Scrap the Welfare State and Give People Free Money

I can walk any street at 2am in Vienna without looking over my shoulder.

Oakland? Philly?

A personal gun doesn't stop anyone. Fantasy from lala land.

Actually, basic income / negative income tax is a very good idea, much better than welfare schemes of almost all kinds - it has almost no administration overhead. Charity, like you advocate, has huge amounts of overhead. Milton Friedman was an advocate, for example, and he was hardly a socialist.

And the idea that charity comes from goodness? That is utter bullshit. It's 95% social signalling. Altruism doesn't exist.

Severe disincentives to crime aren't as useful as you think, because those committing the crimes do so because they don't think they will be caught. Look at some of the absolutely medieval penalties they have in the middle east for various crimes, and yet they still have criminals.

The reason you have the firepower is because those left behind by the knowledge work revolution and living in the inland US still have sufficient political power to counter the Manhattanites and San Franciscans eager to take that firepower away ("oh no, we can't let the peons be seen carrying their icky icky AR-15s, ewww!").

The biggest pusher of gun control in the United States is Mike Bloomberg -- he also happens to be a fairly enthusiastic defender of Wall Street. In his mind it makes perfect sense: why would the elites arm themselves directly, if they can just isolate themselves in Manhattan and Pacific Heights, protected by an armed police state. His gun control support (which seems to be back firing so far) is a great way for him to score brownie points many liberals (who would otherwise be diametrically opposed to most of his positions) without actually proposing any laws that would inconvenience the top 1-0.1% of the population.

I'd imagine the Swiss voters (who are voting for this) are laughing extra hard; upon completion of their militia service, they're able buy their service rifle (SIG 552) for $35 (the cost of converting it to a semi-automatic) -- the US-export equivalent (SIG 556) costs in excess of $1800 and cannot be purchased by those in New York or CT (and without significant alterations, in California), the states where quasi-technocratic elites dominate politics: they "know" what's best for the lowest classes (hence support of paternalistic programs like SNAP as well as individual mandates like social security and ACA), they also "know" what's the best for you to defend yourself.

After all, "your money & property" are purely social relations requiring a state. The state literally prints money, and enforces "rights to property" using people with sticks.

You already pay for people not to kill you: you fund a government and a military to create civil order, without which you'd be a peasant serving a warlord. Once you create government, you have to pick some way to control it. Democracy seems the most fair, but there is as you point out an incentive for people to vote themselves material comforts.

There is of course alternatives to democracy. Plutocratic libertarianism underwritten by brutal authoritarianism (I.e. Hong Kong) seems to be popular among a certain set these days. I don't think these are fundamentally stable though. Eventually people will realize that they'd be better off under democracy.

This seems to imply that it's entirely within the recipients power. Do you truly believe that all it takes is hard work and perseverance to escape poverty? That there is no randomness inherent in success?

Thanks for enlightening us with these gems.

Oh wait, what if you waste your stipend on drugs or "loose it" or someone steals it from you because you weren't being responsible with what was basically free money? Do you get more money to waste, or do you get to kill me now for food?

This is, actually, the argument for why we shouldn't have an inflationary monetary system. Normally technological improvement is deflationary (witness lowering prices for tech goods in spite of inflation - healthcare is different because it's highly regulated). Yet what we do by inflating the currency "to keep prices stable" is to steal the marginal improvement in livelihood created by technology and throw it at the financial sector.... At best. In reality we steal more than the marginal value; hence increasing income inequality, overenriched financial sector, decreased real wages in spite of increased productivity...

What is their contribution to knowledge and technology, so that they "deserve" a stake? What you're saying is that they deserve something for nothing.

Walmart and McDonalds (and everyone else) would therefore either go out of business or raise their wages. Raising their wages would increase the price of their goods. Increasing prices of goods would increase the cost of living which would increase the poverty level which would increase the minimum guaranteed income.

It's an inflationary cycle that would be very hard to avoid.

Citation, please. The examples below suggest that this is not at all the case.

http://www.ushistory.org/us/48e.asp

http://depts.washington.edu/depress/crime_seattle_great_depr...

http://boards.straightdope.com/sdmb/showpost.php?s=902192a69...

Instead of enjoying your wealth on your own terms, now you're in a cycle of vetting your drivers, your nannies, and anyone else who comes within physical vicinity of you. Your physical movements are restricted to routes and destinations that are vetted and secured.

And as the wealth gap increases, the threat to your life increases also. Kidnapping a millionaire may not be worth risking your life - but what about kidnapping a billionaire? As inequality rises the lengths people will go to to harm you increases also, resulting in ever-higher fences, ever more advanced security, and a non-stop arms race between you and the poor.

This is already reality in a lot of places. I for one don't want it to become the reality here.

A final report was never issued, but Dr. Evelyn Forget conducted an analysis of the program in 2009 which was published in 2011. She found that only new mothers and teenagers worked substantially less. Mothers with newborns stopped working because they wanted to stay at home longer with their babies, and teenagers worked less because they weren't under as much pressure to support their families, which resulted in more teenagers graduating. In addition, those who continued to work were given more opportunities to choose what type of work they did. Forget found that in the period that Mincome was administered, hospital visits dropped 8.5 percent, with fewer incidences of work-related injuries, and fewer emergency room visits from car accidents and domestic abuse. Additionally, the period saw a reduction in rates of psychiatric hospitalization, and in the number of mental illness-related consultations with health professionals.[0]

We know that poverty is extremely stressful, and stress leads to all sorts of other negative things. However, there's little evidence showing that poverty provides upward pressure. If we can remove the stress of poverty, people are allowed to start functioning normally.

[0] http://en.wikipedia.org/wiki/Mincome

And if someone refuses to get an education or better themselves when given the opportunity, are they somebody you'd like to hire for your company? Better to keep them placated with some minimum of food and shelter so they don't rob you, and save the jobs for the people who want them and will execute to your satisfaction.

Pain, fear, and force are by far the least effective means of motivating labor, and they massively undercut the more effective means (enjoyment of the work, pride in the product of your labor, identification with and emotional investment in the enterprise, etc.). The threat of destitution is not necessary to procure labor, but only to procure it at a bargain rate.

Unfortunately, if you hand someone with poor money management skills a bunch of cash, they may end up with all of those luxury items & no food on the table.

- It costs money

- It's presented as a way to get a profession that could maybe make you money in the long term, and not as a way to get an education. Besides, evidence seems to be to the contrary.

- The short term financial benefits are nil, and you need money now.

But when people have survival off of their minds, I think it's be easier to convince them of taking a no-risk dive into education. I think consumerism will be there, and people will still be motivated to make more money to spend more money.

A bit like the ancient greek free men: They had their lives all set for them, and so they couldn't help but think about governance, politics, arts, rights, etc.

It might free up the courses for those who are passionate about the subject matter instead.

Why would it do that?

> After all, the thought of perpetual poverty is a huge motivator.

The threat of absolute poverty may have some marginal value as a motivator, but what it motivates is largely risk-averse behavior to maintain the status quo from those at risk of poverty but not currently in it. At the same time, the reality of poverty often means, regardless of motivation, the absence of the means to many things, regardless of motivation.

> With that gone? Won't we see a higher divide between skilled and unskilled, rich and poor?

No, if we are funding a basic income guarantee from progressive income taxation, we won't see a greater divide between the rich and the poor, in any case. We might (though I don't see any reason to believe this is particularly likely) see a greater gap in skills between the "skilled" and the "unskilled" by some measures, but as this gap won't produce as large of a gap as currently between the opportunities and choices available to the next generation offspring of the "skilled" and "unskilled", that will simply reflect a greater realization of human freedom.

That, "make mo money", is the poorest and most cynical incentive to "get an education". Education is it's own reward. Not everyone desires/benefits from going into debt for a piece of paper.

People should be free (by having basic income) to choose their own education (or not at all). And not be forced into becoming fuel for the economic machine.

It's also a catalyst for the kind of lifestyle that quickly stifles further education. As it stands, unskilled, uneducated or partially-educated, non-wealthy individuals often have one realistic option: low-wage, long-hour labor which seems to tend to form a trapping cycle.

Now consider for a moment the line of work for (I think it's fair to assume) the majority of users of this site (software development) and the nontrivial number of people in the business who are largely self-educated. It would be silly to promote self-education and free-time online learning as an exact analog to accredited institutional education, but this field in particular presents an interesting case study in individuals simply choosing to get educated in a subject and succeed on their own time.

Is it likely that a subset of the population would simply settle for the minimum income lifestyle? Of course. But I'll wager without a second thought that freeing up a large other portion of the population to pursue their interests will in fact raise the number of educated individuals entering the workforce. After all, the promise of a higher standard of living is still a huge motivator with a basic income of only $10,000/year (still below national poverty level.) And societal attitudes towards the former group are not likely to change -- in fact the sense of tax-dollar ownership is liable to increase stigma on nonworking or nontraining individuals.

There are no modern examples of such a system to draw concrete conclusions from, so it's all hypothetical in the end. But I think you are looking at it a bit narrowly and missing the greater economic good that could come from removing "basic survival" from the top of the list of concerns of a huge portion of the population.

That's a lot of questions, and few answers, of course. But I think considering these ideas through this lens may be useful. The concept of “my” money, “my” property, etc, is something we've agreed on. There's nothing that says there can't be more facets to that agreement. That is what we organize for. And ideas like this, and like welfare, etc, are ideas that are meant to raise well-being. People who do well tend to create, as well. And creation breeds wealth. So while the specific mechanism whereby we encourage this creation and well-being is something that's absolutely up for debate, it's your money only insofar as you're not trading it for a service. In this case, the service is, greater wealth for all.

Will it work? I don't know for sure. But experimentation seems like a pretty good way forward, rather than simply sitting on our hands in a world where we believe we can increase well-being, out of fear that maybe our money might be misused along the way. If VCs thought this way, a lot of companies wouldn't exist today.

In the rest of the world, the poor people vote for health care, welfare, and unemployment insurance. This is because they want that safety for themselves if something goes wrong. They recognize that these programs are largely insurance. They pay into them in the expectation that most of the time nothing goes wrong, and they're not getting their moneys worth.

But when something does go wrong, the insurance is there to help them. In that situation, they get far more out of it than they put in.

Their decision to pay insurance is a rational one, based on cost/benefit analysis. It's the same as your decision to buy life insurance, or fire insurance on your house. (Car insurance is usually mandated, so I'll ignore that...)

Sure, there are scammers. But the scammers of these programs are individuals. Their impact is limited. The scams done by corporations, and people with the right connections far outweigh the scams done by Joe Average on welfare.

In the US, the poor people vote for no health care, no welfare, and no unemployment benefits. They also vote for lower taxes on the rich (corporate, inheritance, etc.). They claim this attitude is because they don't want idiots on welfare spending MY money.

You might be well intentioned, but the rest of the world thinks your approach is crazy. Not "Gosh, that's crazy!". But "We, the jury, find the defendant not guilty by reason of mental defect".

The disparity between rich and poor in the US has grown enormously in the past 20 years. And it's all because the average joe has bought a line of horse twaddle about "independence" and "welfare mom living off of MY money".

The rich people who've sold you that crap are laughing all the way to the bank. And Joe Average is left wondering why he's doing everything he's told... and is still poorer than his parents.

[If it makes you feel better to say that the government forced you to do that, fine. If you want to talk about monopolies of violence, fine. But there's no way you can reasonably consider it your money once it's left your bank account, any more than money you paid to Amazon is still your money.]

So, if the government is going to give money to people who are in need, would you prefer it to be spent according to a top-down command economy, Soviet-style, or according to a market economy with maximum information at the edges?

Since you voted for a government that distributes welfare from your taxes, the most efficient, effective and humane method of distributing that welfare is to hand out cash with no strings attached. Any additional administration is simply a waste of money, with worse outcomes.

If you don't want to participate in a civil society, there are still places in this world where you can go and deal with everything on your own. Go.

I've wanted to do what I currently do for a very long time, but there was no entrance to it without college, which was something I struggled with immensely. A $10k income with some pell grants would have meant food and health care while working my way through college (which I achieved by being a truck driver on weekends), but a $25k income would have meant "fuck it, I'm just gonna do nothing".

Solutions like "Then find a way to incentivize yourself to work" might be good advice, but not a good policy.

There's no other way around it. You need to give people money in a more automatized world.

wages and prices may increase, but money will still be more evenly distributed than it was before. As in the person that had nothing will now be able to get something even if prices increase. That is what's important. We simply can't leave these people behind because a robot will eventually do what they can do 24 hours per day without getting tired and more accurately than any human on earth.

I think the idea is that the money would be transferred using taxes, not printed.

So what would happen is that the basic income would become the new zero line.

How? Even if you did print the money, you'd devalue all of it, not just the new amount. If a dollar from the basic income is worth $0, then all dollars are worth $0, unless it was somehow printed in non-fungible currency.

Of course, the inflation would probably affect some prices more than others, but I don't see how could it ever turn the basic income into zero income.

Let's break it down: $68000 annually is $5667/month or $186/day. Let's say 20% is intended to go to food: $37/day. That's a reasonable amount: for a couple they'd have to shop and prepare most of their own meals and wouldn't eat extravagantly, but they wouldn't be eating rice and beans for every meal either.

For $37/day to become essentially worthless for the purposes of feeding a couple, I think it's buying power would need to drop 66% to 75%. The latter gets you down to $9.25/day, which is rice and beans territory. It's still survivable, but you can't survive well on it.

This couple would still have the equivalent of $17000/year, which is about what one person working full-time at minimum wage would earn. So, if one of them gets a minimum wage job, they'd be earning as much as two people working minimum wage, while one stays home (perhaps to care for children and avoid the costs of child care.) That's already better than the system we have today, where both of them would have to work to earn that much and any children are left to fend for themselves much of the time.

If they both get minimum wage jobs, they're now earning as much as three minimum wage workers instead of two. Again, much better than today. This keeps one of their teenage children in school instead of joining the minimum wage workforce to help support the family.

All this is assuming that the entire economy is hammered by enough inflation to cause a 75% reduction in the earning value of a dollar. Historically, it takes decades for that to happen under normal circumstances, and I don't think that changing the way the government spends money that it's already spending anyway is likely to cause hyperinflation.

Marginal impact is greater. Using the numbers I listed above your marginal tax rate at a income of $10k/year is NEGATIVE 100%, at an income of $100k/year it would be 0%, at $500k/year it would be 8%, at $1m/year it would be 9%... asymptotic increasing towards 10%.

> ...there is always a positive incentive to higher income

Sorry, you are correct. I should have said there is increased income doesn't increase disincentives.

> Only if the flat rate is set very high compared to the existing rates paid by most of the population.

The point wasn't being made on total net revenue but on cost per dollar collected due to compliance enforcement and bureaucratic overhead. Regardless the flat tax rate CAN be set very high as long as there is a corresponding offset in the MBI. Ultimately the ACTUAL rate people pay could be similar to the amount they currently pay but normalized over the population as a whole.

> If this includes taxing capital gains as income

> To do this, government has to alter the definition of taxable income

Which is why I specifically mentioned ALL income.

> This does not eliminate their ability to make similar decisions in the future

This is very true, and probably the strongest argument you made in your post. Hopefully such exemptions would "stand out" with such a simplified tax structure but any government that exists will continually work to expand it's power at the expense of the governed.

> Everybody feels the effect of rate changes now

Everybody does NOT feel the effects of a rate change as often lower tax rates are unmodified while higher tax rates are adjusted.

> Define "market freedom".

Sorry, "market freedom" is both to general and arguable incorrectly used in this case. I should have said it equalizes market manipulation by the government.

A progressive tax system that enabled either (a) recognize income for tax purposes in advance receiving it, or (b) deferring recieved in year t+1 that is much greater than in year t for tax purposes would do the same thing, without being a massive tax break (compared to existing progressive systems) to those who make large incomes year-after-year consistently.

Obviously I'm not advocating giving $1T to Bill Gates, but this is a fundamental misunderstanding that gets repeated over and over again. Rich people do not keep their money under their mattresses. Much of it they keep in a variety of financial instruments, most commonly stocks and bonds. Sale of stock is how many companies finance their operations, which includes, among other things, hiring people who pay taxes. Bonds are how corporations and governments fund things like building factories, roads and schools.

Even if Bill just kept it in the bank, the bank now has more money to lend at easier terms to businesses needing capital.

There is a serious economic study and debate about how much of a "multiplier" effect you get from handing money to a poor person vs. to a rich person. It wouldn't surprise me if it were higher for the poor person, but it's surely not 0 for the rich person.

Yes; if you'd bothered to read the last paragraph of my comment before responding to it, you would have seen that I reached the same conclusion.

> I really dislike how little people think BI systems through before dismissing them

I really dislike how people like you can't be bothered to read and comprehend someone's comments before making these little dismissive responses. You should work on your reading comprehension before you accuse other people of not thinking things through.

Gotta love uncle Milty (Friedman) and his boys.

This applies most of the the large-purchaser effect of a social program, but isn't a traditional social benefit program (sure, the actual ACA, which has subsidies for some purchasers, includes a traditional social benefit program as a component, but there is no reason that the rest couldn't be maintained with similar benefits without the subsidy in a BI system.)