We Need a Basic Income Guarantee | Hacker News Reader

We Need a Basic Income Guarantee

dangerousminds.net

268 pointstokenadult530 comments

Can someone please explain to me why a BI wouldn't simply result in higher prices, resulting in the need for a higher BI, resulting in higher prices, resulting in the need for a higher BI, etc?

You have two mechanisms by which you can fund such a proposal:

* The government prints money and hands it out. Basically, just direct inflation; the BI becomes an arms race to keep up with inflation caused by BI.

* The people who successfully make money have a larger portion of it taken away by the government and given to people who don't make money. They recoup their losses by raising prices and re-extracting it from the people it has been given to, except now the government gets a cut of it twice. BI has to be increased to keep pace with rising prices caused by funding BI.

(There is a third proposal: Borrow it without any plan to actually repay it, which is not self-sustaining for obvious reasons)

In either case, I can't understand how a BI would lead to a more stable economy. The endgame of the first option is Zimbabwe. The endgame of the second option is Marxist communism; the point at which the system reaches stability is the point at which there is nobody left to extract extra money from to distribute.

I feel like I'm missing something critical that makes it a viable strategy. I don't think anyone at all is in favor of uncontrolled hyperinflation, so I'm left to conclude that the favored option is the second choice. We know from history that communism just doesn't work once you reach a large enough population that people are not personally accountable to each other; why would it be different here?

(I want to make it clear that if I could snap my fingers and make the world such that nobody had to live in poverty and had food, clothing, shelter, and an internet connection, I'd do it. I don't have anything against the moral goals of BI. I just don't see how it's sustainable, since the money for it has to some from somewhere.)

I think this is the classical error of false dichotomy. Useful for rhetorical purposes, but it is more just a statement of two possibilities and an assertion that they're the only two, with no backup.

I reject completely the idea that either printing money or borrowing money is a viable solution for most economies in the medium or long term. According to you, that must mean I support a Stalinist regime[1]. This is false, to say the least. Other (relative) proponents of a basic income, including such luminaries as Hayek and Milton Friedman, would likely also look at your claim with great skepticism.

A basic income is just the redistributionism practiced by current mixed market economies but implemented much more efficiently (in both the Pareto and administrative senses) than what exists now.

Price levels would be affected by a basic income, but you've got to specify what and how much. Considering supply effects, the likely first order result of a basic income is an increase in the cost of basic goods and also an overall increase in the consumption of them. Goods that are typically bought with, say, the marginal dollar at twice the basic income level will decrease in price but also be consumed less. The market would reallocate capital to more efficiently produce basic goods (defined as the goods that are typically bought with marginal dollars beneath the basic income level).

You might dislike this kind of very limited redistribution. Fair enough, and that is a great debate to have! But you've also got to be thoughtful about the full package. It's not whether you prefer no redistribution to a basic income. It's whether you prefer a basic income to a costly and heavily-administrated redistribution driven by special interest groups.

[1]Also, "Marxist communism"? I'd be curious to ask if you've got even a passing acquaintance with the structure of the Soviet economy. It's fine to criticize a basic income on inflationary grounds, but saying it's communism is so off that it qualifies as not even wrong.

> According to you, that must mean I support a Stalinist regime[1]. This is false, to say the least.

Agreed, and I apologize for the rhetorical device. I'm not sitting here twirling my mustache trying to get people to say "BI == Stalin!!" - it seems to to me to lead in that direction, though, and I'm genuinely wanting to understand why it doesn't (or if it does, why that's okay).

> Considering supply effects, the likely first order result of a basic income is an increase in the cost of basic goods and also an overall increase in the consumption of them

The increase in cost seems obvious (as the necessary contraction of available capital would invariably cause), but I guess I'm hung up on the idea that there would be an overall increase in consumption (or at least, enough of an increase to offset the costs). People are already buying basic goods, be it on government welfare or not; would BI substantially increase purchases of those goods? As I understand BI, the general idea is to provide enough money for everyone to be able to purchase a minimum level of food, clothing, and shelter, so as to attain some particular quality of life. So, my first question would be "how many people do we currently have who are not able to attain this minimum quality of life?", which seems like would be the only market for whom consumption absolutely would increase under a BI plan. As I understand BI, for those currently on welfare, it's approximately analogous - there wouldn't necessarily be much of a change in income. I feel like this is a piece I'm missing - why would consumption of basic goods significantly increase? Basic goods by definition have a price elasticity of less than 1; you don't get linear returns in demand by increasing income.

Re: [1] Woefully unfamiliar, and making an effort to fix that by reading basically all the economic philosophy I can get my hands on. I'm aware that the USSR wasn't a great implementation of Marx's ideals, but I also believe that even the best system gets screwed up by people - if we could actually implement ideal communism, it'd probably be awesome. I guess I more meant "Marx's ideal of the elimination of social classes as we've seen it (mis)implemented".

It's true that most people do manage to consume a basket of goods costing at least as much as reasonable basic income levels. Even the homeless end up consuming many tens of thousands of dollars every year, in costs of health care and social services. (More, in fact, than the simply impoverished do.)

But that suggests a key point: the basket of goods and time that people consume while below the poverty line is not necessarily what they would choose to consume if they simply received some amount of money equivalent to what one could reasonably expect to survive on. For instance, a huge chunk of the money we ostensibly give to people goes to Medicaid, which effectively redirects aid to an expensive program that doesn't even seem to improve health outcomes. What the money would flow into instead would cause inflation in those goods, but at the same time capital would flow to the production and provision of those same goods as more people were buying more of them. The net result is increased consumption of the replacement goods coupled with an increase in price somewhere between 0% and the percentage increase of the demand going for them. The exact value depends on elasticities and how many new ways capital can find to supply those goods.

There are welfare programs that do pass out real money, but they force a different kind of consumption: of time. Instead of consuming hours as an individual knows best, we ask them to send out dozens of ineffective applications. I don't know if they even have good choices: maybe these people are just screwed. But I do know that they probably know a lot better about how to get out of their situation--within the constraints of their particular levels of knowledge and self-control--than I do.

There are also psychological aspects that are pretty important. Living in a constant state of staving off being kicked onto the street forces a focus on short-term thinking, at the expense of medium- and long-term thinking. This is more behavioral than micro economics, but it's as real a factor as any other, and definitely changes what and how people choose to consume.

It's worth noting that I've left off all discussion of people above the basic income level (which, to be clear, I'm imagining as being around $10k), who constitute a significant majority of Americans. Two points I'd like to mention:

1) A lot of people fall into a benefits trap, where if they work they'll be punished. Literally they face a greater than 100% tax rate. For people on disability, this can actually be from 1,000% to 10,000%. This is horrific from an economic point of view, and horrific from the perspective of human dignity and autonomy. A basic income is one way of totally removing those obstacles to participating in the labor force.

2) People at $40k and above theoretically shouldn't be affected much by my suggested basic income, aside from a real but manageable tax hike. In practice, though, I suspect the behavioral aspect would be significant, if they know that they can quit their jobs without having to worry about bare minimum needs (though this is clearly just a strong suspicion on my part--I have difficulty imagining a good test for it). Instead of worrying about destroying their savings, they can go out and try new, risky ideas. I think we live in an era where there's a great need for individual entrepreneurship in both monetizable and non-monetizable goods, so that's something I embrace.

Now there's an interesting argument! If I understand you correctly, your argument is that BI would effectively improve our net economic efficiency (in addition to individual quality-of-life for the poorest) by eliminating waste (in time, money, red tape, etc) from the slew of bureaucratic programs we currently have? That's an extremely interesting point, and one I hadn't considered. BI as a dollar-for-dollar alternative to current entitlement programs sounds very attractive.

I hadn't considered the >100% tax rate on the impoverished, either. I wasn't even aware that this happens - it sounds absolutely horrific, and should be abolished posthaste if it's anything like you describe. Can you point me at some reading material on that sort of thing?

As for the $40k-and-above folks, I definitely think that it could encourage exploration by people with little to lose, but I don't think it would significantly affect people with mortgages and families - quitting your job to pursue a dream that fails still means losing your house and not being able to consistently feed your kids even on $10k BI. I definitely think it would help a certain set of people, and I would love to see entrepreneurship encouraged and facilitated; my concern is that it would do so by disproportionately penalizing existing entrepreneurs, by front-loading the majority of the cost for such a system onto them, and making them bear the brunt of the penalty for it if it fails.

As to the point about Soviet economy,Marx didn't actually have any real plan for how socialism should work, aside from a couple pamphlets he wrote that lacked any real detail. I guess the plan was to play it by ear once the almighty revolution happened. From a business perspective, it strikes me as something close to "Let's implement a product with literally tens of millions of features in a single sprint, and if we fail millions of people will starve to death!" [1]

A good accessible book to read, if you're interested in Soviet economic planning, is Red Plenty. Yes, it's fiction, but very much targeted at people who think linear programming and algorithmic complexity aren't out of place in a fiction book.

[1] That's a bit unfair, in a perverse way, as most of the mass famines we hear about with tens of millions of deaths weren't an accidental byproduct of bad planning but a conscious decision to destroy political enemies or demographics that statistically were less likely to support the regime. From an implementation point of view, the mass economic dislocations the USSR experienced in the revolutionary period were less than I might expect.

I should point out that the structure of the taxes to fund a basic income are a very, very important implementation detail. As a pragmatic matter, I'd want to phase out existing programs like Medicare, Medicaid, Social Security, SSDI, food stamps, educational grants, etc. and simply redirect their funding streams to a basic income--best to pick one battle at a time.

But my ideal taxation scheme includes an abolition of corporate, income, and sales taxes, and a replacement of them with aggressive taxation on goods that are highly inelastic and cheaply taxable. Think land taxes, except updated for contemporary times. Yeah, wish me luck with that.

Why except land taxes? Replacing property taxes with land taxes makes a lot of sense to me...

Because the real world isn't Econ 101.

Not all goods are perfectly elastic. Take a look at the research surrounding the minimum wage.

If we were to increase the minimum wage by $0.50 (~6.7%) we'd only have about a 1% increase in food prices (http://www.ers.usda.gov/media/306735/aib74703_1_.pdf). Also take a look at the study regarding fast food prices by Card and Krueger.

Increasing the minimum wage in general does not cause a net rise in unemployment (http://www.deakin.edu.au/buslaw/aef/workingpapers/papers/200...).

The people who would receive the BI are the in the lowest income brackets. The bottom three income quintiles on average spend more in a year than they earn. This mean redistributing money to the lower income quintiles effectively results in more money being put back into the economy.

You can see this by studying the economic effect of various subsidies. Food stamps have the highest return on the dollar, with $1.73 in economic activity generated for every dollar spent on food stamps. And subsidies to the higher tax brackets like the Bush tax cuts have a negative return. http://frac.org/initiatives/american-recovery-and-reinvestme...

Thank you! Lots of things for me to chew on and mull over here. One thing stuck out to me, though:

> The people who would receive the BI are the in the lowest income brackets.

As I understand BI, this is not true. BI is a payment made to every citizen and/or resident of a country, irrespective of any other consideration (including income, wealth, etc). What you seem to be describing is Guaranteed Minimum Income, which is an entirely different ball of wax. I'm now wondering how much of the discussion is people talking past each other because of conflation of these two terms.

See http://en.wikipedia.org/wiki/Basic_income and http://en.wikipedia.org/wiki/Minimum_income

All formes of BI are paid for with a tax, if your making say ~50k the money that tax equals the amount you receive from BI. But if your making 200k you end up receiving far less from BI than you pay in taxes even if there depositing money into your account every month.

PS: Of note BI is assumed to replace social security so someone making 50-80k may effectively pay significantly less in taxes prior to retirement but receive far fewer benefits in retirement.

>The people who would receive the BI are the in the lowest income brackets.

Everyone would receive it. Otherwise it's not BI.

Even with BI guaranteed to all, not everyone would receive it because of income tax withholdings.

This is an incoherent argument.

The people who successfully make money have a larger portion of it taken away by the government and given to people who don't make money. They recoup their losses by raising prices and re-extracting it from the people it has been given to

That doesn't happen in the real world -- raising taxes doesn't cause runaway inflation. (How could you possibly think that it does?)

BI has to be increased to keep pace with rising prices caused by funding BI [...] The endgame of the second option is Marxist communism

Even if raising taxes did cause runaway inflation, this would still be wrong. Say that each year you set aside 20% of the GDP for basic income. Then your basic income plan already automatically increases with inflation.

So the percentage of GDP used for basic income would be stable. We would never get communism.

The endgame isn't the Soviet Union, it's Denmark.

> That doesn't happen in the real world -- raising taxes doesn't cause runaway inflation. (How could you possibly think that it does?)

I agree that it doesn't cause runaway inflation (which we can see empirically), but it does cause economic contraction, which has many of the same effects as inflation. There's a good reason that one of a government's first relief measures in a recession is to ease taxes.

> Say that each year you set aside 20% of the GDP for basic income. Then your basic income plan already automatically increases with inflation.

It's important that we not conflate "inflation" with "consumer price index" here. The GDP is not fixed to the CPI - they have an inverse relationship. This means that if the GDP contracts significantly (reducing BI), the CPI could well expand outside of the bounds of what BI provides, necessitating the need for a greater BI contribution. Setting aside 20% of the GDP works until it doesn't.

Denmark, who is finally recognizing that they are having problems with their welfare system.[1] You know something is broken (and unsustainable) when the people on welfare are getting more income than the people with jobs.

[1]: http://www.nytimes.com/2013/04/21/world/europe/danes-rethink...

Basic income, rather than welfare, would eliminate that problem.

The endgame isn't the Soviet Union, it's Denmark.

You're assuming that Denmark is a stable endgame. Is it? On what timescale?

>Can someone please explain to me why a BI wouldn't simply result in higher prices, resulting in the need for a higher BI, resulting in higher prices, resulting in the need for a higher BI, etc?

Of course it would. But there is no reason to think that an equilibrium couldn't / wouldn't be reached.

>The endgame of the first option is Zimbabwe.

We can get Zimbabwe or Weimar Germany without BI.

> The endgame of the second option is Marxist communism; the point at which the system reaches stability is the point at which there is nobody left to extract extra money from to distribute.

For that to be necessarily true, we'd need to already be in a sort of Malthusian crisis, and/or have a resource scarcity. Sure, it might happen, but it is not a certainty.

>why would it be different here?

People still strive for wealth, why would they stop just because of all-you-can-eat-beans-and-rice buffet and health care?

> Of course it would. But there is no reason to think that an equilibrium couldn't / wouldn't be reached.

I agree equilibrium would be reached. I guess what I'm asking is "Why wouldn't the equilibrium be Marxist communism?" (and if it is, can we just admit that we're advocating for communism?)

> For that to be necessarily true, we'd need to already be in a sort of Malthusian crisis, and/or have a resource scarcity. Sure, it might happen, but it is not a certainty.

Can you elaborate on why this is necessary? This ties into my question of "Why wouldn't the equilibrium be Marxist communism?"

> People still strive for wealth, why would they stop just because of all-you-can-eat-beans-and-rice buffet and health care?

Wealth is a means to an end to achieve a certain quality of life. For most people, it is not the end itself. The caricature of the Scrooge McDuck character who collects money out of a psychopathic addiction to raw wealth so that he can swim around in it is not representative of almost anyone's actual financial goals or motivations.

People don't create wealth for the hell of it - they create it to improve their quality of life. If I am producing wealth, but it is not contributing to my quality of life, I have zero incentive or motivation to continue producing wealth.

> Why wouldn't the equilibrium be Marxist communism?

Communism is all about state ownership of the means of production at every level. Wealth and entrepreneurship are heavily discouraged, if not outright banned. Those who advocate for a BI have nothing against wealth and entrepreneurship, and would probably withdraw their support for it if they believed that it would result in the outcome that you predict. BI isn't about everyone being equal, but rather about establishing a minimum income level.

> If I am producing wealth, but it is not contributing to my quality of life, I have zero incentive or motivation to continue producing wealth.

I think that the ideas that you have about incentives and wealth don't track with reality. Just look to yourself--I would be surprised if you live your entire life as a wealth-maximizing entity. Most people are very complex in their motiviations, and many, many wealthy people continue building wealth because it is a side-effect of something that they love to do, not because they want to make even more money.

Regarding equilibrium:

What makes you think that we aren't already near the price equilibrium that would be reached under a BI system? Ostensibly, at least at first, the only people who would see a gain in income net of taxes under BI would be people who are currently receiving some sort of social welfare payment such as social security, unemployment, or AFDC/TANF, which payments would be eliminated concurrently. If no net cash is injected into the economy, how would it have any effect on prices? In fact, BI could have a stabilizing effect on prices if it reduced the deflationary pressure on consumer goods that accompanies economic downturns.

> Those who advocate for a BI have nothing against wealth and entrepreneurship, and would probably withdraw their support for it if they believed that it would result in the outcome that you predict. BI isn't about everyone being equal, but rather about establishing a minimum income level.

I get this; I just wonder about the effect that funding it would have on wealth and entrepreneurship, given that decreasing the value of a unit of work through taxation tends to retard economic growth, and heavy taxation would be necessary to provide for these kinds of programs. If we can manage to pay for them without over-disincentivizing entrepreneurship, everything is dandy. Given the scope of the proposal, that seems sketchy - we have already seen a tangible effect from things like the ACA on employment (that is employers are willing to sacrifice raw economic output in order to avoid higher effective taxes) and that's a relatively small drop in the bucket compared to what would be needed to bootstrap a BI system. I may just be mentally overinflating the issue, but it seems like the capital necessary to fund a BI system would be so gargantuan that it would have a significantly detrimental effect on low-margin businesses, kicking us into a feedback look of reduced supply and higher prices.

> many wealthy people continue building wealth because it is a side-effect of something that they love to do, not because they want to make even more money.

Definitely, and isn't that the ideal here? To get us, as a society, to the place where we can devote all our time to things that we love to do, rather than the things that we have to do? I half-joke that I love what I do so much that I'd do it even if I wasn't making money at it, and I think that's true for a lot of people, but I can also say that I think the fact of the matter is that most people do what they do because they have to, not because they want to; squeezing out the wealth incentive leaves little there for most. If we can get everyone to a point where people do what they love and society still functions smoothly, I'll be the first to sign up for that. :)

> What makes you think that we aren't already near the price equilibrium that would be reached under a BI system?

Back-of-the-napkin math suggests to me that it would require much more capital to implement BI than current entitlement programs require. If this is not the case, and it's just a matter of liquidating current entitlement programs, then there's absolutely no issue at all. My entire argument is predicated on the assumption that BI would require far more in the way of entitlement resources than we currently have available.

> can we just admit that we're advocating for communism?

Communism has gotten such a bad rap that even when people advocate for something like it, they cannot admit that it's like communism.

See the quote from Keynes in the article, even. Obviously Keynes wasn't exactly a communism advocate, but "society will be so productive that it won't be organized around work but around leisure" is almost taken straight from Marx in many ways.

I guess what I'm saying is a variant of Graeber's "Are You An Anarchist? The Answer May Surprise You!" Remove the ideology behind some words and the positions that people advocate can be fascinating.

I agree, and I'm really not trying to "trick" people into admitting a communist philosophy as some sort of way to invalidate the idea. I'm just trying to get at the heart of the matter. If it's communism as Karl Marx outlined in his writings, let's call it that, because that's what it is. Communism is not an invention of Soviet Russia or China - they're certainly examples of it failing spectacularly, but my intent is to say "If we're advocating for a system like Marx described, can we admit that it's what Marx wrote about?" - I'm not trying to equate people who advocate for BI with Lenin or anything. If someone believe that communism is the right economic model, then great, argue from that position. Just be straightforward about what the position is.

>"Why wouldn't the equilibrium be Marxist communism?"

Why would it? I think that it might neatly solve the problem of the current system whereby low skilled people are actually dissuaded from working. I know for a fact there are people on welfare who would rather have gainful employment. It might even wind up being cheaper than the current system (from a tax perspective). Another thing that I am certain of is that technology will displace low-skill labor, and that we will have to have a society-wide solution for how we treat the displaced laborers.

>...can we just admit that we're advocating for communism?

It may well be the result. But I'd consider myself to be very far from a communist. My predictions about the future may be wrong, just as you may be in yours; but, no, I am not advocating for communism..

>Can you elaborate on why this is necessary?

If I understand your argument correctly, "...the point at which the system reaches stability is the point at which there is nobody left to extract extra money from to distribute." aren't you implying that there isn't enough productivity/resources to support the entire population currently?

>Wealth is a means to an end to...

I sacrificed precision for brevity when I used the word wealth. Maybe I should have said: I reject the hypothesis that providing BI for a person will squelch or kill his/her ambition. On the contrary, I expect some people to perform 'better' in that respect once the stress of survival is removed.

As for your assertion that the already productive will lose the incentive to produce, I don't believe that either.

> Why would it?

Consider how much the rest of your paragraph sounds like "from each according to his ability, to each according to his need."

I think the existence of a market equilibrium would require the existence of a market. The existence of a market would preclude the existence of a truly Marxist economy.

Quoting myself from a comment below:

>> Can someone please explain to me why a BI wouldn't simply result in higher prices, resulting in the need for a higher BI, resulting in higher prices, resulting in the need for a higher BI, etc?

> A basic income guarantee is the same as having a basic (food/healthcare/public services/whatever) guarantee (basically, state welfare already implemented in many countries) - the difference is the government is paying in money instead of trying to provide the services themselves.

My understanding of BI is that it's a flat amount paid to every person (adult? working age adult? I'm not sure) without consideration for any other factor. From the Wikipedia article on the topic, "Basic income is entirely unconditional: the only requirement for receiving it is to be a citizen and/or resident of the country."

State welfare programs have a long list of conditions for who is and is not eligible for welfare assistance. If you're just talking about liquidating all state welfare and distributing raw cash instead with no net change, then sure, okay, no big loss there except for the elimination of thousands of government jobs. That's not what BI is, though - BI is Oprah. "You get $1000! You get $1000! Everyone gets $1000!" Unless I grossly misunderstand the concept, liquidating existing state welfare services wouldn't even begin to approach the financial needs of BI.

Most of the people commenting are probably urban or suburban residents, and as such, the minimum living wage is considered a lot higher than in a rural area. Basic Income shouldn't provide people the ability to live in an urban or suburban area comfortably, that's a luxury. It should provide sometime the ability to live in a rural community acceptably, not comfortably.

It shouldn't replace everyone's desire to work. It should have some built in compelling agent to keep people working m even if it isn't that much work.

1. Cities need places for the poor to live, that cannot go away unless you can completely automate unskilled labor, or make serious changes to transportation infrastructure.

2. Living in rural areas isn't always as cheap as you think. Gas, Food, Internet, Phone, TV, etc.

I was fairly certain that the point of BI is that you didn't need to work unless you wanted to or had something you decided you wanted above the basic needs.

Frankly, we don't need as many people working as much as they do. (speaking about productive work)

Thats pretty much what BI is. Many people I talk with use BI interchangeable with a negative income tax, which would give more money to people with less income.

Basic income is meant for purchasing goods that are essential, which means that those goods are already being purchased in the volume required. Prices are set at the margins (imagine fighting for the last loaf of bread), and if everyone is buying the same amount as before, then prices won't change. What will change however is the prices of discretionary goods as any additional income people make goes towards these.

BI isn't so much of a radically new idea because nearly all if not each and every (at least non-developing) country in the world already does provide some sort of welfare and/or unemployment benefits.

Currently this is generally done in a highly inefficient manner though dozens or hundreds of different subsidies and benefits, and it costs a lot to process everything through a thick wall of bureaucracy, and it still ends up being unfair and unmotivational to many. The canonical class of problems is that it doesn't make sense to work because your benefits received would drop in direct proportion to what you get paid. Or it's simply forbidden work even a little in order to be eligible to receive benefits.

The point of BI is to redistribute the already redistributed money in a fair and simple way: everyone gets something that may or just may not be enough to live on its own, but there are no questions asked and if you work on top of that, you scoop most of the extra money to yourself after taxes.

If you're really, really a scrooge you might just make it with the BI only if you're willing to drop your standard of living a couple of decades back. But most people want more money and they'll work for it, if it's five hours a week or 20 hours a week, and they don't lose BI if they do. For any middle-class adult, BI would simply translate into a slightly lower tax rate. They would still get $500 of BI per month or so, but because they would make $5000 per month in salary on top of that the significance of BI would be marginal.

this

>>> * The people who successfully make money have a larger portion of it taken away by the government and given to people who don't make money. They recoup their losses by raising prices and re-extracting it from the people it has been given to, except now the government gets a cut of it twice. BI has to be increased to keep pace with rising prices caused by funding BI. >>>

is rather muddled.

1) FWIW Basic income would be distributed to everyone.

2) What you are describing is the current system, people who make more money are taxed more, and that money is distributed to various things, including giving money to poor people.

3) The phrase "they recoup their losses" has nothing to do with how the market functions right now. Companies set their prices based on a variety of factors, and generally try to be as profitable as they can. The taxation rate of individuals does not directly modulate that. For example, if the CEO of Walmart or Mattel had a marginal tax rate of 99% this would not directly change the price of a Barbie doll.

I don't think you've sufficiently explained how option 2 will progress all the way to communism. It seems to me that option 2 could easily reach a stable endgame that results in a sizeable chunk of the middle class being demoted to BI, but without an unbounded taxation arms race with the rich.

That's quite fair. It may just be that I marginalized the mechanism, and there's a middle ground that's less drastic. I'm not an economist, and I don't have the numbers to show it one way or another (and if I did, I'd be doing something with them!), but it seems to me that the mechanism is basic redistribution that has a built in feedback loop. It doesn't seem logical that people would argue for such a system, so I'm trying to figure out where specifically the invalid assumptions lie.

As long as the basic income implemented is much less than per-capita GDP, there's still opportunity and incentive to work to earn more, especially if the basic income level is set at a realistic poverty level that doesn't allow for much in the way of luxuries. And if the basic income only provides a net income boost to a minority of voters, then there will be electoral pressure to keep it low, rather than to keep increasing it. It's not a slippery slope we're discussing here so much as a slippery mountain with communism on the other side but some significant uphills between here and there.

I also don't think that a basic income would have as strong an inflationary effect as you think it would on the items necessary to survive on a basic income. Since the basic income would replace minimum wage, producers would be free to pay cheap labor much closer to fair market value, so the cost of the products of unskilled labor could drop significantly (offset by an increase in the price of luxuries due to higher income taxes).

> As long as the basic income implemented is much less than per-capita GDP, there's still opportunity and incentive to work to earn more, especially if the basic income level is set at a realistic poverty level that doesn't allow for much in the way of luxuries.

I'm really trying to avoid arguments about whether BI would encourage or retard laziness, because I can't make an intelligent argument one way or the other. My concern is with the cost of funding, and the negative effects that would have on currently-productive parts of the market.

> if the basic income only provides a net income boost to a minority of voters, then there will be electoral pressure to keep it low, rather than to keep increasing it.

Can you elaborate on this point? It seems like this same argument could be used to argue that there would be electoral pressure to not implement BI in the first place, if I understand you correctly. What makes BI electorally viable at level X but not at level Y?

> Since the basic income would replace minimum wage, producers would be free to pay cheap labor much closer to fair market value, so the cost of the products of unskilled labor could drop significantly (offset by an increase in the price of luxuries due to higher income taxes).

I hadn't considered that at all. Interesting variable. This actually changes my view of the whole thing substantially, since the reduced cost of labor could be the variable that employers could tweak to keep prices approximately stable (I get less of each dollar earned, but it costs less to earn that dollar, so it's a wash). I was assuming that labor costs would remain fixed, but if BI permitted for them to be reduced, that might in fact address one of the biggest concerns.

Nice to see someone capable of independent thought.

Demand isn't the only thing that sets a price. Competition keeps prices low.

Sure, but if we posit that we have a functioning capitalist system right now, then prices are already at a natural low due to the existence of competition. In markets where competition is actually healthy, prices should have already reached an economically viable minimum. If the government shows up and says "k, we're taking an extra 15% of your income to fund this program", then suddenly your net revenues are lower than you can afford for them to be, and you have to make up the difference somewhere. That means either improving the efficiency of production (which basically means firing workers and working your existing workers harder, barring some technological leap) or raising prices.

Competition keeps prices balanced; it doesn't drive them arbitrarily low. Nobody will sell at a price that doesn't allow them to sustain their business.

Alternatively, we could find such a system by:

1. Using public pensions. While unlikely to be supported by the people making the laws (it is their pension), if they have basic income, they don't need a pension.

2. Move all funds currently in other welfare programs into the basic income program. This both moves existing funding m and gets rid of those departments, removing people working for those departments from the payroll. While my statement may be crass, it's a valid solution.

3. Take some of our military funding. Also give some of it to NASA.

None of those solutions decrease net income, except for people losing their jobs (they can find another one?) or their public pension (they're getting the basic income, and the original idea was that once someone served their term, they'd return to their previous profession, and become contributing members of society).

> They recoup their losses by raising prices

I thought BI inflation would happen due to people having more money to spend, not because losses had to be recouped for. Am I wrong?

Tax-and-distribute BI doesn't cause direct inflation, because it's not changing the amount of money in the economy. If it's taking money from wealthy people that is just sitting and doing literally nothing, then yes, it causes effective inflation since it increases the amount of currency in active circulation, but rich people tend to use their money as capital - I don't have hard stats on this, but I don't think that very much of it at all is genuinely out of circulation which could otherwise be brought into circulation through BI taxes (this is the reason that some inflation is considered a good thing; it incentivizes keeping money in circulation to avoid the inflation tax).

If people magically had more money to spend without anyone having to lose money to fund it, that would cause direct inflation (since the total amount of currency in circulation would be higher). The only way that happens is if the government starts printing a few hundred billion each month and handing it out to people.

Do you actually imagine that wealthy people are like Scrooge McDuck with a vaults full of cash in the basement, just sitting there, "doing nothing"?

Quite the opposite. I was saying that I suspect that most people keep their money in circulation, if for no other reason than to negate the effects of inflation. I was saying that if the Scrooge McDuck model were the case then increased taxes from BI would cause inflation, but I don't believe that's the case.

> I don't think that very much of it at all is genuinely out of circulation which could otherwise be brought into circulation through BI taxes

Unfortunately, I think a lot of people believe that.

The issue is what is the most efficient way to distribute income, which we already do plenty of. The problem with Basic Income is all the other ways would have to go away, and that is not realistic

I understand your concern but to answer it I think a necessity with a BI would be stricter regulation around credit. If you offer a BI and people can take the BI while simultaneously accepting predatory credit offers, the prices of things will go up, BI acceptors will get duped by banks and credit card companies and the BI money gets funneled back to those large institutions while BI-receivers pay for their financial mistakes.

This doesn't quite sit right with me, because it seems like the underlying argument is "those who benefit from BI don't know how to spend their money, so we have to protect them from spending it poorly". The end result of that line of thinking is targeted social programs, which specifically do not permit people the chance to mis-spend money. How would BI + strict regulation and oversight be substantially different from the entitlement programs we have today?

Actually we could just refuse to enforce contracts in which future BI income is leveraged for debt. That's already done with certain kinds of retirement assets.

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Okay, I can accept that. Let's run some numbers: What are we going to set BI at? There are 228 million adults in the US. If we set BI at a nice round number, say $1,000/month (equivalent to a full-time $6.00/hour job with 2 weeks paid vacation per year), we have to come up with $228 billion dollars per month to fund it. How much of that is a luxury tax going to cover?

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If someone can present an actual spreadsheet showing where the money would come from and how to avoid impacting the prices of things that people requiring BI would be purchasing, then I would be extremely interested in it, but I am willing to flat out say that it's impossible to cough up $2.7 trillion yearly (that's 18% of the US's GDP) without moving the needle in a substantial manner.

The thing about luxury goods is that they are, well, luxuries. Nobody has to buy them.

http://articles.sun-sentinel.com/1993-08-16/news/9301300112_...

It depends on how broad your definition of luxury is.

The UK has a sales tax called 'VAT' that applies to almost everything, with a defined list of exceptions.

Most types of food are untaxed, as are books, children's clothes, college education, safety boots, gold investment coins, sport activities, tap water, most healthcare services, burials and cremations, museum entry fees, houseboat moorings, charter of military aeroplanes, and so on [1].

OK so the list of things that are exempt or 0% taxed is fairly long. But the vast majority of things are subject to VAT.

[1] http://www.hmrc.gov.uk/vat/forms-rates/rates/goods-services....

I see this proposal, but like many I object to it. It reduces the marginal value of work and encourages laziness. We already have enough laziness, we don't need more.

The fact is we waste a lot of human capital. People claim to be unable to find work, yet it costs $50-80 to have your house cleaned in NYC. The unemployed are simply unwilling to clean houses for $10/hour. According to many on the left, we need more unskilled immigration since immigrants "do jobs that Americans just won't do" [1].

But I do agree that we should eliminate the current ragbag of welfare programs and replace it with a single simple one. So rather than a basic income, I propose a Basic Job Guarantee. The government will give anyone who asks a job at minimum wage. If that is insufficient to pay rent, the government can also provide cheap housing out in the boondocks [2] and buses to the location of the Basic Job.

This is the FDR plan and it worked well. Rather than paying people to watch TV we paid people to build national parks. A basic income without work makes sense after technology makes human labor obsolete, but we are nowhere near that point yet.

[1] I'm not opposed to immigration, I'm simply pointing out that people across the political spectrum agree that many Americans are unemployed by choice.

[2] I.e., move the housing projects to south jersey, don't stick them in midtown manhattan.

Actually, basic income does not encourage laziness (that's a common misconception based on our personal opinions which make sense from a certain point of view and from a confirmation bias). I'm currently researching basic income and the criticism that BI increases laziness is the most frequently repeated criticism for which I argue that it's invalid because it is based on personal opinion and not on fact.

Actual data and field experiments on basic income prove that people work more hours, that their income increases, that they visit hospitals on fewer occasions and that they spend money responsibly.

Sources: 1) http://www.dominionpaper.ca/articles/4100 -> Dauphin Canada, 1974-1978 experiment -> only mothers with newborns and teenagers worked less.

2) http://www.usbig.net/bigblog/2013/08/important-study-finds-t... -> BI receivers worked 17% more hours and their annual income after two and a half years was 50% higher (they invested mental resources into building their own businesses or looking for better paying jobs).

Also, allow me to argue that the system would work even if most people did not actually contribute anything. How many Linux users are there, vs. how many developers contributed source to the Linux project? Only a tiny, tiniest fragment of the world developer population actually got off their butts and did something for Linux, and the rest of the world sat by and "leeched" off their work. And yet, Linux thrives. My argument is that we still don't have real data about how many people in % need to be productive for the society to be sustainable and progressive. I believe we grossly overestimate the % of people who need to be productive.

The Uganda experiment is rather different - it provided a large capital investment to individuals in a capital starved economy. Basically, it allowed people to invest in their business. The US is not a capital starved economy, so it is unlikely that the same would occur.

The actual report about Dauphin Canada would be useful here rather than some reporters interpretation of it. Among other things, the drop in work related injuries strongly suggests work did go down, as do the anecdotes of people who "could wait for something [work] that better suited them." Anyone know where to find the real report? It does sound interesting.

The example of linux contributors compared to the development world is not really indicative of the economy at large. Software is infinitely reproducible, unlike most goods and services.

It's not that capital here doesn't exist - it's just concentrated to a toxic degree. Warren Buffett is a smart investor, but he can't squeeze the most out of every dollar, not at the scale he's obligated to invest at. Scale - especially the bespoke, "too big to fail" kind - invites waste.

Capital requirements in the US are also higher. In Uganda, people can become significantly wealthier and improve their standard of living simply by having a few chickens. But in the US, individuals are taking on debt just to have enough education to get a job! And the level of spending needed to operate in most US industries is similar to the costs of college education. Like you point out, software is exceptional in this respect since it has an extremely low capex - so we can conclude that, in fact, individuals are capital starved in the US as well.

With Linux my using it imposes a cost no different on those that develop it than not using it other than the bandwidth of the person I download it from.

The argument of "I can't find someone to clean my house for $10/hr, so everyone must be lazy" is specious at best. Occams Razor says that you're mostly likely not soliciting labor from the right people. It's likely that a broke teenager or an addict who needs a fix would be willing to work at the low end of the pay scale. You don't get to make proclamiations about the american work ethic because no one answered your flyer.

It's not productive to turn the poor into an "other" or a "them". They are obviously people just like us, with pride and dignity just like we have. The fact that they don't want to clean up other peoples' messes for $10/hr doesn't mean that they are "lazy"...it means they are normal people who don't want to do dirty jobs for low pay.

One of the things that a BI will do for us is weed out the people who don't want to work. Ideally, the people that we interact with in commercial situations will want to be there, as opposed to lazy and incompetent people taking up slots just so they can get a small paycheck. It could be a like a streamlined version of our current welfare state: jobs for those who want them, a modest living for those that don't.

There are people in our society who suffer from mental illness, addiction or have social problems that prevent them from being able to focus, show up on time or be a part of a team. We can ask them to clean our houses for a cut rate or we can get serious about solving the problems that effect so many of our fellow citizens. None of us would be on hacker news if we hadn't gotten lucky in so many ways. Instead of calling people "lazy", We should be eager to help those who weren't so fortunate.

Of course, the assumption is that people living at the basic income level will spend their money wisely; a hard assumption to make. When you work a full time job to earn your money you have less time to spend it. Spending money you sweat for is much harder than spending money you got for free, I don't care who you are. You are probably pretty tired when you get home and you just want to eat, relax in front of the tv for a while, and get some sleep so you can do it all over again the next day.

If you suddenly start receiving a basic income and no longer have to work what the heck are you going to do with your time? Sit and watch tv all day long? Or will you spend your money now that you have the free time to enjoy it? I think it's naive at best to assume that everyone will budget their BI perfectly and sit inside their houses not bothering anybody.

The likely scenario is that people will treat their BI like discretionary income and spend it as soon as they get it, most likely on entertainment or luxury items. Once it's gone, they will go back to the same menial jobs to earn whatever little they need to actually survive and the cycle will continue. You can lead a horse to water but you can't make it drink.

> A basic income without work makes sense after technology makes human labor obsolete, but we are nowhere near that point yet.

I would argue we are slowly moving to that point. The fact that there is just not enough work do to anymore to keep the entire population employed clearly points in that direction. And that is not factoring in a lot of "kinda useless" work or work where humans could be replaced by machines but have not been yet because labor is so dirty cheap.

A few decades down, we might only need a fraction of the population to effectively produce all we need, all we want, and all we neither need nor want but still produce anyway.

The fact that there is just not enough work do to anymore to keep the entire population employed clearly points in that direction.

The average American spends 1.74 hours/day doing household activities. Most of the middle and upper class would be willing to pay others to do some of those tasks, provided the price were sufficiently low.

http://www.bls.gov/tus/tables/a1_2012.pdf

There is plenty of work to be done. Unemployed Americans are just unwilling to accept those jobs at a price low enough that people are willing to pay it.

To put a technological spin on it - if you had a humanoid robot, would you be unable to find tasks for the robot to do?

> Unemployed Americans are just unwilling to accept those jobs at a price low enough that people are willing to pay it.

I don't understand what's wrong with that. Why shouldn't the price be high to get another person to clean up your detritus? What ill would befall society if everyone but the most brilliant (and ostensibly highly paid) had to clean up after themselves?

Or do you feel that only a certain type of person deserves the dignity of being paid well to clean someone else's toilet?

If there were a basic income guarantee, then the price might go up for cleaning toilets and other filth--if it already isn't high enough that a BIG wouldn't make a dent. But I think rich people would still find people to do the job if they paid enough regardless, so what's the big deal?

It's wrong that hardworking middle class/rich people are forced to support people who are unwilling to work to support themselves. If that's acceptable in your value system I won't be able to persuade you otherwise.

But I think it's important to be honest about this point.

The point of the guaranteed minimum is precisely to make this kind of jobs even more expensive, so that people are not forced into unfulfilling jobs by economic necessity.

I mean, if you don't need to clean other people's houses to survive, you sure as hell will not do it, unless it pays enough to make your life significantly better. Someone would have to pay me in the millions to work as a maid for a year.

With a minimum revenue of $2000 a month for example, the incentive would be very low to do this kind of work for less than say $100 an hour, since it would only marginally increase your standard of living.

In the long run this should work towards automatization of these tasks by producing an economic incentive. And at least the robots won't suffer from mental and physical conditions due to a bad work environment.

"Unemployed Americans are just unwilling to accept those jobs at a price low enough that people are willing to pay it."

The whole point of BIG is that people will begin accepting low-paying or even altruistic jobs once they won't lose social security over it. Everything they earn over BI is premium, why not snatch it?

Let me emphasize that I'm not arguing for the current welfare system. I'm arguing that replacing it with a Basic Job is superior to both the current system and a Basic Income.

Much like a Basic Income, a Basic Job also gives you an incentive to work. No work => no pay. People will accept a $10/hour house cleaning job because it's better than a $7.25/hour Basic Job. In contrast, with a Basic Income, the choice is $7.25/hour equivalent for watching TV, or maybe twice that for working hard. Many people will be happy to live without working.

Additionally, society gains the benefit of the public works created by people working the Basic Job. We gain cleaner parks, better infrastructure, etc. (Unless you want to claim that US infrastructure is as good as it could possibly be...)

>> we are slowly moving to that point.

It would be better to rapidly move to that point, that way the transition period(with the suffering it will cause) will shorten.

As part of doing that, and from the understanding the lack of jobs in the future, we need to strongly work at reducing costs of basic needs. Partially, it's happening now , with solar, online education.But mostly , with regards to healthcare, housing, transportation and some parts of education(K-12) - we see lack of investment and large regulatory barriers in regards to cost reducing innovation.

If we are moving to that point then tax machines doing human job and split that and only that tax's revenue evenly among the populace. As soon as we get to that point you'll immediately get BI.

Till then, I'd rather not work to support people who had not worked a single day for generations.

I think the crux of the issue is, entrepreneurs (us!) just don't want to build companies that rely on "unscalable" low-cost human labor any more. We want to build our empires on the backs of machines. There are no new jobs being created at the margin. All the jobs we want people to do are hard, and all the unemployed people we have are unqualified to do them.

My wild-and-crazy suggestion: a Basic Training Guarantee--a law requiring companies to hire capable-but-unskilled laborers, and convert them into skilled labor. No more "15 years' Node.js experience required", or its equivalent in any industry. Work with what we've got!

There are plenty of job openings being created at the margin. I want my house cleaned for less than $80 (note: 2 hour job). Farmers want their crops harvested for minimum wage.

There are no jobs being created because the unemployed are unwilling to do these jobs.

To identify all the job openings that go unfilled, go live in India or China. Most upper class families have a maid, a cook and a driver (if they are wealthy enough to own a car). This is quite uncommon in the US - instead, we have people who are paid not to work.

Some of those jobs will be probably transitory and some are not worth doing in the u.s. even at minimum wage.

There's a lot of automation going on in agriculture[1].

Regarding maids: Roomba's and alike might be starting to become popular in india[2].

Regarding a driver: The average wage for a taxi driver in the u.s. is $12. Not that far from minimum wage[3].

Regarding a cook: I suspect that , a least at current wages cooks make(and even at minimum wages), it's more economically and varied to order food than to have a cook.

[1]last paragraph , http://www.economist.com/news/technology-quarterly/21567202-...

[2]http://articles.timesofindia.indiatimes.com/2012-07-22/peopl...

[3]http://www.bls.gov/oes/current/oes533041.htm

> I want my house cleaned for less than $80.

A consideration: can someone who earns less than $80 for a day's work afford to live within driving distance of your house? In India, definitely; in a US metropolitan center, definitely not. (This reduces the problem to the much-better-studied, "people really don't like relocating thousands of miles away for a job, even if their life currently sucks.")

It's $80 for 2 hours. You can survive within commuting distance of Manhattan on $15/hour. You might need to commute from NJ and suffer the indignity of having roommates and black neighbors, but it's quite doable.

I lived within commuting distance of Manhattan during grad school on a stipend roughly equivalent to a $10/hour x 40 hours/week. Prices have gone up a bit since then, but only enough to push me 15-20 minutes further out.

> I want my house cleaned for less than $80 (note: 2 hour job).

First of all, I doubt there's anywhere in the USA you couldn't get responses to a craigslist ad offering $40/hr for house cleaning.

Second, a 2hr/month gig is not going to pull in anywhere near the responses that a 40hr/week would at the same rate. It's just not the same thing. Try living off freelancing for a while; then you'll know what "2 hour gig" really means.

What about unskilled workers who are not capable of learning/understanding programming or other technical endeavors?

In a society that runs out of physical labor to do, you might just as well call them "disabled", and pay them a cheque out of that pool. But Basic Income (or a negative income tax) is cleaner in its economic predictability than special-casing things like that.

This issue comes up from time to time here on Hacker News, which is why I submitted the current story. The policy proposal of a basic income guarantee is interesting because

a) no country has ever tried it, really, so there isn't a real-world experience case to look at yet,

and

b) a remarkable variety of people from otherwise differing points of view have proposed it over the years.

Charles Murray's book In Our Hands: A Plan to Replace the Welfare State,

http://www.amazon.com/books/dp/0844742236

goes into detail about how much a program of guaranteed income for everyone would cost in the United States, and suggests some probable effects that would have on everyone's everyday behavior. I read the book a year or two after it was published.

Murray's own summary of his argument

http://www.irp.wisc.edu/publications/focus/pdfs/foc242a.pdf

and reviews of his book

http://www.aei.org/article/society-and-culture/poverty/in-ou...

http://www.conallboyle.com/BasicIncomeNewEcon/MurrayReview.p...

http://www.richmondfed.org/publications/research/region_focu...

http://mises.org/misesreview_detail.aspx?control=296

may inform the discussion here. Big public policy proposals are not easy to discuss, but the big public policy proposal of a guaranteed basic income for all is a response to existing policy of supposedly targeted social welfare programs that are just about equally expensive in the benefits they provide, but much more costly to administer.

As a matter of personal opinion, I am still thinking about whether or not a basic income guarantee is a good idea, but I definitely want to figure out if spending no more in total for social welfare by directly transferring cash to all citizens would simplify administration of welfare programs and allow more individual choice about how to use the money.

One thing I like about this policy is it removes all kinds of perverse incentives which currently exist.

Some (true) personal examples: a friend of mine is moderately disabled and lives with his elderly parents. He wants (and they desperately want for him) to be able to live independently in a small apartment so that he can develop coping skills which will serve him when they are no longer around. His parents have the means to help him buy an apartment, but doing so would disqualify him from receiving any disability pension (including free health care).

A colleague of mine once employed a young woman as a secretary/admin assistant. One day her family advised him that they had arranged a marriage for her and as she was no longer living with them she and her new husband would both qualify for unemployment benefits. If my colleague refused to pay her the equivalent of two unemployment benefits (after tax) she would resign. The next week she did.

I used to know a guy who was what I would term chronically unemployable. He had no obvious disability but was seemingly unable to accomplish anything without having his hand held (it was a severe issue, not a joke). As an example, I actually couldn't trust him to fetch a plate from the kitchen. He was unsuited for either technical or menial work because he needed to be instructed down to the barest minutiae. Nice chap otherwise.

He naturally ended up on unemployment benefits and attended fortnightly reporting sessions. He was required to apply for 5 jobs each fortnight which he would be duly rejected from, then report back on his results. I'm convinced that the sheer brutal pointlessness of the process crushed him to the point where he took his own life.

Perhaps a basic income would create other perverse incentives, but it is clear to me that the current system is beyond broken.

Perhaps we should think of unemployment benefits and minimum wage laws as a subsidy for technological progress, in particular automation and artificial intelligence.

Low-wage workers are competition for automation, at least in the early stages when a new technology is just getting off the ground. Remove them, and there is likely to be more demand for technological solutions to do what they used to do. In the long run, everybody wins by giving private enterprise an incentive for more automation.

It does not remove "perverse" incentives. Human nature dictates our desires. If we could have everything we ever wanted then there would be no "perverse" incentives. I could have my own amusement park where there would be no lines and I could ride any ride I wanted at any time - not to mention someone would carry me from ride to ride.

People will always want more, to achieve more. The "perverse" incentives exist simply because of that fact. If you cannot accept that, you should go live in the woods far away from people and be happy.

Life isn't fair, you do what you can to help those less fortunate around you. But, if you think for a second that some sort of "equal" pay will solve our worlds problems you are either ignorant or in denial of our human nature.

Your post contains no arguments, just a straw man with some accompanying unsubstantiated statements. No one is suggesting that any single measure will solve all the world's problems. But might we not solve one, or two?

First of all, nobody's opinions are substantiated. I believe that human nature has not and will not change. By human nature, I'm talking about what drives us to do the things we do.

I understand the logic behind BIG. My problem with the _idea_, as it is, is that the idea ignores human nature. If you want to bring an idea to the table, at least be honest about it.

I think you fundamentally misunderstood my point.

The examples I gave were situations where people did something against their own interests because the current system of welfare provision is broken. Maybe that is inevitable; maybe the system we have is better than any alternative.

But ask yourself if a BIG were implemented:

Would my friend still live with his elderly parents? Would my colleague's secretary have quit? Would my acquaintance have been forced into a degrading simulation of a job search he would never succeed at?

The secretary might still have quit anyway - it probably depends on the level of BIG. Ending the pointless simulation of a job search for your acquaintance doesn't require a BIG, and a BIG alone probably doesn't represent the optimum solution either.

Those points don't mean that a BIG is bad, but since people tend to only see one side of an issue after they've made up their mind on it (whether rationally or emotionally), I thought I should bring it up.

I do understand your point. And you gave perfect examples of situations where BIG would be beneficial. My problem with the idea is that proponents ignore the negatives or severely downplay them. My biggest argument against that type of idea is that it kills human drive and ambition and progress.

Sorry, you are confusing "perverse incentive" (as in the incentive itself is perverted) and "incentives to things that are perverse" (as in having incentives to do things that are socially considered to be perverse).

It is a simple innocent ignorance of the term. Look up what perverse incentive means and you'll understand.

I read an adjective describing a noun, not a combined two word, self-defined phrase?

Perverse: inexplicably irrational: contrary to what is regarded as normal or reasonable, often for reasons that seem unaccountable or self-defeating

Incentive: something that encourages somebody to action: something that encourages or motivates somebody to do something.

Please, all knowledgeable one, tell me where you learned of this definition of "perverse incentive" (one word?).

You might want to Google the term yourself. According to Wikipedia, "A perverse incentive is an incentive that has an unintended and undesirable result which is contrary to the interests of the incentive makers". That is exactly westicle's usage here, unless you are implying that the outcomes he described were actually intended.

I don't see what your point is.

Maybe you aren't aware of the meaning of the term "perverse incentive." A "perverse incentive" is when you are incentivized to do something that doesn't make sense. It's not the same thing as "incentive."

Arguments like this assume you can change one thing and society won't change around it. With a basic guarantee many people who are marginally employed would stop working. You'd have two classes of citizens: the workers and those who are effectively parasites off of the workers. I don't like people being poor but society is just not wealthy for poverty to disappear. The said a person living in poverty is probably better off than all the but the richest people at any time in human history. Part of the issue is that we lack an understanding of poverty and what actually causes people to not be in poverty. Considering that in human history poverty has always been the norm it makes sense to look at what causes poverty to not be the norm first before moving onto just "fixing" it.

>With a basic guarantee many people who are marginally employed would stop working.

I believe with basic guarantee many people who are unemployed would start working. Social security in many countries mean that it's rational to either work many hours per week or work zero hours per week. Basic income means that every hour worked or dollar earned increases your standard of living, thus creating a higher incentive to work.

>You'd have two classes of citizens: the workers and those who are effectively parasites off of the workers. I don't like people being poor but society is just not wealthy for poverty to disappear.

There are countries like Finland with a social security guarantee. You can pretty much refuse to work and get $1000/month as a social security (though there are details and sanctions which make this more complex in reality). Anyway, the point is this: in Finland you can already be a "parasite" and some people do that.

Finland doesn't have a basic income guarantee. We also have a system where living on basic social security (toimeentulotuki) working 5 hours per week doesn't really make sense. The effective tax rate for working only a little is 90-100%. If you make 100 euros per week, the social security is decreased by 100 euros. With basic income the effective tax rate would be 20-30%, so working would make sense.

In Finland you pretty much have either full-time/part-time workers (20+ hours) or people who are completely unemployed.

Why should a citizen living on basic income would want to work? To get paid more.

An unemployed person living on $1000/month basic income can increase his or her standard of living substantially by getting paid $200/month more. If someone is working full time and getting paid $3000/month, a $200 increase per month has a lesser increase in standard of living.

The current social security system has an incentive to be completely unemployed. Basic income means that it makes sense to work 1 hours, 2 hours, 5 hours, 10hours, 20 hours or 40 hours per week. All different kinds of working situations are naturally covered under basic income guarantee.

>I believe with basic guarantee many people who are unemployed would start working. Social security in many countries mean that it's rational to either work many hours per week or work zero hours per week. Basic income means that every hour worked or dollar earned increases your standard of living, thus creating a higher incentive to work.

I am what in the US you would consider a "strong libertarian" - and I would say, I would be in favor of instituting a basic income if we got rid of the minimum wage.

In reality I think you'd see people moving from collecting social security/SSDI/etc. and getting paid in cash under the table to collecting BI and working in licit jobs and paying some taxes/having some employment protections.

You might also lose some people who "can't work" for economic reasons of UI/SSDI/etc. and volunteer instead to the paid workforce.

> Why should a citizen living on basic income would want to work? To get paid more.

What in the case that the person doesn't want to get paid more? They can live comfortably enough on what is given to them and value the free time more than the extra money.

What would be the way to deal with this?

You're assuming that the goal of a social safety net is to avoid or eliminate parasitic behaviour. I would suggest that reducing parasitism to zero is not possible. In fact the nature of any wealth transfer system is that some people will be drawing more out of it than they contribute.

One political problem with welfare schemes is getting over the psychological hurdle that hard-working people are funding welfare abusers. I, for one, do not care if there are a few egregious abusers if the overall system is cost-effective.

Focusing on eliminating parasitism leads to wasting even more money on administration, e.g. drug testing for welfare recipients.

A similar analogy that occurs to me is the justice system. Yes, there will be guilty criminals who walk free of a innocent-until-proven-guilty, trial-by-jury-of-your-peers justice system. The alternative is convincingly worse enough that we accept the false negatives and outliers of the system that protects us.

In this case, letting millions suffer in poverty with real effects of poor healthcare (instead of investing in preventative care), restricted access to better opportunities for themselves and their children seems thoroughly worse than accepting the outlier "parasites."

I am of the belief that given the foundations of Maslow's hierarchy and a real education, many of those "parasites" with limited opportunities can be changed into people who feel they have a chance and pursue "self actualization." Poverty is a vicious cycle; it's hard to be ambitious in a "i want to change the world" way when you have no choice but to take whatever you can to support your family on minimum wage.

I agree completely that instead of throwing money at administrative peripheral problems like eliminating any parasitism, we should address the root problem.

Overall, people living in poverty do not have the same opportunities as the wealthy. Given the same opportunities there is no reason that they would not pursue the same "worthier" career aspirations. The assumption that poor people are parasites is the most colossal example of Fundamental Attribution Error[1] I can think of.

[1] https://en.wikipedia.org/wiki/Fundamental_attribution_error

> Overall, people living in poverty do not have the same opportunities as the wealthy.

This is the basic issue every argument against any social program needs to address.

The last time basic income came up I saw a poster strawmanning it by claiming that the "producers" would be financing everyone else to have daily parties. Actually nobody is suggesting that we give enough money for people to throw parties every day. The suggestion is to give people enough money to survive in a way that eliminates government waste on the program. Then we will see what sort of jobs or tasks they create for themselves. The majority will not be content to watch TV all day.

You are obviously right, but it doesn't contribute to a solution of the political problem.

Today, means-tested aid receives a huge amount of criticism about supposed "leechers", even though abuse is basically a rounding error, and the vast majority of recipients are not at fault for their situation.

Imagine how much worse the criticism could get when there really are leechers because leeching is officially approved.

So no matter how nice a BIG is, I often wish that at least part of the massive amount of political energy spent on promoting it would instead be targeted towards poverty-reducing and power-shifting policies that have a higher chance of being implemented and remaining implemented.

I wonder how many of the people who argue against a basic income because of parasitic behavior also argue against paying people for work for the same reason. Paid labor has unbelievable amounts of abuse, yet we go on.

Edit: man, typos galore. How embarrassing.

Here's the problem with your analysis: Just because someone doesn't have a job, doesn't make them a parasite. Here's an example, a granddaughter who lives with and helps take care of her poor grandmother who has Alzheimer's. In her spare time she does sonogram analysis to determine the sex of babies for newly pregnant mothers (Yes, this does exist.) But there is no money in any of this, even though she provides a service to society. Give it some thought and you can realize there are many variations on this. The problem with capital-driven society is that it only values a narrow range of activities that have high rates of money exchange. But there are many things in life worth doing, indeed that need to be done, that do not.

The "parasite" in your story is actually the grandmother. Realizing that the system having "parasites" is not avoidable and is not a moral failing is huge.

Ignoring for the moment the argument that the grandmother may well have paid a load of taxes before getting alzheimers, one thing that would seem fundamental is that the grandmother gave birth to a parent of the carer, without which the carer would not have existed at all, so how can the grandmother be considered a parasite?

Except your granddaughter isn't providing services to society. She's providing one service to her grandmother, as a family member (which could almost be seen as repaying a debt). The other service she's providing is the equivalent of a hobby: if it was valuable enough to other people to be considered a "service to society," then she could be getting paid for it.

Isn't the granddaughter getting paid for the sonogram analysis? If not, why not?

The U.S. doesn't have much real poverty, at least as long as you leave out people with mental illness or veterans with psychological issues.

Bottom decile personal income in U.S. is above $5,000 which puts people in that bracket above the median person in Mexico and not terrible far below the median person in Poland: http://super-economy.blogspot.com/2010/04/median-earnings-hi... (note the chart is in PPP-adjusted dollars).

Poverty in the U.S. means subsidized housing, terrible schools, food stamps, etc. But survival is guaranteed.

So the issue with basic income is not eliminating poverty. It's about changing the mechanism by which we have eliminated poverty.

moving, goalposts,etc.

Just because many people are in extreme poverty doesn't mean that the US doesn't have "real" poverty.

Also poverty is more or less defined in the society in which it happens. And the "standards" for not being poor in the US is not met in a lot of cases.

This --^

The definition of "poverty" is influenced to buy votes for politicians.

You can have A/C, Cable TV, full meals, and still be considered in poverty.

The problem is that this is comparing apples to oranges.

Things also cost more in the US than in many places with lower incomes, so it's not fair to say "But people in country x make lots less money, so our poor people aren't /real/ poor people."

Beyond this most social programs people mention are harder the be eligible for than one might think. The only thing that pretty much any US citizen will be consistently eligible for if they have a low enough income is food stamps. Most other programs require having kids or a disability to be eligible for.

And to be poor enough to get much out of food stamps, you're likely to be in a situation where you're struggling to afford a place to live and associated costs, even with food stamps factored in.

You know, you call them 'parasites' but it could be argued, firstly, that spending their 'free' cash is the service rendered (think utility functions: do you trust "average joe" or bureaucrats to be more effecient spenders of tax dollars?). Also, by giving these people basic income, you allow these families to build their own lineage and estate: over generations, families will be less likely to fall through the cracks, and thus can start producing "useful" members of society.

Parasites you might call them, but they can be producing something even in this state.

>do you trust "average joe" or bureaucrats to be more effecient spenders of tax dollars?

This is an excellent point. Even when one points to the dregs of society, those people are likely to spend their 'free' money in a way that is beneficial to me, by spending at local businesses.

Thank you. People live in poverty because they don't know how to not live in poverty. We think we can buy our way out of the problem by providing housing, foodstamps, welfare (or, as proposed, scrapping all those things and providing a "basic income") but all this really does is make poverty a bit more comfortable without actually teaching those in poverty that everything they know about how to live is wrong and counterproductive and contrasting that with what works.

From the article: A Basic Income Guarantee would establish economic security as a universal right. It gives each of us the assurance that, no matter what happens, we won’t go hungry.

I don't see that it provides that guarantee at all. It doesn't mandate that the money be spent on food, housing, or anything sensible. One of the things that people in living in long-term (generational) poverty tend to do is to immediately spend any money they get on "escaping" the drudgery of their survival, e.g. on alcohol or drugs, flashy jewelry or clothing, gambling or other entertainment. It simply doesn't occur to them that money can be managed, invested, or saved. If you don't break this way of looking at life, then the money will be gone in a week or two (or less) and they'll struggle for the rest of the month until the next payday comes, and repeat the cycle again.

[Edit: Cite for my last paragraph: A Framework For Understanding Poverty, Ruby K. Payne]

One idea I've casually pondered is if things would be better if you had a card that got a daily, or even hourly top up, instead of the status quo of a monthly top up. Bills would have to be similarly broken up into continuous payment, or some people might not be able to save up enough continuous income to pay them.

I think it at least sounds possible that it could shift people to a more even expenditure rate instead of the rich for a week, starve for three, some people lead.

When you work for 7.75 an hour to support a family, you don't have enough money to "manage," much less gamble or buy jewelry. That's what it means to be working poor. I don't think you could hack that.

Here's an article summarizing some experimental evidence to the contrary: http://mondediplo.com/2013/05/04income

You talk about poor people as if they are a different kind of human being from "normal" people.

In fact, 80% of USA citizens are poor at _some_ point in their life. _Most_ people experience poverty. It's not necessarily because they "don't know how" to be anything but poor. (Often it's a result of becoming too old to work.)

Agree with first paragraph a hundred percent. How can we teach those in poverty that the way they live their lives is counter productive? The politics have to get out of the damn way or it will never happen.

It's likely that job-sharing would increase. Instead of one unemployed person and one 'full-time' waiter, you'd have two part-time waiters. Waiting being a menial job that's not awesome, but is easy to pick up and easy to manage when it's only a couple of shifts per week. The focus would have shifted from "I must do all this to survive" to "a bit of extra money on top"

> Considering that in human history poverty has always been the norm it makes sense to look at what causes poverty to not be the norm first before moving onto just "fixing" it.

"When I give the poor bread, they call me a saint. When I ask why they are poor, they call me a communist."

> With a basic guarantee many people who are marginally employed would stop working. You'd have two classes of citizens: the workers and those who are effectively parasites off of the workers.

We already have this, it's just horribly mislabeled. http://apps.npr.org/unfit-for-work/

> With a basic guarantee many people who are marginally employed would stop working.

So what?

> You'd have two classes of citizens: the workers and those who are effectively parasites off of the workers.

We already have that; the latter class is called "capitalists". With a BIG, the public commons become an equally-owned, dividend-paying asset, which in effect makes everyone at least a very-small-scale capitalist.

> I don't like people being poor but society is just not wealthy for poverty to disappear.

Reducing the necessity of continuous wage labor for those without large personal fortunes increases labor market mobility, opportunities to explore higher-risk, higher-potential return activities, and opportunities for job retraining for better fit to changing markets.

Yes, a cost of that is that some people will opt-out of work without engaging in even potentially socially-useful activities, but this is to an extent self-limiting (the more people do it, no matter the nominal level of the BIG, the less goods and services the BIG will suffice to purchase, so that the more people that opt out, the less attractive opting-out becomes.)

> Part of the issue is that we lack an understanding of poverty and what actually causes people to not be in poverty.

We actually understand poverty quite well, and understand very well that the combination of limited goods and inequality in the distribution of goods cause people to be in poverty. What we don't have is a mechanism that works with human nature to encourage enough production and equal-enough distribution of goods to eliminate poverty, and BIG isn't, itself, intended to be a solution to that. Its mostly a self-regulating partial solution on the distribution side, since, as productivity increases, the sustainable minimum level under the BIG increases as well.

With a basic guarantee many people who are marginally employed would stop working.

Why do the rich work?

a person living in poverty is probably better off than all the but the richest people at any time in human history

I'd imagine that hunger feels much the same now as it did a thousand years ago.

A proposal in this direction has been pushed in Switzerland that will be subject to a referendum.

The idea : hand out 2500CHF a month (about $2700) to each citizen without anything in return or any condition. Plus around $1100 a month for each child you have to support.

Now this has not been confirmed yed (the referendum is to be held in 2015). The goal is to put an end to the degrading controls forced upon people depending on welfare, and to balance the relationship between employers and employees - if you don't HAVE to work, you don't have to put up with abusive employers, low-paying slavery and the like

I'm intrigued by the costing of this proposal.

2500CHF per adult is an enormous proportion of national income to redistribute: even taking into account Switzerland's unusual prosperity we're talking about an income subsidy that's nearly 40% of per capita GDP. That's a huge sum of money that's going to have to be found via the tax system, and it's far too big to find from merely taxing the top end (especially when you're as full of millionaires and as prosperous from foreign capital flows attracted in part by your low tax regime).

It sounds likely to be a huge boon to certain categories of "idle rich" dabbling in low end residential property speculation (CHF 2500 per month average Zurich apartments aren't going to stay that way when even unemployed couples earn double that) and ironically probably penalise precisely those employees most readily exploited by employers: those without the raw ability to earn above the median wage but with the work ethic and drive to get close.

You could do it, you'd just need the world's steepest tax rates- and not marginal tax like the USA, either, where the top marginal bracket is 40% but the effective tax will be much lower. We're probably talking you take home one dollar for every three you earn.

ironically probably penalise...

This actually brings a really interesting point to mind. When everyone gets 2500CHF, the people who are currently working for 1250CHF have in a sense had their incomes slashed. They go from being infinitely richer than the unemployed, to only 50% richer (on a monthly income basis). So instead of lifting themselves high above the jobless, the same amount of work now lifts them only a little bit. I am unsure at the moment whether this can be described as decreasing the marginal utility of the income they currently earn.

> Now this has not been confirmed yed (the referendum is to be held in 2015). The goal is to put an end to the degrading controls forced upon people depending on welfare, and to balance the relationship between employers and employees - if you don't HAVE to work, you don't have to put up with abusive employers, low-paying slavery and the like

That's quite radical, but smart at the same time. It has the potential to weed out bad companies from the economy, which in the long run is beneficial. It shifts a lot of power to the employee though, so there's a risk in the long run it can create a bad workforce instead.

There is no such thing as a "bad company."

Either a company is providing a good or service that people want enough to pay for, or it's not and it goes out of business. That's the market.

Wow, I didn't think 2500CHF/month is anywhere near possible for a country like Switzerland. I think that balancing relationship (or negotiating position) is the argument for basic income. That being said going from 0 to 2500CHF/month looks very bold.

SPECULATION: I'd guess that they already have some kind of social security system that costs them a lot plus they would use progressive taxation to get most of the money back.

Citation? I really like the idea of basic income but $2700/month per person seems absurdly high. I don't know why any political faction would try for so much.

Is there a detailed explanation of the plan available online?

> a) no country has ever tried it, really, so there isn't a real-world experience case to look at yet,

Brazil is trying, it's called "Bolsa Família". It's an attempt to assure a minimum base income, stop child labor and develop the economy on places far away from the big centers. It works by putting money directly into the hands of poor families and letting they decide how to use it, as opposed to more specific welfare programs.

I guess that's as close as you can get to socialism, and there's a lot of controversy surrounding it, since brazilian government is provenly corrupt.

[1] http://en.wikipedia.org/wiki/Bolsa_Fam%C3%ADlia

Thanks for pointing out Brazil. And as for the OP, I would also point out History! I mean what is this bullshit - basic income guarantee has been in practice for 50 years in almost every communist state around Russia, my Poland included. It wasn't called that way, but the policy was that everyone has to have a job and receive a specified wage. And everyone did. You know what happened? Money was useless because there was no supply. Everybody had money, nobody was poor, the problem was - you can't eat paper.

You know what would happen in the US, where there is supply? It would drive spending nuts, demand would grow, prices would grow, therefore inflation would grow and the dollar would lose its value, effectively diminishing the basic income benefits.

Because life ain't fair, it never will be unless we live in utopia where everyone is good and there is no evil. So why not try it? Because there was a guy who wrote it all down. His name was Marks. And you know who used his theories in practice? Lenin. And you know what happened next? The Red Revolution.

Seriously, such ideas for the US… "Fate, it seems, is not without a sense of irony."

"basic income guarantee has been in practice for 50 years in almost every communist state around Russia, my Poland included"

This type of statement betrays a total lack of understanding of what a basic income guarantee even is. Plenty of deeply anti-communist thinkers--including probably the most effective one in history--have supported a basic income.

Why did your native Poland fall far short of its productive potential? As you yourself say, it wasn't for lack of money: it was because the things people wanted to consume were not being produced.

The root cause of that was broken capital markets: special interests (or foreign special interests, in the case of Poland) captured political control of the economic resources of Poland and used non-market decision making to allocate capital. If people who completely deprioritize popular standard of living control capital, then, yes, unsurprisingly other things--military, party functionaries, foreign invaders--will end up getting their demand met.

Also: "Because life ain't fair, it never will be unless we live in utopia where everyone is good and there is no evil. So why not try it? Because there was a guy who wrote it all down. His name was Marks. And you know who used his theories in practice? Lenin. And you know what happened next? The Red Revolution."

It's abundantly clear that, for all his faults, you don't even have a passing acquaintance with Marx. He's wrong on virtually everything, but you're not even wrong.

I can't comment on your reply because it lacks any argument against my post. Tell me where I'm wrong. But what I can tell you is that if you give $1,000 per month to every adult in US without any requirement, then: 1) you might as well not give any money to anybody, because relatively no ones wealth will change 2) at first everybody will be able to buy the essential stuff, food etc. but then 3) you will end up with inflation, because free money will create more demand, which in turn will result in smaller supply (relatively to demand) and higher prices, and cheaper dollar - in the end these $1,000 after a couple of months will buy you only $500 worth of goods (end game is that these $1,000 will be worthless after some period) 4) you will be spending $3bn per month on this, out of thin air, effectively pumping cash into the system, decreasing dollar value even more

To some extent this already has been tried in the US in the form of cheap mortgage credit to the poor. Thousands of dollars were given to people who defaulted and never paid back. Look where it got us…

> It wasn't called that way, but the policy was that everyone has to have a job and receive a specified wage.

That is not a basic income guarantee. With a basic income guarantee, you receive the basic income regardless of whether you have a job or not. You do not have to have a job. If you choose to have a job, you earn a wage in addition to your basic income. The system you're describing is a completely, fundamentally different thing from a basic income guarantee.

Let me explain: in a communist country, people had various jobs. Each job had a different salary. But everyone had a job, everybody had income. So, if you asked anyone "Do you earn at least $100?" - all would say "Yes". But some could earn more if they were in better jobs. Obviously that meant you didn't actually have to work to receive salary - that's why productivity sucked. Not so different now, huh?

> I mean what is this bullshit - basic income guarantee has been in practice for 50 years in almost every communist state around Russia, my Poland included. It wasn't called that way, but the policy was that everyone has to have a job and receive a specified wage.

But is it really the same thing?

A basic income guarantee is the same as having a basic (food/healthcare/public services/whatever) guarantee (basically, state welfare already implemented in many countries) - the difference is the government is paying in money instead of trying to provide the services themselves.

The way I see it, it's quite different than everybody getting the same income. It has the potential to improve public service efficiency and foster the economy away from big production centers (decreasing city population density, which causes a lot of problems on it's own, like homelessness or poor housing conditions, traffic, health and environmental issues, all of which are problems the government has to waste money on already).

> Because life ain't fair, it never will be unless we live in utopia where everyone is good and there is no evil. So why not try it? Because there was a guy who wrote it all down. His name was Marks. And you know who used his theories in practice? Lenin. And you know what happened next? The Red Revolution.

https://news.ycombinator.com/item?id=6311812

> Because there was a guy who wrote it all down. His name was Marks [sic]. And you know who used his theories in practice? Lenin.

Marks, really? If you want to pose as a scholar, at least learn to spell the names of important historical figures. And this isn't a trivial correction -- because you think his name is Karl Marks, your post will not show up in Web searches of the topic you think you're writing about.

A big difference between the BIG scenario and what you describe is "everyone has to have a job". The inefficiencies of/resistance to state-mandated production quotas make the two systems significantly different.

Bolsa Familia is not a basic income. It fails to fix the fundamental problem with current welfare: that it is a disincentive to reemployment.

A proper basic income is fucking trivial to implement. Give every member of society X amount of money per T time period.

This has nothing to do with socialism. The means of production do NOT change ownership.

> Bolsa Familia is not a basic income. It fails to fix the fundamental problem with current welfare: that it is a disincentive to reemployment.

I don't think it's disincentive to reemployment in this case, because being unemployed is not a requirement to receive the money, just being below a certain level of income per family member. Those families can both receive the benefit and work, as the program has the potential to stimulate the local economy and create business opportunities or jobs that didn't existed before.

> This has nothing to do with socialism.

Redistribution of wealth is a core concept of socialism, and that's what this program effectively achieves. The resources come from heavier taxation from the federal government on the bigger economic centers of Brazil. So I'm not sure what you're trying to say here.

Redistribution of wealth is a core concept of centralized government of all kinds, through the medium of taxation. And governments of all kinds already redistribute wealth in pursuit of social goals, whether they are socialist or not.

> I don't think it's disincentive to reemployment in this case, because being unemployed is not a requirement to receive the money, just being below a certain level of income per family member.

Well, I personally know people that refuse to work because they get the benefit, and even a minimum salary would make them ineligible.

Bolsa Familia is fixing several people into poverty.

Genuinely curious, at what point does taxation become socialism?

> A proper basic income is fucking trivial to implement. Give every member of society X amount of money per T time period.

Just like that, huh? Pray tell, where does the money come from? Magic money pixies just conjure up limitless amounts of money and sprinkle it everywhere, and the only effect that has is that now everyone has money!

> This has nothing to do with socialism. The means of production do NOT change ownership.

Oh, a Marxist.

>> This has nothing to do with socialism. The means of production do NOT change ownership.

> Oh, a Marxist.

Not necessarily a Marxist, just someone who actually knows the meaning of the word socialism. Depressingly uncommon, that.

From what I have read basic income is often suggested to be combined with a single land value tax. This means the only direct taxes are on the unimproved value of land, which is fairly easy to administer in a country like the United Kingdom, for example. That tax is then passed on to people who consume the output of the land, be that actual produce, like vegetables, or more intangible things, like crossing the land in a train.

The land value tax can be scaled to match the requirements of the basic income, plus additional government costs (e.g. defence). I suppose in a libertarian interpretation of that system the additional government costs would be minimal. Personally I would favour more social spending, but I could imagine less being necessary than under systems where basic provision is lower, or has more strings attached.

The money could come from a number if sources, like all existing welfare programs, or public pensions, which are already incredibly high, and could be substantially lowered. Or we could cut our ridiculous military budget by a tiny fraction.

I would hardly call "basic minimum income" socialism. Socialism is top-down control of the economy by the state; this is just an (extremely) liberal (in the european sense) welfarism. You could argue that it's less socialistic than the US' welfare system, which imposes lots of behaviour controls on its recipients.

>I guess that's as close as you can get to socialism, and there's a lot of controversy surrounding it, since brazilian government is provenly corrupt.

I would say that is as close as you can get to capitalism (while having welfare). In the current welfare systems, the government funds specific programs to provide for the public. With a BI, the government gives money to individuals, and allows the market to arrange itself to provide for the public.

Actually, that's what I meant.

It's as close as you get to socialism (redistribution of wealth is a form of common ownership of the country's GDP) without rendering money useless (having the government provide everything for everybody).

a) France does just that.

Since 1988.

It was called for years RMI for "Revenu Minimum d'Insertion" which translates to something like minimum revenue for social integration.

Our previous government changed the name to RSA or "Revenu de Solidarité Active", which translates to revenue of active solidarity. They reduced the revenue by a few percent at that occasion.

The RSA provides now enough to live (about 500€ for a single person per month) if not in a major city center. It becomes about 1200€ month for a family with two children. Again, just the minimum to live.

Also take in account that education and health are free* in France.

(*) YMMV, not all MDs, but most schools, etc.

Except RSA is not available to everyone (many people are not eligible), not guaranteed (it's tied to searching for a job, for instance), and not an actual income that provides you the bare minimum (in some places it doesn't even get you housing).

Does this apply to immigrants ? If so why are there such large tensions around the issues of immigrant unemployment ?

Yes, under conditions. Mainly: stable residency, plus legal immigration papers.

Legal immigration is pretty low in France (compared to other European countries for instance), but what you mention IS a source of tensions, and the bread of extreme right parties.

I've been thinking about this proposal for quite a few years, and wrote a blog post explaining how this kind of negative income tax actually reduces distortion of free markets by separating personal risk from income risk.

I think the reason it keeps coming up here is because the ability to do this is particularly relevant to entrepreneurs. Unfortunately, it didn't get much interest when I posted it here, but hopefully some folks will find it interesting enough to more seriously consider this.

It is not welfare, it is not socialism. It frees people to be rational actors in a capitalist society.

http://neltnerb.tumblr.com/post/58818804903/an-entrepreneurs...

Basic income of all the failed attempts at communism, whats the end difference? Everyone can be happy in poverty except for those who run the industries and government?

Seen it, fails every time. Basic Income is nothing more than some people hoping to pay some groups enough so they don't steal their stuff. The issue becomes, how much is that pay off going to be?

NPR has lots of stories about people living off of SSI/SSID and similar, very close the requirements of BI, guess what, they seem to lose the will to improve their lives.

BI will just result in more people not trying to improve themselves

If you think the majority of people would just lay their lives to waste because they don't need to doing the bidding of others just to survive, then you are wrong. 99% of able-bodied and able-minded adults would not succumb to idlery.

Applying for SSI/SSID is an incredibly dehumanizing process. It takes over a year if you are lucky. You will be denied for any reason they can possibly find. It is guaranteed you will be denied for your first application. You have to prove you are disabled to them (disgusting really). You must have documentation. It goes on and on, but they honestly hope most applicators either die in the interim or just give up on 'improving themselves'.

Really, if there is a miniscule amount of people who will abuse the system it does not at all outweigh the good it provides. If your qualm is with said abusers, profile, detect, and prosecute them. Society is not going to collapse.

>If you think the majority of people would just lay their lives to waste because they don't need to doing the bidding of others just to survive, then you are wrong. 99% of able-bodied and able-minded adults would not succumb to idlery.

I would like to be the first to welcome you to planet Earth and introduce you human beings, as it is clear you have just arrived here.

> a) no country has ever tried it

Isn't the cash you get from "Social Services" (or whatever it's called) just that, a basic revenue that's guaranteed (as long as you follow some very simple/basic/normal rules)?

No, not really; and the rules aren't that simple.

Example: My father's Medicaid was suspended/discontinued because he failed to submit some paperwork by a deadline, and missed a scheduled appointment.

Well, of course he has to fill out the proper paperwork and make his appointments! you might respond, and yes, for you or I, perhaps it might be reasonable to demand filled out forms, on time, and that we submit to an in-person interview. However, if you have COPD / Emphysema, you must to take oxygen with you; lacking a portable oxygen system means that you are, for all practical purposes home-bound. You most certainly are not able to make a sixty mile round trip. So, homebound, and lacking necessary medicine, portable oxygen, his health deteriorated until he needed hospitalization. At the hospital, a social worker was quickly made available. Medicaid was restored. He received enough care at the hospital to be released. He returned to his apartment. This cycle was repeated several times before his death.

Horrible story. This is exactly why these types of services should be provided without conditions attached to them.

One of the tenants of basic income is that you don' discriminate who gets it. The economic impact of everyone having some fraction (relative to their monthly checks) of demand met regardless of employment is something we have never seen. Additionally, all those unemployment / SSI projects are probably less popular because its discriminatory. With BI everyone from a homeless guy on the street to Bill Gates would get a check.

Those services have very narrow windows of qualification. This create a lot of top heavy bureaucracy which wastes a great deal of money that could be going directly to people. In addition it create a bifurcation of society, "those parasites" vs everyone else, which is turn create social stigma which only further exacerbates poverty.

> "those parasites" vs everyone else, which is turn create social stigma which only further exacerbates poverty.

Yep, our cultural stupidity does exist. That's why everybody should get a good education.

Not so much. It is not very easy to navigate and can take a while depending on how you end up there. Some of the money is also restricted use[1]. It is very much not guaranteed.

1) ok, in the last year or two some rules changed allowing EBT payments at strip clubs and liquor stores, but not buying a burrito at a gas station then cooking it in the gas station's microwave.

> a) no country has ever tried it, really, so there isn't a real-world experience case to look at yet.

Argentina had implemented a minimum income based on the number of children of a family. There are some studies about it like: http://www.degruyter.com/dg/viewarticle/j$002fbis.2012.7.iss...

This is not a basic salary but it's an important income for poor families.

Australia has it: https://en.wikipedia.org/wiki/Social_security_in_Australia#N... It's conditioned to seeking a job, but nonetheless there is no time limit; plus they offer job placement support, helping you become a productive citizen.

Surprises me that in 400+ coments there is no mention to it.

That is nothing like an unconditional payment to every adult regardless of their work situation. That's why no one has mentioned it.

The concept of a basic income seeks to replace the variety of welfare/support payments a country has. In Australia, that would include Newstart, Austudy, Abstudy, veterans payments, carer's allowance, disability, pensions, etc. You would get the basic income even if you chose to work as well.

They idea is interesting, but only if you take healthcare out of the equation. Healthcare expenses are close to nothing when you're in good health, but can get incredibly high - at market rates - when you're not. And no, private insurance is not the answer.

> no country has ever tried it, really, so there isn't a real-world experience case to look at yet

Canada tried it in the city of Dauphin, Manitoba in the 1970s. While it was not conducted across the entire country, there is at least some data to look at.

Poverty in the US is nothing like poverty in other countries. Poor people in the US mostly still have tvs, etc. Poor people in true Third world countries wash themselves in puddle water, and poor children play in garbage dumps. I've seen both with my own eyes.

I don't agree that Americans need a basic income guarantee whatsoever. The idea might work in other countries, but certainly not in the US.

Dilemma for you to solve. Imagine that automation machinery completely overtakes the majority of all menial labor. And that it does so in less than a generation. Now, on the one hand this is wonderful because humans are mostly freed from drudgery, as well as many dangerous jobs. OTOH it is terrible because a vast number of people are now unable to support themselves. What solution do you propose?

PS This has happened before (mechanized agriculture), and I am certain that this will happen for a large fraction of US workers in your lifetime.

New jobs will be invented, as they always are.

Poor people in the United States are more poor than most people in e.g. Scandinavian countries.

You also made the fallacy of "if some people are worse off, then Americans shouldn't be any better". However, it's ethical to increase the standard of living of all people.

And it's certainly ethical to try to increase the standard of living in your own country, regardless of how bad off others might be.

I'm really weary of paying taxes to kill poor brown people on the other side of the world. I would be more than happy to pay taxes for a guaranteed income.

And the programs work: http://www.cbpp.org/cms/index.cfm?fa=view&id=3997.

If you break it down by race and ethnicity, this falls away. Poor Scandinavian people are as well off here as they are in their home country.

This idea could not work in the kind of 3rd world country you are talking about. Those countries have a much more fundamental problem in not having a capitalized society at all. So there is no foundation for any such base income system to be built. For them to get out of poverty requires the removal of their corrupt governments and the establishment of a sound money system coupled with a required public education system.

Well, it could work if the BI was applied globally...that would be quite wonderful from a world peace, human rights perspective. It might not ever happen, but we can always hope. Of course, the corrupt governments would have to be removed first...

Your conclusion has no relationship whatsoever to your observation, and you don't describe a connection in your post.

I live in a country with high income disparity, basically the poor are living in dumps, but I don't see what that has to do with the states which is further a long the developed country spectrum.

I am libertarian and pro market. I like the idea of BI.

The problem with our modern "capitalist" society is that you are forced to play the game with no exit options. Earlier it was possible to "just move West" and start farming some land. Today you don't have this option and I think it is indeed a fundamental problem.

Milton Friedman, not your typical socialist, was actually one of the inventors: http://en.wikipedia.org/wiki/Guaranteed_minimum_income

If you're a libertarian, then you should realize that these money would come out of other people's pockets without their actual approval. Have a fund for poor financed voluntarily. Don't force people to pay for things they disagree with.

The problem is funding that poverty relief fund is not giving you a competitive advantage in a systemically brutal market. If you give charity (beyond the tax emept parts) while your competition invests, you are losing ground.

If society forces a 10% consumption tax on goods transactions, or you could just put a 10% profit tax, you don't create an environment where being empathetic is bad business.

The issue is that we already do redistribute wealth to the poor, and BI is a more efficient way of doing it in theory

You know where there is a lot money to be saved - much more than from food stamps and whatnot? The "defense"/war budget and the home police state. You could save literally hundreds of billions of dollars - every year - and you'd still have a bigger budget than it was at the beginning of 2000's.

Not to mention an increasing chunk of that money is used against you: militarizing the police, all the unconstitutional searches from DHS, the mass spying of NSA, the "war on drugs" DEA, and so on.

Besides keeping buying stuff the army doesn't even need to have a strong defense, and besides going into pointless wars for the sake of maintaining the profitability and businesses of the Military Industrial Complex, there's also incredible waste in the defense department, with things being paid for many times over what they're really worth.

So, Democrats (or really, anyone), if you want a lot more money put into social programs and into fixing and building the infrastructure, then target the defense budget, and ask for a dramatic cut - and not just those bullshit "cuts from planned budget increases", which is just another way of saying they won't increase the waste much more than it already is, in the future.

The army and military industries are huge employment and research organizations. Not efficient ones in the latter case, but there you go. You'd have to re-target all that employment and spending somewhere to make up for the hole, like, say, health and energy. Unfortunately other countries around the world may not make the same decision as you and the US would fall behind in certain capabilities, which may be important to have at some point.

To put it more bluntly, the DHS is a jobs program. We already have BI; you just have to hold a gun and let the government tell you what to do.

I was dubious about the idea of Basic Income in the past, but now having more experience of the problems of the economy I'm in favour of it and see it as becoming inevitable at some point. Eventually it will simply be impossible in the majority of cases to exchange human labour (intellectual or physical) for resources, and we're on a sliding scale where it is becoming increasingly difficult to do that.

The existing welfare state here in the UK is wasteful and highly corrupt. In the last few years I've seen all of the various government scams with my own eyes. It would be far more efficient simply to have a minimum basic income for everyone without preconditions or poisonous moralising. A lot of wasted effort and unnecessary hardship would be prevented by doing that.

You're an entry level worker with few skills and little experience, living just above the poverty line. You're unemployed and thinking of eating your cat. Along comes unconditional basic income, and suddenly you're netting $20K a year. You were making $23K at your last job before you were laid off, so this isn't so bad!

A year later, your old boss calls you up and offers you your old job back. Awesome! Only now the salary is $6K, not $23K--the market wage now that everyone gets $20K.

Work 40 hours a week for an extra $6K? No thanks--you're doing okay with your basic living wage and zero effort. Plus, Rob is getting the band back together! And so you remain an unemployed entry level employee until you die.

It's pretty easy to fabricate a story to support whatever position you want:

You get laid off and along comes unconditional basic income. Your $20K is covering your basic expenses pretty well, but you're bored out of your skull (you sold the TV after you were laid off). Rob says he's getting the band back together and after a while you guys think you're starting to sound pretty good.

A year later your boss calls and offers you your job back. He wants to pay your $6K, you negotiate part time for $4K so you still have time to devote to the band. Your boss agrees since he can just hire another person or two for less than your old salary.

With your extra money you pay for time in a recording studio and new instruments. Your band becomes wildly successful and you quit your job since royalties are now making you wealthy beyond your wildest dreams. And so you rise above your entry level beginnings and tell people stories of how you've achieved the American Dream until you die.

I don't get it. If nobody wants the 6k job, how is it that nobody is offering more? Are there less people looking for workers?

Let me tell that history again. Yeah, you get that 20k a year. Then your old boss calls, and just offers you 30k for that job you used to do for 23k. You can either join your old friends on their band again, or get a total 50k a year, your choice.

Now, about your old boss, he'll have to pay more, no questions about it. But the total cost of salary is trending down anyway, so the best option is to start with a small basic income, and grow it at the proportion that income concentrate at the top.

If nobody's willing to do the job for $6K then why would the salary of the job drop to $6K? Nothing you've written makes any sense.

This is a fascinating comment, encapsulating all that I disagree with from opponents of BI. There's the guess that market wages for jobs less desirable than touring with your band would trend much lower, which seems unlikely.

But more, you seem to think having people pursuing what they enjoy because they have more leverage over potential employers is obviously a bad thing!

That's clearly an unresolvable moral distinction; I am strongly, STRONGLY in favor of more people pursuing what they love at the cost of paying more for jobs I consider no fun to be done.

Certainly many people will sit around much of the time; why in the world do I care? While it is possible society will collapse because all humans require external threats to be productive, that seems extremely unlikely to me.

Lots of people will get a chance to pursue meaningful work instead of drudgery. I am all in favor of this.

> A year later, your old boss calls you up and offers you your old job back. Awesome! Only now the salary is $6K, not $23K--the market wage now that everyone gets $20K.

This requires the rather counter-intuitive assumption that providing an additional source of income decreases the market clearing cost of a unit of labor. The basic rules of supply and demand indicate that it would increase the market clearing cost of labor.

> Work 40 hours a week for an extra $6K? No thanks--you're doing okay with your basic living wage and zero effort. Plus, Rob is getting the band back together!

Work other than traditional wage labor ("getting the band back together) isn't zero effort. Its perhaps very-high-risk, but a major focus of BI is to reduce the incentive to engage in low-risk drudgery over higher-risk activities that might have greater personal attraction but less certainty of financial payoff, including artisitic and entrepreneurial activities.

> And so you remain an unemployed entry level employee until you die.

No, if you choose pursuits other than wage labor -- like independent artistry or entrepreneurship -- you aren't any kind of employee. You seem to be stuck in the mode that everyone must be a drone, and is defined by what kind of drone they are, even going so far as to engage in contradictions that are obvious on their face to further that model (the whole "unemployed employee").

strawman based on the concept that people proposing BI haven't considered the list of objections a random person can come up with in 30 seconds.

This could be an interesting experiment on a small scale. Maybe a small-medium US state could try it and see what happens. That's the Federalist approach, which we seem to have forgotten about (the article advocates doing it for the entire US, which would be a ridiculously reckless and disruptive thing to do without proving it on a smaller scale first).

One drawback that would really concern me is: can people borrow against their basic income? That could be bad in so many ways. In fact, I could see that destroying the entire system. You could have people back at the food bank, and you ask them where their $10K went, and they tell you they have $500/mo in debt service.

But to eliminate that, you'd basically have to prevent people from making any forward promises dependent on that money, which could include things like apartment leases. I guess you could try making a web of special-case exceptions and loopholes by which you could do long-term housing leases but not long-term TV leases; but that sounds like it's turning the simple system into an accounting mess.

There are also numerous other drawbacks. People will still make bad choices and still end up with serious problems, so we'll still need other programs.

> This could be an interesting experiment on a small scale. Maybe a small-medium US state could try it and see what happens.

What if we had some big colony made for social/economic experiments? We could try out crazy things like basic income. Perhaps the experiments are opt-in/out, or maybe if you hate them, you can leave with paid relocation.

The population should be a microcosm of the US or a US city, and the goal should be to try weird things to get it close to a utopia, using the same budget as a comparable populous.

I'm an empiricist at heart, too (at least for some things; everyone is an idealist one way or another). But come on, it has its limits! I think we both already know that a social experiments colony would be chaos.

What I was suggesting would have an outside chance of providing useful information. Given enough time, it would probably provide enough information to prevent the next phase from being a complete disaster.

You could say that every nation created (or major political upheaval) is an experiment. The U.S. certainly was. Unfortunately, it takes hundreds of years to start producing useful results, and even then, the results are very muddled.

What if we had some big colony made for social/economic experiments?

And a hundred and fifty years later: "We hold these truths to be self-evident..."

The last thing we need is another government program. Everyone thinks he has a great idea when he can use the force and coercion of the State to extort everyone else to support his megalomaniacal master plan. If this idea is so good, let's not use to the State to implement it. Let's start locally and work our way out. But that would be too difficult and too much work. It's much easier to get politicians to point guns at people.

Instead of just handing people a BIG, maybe we need to look at what is fundamentally causing poverty. BIG is just an impersonal, "throw some money at it" non-solution. It will probably be used by the rich and powerful to keep people poor. Special interests will get involved; the State will pick winners and losers; people will be less free and more dependent on the State. Is this what we really want?

I'm pretty heavy on voluntarism and libertarianism, but a counterargument here is that when people are given the choice, they allow poverty, because there has always been poverty.

It doesn't help that one of the major ways to get wealthy is to be very apathetic to the suffering of others. A lot of the runaway profit centers that can get people really wealthy depend on what is already borderline extortion (landlords abusing tenants, healthcare costs, credit cards that predate on the poor).

Also, the main argument about BI is that you don't pick winners or losers at all. From square one, you don't pick sides. You say "every citizen of adult age is authorized to get $2000 a month" the end. You eliminate all the other welfare, you could even possibly eliminate public healthcare, and just do a raw wealth redistribution.

While it would be nicer if we could get a 99% econonmically literate society of people who can't be taken advantage of who are eternally vigilent to protect their economic interests and behave rationally in all interactions, we can't pull that off. And I think the last 30 years have well demonstrated what happens when people who live to make money off others focus entirely on making money off people who aren't focusing on fighting that battle - they win. By a landslide. And they can crush an entire middle class by way of a cultural apathy to it.

And we can't easily fix it, at least not while people are destitute. If everyone was more prosperous, their heirarchy of needs was well taken care of, maybe over a hundred years you could transition to a culture of intellectualism and personal introspection so that you could dissolve violent theft of profits and let people interact as rational informed actors, but we don't have that right now, the problems are only getting much worse, and the worse they get the less likely you are to stand a chance to achieve a truly free society.

when people are given the choice, they allow poverty

I'm not sure I understand this. What choices are you and I making that "allow" poverty? (Note that your next paragraph talks about ways in which some predatory people can cause poverty, by preying on others; but that doesn't seem to be what you're referring to when you say people in general "allow" poverty.)

This article argues that with a fraction of total GDP you could cycle back that productivity into BI. That means, even indirectly, most of us enable poverty by the way we spend our money and the way we engage with charity.

If you buy a lot of stuff at wal-mart, you promote sub-living wage income in most places for the clerks, because wal-mart (and the market at large) doesn't value their labor at what it would cost to survive, they just go with the state mandated minimum they can't violate.

It isn't something one person can change. Hence why it seems futile to try to moitivate individual behavior to cause a universal change that is inherently counter to the benefit of those with the resources to fix the problem - even if you don't forcibly take the money, if enough charity was going on to uplift the impoverished from poverty, there would be much lower than 15% poverty. Therefor, the market as is doesn't provide an uplifting effect, espeecially if poverty is getting worse (post recession).

> The last thing we need is another government program.

So would you then be in favor of a plan that dismantled all other current government means-tested welfare programs (welfare, unemployment, food stamps, medicaid, etc), replacing all of them with a strict implementation of a basic income guarantee (everyone gets the exact same amount, no matter what, no exceptions)? That would decrease the number of government programs, vastly decrease administrative overhead, and some calculations have shown that it would actually decrease overall spending as well.

I'm not in favor of any of them, but I guess BIG would a step forward, so I see your point. The thing is, a lot of people are dependent on those programs, and not just the recipients, but everyone in the chain. So removing them is going to be a tough sell and the opposition will be fierce.

One thing that opponents of BI are missing, and proponents fail to realize and explain is that there will be no "magic extra money" involved. The cost of basic income will not be higher than what currently is spent on social safety nets. Yes, every adult in the state will get ~1000$ and every child ~500$. That means that lover income or no income people with get enough to survive, without penalizing them for actually working low paid jobs. Middle class people will get the same amount, but obviously they are going to be taxed progressively more, so their net income would stay more less the same as now. Even the richest people will get this money, but I guess they will be net losers because of the taxes.

Now, if implemented correctly, there won't be extra taxes, no printing money, since the money will be distributed just a bit differently. No inflation, since total monetary sum stays the same. In addition to that, it might be even cheaper, since it will reduce administrations costs of current welfare system to almost a half. (No hard data, but remember reading that charity spends almost ~40% of revenue on administrative tasks). And, poor people will have incentive to work, since even a minijob would be a net beneficial to them.

To understand if this is feasible I think we would need to answer a few basic questions:

1. Given that we have a plethora of wealth transfers in place why have they not lead to a decrease in poverty? The "Great Society" was introduced 40 or 50 years ago and why has that not lead to a decrease in poverty?

2. Why does collapsing all existing programs into a single program make it more efficient? Why will it lead to less complexity? How will other actors (like government unions) respond?

3. How much is "Basic Income"? How should it be adjusted for inflation? Should it be the same in every geography even though the cost of living varies greatly? It seems to me this is the real question that people focus on even though personally I believe it should be the second.

For #2, look at the Brazilian experience. All the social programs were collapsed into "Bolsa Família" (a 2 oposing presidencies work), with huge gains in efficiency and a huge reduction in corruption. The long term response from the government was to create new programs, that don't suffer from that huge reduction in corruption, but it's hard to make excuses for them, instead of just increasing the main one.

For #3, the best way I can see is targeting an income inequality. It income concentrates, increase the BI, if it gets more distributed, reduce it.

Why do we still have the same level of poverty as we did 50 years ago? Short answer, we don't. It's just the goalposts that keep moving.

Perhaps it's because we have an entire industry (and government bureaucracy) dependent on there being dependent class? Yes, the goal posts get changed. It's not that kids are hungry, they're food insecure. Same with parents, job insecure. Well, they used to call that life. You'd go out, work your butt off, save what you earned, and only rely on family, friends, and church. Nowadays, it's depend on your monthly EBT and never improve your lot.

Yes. Here in San Francisco, there's a push for food stamps to be accepted at higher-end restaurants as opposed to just fast food. It's slowly becoming a "right" to not only eat out, but to dine well.

So, to recap, poverty has gone from starving => hunger => food necessities => fast food => fine dining.

I really don't mind the push for this. It's just calling it "poverty" that grinds my gears.

We need a BIG because it is becoming a required human right in an information society. More and more, power and opportunity are determined by access to information, and we're making strides in democratizing that and thereby decentralizing power. But to actually realize the benefits from increased access to information requires freedom from existential fear (and education and a mostly discrimination-free society). If we do not fix these problems, we're not improving the world with all our wonderful tech tools but establishing a digital elite.

We need a BIG because it encourages risk taking. Society is built largely on the backs of low-wage laborers, but actually benefits most from free, educated, motivated people chasing not just a living wage but a fulfilling occupation. The ingenuity of human minds is our greatest, most renewable, still hugely untapped resource. It should be society's goal to enable and tap that potential. YCombinator sort of pays smart people BIs for a summer not as a reward for work but to ENABLE them to work, to great benefit (though not entirely unconditionally, obviously). When and why have we given up hope of expanding such concepts to all of society?

We need a BIG because markets are made of people, which means there can be no free market without free people. Many people today are not free but under economic duress. Only once people's livelihoods are secured, the labor market will produce win-win situations and exploitation will be eliminated (giving everyone a benefit most of us techies already enjoy). Finally, jobs will be paid what they're actually worth to us rather than what employers can get away with. Unpopular tasks will have to be fairly (=highly) paid or automated. A BIG actually perfects capitalism, rather than undermining it.

We need a BIG because it's not possible to "live off the land" by your own labor anymore in our society. An income is required for survival.

We need a BIG because progress is eliminating (the need for) many low-wage, manual labor jobs. "Full employment" is becoming less and less necessary or desirable.

We need a BIG because many tasks society benefits from aren't paid: Caring for the elderly, raising kids,... but even writing open source software or contributing to Wikipedia. People doing such work today are either privileged, dependent on others or in precarious living conditions. All of these strike me as things we should work to avoid.

We need a BIG because it is fair and simple – paid not just to the jobless, but everyone. It is empowerment rather than a bureaucratically administered handout with all kinds of social stigma attached.

YCombinator sort of pays smart people BIs for a summer not as a reward for work but to ENABLE them to work, to great benefit (though not entirely unconditionally, obviously). When and why have we given up hope of expanding such concepts to all of society? I think tech investment actually works better as an argument against expecting returns from giving people money to do what they want. Venture capitalists distribute capital to the most talented and motivated individuals in the entire country and have significant leverage when it comes to ensuring those elite recipients use that capital to generate positive financial returns. And yet most VC funds still lose money.

Do we really think that taking money from people performing tasks people are willing to pay for and giving it to people performing tasks people are unwilling to pay for will be, on average, a winning bet for society? If it is, the misallocation of resources is probably too big a problem to be solved simply by throwing money at people.

It's one thing to subsidise public service and the risk of trying to produce something else. It's another thing to subsidise self-service and insulate people from the consequences of never producing anything.

> We need a BIG because it's not possible to "live off the land" by your own labor anymore in our society. An income is required for survival.

This brings up an idea I had recently: how about a Basic Land Guarantee instead? You give everyone who asks some piece of fertile land, where they can move and start a farm. If they can't live decently in the big city, they could move to the countryside and support themselves.

It kind of sounds good but then you realize it's completely insane. Do you want to go back to pre-industrial agriculture?? That is a waste of land. There probably is not enough even land for it anymore; even if there were, it would mean a massive reduction in food production capacity.

...Unless you were going to allow people to pool their land and farm it using industrial methods. So they could exchange their land for shared stock in an agricultural corporation. The corporation would sell the produce, and distribute the resulting funds as dividends... oh wait it's a Basic Income!

Even if the US's population was half its current total I think you'd be hard-pressed to actually have everyone support themselves on independent farms in the countryside.

Farming is HARD WORK, the expenses are numerous and unpredictable, and profit margins are slim. If you want to understand this more you should read up on the various farm subsidies and other programs currently in effect in the US, and maybe talk to some people who've lived in rural areas or actually operated farms.

I've always thought that this would have some interesting effects on society.

Sure, there are some people who would be content with basic subsistence. Some of those people might turn to crime to get their jollies. I'm not sure there is any social system that can prevent this.

A guaranteed income that paid a basic subsistence would drive up the cost of goods. Some of that would be because people at the lowest end of the wage scale can now be picky about their working conditions, driving up the cost of delivering goods and services, and generally improving working conditions. Employers would have to make mundane, dirty, low-skill work a more palatable proposition. Garbage men's wages would increase. Some of it would be because of opportunistic business practices seeking to maximize profit from goods and services and especially off of the people at the bottom. An equilibrium could be reached, but prices for goods and services wouldn't look like the do now.

Why some action is necessary:

Whether you like the Basic Income or not, something has to change. Technology, especially automation, is currently and will continue to displace low-skilled labor. At some point it will also begin to eat some skilled labor. And why shouldn't it? I can't blame industry for automating labor away. I also can't blame them for the effect that will have on the displaced labor; but, it will have a terrible effect if nothing is done. Nobody can expect those people to starve themselves. This is actually a great opportunity for humanity; if this 'surplus' labor can be directed toward further advancing society (in a positive way).

What are the alternatives?

A fragmentation of society into: Aristocracy, Worker Class, and a Loafer Class. I doubt this would be stable without an oppressive authoritarian State.

Something else?

US population estimate as of current = 316,582,121

Estimated population over 21 = 80% = 253,265,696

Cost of BIG: $2.53 Trillion (15% of GDP, more or less)

The benefit hopefully would be no person should have to worry about basics of water, food and shelter. (See homeless camps that appear to be third-world mud & scrap shelters.)

2012 Federal Tax Receipts: $2.45 Trillion

This is where it falls apart. To implement this program, you would need to double tax receipts. 98% of income taxes, which account for about 46% of all receipts, are paid by the top 50% of the population. The median income is around $30k. At that level, about $4050 goes to federal taxes. If we double all tax sources, that would increase the tax burden to $8100. (This is assuming the BI is untaxed.)

Effectively, the median would see an extra $5,950/year from this program. People making above $70,000 would start to see their taxes increase more than the $10,000 BI. People with incomes of $200,000 would be paying an extra $35k per year.

I think it's an interesting proposal, but with these sorts of increases, you're going to encounter a lot of resistance from upper-middle classes and higher, the sort of people who tend to be much more influential in politics...

So how exactly would this be funded? Double taxes?

The rich would never pay anything more, the mid/upper would be squeezed.

Also: Deficit, debt and looming likelyhood of austerity strategy.

That's what I was getting at, we'd have to double taxes, though for anyone below $70k/year, it'd be a net positive.

Well since we are all pretty much software guys here and since this is HACKER news:

Wouldn't it be wise for some among us to try to build a simulation of what would happen in the US economy given a Basic Income?

That's what I propose. I believe we have enough historical, economic, and census data to at least "play out" a few different ways something like this could go down.

It would require taking into consideration plenty of factors and it would be a bit of work but in the end it could also potentially be history-altering itself.

Let's make it open source to avoid any possible corruption though. ;)

Couldn't help thinking about this:

http://en.wikipedia.org/wiki/A_Mind_Forever_Voyaging

I wonder what it would take to do an incrementalist version of this -- basic income either at a state/local government level, or for a certain class of people, or as a purely private thing, as a way to test it and build support before going national and universal.

Alaska's Permanent Fund dividend is like a deci-BI (it is O($1k/yr, BI of $15k would probably work in Alaska?).

Arguably (government) pensions are a form of BI. You can get one with 20 years of military service or 20-30 years of LEO service in a lot of cases, and maybe this could be compressed even more. 10 years of overseas service in a high-risk occupation force could produce lifetime BI before you're 30?

I might be willing to pay BI already in exchange for people having training for EMS/disaster response in certain areas. That's not really BI on paper, but if the training isn't particularly onerous, and the deployment is infrequent, it is approximately the same in effect, and could be used.

A college/university with a huge endowment and few students could potentially do BI for graduates of certain programs, particularly in markets with high unemployment but high external benefits from the graduates.

Your disaster response BI example is basically what the Reserves and National Guard did until about a decade or so ago. This was my experience in the USAR in the 90s. There have been a variety of (internal) doctrinal changes over the years which outsiders probably wouldn't understand, such that it certainly could not apply now. But, doctrine can change quickly.

One interesting issue is being in the Reserves meant a "basic income" which was wealthy for a kid, "about average" for a college student, and a rounding error once you get a real job. You probably need some kind of pay scale modifications, which inevitably results in considerable gaming of the system. "Well, as long as I don't graduate, I'll get an extra $500/month and I'm spending that on nicer rent so I'll take one class per semester for the remainder of my life" (I suppose there are worse unintended consequences)

Another problem is supply and demand. So you give young people $10K/yr. And everyone knows it. So colleges raise tuition $10K/yr because they have an obligation not to leave money on the table. And rents go up $10K/yr ditto reasoning. And sin taxes go up $10K/yr. And price of cars goes up $10K/yr. By the time you're done, the poor are more miserable than ever because they've only gained $10K but inflation has demanded an extra $50K/yr just to keep up with where they're at. I've seen this play out in govt sponsored day care cost sharing, govt sponsored housing (both welfare and nearby .mil bases), govt sponsored everything...

Yeah, I was thinking of RC/NG, although I'd never force people do only have a choice of an armed force.

The market-distorting effects only happen if it's a high percentage of population (either overall, or in a specific area). Even things like the FB "$500/mo extra for rent if you live within a mile of the office in downtown PA" turned into "all rents go up $500/mo" once the density of FB employees in that area was high enough. (and it only has to be people renting at the margin; established residents were already in place filling most of the apartments.)

100 BI recipients per state wouldn't distort things much.

Once BI was universal, as long as some people made substantially more money than BI (and that making money in supplement to BI was considered good, in general), there would probably be enough market incentive to provide goods in the BI price range, or slightly augmented BI price range, to keep cheap food/housing/etc. cheap. After all, slumlords usually live in nice places themselves.

If it were universal, it would also replace the "game student loan recipients" (U of Phoenix...) with "game BI", but since BI is much more flexible, it's harder to game. It's just "there's a much greater demand for products in the $10-30k/yr income bracket", which should reduce prices (through competition, economy of scale, etc.) for goods with declining marginal cost to produce, like say cheap phones. Real estate would be interesting, but if you didn't need to work a $20k/yr job, you might live in an entirely different place on $20k/yr BI. The US is huge; it's only real estate within proximity to certain things which is inherently expensive.

"although I'd never force people do only have a choice of an armed force."

One of my cousins took a different path than myself and signed up for the Peace Corps in a township in South Africa in about late 80s/early 90s.

Going back a couple generations there was the CCC in the 1930s. Seeing as the 00s and 10s are turning into an echo of the 30s, a new CCC might be a good idea.

There is a pretty substantial difference between one weekend a month/two weeks per summer in the reserves and basically a full time jobs program, but with a couple regulation changes that could be fixed rather quickly. So rather than one year deployments in the PC and CCC we'd do weekend or half month deployments. I suppose the transportation industries would enjoy being selected as the winner in that situation.

This is a classic macro / micro problem from economics where some people just won't look macro. WRT "game student loan recipients" or rent/land anywhere in the nation, all it would do is drip an extra $10K/yr $20K/yr whatever worth of blood in the water for the piranhas to attack. If you think they wouldn't raise prices out of the goodness of their heart, well... And every industry is run by sociopaths because if they were not, they'd out compete and destroy the non-sociopaths.

If you want to change the existing power structures or change demographic trends, merely making rich wolves richer by giving them fatter sheep to shear isn't going to help.

More money in the system will cause inflation, but given the free market it will be equally distributed around all income brackets so their will be net gains at the low end and net losses at the high end. Sure, your car manufacturer can raise their car prices, but their competitors won't. People might also upgrade a bit in their lifestyle because they can afford to...we don't drive around in one lakh cars for a reason! Universities might increase services to get more of the paid pie, but it's not lie they exist without competition either (moocs....).

Tangentially, but I'm always thrown by the Indian counting system for large numbers (lakh, crore, etc). Does anyone else use separators at other than the 10^3 used in the Arabic system? I know in Japanese/Chinese it is 10^4 in native language, but when they write numbers in Arabic form it tends to be in the 10^3 format.

"Sure, your car manufacturer can raise their car prices, but their competitors won't."

LOL see housing prices 2000-2007-ish

Or education price and medical prices in the USA for a couple generations. "Oh, you say your health/kids education is priceless, well guess what we're about to charge"

It always amazes me how these people are always ready to extract money out of other people's pockets by force, essentially, to finance their equality and poverty elimination ideas. Why at least one of them wouldn't just commit to making a billion dollar himself by building some useful business and then give it all away to prove his point? Why does it always have to be somebody else, who's paying?

Bill Gates is doing almost exactly that. But even with his wealth, he can only make it stretch far enough to matter in areas of extreme poverty. The situation in the US and most developed countries is big enough to need collective action.

Convince people to help voluntarily by donating, without any fear of consequences if they decide not to pay. If you can't convince them, then you're forcing them to agree with you and pay, basically acting like a bully.

I don't know about Russia, but in the US we have a system where we vote for people who mostly agree with us to represent us in the state and federal government, then try and nudge whoever wins toward our viewpoint on specific legislation. My neighbor and I can both call Paul Broun to encourage him to support our different views.

Sometimes it means markets are deregulated to the point of self-destruction, but it also means we get things like the ACA. It's an imperfect system, but it tends to move in what I consider a good direction. I happen to prefer a civilization that tries to keep the lowest of its members from falling too far, and a system that taxes with representation is the best way I know to do that.

A billion dollars is about $20 for each of the 46 million Americans that live in poverty.

Great, convince others to help, don't just tax them. If you can't convince a person that you're right about helping those people, and decide to simply impose an additional tax, then you're coercing them and treating your fellow citizens as objects to be milked, not as individuals to be convinced.

But anyway, if you have THAT many people living in poverty and you want to just give them money, there's something wrong with either your assessment of what poverty is or with the solution you propose. The point is not to give money. Money are irrelevant. If you give money, you don't create wealth, you redistribute it. The point is to help all those people create value and, thus, wealth.

I grew up in a family that was receiving money from the government (Québec, Canada). My mother was very sick, you see? Thanks to that money, she saved enough to sent me and my brother to school.

Now, I make decent money. I pay lots of taxes. Every paycheck, I pay in tax what we would receive for a month when I was a kid.

Trust me from firsthand experience. You want to give money to poor people. Why? Because this money is used to send the kids to school. To put food on the table. To slowly get some education. Do you really believe that people will only buy drugs with the money you give them? That they will gamble it away? Bullshit. Go out, meet some people.

We don't need a basic income guarantee. We need essential needs and basic services approaching the cost of zero.

Example: sunlight approaches the cost of zero (though there might be a capital expenditure to take advantage of it, the ongoing expense approaches zero).

Sunlight does not approach the cost of zero when there is private ownership of land. The legal right to collect the sunlight is attached to the land. Securing that legal right costs money.

You forgot to mention water rights too.

The thing is, such rights are at the end of the day, absurd. Such rights comes down to being able to exercise power to seize and hold land.

Did I mention in my original post, I talked about capital expenditure, and approaching zero expense? Land would be a part of that capital expenditure. Any ongoing expenses related to land would be the cost to hold land, whether that be through registering it with the government or to defend it against all comers.

Here's a thought: anyone supporting the BI theory, don't say any more about it until YOU are providing BI, personally, to at least one other person unrelated to you.

If you intend to use the police power of the state to take thru threat of force the lawful and moral possessions of others to give to those you are sympathetic to, then you should at least FIRST be willing to do it out of your own pocket without coercion. If you won't do at least that, then you have no moral stand thereon.

Some posit that given what they assume to be an inevitable loss of the majority of jobs to robotics/AI at some point, a basic guaranteed income is going to be essential to ensure continued consumption and growth.

Paul Krugman wrote an opinion piece with his thoughts on this earlier this year[1]. As one commentator noted on the piece:

If the fight is between capital and labour, and capital is winning, it seems subsidies in the form of some basic type of income may be called upon.

As Krugman notes, the issue relates to the fact that it is now jobs on all fronts that are being jeopardised. Highly skilled, unskilled not to mention the professions most suited to little grey matter.

The new inequality we are seeing has little to do with how well educated you are. It’s hard to penetrate beyond the barrier on education alone. The new inequality is about capital owners and non-capital owners.

An alternative of course, is the continued rise of "bullshit jobs" that was highlighted in a post a few weeks ago.[2]

[1] http://www.nytimes.com/2013/06/14/opinion/krugman-sympathy-f...

[2] https://news.ycombinator.com/item?id=6236478

>America is awash with money.

>Yet poverty continues to grow.

After this statement I stopped reading, and I would like to take some time to address a common issue that I see repeating itself.

There are some incredible minds here on hacker news. Fast and efficient problem solvers. However, the issue is that you trust too much. You trust the general opinion, and the science that was laid before you.

This isn't an issue in and of itself, however it makes you sometimes start with an assumption and try to solve a problem that isn't there. Never forget that the majority of the knowledge the mankind has always thought of to be exact, has been completed or even disproved by newer science.

Solving the problem: "America has lots of moneyz, but people are getting poorer" is a fool's errand. The author acknowledges the fact that the economy is failing, but still starts with that assumption. That statement is so deeply nested inside his psyche that even though he acknowledges the exact opposite as truth, he still seeks out to solve that problem like a Don Quixote charging the windmills.

Don't be a Don Quixote. Double and triple check your assumptions about reality. Try to disprove your own assumptions. Only then you will be completely certain and self confident about what you do.

America is both rich & poor at the same time. We have one of the most productive and efficient workforces on the planet, yet we are $17 trillion in debt. This can only be because we spent our money poorly - making bad decisions about where it should go.

That debt can only be retired if we have a plan to stop increasing it, and to make payments to reduce the principal. The article says that the BIG would do this, but provides no rationale as to how this might happen. Would the BIG replace the myriad existing income programs? I don't see how - $10k is $834 a month, which not much more than the monthly food bill for a family. It would be to their advantage to continue on the old programs, as they'd get more money each month.

The other danger is that the $10k wouldn't stay $10k for very long. Soon, there would be impassioned pleas from the politicians that "We have to help these people" by increasing it to provide a living wage.

"This can only be because we spent our money poorly - ..."

Irresponsible spending is not the only way to accumulate $17 trillion in debt.

As long as the real interest rate is negative, it's perfectly rational for the US government to keep increasing debt, as long as the debt is at a level where the US could reasonably pay down most of the principle that becomes due each year if the US loses the ability to roll the debt forward at rates below inflation. Currently, yield on the 10-year is about 2.75% and US real effective exchange rate inflation is just over 3%.

Back in... 2003? I remember one bank offering credit cards with no annual fee and zero interest for the first year. I got a credit card for $2,500, maxxed it out on tax-deductible charity donations I was going to make anyway, paid it off a year later, and never touched the card again. One friend told me there was a loophole in the bank's promotion for rolling debt from another credit card, where you could for free turn that credit limit into a one year interest-free personal loan. Depending on one's risk appetite, one would then either buy US treasuries, 6 month CDs, or some high grade commercial paper. As long as one had enough savings to easily stomach a $2,500 loss if things went sour, it was perfectly rational to max out one of these credit cards for an arbitrage opportunity of about 200 bps. (* This should not be construed as investment advice or solicitation for any investment.) Then again, that's a fair amount of work for a free $50.

Now, it seems the US government doesn't have a plan for dealing with this debt if the world stops charging the US insanely low interest rates on its debt. That's irresponsible spending.

Debt isn't the problem. The problem is the lack of a good plan to reduce debt when the world stops paying the US 25 bps for the privilege of holding US debt.

60% of the US national debt matures in three years or less. It isn't rational to expose yourself to that much interest rate risk, but the people taking on this risky debt on behalf of the rest of us won't be the ones responsible for paying it if interest rates spike.

"for a family"

Slightly unrelated: Of course children should receive BI. Why won't they?

Of course, legal care must be taken so 10% of a family first child's BI, 33% of second child's BI, 50% for thirg child's BI (and so on) go to some special saving account then used to finance housing or education for those children. Or else a "family" collecting BI for their five children, living off it and then give children a boot after they grow up will become a social problem.

Why should the .gov chose a winner as in "used to finance housing or education for those children"?

Why not demand a savings account for iphones to make apple rich? The fundamental problem is housing and (excessive) education is a non-productive activity.

I don't see any benefit for society as a whole, in a supply/demand situation, to make relators and school administrators wealthy, while making it financially much more difficult / impossible for kids from small families to compete. What philosophical reasoning behind a kid with only one bro/sis has to live in the poor ghetto or be unable to afford college, in comparison a kid with ten bro/sis will have far more money in his account and be better off for his/her entire life merely because his parents were more fertile? There's an obvious financial reason under this system for college admins and housing builders to encourage huge families, because they'll be able to suck more money out of them.

Another interesting effect of inflating higher ed prices would be the elimination via unaffordability for adult education. No more going back to school to learn X if the tuition for X has been exploded such that only children with 18 years of savings and 10 siblings can afford it. I'm not sure as a cultural trend that using the hammer of .gov policy to discourage lifetime learning (insert cliche about the economy being faster than ever, blah blah) is a wise social goal.

Whoa whoa okay, let's put it in some savings account that is divided to all children equally once they're 18. They are then free to spend it as they want.

This is to avoid inheritance problem: One- or two-kids families usually can conjure more help for grown-up children than big families, while big families receive more financial help but tend to eat thru it saving nothing. We need to defer some of that financial help till children grow up.

We might get to the point someday where we want to encourage a higher birthdate, like say much of Europe, Japan, Korea, Singapore. This could be a decent way of doing that.

Not sure if you read all of the linked article but it proposes a basic income for adults only. This makes sense to me; children don't have a clue about money. Although if a child were say, emancipated from her family (living independently) perhaps she should receive a basic income?

Pay it to the family. They have their parents' rights yet, don't they.

You misunderstand the nature of public debt. We still haven't paid off the Civil War.

I like the idea, however this quote sums up why I think it may not happen.

“Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” ― John Steinbeck

This will raise the price of everything I think, because nobody will want to do the chores and we cannot (yet) automate everything.

In the end people with the Basic Income will be poor and we'll be back to square one.

not if the total subsidy is equal to the amount currently redistributed to poor people

"annual cash grant of $10,000—with no work requirements—to every adult over age 21."

And why is that?

Imagine you're 18, you've finished your high school and look up to three years of busting your ass in McDonalds instead of attending some education courses because you for some bizzare reason don't qualify for getting money like everybody else does.

Then there are single moms who don't get anything for their children.

Obviously we see and example where a smart man didn't stop and think, instead throwing in an "over 21" no-brainer.

>single moms who don't get anything for their children.

Which is good, because then there's no incentive to produce many children just to cash in their basic income. Being a single mom in Western nations is mostly a business model anyway (either the father or state has to pay and considering that more than 70% of break-offs are initiated by the woman), and it usually results in children who are more prone to become criminals and dropouts.

We can disincentivize having each next children so our family converges on "mom, dad and 2-4 children", which would be pretty nice actually won't it? While building some savings for those children, larger when there's a lot of them.

Western nations sponsor single moms and get a surplus of single moms, that's what BIG ends.

>Being a single mom in Western nations is mostly a business model anyway

Can you expound on this?

> Then there are single moms who don't get anything for their children.

This is an example of a problem that's easy to state, but not at all easy to solve. If we give money to single moms with no strings, this may provide incentive to have more children (an idea with substantial evidence). If we create a disincentive to address that problem, someone will surely accuse the state of promoting racist policies or trying to engineer a change in the genetic makeup of the population.

Well, I've figured a solution here: https://news.ycombinator.com/item?id=6310186

Even better: Simply send every single American citizen a check for $1,000 a month. This is more than enough to live comfortably, and wouldn't have to be means tested. Bill Gates would get one, and a six month old child born in poverty would get one.

The total bill would be around $3.6T, a bit over half what the US government currently spends in total.

Phase out all education spending, health assistance, pension assistance, welfare assistance. Replace it with a simple check that every single citizen gets.

More efficient, less waste, and more honest.

Got a source for the Federal Govt. budget being over $7T a year?

Never said it's $7T - it's $6.4T.

And who said anything about Federal only?

http://www.usgovernmentspending.com/breakdown

I think the BIG is an interesting idea, but I'd like to see some hard evidence that it works before we implemented something this large nationwide. The government should do a controlled test. You could go somewhere like India, randomly select a bunch of small cities, give half of them a BIG, and see what it did to work incentive and the local economy. It would only cost a few million, and you'd have better, more reliable data than economists' un-tested theories.

It's been done, details here: http://mondediplo.com/2013/05/04income

George Carlin said it best: http://www.youtube.com/watch?v=x9wDadtkByw

It's because the distribution of wealth affects what the economy produces. If money is more evenly distributed, you will see more economy cars, microwaves, middle income housing construction, etc. If only a few people are really wealthy, you will see luxury yachts, mansions, etc. So scarcity conditions are different -- there really are more toasters to go around because the people had the money to buy them.

How does it work in cultures or societies where the government issues stipends annually? I am thinking of certain Native American tribes in the us issue their tribe members $xx,xxx a year as their share of casino earnings (sans work). Or aren't there places like UAE that have some sort of basic income to citizens?

The shortest clearest argument for basic income I've read http://books.google.com/books/about/What_s_Wrong_with_a_Free...

Another F'ing onswipe site. It just makes for a terrible mobile browsing experience.

This is a good idea in theory, but in theory there is no difference between theory and practice. It could work, if you could phase out all other types of assistance. But what's the chance of that?

Because welfare did such a great job of ending the poverty cycle...even Clinton felt it needed reform...Im only 45 and and Im seeing the cycle of stupidity.

The thesis is easy to state -- we're wealthy, therefore there should be a default payout to unproductive people, as a sign of how we differ from animals, from fascists and blind supporters of oligarchy. A failure to take this step will identify us as unworthy to claim membership in the human race.

The idea has merit but unfortunately blurs the issues of income redistribution and state power. As with many public issues, if the state administers the program, the result will likely be a catastrophe. The evidence? The outcome for prior programs of this kind.

Warren Buffett has recently argued that he and other very wealthy people should pay more in taxes, a sentiment many other wealthy people share:

http://www.nytimes.com/2012/11/26/opinion/buffett-a-minimum-...

Quote: "... we need Congress, right now, to enact a minimum tax on high incomes. I would suggest 30 percent of taxable income between $1 million and $10 million, and 35 percent on amounts above that."

But this realistic proposal, and the idea of a guaranteed income, differ in one important way -- the former is being proposed by people able and willing to take action on their own, which they have:

http://en.wikipedia.org/wiki/The_Giving_Pledge

But the latter guaranteed income idea would be administered by the state, which means it would be subject to ever-changing political forces. It would be a shame if a good idea were administered by an entity renowned for doing things so badly that even good ideas can be made to look terrible in retrospect.

As tokenadult remarks in a post here, it's never been tried, anywhere. On that basis alone, it deserves a hearing. But it would be a shame if the power responsible for its implementation guaranteed the failure of a potentially successful policy.

Am I unjustly skeptical of big government? I don't think so. Examples abound that show how inefficient and counterproductive big government can be -- NASA compared to private space companies, government welfare programs compared to those administered by private agencies. But my favorite example is that, six months after the 9/11 attacks, the INS approved student visas for two of the dead terrorists so they could enroll in pilot training:

http://www.nytimes.com/2002/03/13/us/nation-challenged-hijac...

This example redefines "clueless" and is hardly atypical. I would hate to see a sound public policy idea undermined by the method of its implementation.

BIG is much easier than pension and social securty systems every country already have. If you're afraid that government will screw up, you should be pro-BIG because there is not remotely as much space for screw ups. BIG is very simple: everybody gets their cut, the only thing you can argue is how much that cut will be.

I'm pretty sure the U.S. Congress is capable of taking this "simple" idea and making it into a monstrosity. After all, who could be against paying more to college graduates who agree to teach in inner city schools, for example?

> The thesis is easy to state -- we're wealthy, therefore there should be a default payout to unproductive people,

A default payout to both unproductive and productive people.

> A default payout to both unproductive and productive people.

But the idea under discussion is a guaranteed minimum income, not a payout to everyone. It's meant to help those at the bottom, not Warren Buffett and Bill Gates.

Were would the money needed for BIG come from? Increased taxes on the rich?

And why Medicare and Medicaid would cost so much in the future?

Another perspective on BI: "For us, the living." Written by Robert Heinlein in the 1930s IIRC.

subsidies of any kind won't help an already failing economy.

This is economically illiterate on multiple levels.

Because ec1, ec2, and ec3 turned out so well. corn subsidies, oil subsidies, and energy subsidies are working well too... You're a towel.

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