Just to put it in context, that's twice the entire NHS's budget, or 5 times our defence spending.
http://www.ukpublicspending.co.uk/
Perhaps I misread the data.
This could well be cost neutral for the UK.
If the idea is to give everybody money so that you can tax it more, you're engaging in economic waste. Without being able to increase productivity in other areas to cover the lost value, you will, hopefully slowly, but eventually trend towards zero, and a failure of the system overall.
Encouraging economic productivity in an environment in which nobody has to be productive may or may not be possible, I honestly haven't any idea, but its certainty doesn't seem terribly obvious to me.
A basic income doesn't remove the potential for poverty.
Sorry, but the whole idea is laughable. Not to mention the fact that it's another incentive to have more children and bigger families because the state will give you more money.
Should be easy to back that wild claim up with statistics. Can you?
Everywhere I look, I see the opposite. Families with a comfortable amount of disposable income have the 2.4 kids, but those in poverty (and particularly the working poor) have 3, or upwards. Anecdotal, but I'm yet to see evidence to the contrary
I always suspected that the reality was more like "people who are able to afford children and able to make long-term plans tend to have only as many children as they want, when they feel they are ready, but people who aren't able to afford children or who don't make long-term plans will tend to take a more devil-may-care attitude towards procreation."
Since population explosion has felt out of fashion, there's a long time that I didn't see such plot. But what I've seen has a much clearer tendency than most social correlations people use at real decisions. It's about as clear as most correlations of quality of life with GDP.
If you try and slice it by family you find that the 'traditional' family makes up a fairly small percentage of the population.
Richer men in the same country have more kids.
PS: I think I just misread your comment. By "national scale" I thought you meant in the same country.
I don't know of any study on national level, i.e. of families in a single country. The only thing I know of are anecdotes and stories about very poor families having 5+ children.
EX: http://econlog.econlib.org/archives/2011/06/kids_are_normal....
Higher income > more kids, Higher education > fewer children.
This seems fairly obvious as people are less likely to have children and stay in school. But, as I understand it the effect is larger than that.
http://economix.blogs.nytimes.com/2011/07/01/richer-people-w...
http://freakonomics.com/2011/06/10/the-rich-vs-poor-debate-a...
Basically if you have two groups of American born, collage educated men, with of the same age then income positively correlates with number of children. But, if you compare collage dropouts vs. people that have PHD's then the PHD population makes more money and has fewer kids. So, education is a huge confounding factor.
We went from 14 being a reasonable age to start a family to 24 or even 34 being the 'reasonable age' that's a huge impact. But, ‘wealth’ as an independent factor aka adjusted for age, education, country etc becomes a positive factor.
PS: Historically, starvation also limited family size.
A talk by Hans Rosling[1] on the subject.
But bear in mind: Statistics could indicate the extent that the incentive is having on the incentivized population group, if at all.
http://articles.latimes.com/2013/dec/15/opinion/la-oe-barash...
£240 billion / 64.1 million people in the UK = £3,744/year (assuming no government overhead).
Seems low. That works out to be £312/mo/person. That certainly wouldn't seem to replace many costs (especially pensions and the like).
Let's say you wanted it to be £500/mo/person. That'd run you £384.6 billion/year. Add in, say, 5% overhead and you're at £403 billion/year. Where does that money come from? If you stick with the idea that the income is universal, you're dishing out £6,000/person/year, waiting a year, then taking it right back via taxes. Which seems incredibly wasteful, and might drive up that 5% overhead number.
Put another way, if the current welfare spending is £120 billion/year, the recipients are only getting £40-£60 billion/year. So that's all of the Basic Income you need to replace the welfare spending, leaving you with a £60-£80 billion/year surplus.
Obviously, the actual amounts depend on the detailed overhead costs for each agency that would be replaced by a UBI program. But I'd be willing to bet on anywhere from 20% to 60% savings for each agency. UBI can be highly automated; with electronic payments and ties to a tax database, it can be as little as a smallish office of administrators and DevOps, and a server farm.
The simple fact is that many social welfare programs are just expensive, because there are a lot of people being helped and the quantity of money you need to spend to make any difference is just adds up.
When Medicare/Medicaid pays $150 for the same type of crutch that sells in a local pharmacy for $15, that difference does not go into "administrative expenses". I might prefer the expense of a human employee driving to Walgreens, buying a crutch off the shelf, and delivering it by hand to the patient that needs it, rather than paying a hospital that big markup just because that's the most they can charge without the benefits management program automatically denying the expense. Because even if it costs $135 in labor and transportation for a human to do all that, the mere possibility that might happen would discourage the hospital from charging significantly more than the pharmacy across the street for exactly the same item, or from charging different prices to different people based on their insurance plans.
It would even work to just give the patient $150 in cash, and tell them to buy a crutch with it and keep the change. Or carve one out of a tree branch and keep all of it. If they end up not having a crutch, it won't be because they couldn't afford it.
You can't rely on a bureaucracy's reports on itself to reveal the inefficiencies of that bureaucracy. There is just too much political pressure to cook the books.
They have 20 pages of corporate guidelines telling them how they have to lie. Zing!
If you think my figures are significantly out, I'd appreciate any corrections.
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[There were requests for "back of a napkin" calculations, so I've done some for the UK. To convert to USD, just add 50%, as a rough measure.]
Firstly, I prefer to refer to this as a "Citizen's Dividend" rather than a "Basic Income", as I know for a fact that anyone on a low income would prefer to get a guaranteed £20 a week extra rather than hear a politician say, "We can't afford to pay £75 pounds a week to everyone, so we're doing nothing." Tell me if I'm wrong. But "Basic Income" if the preferred name, so I'll refer to it as that from now on.
The UK government spends £732 billion. If we subtract £222 billion for Social Protection (we're replacing all of it with our BI), we get £510 billion required. If we add up all government income except Income Tax - Business Rates, Excise, etc - we get £481 billion.
That leaves us a shortfall of £29 billion. For the sake of simplicity, I'm going to assume that reductions in crime, the increase in VAT revenue, better health, etc are going to cover that. Let's call it close enough for government work. At the end of the day, we currently borrow £84 billion anyway, so at worst I've slashed the deficit!
Income Tax brings in £167 billion. UK population I'm going to take at 60 million. So, as a starting point, that gives us a BI of £2,783 annually, or £54 ($80) a week. Well, that's not a bad start! Let's consider what it means for actual people. Thus far:
Who loves me: - Right-wingers. I've eliminated (or vastly reduced) the deficit, effectively increased the income tax allowance by £2,783 and given them this amount in cash, while reducing welfare payments to lazy, single-mother immigrants. I should be head of the Conservative party.
- Most people on Job Seekers Allowance (unemployment benefit). While I've cut the amount they actually get, I've also cut out all the paperwork, visits to the job centre, taking money off them if they happen to earn something that week, etc etc. Money without the hassle.
- Low wage workers. This is a big boost above Working Tax Credit and is hassle free (you don't lose it by earning more). It also allows some degree of security in the event of losing their job.
Who hates me: - Left-wingers. While I've helped some low paid workers, I've also slashed benefits, there's no housing support...in short I've cut welfare while giving more money to wealthy people. I should be head of the Conservative party.
- People who're claiming several benefits. People who're on sickness benefit. Basically, all the folk who've had their income reduced below a living wage.
- Pensioners. The state pension has been cut significantly (and illegally).
Ok, I think I need to balance it a bit more. I'm going to reduce the Income Tax allowance from £10,000 (current) to £6,000. This should balance out at the end. I'm going to assume this increases income tax revenue by 25% (I've no idea if this is remotely close. If anyone can be bothered finding out, please let me know). More controversially, I'm also going to increase income tax by 25%, so the basic rate is now 25% rather than 20%.
That should give me a total revenue increase of 50% from Income Tax which gives me a BI of £4,175 annually or £80 ($120) per week.
There is a problem: we've neglected the people who require more than that either because they're owed it (e.g pensioners) or because they have extra requirements (e.g. orphaned children), so having increased the BI up to £80, I'm now going to cut it again down to £60 a week. This will cover pensioners, people claiming benefits which are currently in excess of £60 and support for vulnerable children (note that children also receive the BI, so 'child benefit' has seen a massive boost from the regular £20 per week maximum).
I'm assuming that 20% of people fall into one of the above categories, so cutting £20 off the BI gives us £160 a week to help these people. This is more than the current basic state pension (£113.10/week) so that's a fairly big increase. I don't want to complicate the calculations any further, so the small number of people who require more than this will have to be paid out of the £50 billion we haven't borrowed.
That's us at £60 per week basic income and up to £160 per week for pensioners and vulnerable people.
And I think I'll leave it there. We might still need to borrow (or cut spending elsewhere) to make up other shortfalls, but as long as these borrowings total less than £50 billion we still come out ahead. It might be more natural to cut the payment to £50 for everyone in order to free up some cash for other payments. In the real world, you wouldn't exclusively reserve Income Tax to one specific spending area anyway, but it makes things simple enough to get a rough measure.
On the morning following the event, some boffins assemble and work out an emergency plan for re-establishing a workable economy, on the assumption that one existed before everyone forgot what it was.
Now, with no memory of the past, does the UK have the land, labor, and capital to completely provide for the needs of its people? If that costs £X per year, can the people of the UK produce £X of economic output per year, and with the correct proportions of goods and services?
(For your reference, the UK represents approximately 4% of the global economy.)
I reached my own conclusion as a result. It is completely workable mathematically. It just doesn't work within the existing legal tradition. That's the one that respects property and contracts--the one we all like because it's what we rely on to assure ourselves that the car we drove to work will still be there when we knock off for the day, and the house we go back to won't be full of grubby squatters when we get there.
But as much as we like it, those with more wealth, who lack the will or the imagination to spend what they earn--to keep the production-consumption economy circulating efficiently--like it more. It keeps the grubby middle class from building ugly-but-productive anthills and beehives within sight of their beautiful-but-inefficient homes, yachts, and luxury resorts. And that is what stops the socialist schemes to erase poverty--we just don't have the stones to commit armed robbery to do it. The middle class largely pays for itself, and no more, so the only available source for the necessary resources to haul the lower classes out of poverty is the rich, including the synthetic rich people better known as corporations.
So you swallow your lofty free-market, shalt-not-steal ideals, abandon your pipe dreams of one day being in the upper class, and you tax the rich at near-extortionate rates. Naturally, they would want to flee such a tax regime. Let them. Just stop them from taking the productive capital with them as they go.
It might work out like France. It might work out like Venezuela. It might work out like the USSR. But if it doesn't work out, it won't be because it is a mathematical impossibility. It will just be because someone made a wrong assumption in one of the thousands of possible places to make a mistake when trying to re-engineer an entire national economy.