gets exactly the same amount as a crippled mother who is unable to work.

I said reduce, not replace. If you get $800 / month in UBI and $5,000 / month for disability (crippled mother example) then you would reduce disability by $800. There would be no change to the benefit for the crippled mother who is still getting $5,000 / month ($4,200 from disability and $800 from UBI).

Then what you have, at the end, is just an additional entire department devoted to a welfare program, feeding from the same pool of funds that all the existing welfare schemes are using.

I mean, using "reduce" to mean "lower existing welfare payouts (not costs) by enough to allow UBI welfare" is very different to how UBI proposals normally mean "reduce".

There is a need for something, but UBI as it is currently being proposed by world+dog is not that thing.

I think your argument might be the first one that I've seen that doesn't use "reduce" to mean "almost eliminate".

Think about this like a plug-in hybrid vehicle. Most people drive less than 35 miles per day so by moving that mileage to electric, you eliminate the vast majority of gas usage.

By taking out the first $800 from every other benefit program you will eliminate the vast majority of their usage as well which will shrink them enough that they can be safely reformed if need be.

> so that there is still an incentive to contribute to society with your work.

I think you're mistaken on some parts. The problem that UBI is trying to solve is that we're quickly approaching a situation where we don't need people to 'contribute to society with their work' anymore.

On some basic level the economy works because companies produce products and services and the consumer pays for those products and services.

Currently the consumer side is in large part financed by wages.

This means that a large part of the economy is dependent on a large part of the consumers being employed.

This will be a problem when there is a very high possibility of mass unemployment when advances in AI will make most jobs obsolete.

The solution is to decouple the consumer income from employment, through something like UBI. This allows people that are jobless to still contribute to the economy and keep (local) businesses alive.

For this to work UBI actually does need to be able to provide a comfortable (desirable) life. This doesn't mean luxury, but it should allow someone to have a house, buy groceries, visit friends and family, use (public) transport, go on a 2 week (national) vacation every year, save a little bit.

If the UBI is not enough to provide a comfortable life, people will still need to work which doesn't solve the problem.

I think making the UBI low enough that most people will still work is exactly what would cause inflation. If the UBI replaces wage, the amount of money in circulation wouldn't change, so no inflationary pressure. If people keep working but get an extra UBI on top, the amount of currency would greatly increase thus lead to inflation.

Personally I think we all should just accept that if we allow people to truly choose what they want to do, some of them will choose to do nothing. But in general people are productive creatures, and most if not all, have some limit to the time they don't want to do anything. Besides that UBI would be a great incentive for people to start their own business, volunteering, or doing valuable things that are inherently unprofitable

>This will be a problem when there is a very high possibility of mass unemployment when advances in AI will make most jobs obsolete.

We've been here a few times. Not with AI, but with the agricultural revolution (hunting and gathering became almost obsolete), the industrial revolution (physical force became almost obsolete, if it was not needed in conjunction with intelligence), the computer revolution (tedious data processing became obsolete), the internet (messengers and mail, as well as local businesses became almost obsolete)...

Every time, large swaths of human work were made nigh-obsolete, but societal progress needed people to find other niches to work in to expand our societal wealth. If everybody just laid down their work and didn't look for anything new, some other civilization would have taken over, because somebody there would.

>UBI. This allows people that are jobless to still contribute to the economy and keep (local) businesses alive.

If the money they use is not backed by value production it will make everything more expensive, since the purchasing power of that currency depends on less value. Local business will be the last to be kept alive, because UBI will need to be lower than working wages to motivate others to continue working whose work is still needed. Local businesses have the habit of being more expensive. UBI receivers will be the last people able to afford that luxury.

>I think making the UBI low enough that most people will still work is exactly what would cause inflation.

Why? The more people work, the more value is being produced by this society, the less inflation there should be, due to costs being lower.

>If the UBI replaces wage, the amount of money in circulation wouldn't change, so no inflationary pressure.

But nobody worked for this money, since it's a redistribution it will have inflationary effects. Because there's the same amount of money, with less things to buy for it.

> 1) It can’t be enough to desirably live on. It must essentially be “survival level” so that there is still an incentive to contribute to society with your work

I used to think like that, but it too is fundamentally unfair. It is a recognition that there must exist an underclass of people that will be coerced into work else they will be kept at "survival level".

Yes, it is unfair. If we have all this great automation and AI, why is this necessary?

Any sane UBI replaces most, if not all, other benefit programs.

It just doesn't work though mathematically. If you take my home country of Canada, giving 40k a year to every person 18 and over would cost around 1.3 trillion (assuming a modest 3% admin cost) vs a current federal budget of around 400 billion, with the provinces it's likely around 1 trillion. SO just to fund a ubi that would not be very comfortable for anyone to live on, especially with a family, would require raising 30 % more revenue. This does not account for the large percentage of the budget that is just not cheaper to provide privately through individuals paying from their ubi (i.e. military, healthcare, policing, transport, protection of public forests, regulation of food and drugs, education). even if you cut all levels of government spending to the bone leaving only the stuff it makes complete sense to provide communally, you are left with maybe 300 billion (but likely much lower because I haven't analyzed the cost of promised retirement benefits at all), which is roughly 9k per year per over 18 person, which isn't enough to come anywhere near the numbers supporters of UBI want. That means much higher taxes but our taxes are already insane and so will likely not extract that kind of money from the populace, especially when they are being incentivized not to work with a 9k check each year, most of us will tell the government to pound sand and just cut our work hours.

Our taxes in Canada are a bit low, especially on the wealthy.

However your argument seems to stem from "if we give it to everyone and cut nothing where does the money come from". Well, a part of it comes from all the welfare programs it replaces (OAS, Ontario Works, etc) and a huge amount of it doesn't really exist (since for the vast number of people you'll tax back 100% of it anyway).

For the amount that's left, yes, one needs to choose a funding strategy. A real policy play with all the data available would have the needed numbers to begin to decide what that looks like

> Any sane UBI replaces most, if not all, other benefit programs.

Elsethread I wrote:

>> Secondly, you have to be prepared to let people starve to death in the streets. If that non-insignificant chunk of people who have gambling/alcohol/sex/drug addictions blow their entire income on the first day of the month on slots/booze/prostitutes/drugs, any funds you set aside for them means that what you have is UBI + existing welfare, not UBI instead of existing welfare.

Are you willing to let people starve to death?

> Are you willing to let people starve to death?

How is this any different from how things work now? “UBI”, to me, and in a society where work is largely a non-human task, needs to encompass housing, food, etc. In a world where jobs don’t exist in the way they do now, UBI needs to be a stop gap while we completely overhaul what it means to have an _economy_.

>> > Are you willing to let people starve to death?

> How is this any different from how things work now?

Now there are specific (and often means-tested) welfare benefits available to people. Replacing all of those benefits with a single (non-means-tested) cash payment because:

>>> Any sane UBI replaces most, if not all, other benefit programs.

means you have to be ready to let other people die for your principles.

I get what you mean, and I don’t think the two can’t coexist. Some benefits like SNAP would probably go away - what’s the difference in $500 for food vs the lump of UBI? If you’re getting $4k/month, then the need for those specific benefits goes away. If you’re disabled, UBI doesn’t need to replace your disability benefits, but could supplement it. Imagine having that $2k/month for disability on top of the $4k for UBI: people could actually focus that $2k on treatment instead of just using it to barely get by.

Existing welfare programs that give out money are in the same boat anyway so it's no change there.

I am not suggesting the elimination of food banks I suppose, which one might consider a benefit program, though usually not government operated.

It replaces a small portion of benefit programs at best. Any sort of a serious disability and/or health related program will still need the same amount of resources to support people who need something other than money. And no UBI payment can cover market rates for these sorts of services.

> You must reduce all other benefit programs by the amount of the UBI to help pay for it.

“Must” feels strong here — particularly for any country that under-taxes their wealthiest citizens and spends wildly on defense.

The article calls this the “battering ram” using UBI against existing entitlements.

> 1) It can’t be enough to desirably live on. It must essentially be “survival level” so that there is still an incentive to contribute to society with your work. Unlike unemployment, this means that if you get a job you just make more money rather than trade unemployment for a paycheck.

such a bizarre position to take. "we could build a basic if functional utopia, but I'm worried about the work ethic of other people and how they have fun so instead I will insist that it fucking sucks".

why are you like this?

why do you:

1) care? 2) assume other people will just smoke bongs all day? 3) care if they do smoke bongs instead of doing something you find valuable?

how much oversight of the worthiness of how you spend your time and how you should be rewarded am I permitted right now?

1) Because a UBI program has to be paid for. It will be paid for out of taxes. If everybody simply consumes it but doesn’t contribute to helping to pay for it the entire system will fail anyway.

You cannot have a UBI if it incentives the majority of people to not work in some capacity because the system will naturally fall apart.

The system shouldn’t survive, that’s fine. A lot of the takes here envision UBI somehow fitting into our current economic model. In the case where AI/automation truly remove a bulk of the jobs, we shouldn’t be trying to prop up our current capitalistic model. At that point of industrialization, we will need a model that allows needs to be met without worrying about what it means to afford something, or to at least drastically reimagine it.

>If everybody simply consumes it but doesn’t contribute to helping to pay for it the entire system will fail anyway.

In a world where AI takes jobs, couldn't they also take on the responsibility of taxes? All the top dogs from OpenAI, Anthropic, NVIDIA, etc. keep talking about the ridiculous value that AI could provide. Trillions of dollars.

I'm no economist, but here's a naive suggestion: make the robots pay taxes. If AI turns out to be as incredible as they're hyping it up to be, then every company on earth will be paying some big AI company for its services. Instead of letting OpenAI and others hoard all this money, take a cut of their insanely high revenue to pay for UBI.

... As I said, I'm not an economist - I suspect there's a serious flaw in my suggestion but I don't know what I don't know. I'd appreciate any rebuttals.

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