A Guaranteed Income for Every American(wsj.com)
wsj.com
A Guaranteed Income for Every American
http://www.wsj.com/articles/a-guaranteed-income-for-every-american-1464969586
386 comments
Does it really matter if a billionaire stacks up billions in some Cayman account? If so, it is straightforward to use inflation to redistribute those digits.
What I care about is a billionaire who buys up all the land in my country. The land can't be hidden and is therefore easy to tax. I care about a billionaire who eats gold leaf ice cream sundaes while the children across town are malnourished, but it is easy to tax gold and food sales at restaurants and groceries.
The big problem historically with sales tax has been that it is regressive, but with basic income that doesn't matter any more. There's no problem I know about with land taxes except misguided concern for the elderly and corrupt loopholes. Why not stop even trying to tax financial abstractions and just address hoarding?
What I care about is a billionaire who buys up all the land in my country. The land can't be hidden and is therefore easy to tax. I care about a billionaire who eats gold leaf ice cream sundaes while the children across town are malnourished, but it is easy to tax gold and food sales at restaurants and groceries.
The big problem historically with sales tax has been that it is regressive, but with basic income that doesn't matter any more. There's no problem I know about with land taxes except misguided concern for the elderly and corrupt loopholes. Why not stop even trying to tax financial abstractions and just address hoarding?
Those billions in a cayman account are dead money. They are the marginal efficiency of labour crystallised, and then transformed into a immotile instrument which benefits nobody.
You say it does no harm, but why do you think we're still working 60 hour weeks when we've improved efficiency in all fields by orders of magnitude since industrialisation? All that efficiency gain's benefit was "realised" by the elites, but until that money is spent, loaned, invested, used - that value is destroyed.
Sure, sure, tell me it's a store of value, but you'd still think the squirrel that stored 1000 tonnes of acorns for winter and wouldn't share, causing furry famine, to only then after winter forget where he left them and demand more acorns from the working squirrels was pretty damn irrational.
You say it does no harm, but why do you think we're still working 60 hour weeks when we've improved efficiency in all fields by orders of magnitude since industrialisation? All that efficiency gain's benefit was "realised" by the elites, but until that money is spent, loaned, invested, used - that value is destroyed.
Sure, sure, tell me it's a store of value, but you'd still think the squirrel that stored 1000 tonnes of acorns for winter and wouldn't share, causing furry famine, to only then after winter forget where he left them and demand more acorns from the working squirrels was pretty damn irrational.
Money in bank accounts is not like acorns, it's more like having other squirrels owe you acorns. I don't see why that is such a big deal.
People working 60 hour weeks has less to do with the Cayman islands than with those people needing a place to stay, and the demand of land far outstripping the supply, making it a zero sum game. That's why a huge land tax is a no brainer, but of course it will never happen, because the land owners can always pull out the old "poor granny won't afford to stay in her own house" argument and get all the sympathies on their side.
People working 60 hour weeks has less to do with the Cayman islands than with those people needing a place to stay, and the demand of land far outstripping the supply, making it a zero sum game. That's why a huge land tax is a no brainer, but of course it will never happen, because the land owners can always pull out the old "poor granny won't afford to stay in her own house" argument and get all the sympathies on their side.
The thing is, in a service based economy we desperately need the rich to buy ostentatious, pointless shit/experiences purely in order to retain jobs.
Returns on investment always beat inflation in the long run.
>If UBI is to be instated, we would also have to implement harsh laws to prevent the upper classes from evading taxes. Moving wealth to a tax haven should be made a criminal offence (with jail time).
How about you don't instate something that requires harsh authoritarian penalties against non-violent behavior to work.
How about you don't instate something that requires harsh authoritarian penalties against non-violent behavior to work.
Crime does not have to be violent to deserve drastic penalty.
Anything can be made a crime by passing a law. But only violent and/or fraudulent behavior should be illegal. Laws imprisoning those who refuse to hand over a share of the currency they receive in private trade are unjust, and should be abolished.
I feel like the punishment should be appropriate to the crime though. Leave jail for the criminally dangerous, those whose freedom would be a physical danger to others. (Murderers, rapists, etc.)
Fraud? If it's money that was gained, then it should be money lost. Fine them into the dirt, but I don't think jail time is appropriate. Making money illegally doesn't make someone a murderer, it just makes then dishonest.
Fraud? If it's money that was gained, then it should be money lost. Fine them into the dirt, but I don't think jail time is appropriate. Making money illegally doesn't make someone a murderer, it just makes then dishonest.
The problem is then the rich will do a simple expected value computation to decide whether to do fraud. A disproportionate and non monetary punishment will be far more effective at deterring them.
> The problem is then the rich will do a simple expected value computation to decide whether to do fraud.
Then write the law so that the penalty can never possibly be worth the cost.
Jail is downright inhumane, and the only reason we should tolerate it is the case when the person is violent and there is good reason to believe that in the absence of imprisonment they will be a danger to others. And they should remain in jail only as long as the threat of danger remains credible.
Then write the law so that the penalty can never possibly be worth the cost.
Jail is downright inhumane, and the only reason we should tolerate it is the case when the person is violent and there is good reason to believe that in the absence of imprisonment they will be a danger to others. And they should remain in jail only as long as the threat of danger remains credible.
>>Fraud? If it's money that was gained, then it should be money lost. Fine them into the dirt, but I don't think jail time is appropriate.
That'd acceptable if at least the following conditions hold:
a. First and foremost, the fraudster should be ashamed publicly and in a very visible manner on social media, television/radio and newspaper. e.g. The fraudster be made to wear clothes that are deemed filthy and be made to hold a placard stating "I repeat that I am a fraudster and I don't deserve to be a citizen of this nation. I also state that my relatives and my friends and my associates can be fraudsters themselves because they liked to hang out with me. They are free to disassociate themselves from me but if they continue to associate with me you know that they are also fraudsters." This video and news should be sent to all people who are associated with the fraudster.
b. the fine should be such that all assets/money belonging to the fraudster should be confiscated and along with all the assets of the relatives that have been linked to the fraudster's money; (it's very easy to game the system otherwise). The relatives should be given a notice that they should declare all such linked assets/money voluntarily and should return the same within a specified period and failing to do so they should also be declared as party to the original fraud and thus fraudsters themselves and be prosecuted.
c. The fraudster should be banned from doing any financial sector job; only physical labour jobs should be allowed.
d. The fraudster should not be allowed to leave the country
e. All the money the fraudster has spent on the legal battle (fee of the attorney) should also be confiscated from the attorneys (this is also important, as the attorneys will be forced to act more ethically not because they are honest but just because of the risk involved). I know they will find other ways to get rewarded but at least those will not be as straight forward. The attorneys also should be given a notice that they should declare all such linked assets/money voluntarily and should return the same within a specified period and failing to do so they should also be declared as party to the original fraud and thus fraudsters themselves and be prosecuted.
f. Any money not recovered from the fraudster should automatically be treated as loan-default and the fraudster be prosecuted for default in addition to the fraud charges and the applicable legal process be initiated.
In short, even the filthy rich fraudsters [1] should not be able to game the system. The punishment should be such a deterrent that even the filthy rich fraudsters should shiver at the thought of it.
>>Making money illegally doesn't make someone a murderer, it just makes then dishonest.
But they are still causing irreparable harm to the societal fabric and other people will fast lose their faith the legal system if the filthy rich fraudsters don't get punished in a big way.
[1] anyone controlling the big banks and big corporations like Goldman Sachs.
That'd acceptable if at least the following conditions hold:
a. First and foremost, the fraudster should be ashamed publicly and in a very visible manner on social media, television/radio and newspaper. e.g. The fraudster be made to wear clothes that are deemed filthy and be made to hold a placard stating "I repeat that I am a fraudster and I don't deserve to be a citizen of this nation. I also state that my relatives and my friends and my associates can be fraudsters themselves because they liked to hang out with me. They are free to disassociate themselves from me but if they continue to associate with me you know that they are also fraudsters." This video and news should be sent to all people who are associated with the fraudster.
b. the fine should be such that all assets/money belonging to the fraudster should be confiscated and along with all the assets of the relatives that have been linked to the fraudster's money; (it's very easy to game the system otherwise). The relatives should be given a notice that they should declare all such linked assets/money voluntarily and should return the same within a specified period and failing to do so they should also be declared as party to the original fraud and thus fraudsters themselves and be prosecuted.
c. The fraudster should be banned from doing any financial sector job; only physical labour jobs should be allowed.
d. The fraudster should not be allowed to leave the country
e. All the money the fraudster has spent on the legal battle (fee of the attorney) should also be confiscated from the attorneys (this is also important, as the attorneys will be forced to act more ethically not because they are honest but just because of the risk involved). I know they will find other ways to get rewarded but at least those will not be as straight forward. The attorneys also should be given a notice that they should declare all such linked assets/money voluntarily and should return the same within a specified period and failing to do so they should also be declared as party to the original fraud and thus fraudsters themselves and be prosecuted.
f. Any money not recovered from the fraudster should automatically be treated as loan-default and the fraudster be prosecuted for default in addition to the fraud charges and the applicable legal process be initiated.
In short, even the filthy rich fraudsters [1] should not be able to game the system. The punishment should be such a deterrent that even the filthy rich fraudsters should shiver at the thought of it.
>>Making money illegally doesn't make someone a murderer, it just makes then dishonest.
But they are still causing irreparable harm to the societal fabric and other people will fast lose their faith the legal system if the filthy rich fraudsters don't get punished in a big way.
[1] anyone controlling the big banks and big corporations like Goldman Sachs.
>a
Why would anyone be ashamed about not paying taxes? That's hardly a shameful thing to do.
>b
That's just ridiculous.
>c
And how do you propose that'd be implemented?
>d
Why?
>e
So those suspected of tax fraud do not deserve legal representation?
What you're describing here sounds like something fit for DPRK, not a civilized country.
Why would anyone be ashamed about not paying taxes? That's hardly a shameful thing to do.
>b
That's just ridiculous.
>c
And how do you propose that'd be implemented?
>d
Why?
>e
So those suspected of tax fraud do not deserve legal representation?
What you're describing here sounds like something fit for DPRK, not a civilized country.
>>So those suspected of tax fraud do not deserve legal representation?
>>What you're describing here sounds like something fit for DPRK, not a civilized country.
I am not for turning USA into a brutal and unjust communist country (e.g. DPRK).
All I am saying is the current laws are such that the financial fraudsters generally get only a slap on the wrist and they are let free.
This is going to cause social unrest (e.g. the occupy movement) in the USA and mostly socialists/communists will be (are) going to take advantage of it to topple the current free market based democracy. If USA wants to save, apart from heavy taxes on the top dirty-rich it should also implement severe and visible punishments for financial fraudsters.
Read this news [1] to know how the dirty-rich are gaming the system and what's wrong with shaming them in public? [1] https://news.ycombinator.com/item?id=11843477
I am not for turning USA into a brutal and unjust communist country (e.g. DPRK).
All I am saying is the current laws are such that the financial fraudsters generally get only a slap on the wrist and they are let free.
This is going to cause social unrest (e.g. the occupy movement) in the USA and mostly socialists/communists will be (are) going to take advantage of it to topple the current free market based democracy. If USA wants to save, apart from heavy taxes on the top dirty-rich it should also implement severe and visible punishments for financial fraudsters.
Read this news [1] to know how the dirty-rich are gaming the system and what's wrong with shaming them in public? [1] https://news.ycombinator.com/item?id=11843477
>All I am saying is the current laws are such that the financial fraudsters generally get only a slap on the wrist and they are let free.
Do you have any statistics to support this? Do you, despite overwhelming evidence to the contrary, believe that custodial sentences lower crime and recidivism rates?
>Read this news [1] to know how the dirty-rich are gaming the system [1] https://news.ycombinator.com/item?id=11843477
AFAIK the vast majority of people "exposed" in the panama papers are not violating any laws. Perhaps the real solution is for governments to consider more competitive tax codes?
>and what's wrong with shaming them in public?
Nothing, it's just not something most people would be particularly ashamed of.
Do you have any statistics to support this? Do you, despite overwhelming evidence to the contrary, believe that custodial sentences lower crime and recidivism rates?
>Read this news [1] to know how the dirty-rich are gaming the system [1] https://news.ycombinator.com/item?id=11843477
AFAIK the vast majority of people "exposed" in the panama papers are not violating any laws. Perhaps the real solution is for governments to consider more competitive tax codes?
>and what's wrong with shaming them in public?
Nothing, it's just not something most people would be particularly ashamed of.
>>Do you have any statistics to support this?
I guess, you have forgotten the Volkswagen fraud, the Goldman Sachs fraud and the Lehman brother, and so on.
In case of the Volkswagen criminal offense plus fraud, the CEO was awarded hundreds of millions of USD as a reward instead of any punishment. In this case, a punishment like the one mentioned above should be handed over to all guilty including the CEO, the top management and the large shareholders too. They should be publicly ashamed and then stripped of all their money and be allowed to work only menial labour.
I guess, you have forgotten the Volkswagen fraud, the Goldman Sachs fraud and the Lehman brother, and so on.
In case of the Volkswagen criminal offense plus fraud, the CEO was awarded hundreds of millions of USD as a reward instead of any punishment. In this case, a punishment like the one mentioned above should be handed over to all guilty including the CEO, the top management and the large shareholders too. They should be publicly ashamed and then stripped of all their money and be allowed to work only menial labour.
A better punishment would be to strip them of their nationality, and then send them after their money. British overseas territories would become overcrowded hell-holes in short order. Treasure islands become penal colonies.
The irony being that most evaders' ancestors were the ones building penal colonies to send their debtors to.
The irony being that most evaders' ancestors were the ones building penal colonies to send their debtors to.
That wouldn't be any kind of a punishment though, people would be queuing up to leave.
The world outside of the US does not consist of "overcrowded hell-holes"
The world outside of the US does not consist of "overcrowded hell-holes"
That would be a great solution, although I think the consequence for the tax havens would be the opposite of what you envision.
>The irony being that most evaders' ancestors were the ones building penal colonies to send their debtors to.
Difference is that those debt obligations were voluntarily assumed, whereas tax debt is an odd form of debt that is imposed on someone without their agreement.
>The irony being that most evaders' ancestors were the ones building penal colonies to send their debtors to.
Difference is that those debt obligations were voluntarily assumed, whereas tax debt is an odd form of debt that is imposed on someone without their agreement.
Cyprus is full of rich Russians, and it is far from a penal colony.
They implicitly agree with the debt by assuming a nationality.
Did you really chose your nationality ?
I get the idea that to live, you will probably need the assistance of your government at one point or another. And that the government needs money. So taxes.
But saying it was something you could chose ? Say I want to live by my own rules, outside a nation. What are my options ? Similarly, can I "give up" my nationality and if so, what happens ?
I get the idea that to live, you will probably need the assistance of your government at one point or another. And that the government needs money. So taxes.
But saying it was something you could chose ? Say I want to live by my own rules, outside a nation. What are my options ? Similarly, can I "give up" my nationality and if so, what happens ?
> Did you really chose your nationality ?
Naturally one doesn't get to choose their initial nationality.
At some point, though, you (may) have the option to emigrate elsewhere, and assume another nationality, and thus assume that other nationality's perks and burdens.
> Say I want to live by my own rules, outside a nation. What are my options ? > Similarly, can I "give up" my nationality and if so, what happens ?
Depends on how much you're willing to give up. For instance, you can liquidate all of your assets and, say, start living on a boat in international waters. Or if you're willing to ilve on a sovereign country's land, just move into a forest where no one will ever find you. Depending on freedom-to-roam laws, that may even be reasonably legal.
Naturally one doesn't get to choose their initial nationality.
At some point, though, you (may) have the option to emigrate elsewhere, and assume another nationality, and thus assume that other nationality's perks and burdens.
> Say I want to live by my own rules, outside a nation. What are my options ? > Similarly, can I "give up" my nationality and if so, what happens ?
Depends on how much you're willing to give up. For instance, you can liquidate all of your assets and, say, start living on a boat in international waters. Or if you're willing to ilve on a sovereign country's land, just move into a forest where no one will ever find you. Depending on freedom-to-roam laws, that may even be reasonably legal.
People already go to prison for tax evasion, if they're doing it systematically and deliberately.
I don't understand the (apparently popular) argument that serious criminal penalties should only be handed out for direct physical violence. Look at all the horrible shit that happened during the housing collapse--taking someone's home away under false pretenses (and under threat of police violence!) is just as destructive as if you'd burned it down while they were away.
I don't understand the (apparently popular) argument that serious criminal penalties should only be handed out for direct physical violence. Look at all the horrible shit that happened during the housing collapse--taking someone's home away under false pretenses (and under threat of police violence!) is just as destructive as if you'd burned it down while they were away.
Two wrongs don't make a right. No one should go to prison for refusing to hand over a share of the currency that they earned in a private trade.
There is so much admiration for the covert mass surveillance that Edward Snowden uncovered and exposed to the world yet we seem to not blink an eye at the blatant and overt mass surveillance of private financial transactions - where we are legally required to totally surrender our financial privacy to the government - that has to be imposed on people so that there can even be an income tax.
Refusing to hand over your private income is totally incomparable to fraud. I honestly have trouble understanding how people can make these kinds of arguments.
There is so much admiration for the covert mass surveillance that Edward Snowden uncovered and exposed to the world yet we seem to not blink an eye at the blatant and overt mass surveillance of private financial transactions - where we are legally required to totally surrender our financial privacy to the government - that has to be imposed on people so that there can even be an income tax.
Refusing to hand over your private income is totally incomparable to fraud. I honestly have trouble understanding how people can make these kinds of arguments.
So we should completely abolish taxes, then? I assume this is one of those plans where we privatize all government services and the free market makes everything perfectly efficient and utopic, except for the people who can't afford to pay their police bill?
We should only allow the government to raise revenue from a split-rate property tax and user fees for government services used. Non-payment of the former should only be punishable by land expropriation, and not imprisonment.
So it's the "police bill" thing, then?
User fees would be for things like use of roads. Services like policing would be paid out of revenue collected by a split rate property tax.
This doesn't matter at all. Taxes always work out the same in the wash. Put the tax on the sale of goods, the consumer pays them; put the tax on the rich CEOs income, then he raises the prices of his goods to suite and again the consumer pays them. It's better that the taxes are low in the chain to prevent the tax dodging you cite.
>If UBI is to be instated, we would also have to implement harsh laws to prevent the upper classes from evading taxes. Moving wealth to a tax haven should be made a criminal offence (with jail time).
Moving out of the country should be a criminal offence? Pretty strong North Korea vibes right there.
Moving out of the country should be a criminal offence? Pretty strong North Korea vibes right there.
Not even necessarily middle class. In Australia, many families who I'd consider middle class use family trusts, negative gearing and the like to minimise tax. The group just below that cops the worst of it, IMO.
I am all for Basic Income but the way the author wants to implement it would be a disaster.
My mother is fully disabled and unable to work as a result of her stroke and she relies on Medicaid, Food Stamps and SSI to live. $13000 per person would be lower than what she gets right now and that's without considering the insurance issues. These changes would quite literally kill or leave homeless a large amount of America's disabled, poor or elderly population.
If Basic Income is to work then it needs to be actually liveable and adjusted based upon the CoL in each area.
My mother is fully disabled and unable to work as a result of her stroke and she relies on Medicaid, Food Stamps and SSI to live. $13000 per person would be lower than what she gets right now and that's without considering the insurance issues. These changes would quite literally kill or leave homeless a large amount of America's disabled, poor or elderly population.
If Basic Income is to work then it needs to be actually liveable and adjusted based upon the CoL in each area.
The article's author also wrote a book advocating a universal basic income, “In Our Hands: A Plan to Replace the Welfare State,” which was first published in 2006. In that book he allows that services for the disabled would need to be retained and could not be replaced with a UBI.
Of course. The problems of the disabled, the mentally ill and so forth are obvious, and the solution is obvious: don't remove all the social security besides UBI.
But that's also the downfall of UBI, because it means that most of the other transfers will remain a necessity, and the bureaucracy to distribute it will remain a necessity, and the whole issue of welfare dependency is back with us, and so is the constant discussion of what support and subsidy should be expanded.
(I'm looking at this from European angle where the welfare is often, though not always, stronger than in the US).
But that's also the downfall of UBI, because it means that most of the other transfers will remain a necessity, and the bureaucracy to distribute it will remain a necessity, and the whole issue of welfare dependency is back with us, and so is the constant discussion of what support and subsidy should be expanded.
(I'm looking at this from European angle where the welfare is often, though not always, stronger than in the US).
> The problems of the disabled, the mentally ill and so forth are obvious, and the solution is obvious: don't remove all the social security besides UBI.
The solution isn't to either remove all other benefit programs or to retain them all. in a static, unchanging way.
Its to build UBI in a way that it naturally grows with productivity, and keep existing means-tested benefit programs (whether general or targetted to specific narrow needs like disability) and count UBI income the same as earned income in the means tests for those programs, phasing the programs out as the UBI rises to a level where it is no longer possible to qualify for them. This does leave you with the administrative costs of those programs for some time, but with dropping caseload which reduces the total costs (both benefit and administrative) over time, eventually to zero when the programs are retired because UBI makes them obsolete.
This also lets you start UBI at a very level level, and reduces risks and provides opportunities to address unforseen consequences of the UBI implementation, because you aren't doing a big-bang implementation where immediately the entire social support structure depends on UBI alone.
(Essentially, instead of being obsolete and removed when UBI is first implemented, other programs are deprecated and to be removed in the future with defined criteria.)
The solution isn't to either remove all other benefit programs or to retain them all. in a static, unchanging way.
Its to build UBI in a way that it naturally grows with productivity, and keep existing means-tested benefit programs (whether general or targetted to specific narrow needs like disability) and count UBI income the same as earned income in the means tests for those programs, phasing the programs out as the UBI rises to a level where it is no longer possible to qualify for them. This does leave you with the administrative costs of those programs for some time, but with dropping caseload which reduces the total costs (both benefit and administrative) over time, eventually to zero when the programs are retired because UBI makes them obsolete.
This also lets you start UBI at a very level level, and reduces risks and provides opportunities to address unforseen consequences of the UBI implementation, because you aren't doing a big-bang implementation where immediately the entire social support structure depends on UBI alone.
(Essentially, instead of being obsolete and removed when UBI is first implemented, other programs are deprecated and to be removed in the future with defined criteria.)
> and the solution is obvious: don't remove all the social security besides UBI.
I think that's where there are two camps within UBI supporters: those who want social security + UBI, and those who want to replace all or most social services with UBI. You can probably see how that maps to the political spectrum.
I think that's where there are two camps within UBI supporters: those who want social security + UBI, and those who want to replace all or most social services with UBI. You can probably see how that maps to the political spectrum.
>If Basic Income is to work then it needs to be actually liveable and adjusted based upon the CoL in each area.
There's a good argument to be made for a larger sum for the disabled who cannot work. But I'd be extremely opposed to any regional adjustments. If individual cities and states want to supplement the UBI, then that's up to them, but people moving out of high-cost areas and into low-cost ones is part of the natural ebb and flow that keeps the cost of living reasonable. And can you imagine what a CoL adjusted UBI for San Francisco would look like? A massive ripoff of the rest of the country.
There's a good argument to be made for a larger sum for the disabled who cannot work. But I'd be extremely opposed to any regional adjustments. If individual cities and states want to supplement the UBI, then that's up to them, but people moving out of high-cost areas and into low-cost ones is part of the natural ebb and flow that keeps the cost of living reasonable. And can you imagine what a CoL adjusted UBI for San Francisco would look like? A massive ripoff of the rest of the country.
The problem of course with that argument is that people also need to move into higher-cost areas in order to find jobs for certain industries. If there was no regional adjustment that encourages individuals to stay put. Poor people congregate in low-cost areas with low job opportunities.
A CoL adjustment for San Francisco isn't the problem, but rather the fact that San Francisco costs so much to begin with.
A CoL adjustment for San Francisco isn't the problem, but rather the fact that San Francisco costs so much to begin with.
The blame for the high cost-of-living in SF lies with the people of California, and especially the people of SF. It'd create a massive moral hazard to have the federal government subsidize that. Run your city like a gravy-train and everyone else will bail you out. People will, I hope, never stand for that. I'm very wary of insulating people from the consequences of their decisions, especially entire political units.
Many retirees choose to live in Florida because they no longer have a job and would rather live somewhere sunny with low expenses.
UBI would have a similar effect - maybe you still want to have a job, but you can choose to accept a somewhat lower paying job to live somewhere nice. It would also put less pressure on places like San Francisco.
Being less dependent on jobs is a good thing. We should allow this migration to happen naturally, rather than subsidizing people to stay where they are.
UBI would have a similar effect - maybe you still want to have a job, but you can choose to accept a somewhat lower paying job to live somewhere nice. It would also put less pressure on places like San Francisco.
Being less dependent on jobs is a good thing. We should allow this migration to happen naturally, rather than subsidizing people to stay where they are.
> The problem of course with that argument is that people also need to move into higher-cost areas in order to find jobs for certain industries. If there was no regional adjustment that encourages individuals to stay put. Poor people congregate in low-cost areas with low job opportunities.
That isn't a problem. You get a concentration of people collecting a basic income who move into a low cost area, then they have money to buy housing and food and so on so there are jobs needed to construct housing and sell food, so then some of them get those jobs. Then they have even more money which leads to even more jobs etc. and soon enough the low cost area isn't so low cost, but that isn't a problem anymore because now they have jobs.
That isn't a problem. You get a concentration of people collecting a basic income who move into a low cost area, then they have money to buy housing and food and so on so there are jobs needed to construct housing and sell food, so then some of them get those jobs. Then they have even more money which leads to even more jobs etc. and soon enough the low cost area isn't so low cost, but that isn't a problem anymore because now they have jobs.
This is far too simplistic, especially when you consider the issue of gentrification and the rise of housing costs associated with it. You ignore that this leads back to the same issue: Poor people are now living in a higher-cost area where their previously held job no longer suffices to live.
So now you force these poor people out of homes that they used to be able to afford into even poorer areas with worse job security. This is assuming that they're even able to acquire new jobs. And it would only get worse with automation.
A basic income that doesn't scale based off of CoL is one that's bound to fail in the face of automation.
So now you force these poor people out of homes that they used to be able to afford into even poorer areas with worse job security. This is assuming that they're even able to acquire new jobs. And it would only get worse with automation.
A basic income that doesn't scale based off of CoL is one that's bound to fail in the face of automation.
How is a basic income that scales based off of CoL even supposed to work?
A UBI causes the cost of living to rise in the short run. If you readjust the UBI the cost of living will rise again and again.
Cities like San Francisco will become more attractive because they not only have more jobs they also pay you more UBI. The more people move in, the higher the cost of living if housing supply is constrained. Readjusting the UBI then makes the city even more attractive. At the same time small cities become less attractive because not only are people moving into the city but their UBI is shrinking too.
A UBI causes the cost of living to rise in the short run. If you readjust the UBI the cost of living will rise again and again.
Cities like San Francisco will become more attractive because they not only have more jobs they also pay you more UBI. The more people move in, the higher the cost of living if housing supply is constrained. Readjusting the UBI then makes the city even more attractive. At the same time small cities become less attractive because not only are people moving into the city but their UBI is shrinking too.
> This is far too simplistic, especially when you consider the issue of gentrification and the rise of housing costs associated with it. You ignore that this leads back to the same issue: Poor people are now living in a higher-cost area where their previously held job no longer suffices to live.
A basic income would allow you to move to some town in Oregon or Colorado without having to worry about starving to death until you can find a job as a bouncer or the like. Once you do the presence of people like you creates some other jobs for plumbers and carpenters etc. The idea that this is going to turn every Podunk town in America into San Francisco or New York City and leave the poor with nowhere to live is clearly untrue.
A basic income would allow you to move to some town in Oregon or Colorado without having to worry about starving to death until you can find a job as a bouncer or the like. Once you do the presence of people like you creates some other jobs for plumbers and carpenters etc. The idea that this is going to turn every Podunk town in America into San Francisco or New York City and leave the poor with nowhere to live is clearly untrue.
San Francisco costs so much because so many people want to live there. Not every person who wants to live there should be able to live there - there's only so much housing in the city.
Yeah. The solution is to property tax those businesses out of the high cost of living areas. If basic income were paid for entirely by a new progressive property tax (or even better, a land value tax) it could ratchet down the wealth inequality, not just the income inequality.
> There's a good argument to be made for a larger sum for the disabled who cannot work. But I'd be extremely opposed to any regional adjustments. If individual cities and states want to supplement the UBI, then that's up to them, but people moving out of high-cost areas and into low-cost ones is part of the natural ebb and flow that keeps the cost of living reasonable. And can you imagine what a CoL adjusted UBI for San Francisco would look like? A massive ripoff of the rest of the country.
I don't know what the solution is here but if in this hypothetical reality, the garden state didn't supplement but California did then I'd move to California in a heartbeat. I am sure I'd be broke even with any supplement in San Diego but at least I'll be broke in San Diego.
Edit: I cannot support any discrimination in basic income based on "ability to work". I'd rather the whole thing fail. I'd rather we never have basic income implemented at all than this bastardization go through. Personally, I'm all for death panels. We should not try to keep everyone alive at all costs. If I get in a freak accident and it'd cost me $10M+ to keep me alive with little to no chance of a full recovery, please let me die.
Something we need to discuss separately from universal basic income is the need to reduce cost in healthcare. I'd gladly support expanding Medicare to everyone without having to qualify. We would need significantly greater penalties for Medicare fraud and add incentives for whistleblowers and make it easier to report fraud. I'm OK with "lite" Medicare that drops expensive procedures and lets patients suffering from rare cases fending for themselves in order to cut costs especially if there is little chance that the patient will ever recover fully.
I don't know what the solution is here but if in this hypothetical reality, the garden state didn't supplement but California did then I'd move to California in a heartbeat. I am sure I'd be broke even with any supplement in San Diego but at least I'll be broke in San Diego.
Edit: I cannot support any discrimination in basic income based on "ability to work". I'd rather the whole thing fail. I'd rather we never have basic income implemented at all than this bastardization go through. Personally, I'm all for death panels. We should not try to keep everyone alive at all costs. If I get in a freak accident and it'd cost me $10M+ to keep me alive with little to no chance of a full recovery, please let me die.
Something we need to discuss separately from universal basic income is the need to reduce cost in healthcare. I'd gladly support expanding Medicare to everyone without having to qualify. We would need significantly greater penalties for Medicare fraud and add incentives for whistleblowers and make it easier to report fraud. I'm OK with "lite" Medicare that drops expensive procedures and lets patients suffering from rare cases fending for themselves in order to cut costs especially if there is little chance that the patient will ever recover fully.
My preferred approach for health insurance is to eliminate all of the regulations about what insurance plans must cover, and any other rules that prevent high-deductible catastrophic insurance from being available on the market. You could then buy a very cheap plan that covers everything once expenses exceed, say, 20k, and be responsible for everything before that out of your pocket. Then, unlike now, people would actually factor in cost into their decisions about which doctors and hospitals to visit, which would hopefully drive down wasteful spending.
The other thing I'd support is removing medical licensure from the law. People would still be free to visit only AMA-approved physicians, but there's no reason to give that guild a monopoly on providing health care. The artificial caps on medical school seats, imposed by the AMA, is one of the biggest reasons for the absurd cost of medical care in the US.
>I don't know what the solution is here but if in this hypothetical reality, the garden state didn't supplement but California did then I'd move to California in a heartbeat. I am sure I'd be broke even with any supplement in San Diego but at least I'll be broke in San Diego.
Sure, and when the people of California realize that they're attracting all of the deadbeats from around the country, they'd be forced to adjust.
The other thing I'd support is removing medical licensure from the law. People would still be free to visit only AMA-approved physicians, but there's no reason to give that guild a monopoly on providing health care. The artificial caps on medical school seats, imposed by the AMA, is one of the biggest reasons for the absurd cost of medical care in the US.
>I don't know what the solution is here but if in this hypothetical reality, the garden state didn't supplement but California did then I'd move to California in a heartbeat. I am sure I'd be broke even with any supplement in San Diego but at least I'll be broke in San Diego.
Sure, and when the people of California realize that they're attracting all of the deadbeats from around the country, they'd be forced to adjust.
> there's no reason to give that guild a monopoly on providing health care. The artificial caps on medical school seats, imposed by the AMA, is one of the biggest reasons for the absurd cost of medical care in the US.
First, the AMA does not control the number of medical school seats in the country. Accreditation of US medical schools is done by the LCME, part of the AAMC. With some research, you'd find that the number of medical school seats is growing each year.
Second, the limiting factor for physician training is NOT medical school but residency. In point of fact, the US imports residency trainees from overseas - we're not constraining ourselves artificially but instead of surplus training positions.
Through a historical fluke, residency training depends on funds allocated by Congress through Medicare funding.
I understand your frustration at healthcare costs, but please research these issues.
First, the AMA does not control the number of medical school seats in the country. Accreditation of US medical schools is done by the LCME, part of the AAMC. With some research, you'd find that the number of medical school seats is growing each year.
Second, the limiting factor for physician training is NOT medical school but residency. In point of fact, the US imports residency trainees from overseas - we're not constraining ourselves artificially but instead of surplus training positions.
Through a historical fluke, residency training depends on funds allocated by Congress through Medicare funding.
I understand your frustration at healthcare costs, but please research these issues.
Apparently this has changed in the last decade (http://usatoday30.usatoday.com/news/health/2005-03-02-doctor...). But until the number of doctors rises dramatically, I think it's safe to assume that the same interests are at work as before.
Further, the LCME is run in equal parts between the AMA and the AAMC. http://www.ohsu.edu/xd/education/schools/school-of-medicine/... See "Who serves on the LCME?"
Further, the LCME is run in equal parts between the AMA and the AAMC. http://www.ohsu.edu/xd/education/schools/school-of-medicine/... See "Who serves on the LCME?"
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I can support letting the bottom fall out like this provided we had full single payer coverage for everyone. Any additional coverage can then be whatever you want with the only protection from law being protection from false advertising.
I can also support removing the ama-fia's control on licenses but I'm afraid we'll just replace it with something similar when it comes to which providers are eligible to reimbursements from the new single payer healthcare system.
I can also support removing the ama-fia's control on licenses but I'm afraid we'll just replace it with something similar when it comes to which providers are eligible to reimbursements from the new single payer healthcare system.
My idea is that these catastrophic insurance plans would be affordable by anyone with their basic income. Debt financing could cover anything below the deductible, for the indigent. Getting such loans would also be easier because of the UBI. Again, people would be financially responsible for their own healthcare, which restores sane incentives, but it wouldn't be possible for it to financially destroy them. No need for a single payer system if this works as I envision it.
"Debt financing" and plans that may be absent or sometimes cover nothing much, is the dystopian nightmare we're trying to escape. Healthcare is not a normal consumer good subject to normal pricing pressures and amenable to substitutes. Single payer works extremely well.
As I stated in a response to the parent commenter,
the AMA does not control the number of medical school seats/new physicians in the country. Indeed, medical licensing is done by the states and is not a federal process.
> if in this hypothetical reality, the garden state didn't supplement but California did then I'd move to California in a heartbeat.
I am guessing so would a lot of other people, which would create an opportunity of a lifetime for California landlords, adjusting the rents to the point where UBI would only offer marginal incremental benefit.
I am guessing so would a lot of other people, which would create an opportunity of a lifetime for California landlords, adjusting the rents to the point where UBI would only offer marginal incremental benefit.
San Diego is nice, but Hawaii is about as expensive and pretty much nicer.
Would people in high cost of living area paying higher income taxes which subsidize the lower cost areas be a massive ripoff to those in the high cost areas?
Under the Murray UBI plan recipients would be required to spend $3000 per year on health insurance. That would be your mother's replacement for Medicaid. However, that doesn't factor in co-pays, deductibles, balance-billing, and the myriad other costs of private insurance. A health care premium of $3000 is going to have a high deductible. My premium is close to $3000 a year, and my deductible is $5250. Under this plan a disabled person requiring frequent medical care would have $4750 to live off of, after health care costs. That's a whopping $395 per month.
UBI is not feasible absent a universal single-payer system. Health care is just too damn expensive to be paid for by the individual.
UBI is not feasible absent a universal single-payer system. Health care is just too damn expensive to be paid for by the individual.
> Under the Murray UBI plan recipients would be required to spend $3000 per year on health insurance. That would be your mother's replacement for Medicaid.
"Annual premiums edged beyond $17,500 for an average family." http://www.ncsl.org/research/health/health-insurance-premium...
And this is in the marketplace that purposefully excludes Medicare recipients, who are older and are disproportionately more likely to have health problems and pre-death expenses.
Here's data on per capita spending on Medicaid, there are very few states where non-disabled adult spending is less than $3k http://kff.org/medicaid/state-indicator/medicaid-spending-pe...
"Annual premiums edged beyond $17,500 for an average family." http://www.ncsl.org/research/health/health-insurance-premium...
And this is in the marketplace that purposefully excludes Medicare recipients, who are older and are disproportionately more likely to have health problems and pre-death expenses.
Here's data on per capita spending on Medicaid, there are very few states where non-disabled adult spending is less than $3k http://kff.org/medicaid/state-indicator/medicaid-spending-pe...
It seems to me the simple calculation is to see that, currently, the US spends ~$9,500 per capita annually for healthcare (that number seems so crazy to me, but therein lies the problem). The WSJ article didn't go into more detail, but I don't understand how $3k per year goes to cover that $9500 amount without huge deductibles and copays, which disabled people won't be able to pay because they will have no other assistance beyond their UBI.
I don't see how UBI works without some other form of guaranteed health insurance for the poor.
I don't see how UBI works without some other form of guaranteed health insurance for the poor.
Her SSI should not go way. She paid into that system and deserves what she was promised. SSI is a retirement plan (albeit a coerced one) not a welfare system. I am all for SSI reform in the light of UBI, but that doesn't nullify the need for retirement, and it should effect only future retirees.
>If Basic Income is to work then it needs to be actually liveable and adjusted based upon the CoL in each area.
What's the point of that? Moving isn't difficult.
What's the point of that? Moving isn't difficult.
Moving fast enough to significantly affect CoL can be extremely difficult if you're poor, less so if your not.
Surely basic income should make moving much easier then?
Depends on how its implemented: one that is implemented as suggested in the source article here (below poverty level and replaces existing poverty supports with aid that is in many cases less valuable in total -- including replacing programs that are federal/state cooperative programs whose value currently is sensitive to local, or at least state-by-state, costs) may well not do so, and indeed may make it harder (as well as making it harder for the poor to even survive.)
If only all of the things that needed doing for the common good were actually being done now, either by robots, or by a small number of people with machine assistance, this discussion might make more sense.
Once the roads are fixed, and the parks are clean, the disabled are cared for, etc, etc, etc. THEN maybe we should have a discussion about "Basic Income".
Our current technology is NOT "The Culture". There is still work to do, it is "simply" (not so simple) a matter of clawing back some cash from those who benefitted most from a stable society.
The WSJ's "10K" plan just sounds like a scam to cut more government jobs while throwing out a small consolation prize to prevent outright rebellion.
Once the roads are fixed, and the parks are clean, the disabled are cared for, etc, etc, etc. THEN maybe we should have a discussion about "Basic Income".
Our current technology is NOT "The Culture". There is still work to do, it is "simply" (not so simple) a matter of clawing back some cash from those who benefitted most from a stable society.
The WSJ's "10K" plan just sounds like a scam to cut more government jobs while throwing out a small consolation prize to prevent outright rebellion.
"The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare."
How the hell does that happen politically?
I would love to see basic income replacing a large portion of social programs in the states but no one seems to be talking about how we get from where we are to where we want to be, realistically.
How the hell does that happen politically?
I would love to see basic income replacing a large portion of social programs in the states but no one seems to be talking about how we get from where we are to where we want to be, realistically.
The thing is, I don't think it can happen politically. What is going on now is just the research stage so that we have some sort of data point for UBI supporters to latch onto.
There are all sorts of groups inside the UBI tent, and many of them disagree with each other violently, but we're so far from a UBI that for now, everyone can agree on it in the broadest possible way.
I, personally, have a completely different take on all of this from most UBI'ers. I take the long view: in 50 years, physical labor could be eliminated. WTF do we do when this happens? Do we relegate half of society to be homeless? Or do we begin the slow march towards eliminating work altogether.
Few talk about this scenario, and those that do often tack on "... and then Skynet takes over and robots enslave us all." Yet, it's still a very valid discussion to be having. I think all this UBI research and interest is in furtherance of the elimination of work, altogether. That's not something that will happen over night, or even in 10 years, but in order for it to happen, humanity needs to begin gathering the data points necessary to enact a solution to the end of work problem.
In the short term, this would eliminate social safety nets, but let's be honest, this is NEVER going to happen in America without a revolution of some kind. Whenever that happens, hopefully the UBI research will be far enough along to support a movement to enact it.
There are all sorts of groups inside the UBI tent, and many of them disagree with each other violently, but we're so far from a UBI that for now, everyone can agree on it in the broadest possible way.
I, personally, have a completely different take on all of this from most UBI'ers. I take the long view: in 50 years, physical labor could be eliminated. WTF do we do when this happens? Do we relegate half of society to be homeless? Or do we begin the slow march towards eliminating work altogether.
Few talk about this scenario, and those that do often tack on "... and then Skynet takes over and robots enslave us all." Yet, it's still a very valid discussion to be having. I think all this UBI research and interest is in furtherance of the elimination of work, altogether. That's not something that will happen over night, or even in 10 years, but in order for it to happen, humanity needs to begin gathering the data points necessary to enact a solution to the end of work problem.
In the short term, this would eliminate social safety nets, but let's be honest, this is NEVER going to happen in America without a revolution of some kind. Whenever that happens, hopefully the UBI research will be far enough along to support a movement to enact it.
I fear the question will be answered with some very dark times. Indeed what will people do, when most of them aren't actually "necessary", and what will they agree to, given that most of them will also be driven by fear of becoming one of those unnecessary ones?
As things stands, politically, and culturally, it's more likely to become som dystopian story of cleansing. Walled communities of elites keeping the poor outside of civilized society, and perhaps even death camps.
So I really do hope that we, along the way, not only get data on the economics of it, but also a new ethical mainstream regarding entitlement. Capitalism will be a rather dangerous as framework of ethics in a world where economic value is derived entirely from capital. Only the elite can justify their existance on that framework.
I'm currently aligned with the geo-libertarian view of things, as an example of a dissenting UBI-proponent. It seems the "mainstream" UBI thinking at the moment is rather socialistic in nature. Don't really see how that can fare much better than the capitalistic views when faced with the proposition that 10% is supposed to pay for the other 90%
As things stands, politically, and culturally, it's more likely to become som dystopian story of cleansing. Walled communities of elites keeping the poor outside of civilized society, and perhaps even death camps.
So I really do hope that we, along the way, not only get data on the economics of it, but also a new ethical mainstream regarding entitlement. Capitalism will be a rather dangerous as framework of ethics in a world where economic value is derived entirely from capital. Only the elite can justify their existance on that framework.
I'm currently aligned with the geo-libertarian view of things, as an example of a dissenting UBI-proponent. It seems the "mainstream" UBI thinking at the moment is rather socialistic in nature. Don't really see how that can fare much better than the capitalistic views when faced with the proposition that 10% is supposed to pay for the other 90%
This is how I feel. A lot of people don't even think about this problem. Cost of living increasing with robots taking more and more nominal jobs that the lower class occupies the homeless rate is going to soar in the future. We are already seeing computers take lots of jobs due to the minimal pay increases in several states.
A basic income is going to be the way of life or people are going to have to deal with millions of poor and an increase in crime.
One of the things that bothers me about the saying, "I don't want to pay for all their stuff, I work hard." Is that people don't realize one of the reasons your able to work hard and not worry about your house getting robbed while your at work is that we take care of the poor and disabled. If you take away that care in the future because your too greedy to help out your fellow man, then you end up losing a lot of peace of mind as crime increases because of people having to steal for basic necessities.
A basic income is going to be the way of life or people are going to have to deal with millions of poor and an increase in crime.
One of the things that bothers me about the saying, "I don't want to pay for all their stuff, I work hard." Is that people don't realize one of the reasons your able to work hard and not worry about your house getting robbed while your at work is that we take care of the poor and disabled. If you take away that care in the future because your too greedy to help out your fellow man, then you end up losing a lot of peace of mind as crime increases because of people having to steal for basic necessities.
>I, personally, have a completely different take on all of this from most UBI'ers. I take the long view: in 50 years, physical labor could be eliminated. WTF do we do when this happens? Do we relegate half of society to be homeless?
Just because you can't imagine what people will do after physical labor is antiquated doesn't mean the average person, who you underestimate as a bumbling fool, will not come up with ways to earn an income.
Just because you can't imagine what people will do after physical labor is antiquated doesn't mean the average person, who you underestimate as a bumbling fool, will not come up with ways to earn an income.
Yeah, it won't. The $10,000 left after the mandatory health payments would be a cut for many social security recipients, and many of those same people are also probably getting more than $3,000 a year in health care out of Medicare.
Similar problems with Medicaid, it's worth a lot more than $3,000 to the people that are getting it (mostly because children).
This is basically taking the desire to cut entitlement programs and rephrasing it to take advantage of the attention basic income is getting these days.
I sort of expect the best thing the US can do right now to make life better and cheaper for the average citizen is to create/fund residency programs. More doctors will actually lead to lower prices. Pouring money into the demand side won't.
Similar problems with Medicaid, it's worth a lot more than $3,000 to the people that are getting it (mostly because children).
This is basically taking the desire to cut entitlement programs and rephrasing it to take advantage of the attention basic income is getting these days.
I sort of expect the best thing the US can do right now to make life better and cheaper for the average citizen is to create/fund residency programs. More doctors will actually lead to lower prices. Pouring money into the demand side won't.
> More doctors will actually lead to lower prices
It might if we had a free market for healthcare and if providers were the largest healthcare expense. But we don't, and they're not. Providers' take-home pay only amounts to about 10% of healthcare spending nationally[0].
Furthermore, the reason we don't have a competitive market is entirely due to the payer situation, not the providers. Providers (particularly hospitals, who account for a much larger chunk of spending) can't offer transparent pricing, because their cost structures are needlessly complex. I've written about this elsewhere, but in short, Medicare is not required to cover the direct costs[1] of the care that their patients receive in the reimbursements that they issue. This means that providers have to make up the difference in their contracts with private insurers, which is why they can't tell you how much a particular procedure will cost you - they really don't know, because it's not purely a function of what it costs them to treat that particular patient.
[0] http://economix.blogs.nytimes.com/2008/11/14/do-doctors-sala...
[1] I'm referring to COGS - the marginal cost per patient, which excludes markup and overhead.
It might if we had a free market for healthcare and if providers were the largest healthcare expense. But we don't, and they're not. Providers' take-home pay only amounts to about 10% of healthcare spending nationally[0].
Furthermore, the reason we don't have a competitive market is entirely due to the payer situation, not the providers. Providers (particularly hospitals, who account for a much larger chunk of spending) can't offer transparent pricing, because their cost structures are needlessly complex. I've written about this elsewhere, but in short, Medicare is not required to cover the direct costs[1] of the care that their patients receive in the reimbursements that they issue. This means that providers have to make up the difference in their contracts with private insurers, which is why they can't tell you how much a particular procedure will cost you - they really don't know, because it's not purely a function of what it costs them to treat that particular patient.
[0] http://economix.blogs.nytimes.com/2008/11/14/do-doctors-sala...
[1] I'm referring to COGS - the marginal cost per patient, which excludes markup and overhead.
I dunno, I think if there were more doctors more of them would end up working outside of hospitals.
It's certainly the case around here that doctors are moving under the hospital umbrella.
This means that providers have to make up the difference in their contracts with private insurers, which is why they can't tell you how much a particular procedure will cost you - they really don't know, because it has nothing to do with what it costs them.
Yes, this is an obnoxious tax. I don't think the hospitals are forced to keep their prices obscure though (see Massachusetts or Oklahoma), it just happens to be the best way for them to make revenue because if people could easily shop prices, they would. Another component of the problem are the many people who have a plan where they simply don't care about prices because they have a low out of pocket limit.
It's certainly the case around here that doctors are moving under the hospital umbrella.
This means that providers have to make up the difference in their contracts with private insurers, which is why they can't tell you how much a particular procedure will cost you - they really don't know, because it has nothing to do with what it costs them.
Yes, this is an obnoxious tax. I don't think the hospitals are forced to keep their prices obscure though (see Massachusetts or Oklahoma), it just happens to be the best way for them to make revenue because if people could easily shop prices, they would. Another component of the problem are the many people who have a plan where they simply don't care about prices because they have a low out of pocket limit.
> It's certainly the case around here that doctors are moving under the hospital umbrella.
That's part of a trend that's a few decades old, and which has accelerated in the last 5-10 years. It's not a function of the number of physicians; physicians are selling their practices to hospitals because they can no longer sustain themselves in private practice.
> I don't think the hospitals are forced to keep their prices obscure though (see Massachusetts or Oklahoma), it just happens to be the best way for them to make revenue because if people could easily shop prices, they would.
If anything, hospitals would prefer to be able to compete this way directly. They can't, though, because there is no single 'price', even if you're talking about a discrete, routine procedure that has no risk for complications. The way medical billing works, they don't necessarily have a set price for a given service per carrier. And even if they do, that doesn't always correlate to what the patient ends up paying (which is, of course, the thing the patient actually cares about). The reason they don't have a set price - even internally - isn't because they don't want to. It's because the contracts with public and private insurers have resulted in the amount of money they need to charge for a service being a function of so many external factors that they literally can't.
Chapter 224 is a perfect example of a feel-good law that doesn't actually do anything in practice, because it fails to address the underlying complexity that's the root of the current problem with price transparency.
That's part of a trend that's a few decades old, and which has accelerated in the last 5-10 years. It's not a function of the number of physicians; physicians are selling their practices to hospitals because they can no longer sustain themselves in private practice.
> I don't think the hospitals are forced to keep their prices obscure though (see Massachusetts or Oklahoma), it just happens to be the best way for them to make revenue because if people could easily shop prices, they would.
If anything, hospitals would prefer to be able to compete this way directly. They can't, though, because there is no single 'price', even if you're talking about a discrete, routine procedure that has no risk for complications. The way medical billing works, they don't necessarily have a set price for a given service per carrier. And even if they do, that doesn't always correlate to what the patient ends up paying (which is, of course, the thing the patient actually cares about). The reason they don't have a set price - even internally - isn't because they don't want to. It's because the contracts with public and private insurers have resulted in the amount of money they need to charge for a service being a function of so many external factors that they literally can't.
Chapter 224 is a perfect example of a feel-good law that doesn't actually do anything in practice, because it fails to address the underlying complexity that's the root of the current problem with price transparency.
From what I understand, they often have no idea what services cost. This is different than not having an internal price. And there shouldn't be external factors that prevent them from measuring it.
Or are you saying that they are contractually bound to avoid tracking costs?
Or are you saying that they are contractually bound to avoid tracking costs?
I don't know the answer to your question, but here's an interesting anecdote: https://news.ycombinator.com/item?id=4465845
Right, they aren't setup to bill the damn thing. It's ridiculous.
chimeracoder seems to be saying that this is because of the complexity that comes from interacting with insurance companies and the public payers. Where I don't really buy that explanation is where there is in fact a fixed capital cost associated with the machine, and a certain number of uses of the machine per year, and a pretty fixed level of complexity per use (different scans will take a different amount of time, but each type of scan will be reasonably consistent from patient to patient). So they can take a spreadsheet and put in the capital costs and the operating costs and the staffing costs and boom, they have a ballpark figure for what each scan costs. It won't be the exact number for a given scan, but it will be closer than not having any estimate at all. I don't see where complexity on the billing side prevents them from doing what I describe.
chimeracoder seems to be saying that this is because of the complexity that comes from interacting with insurance companies and the public payers. Where I don't really buy that explanation is where there is in fact a fixed capital cost associated with the machine, and a certain number of uses of the machine per year, and a pretty fixed level of complexity per use (different scans will take a different amount of time, but each type of scan will be reasonably consistent from patient to patient). So they can take a spreadsheet and put in the capital costs and the operating costs and the staffing costs and boom, they have a ballpark figure for what each scan costs. It won't be the exact number for a given scan, but it will be closer than not having any estimate at all. I don't see where complexity on the billing side prevents them from doing what I describe.
Are salaries a good measure of the income of doctors? I've read that more than half of doctors are self employed, and I suspect that their ownership stake in medical businesses produces a good portion of their incomes.
It's the other way around. As of recently, the majority of doctors are salaried (employed), not in private practice.
The numbers I cite correspond to the practice revenues, but as much as half of what doctors in private practice receive in reimbursements goes to practice expenses and insurance.
The numbers I cite correspond to the practice revenues, but as much as half of what doctors in private practice receive in reimbursements goes to practice expenses and insurance.
That's an interesting change. It wasn't too many years ago that my employer-provided health insurance was through a doctor-owned provider.
Not only will the voting public oppose many of these cuts, corporations (and lobbying groups representing professionals such as doctors, or AARP) will oppose them. And the latter is more ominous to me since they have the lobbying muscle in place.
>create/fund residency programs
Don't several medical lobbying groups actively coerce the government to limit the number of new doctors that can be minted, both overall and in given areas of practice? I am not optimistic about this given the lobbying groups' strong track record of protecting and furthering their self interest.
>create/fund residency programs
Don't several medical lobbying groups actively coerce the government to limit the number of new doctors that can be minted, both overall and in given areas of practice? I am not optimistic about this given the lobbying groups' strong track record of protecting and furthering their self interest.
> Don't several medical lobbying groups actively coerce the government to limit the number of new doctors that can be minted, both overall and in given areas of practice?
Not really. The AMA is often blamed for limiting the number of medical school slots available, but they have nothing to do with that - it's capped by the AAMC, which has been very deliberately raising the number of medical school positions in the US for over a decade now.
But even if that cap were lifted altogether, the number of practicing physicians would be completely unaffected, because we already have more MDs than we have residency slots available. Increasing residency programs would require funding, and currently Medicare is the source of funds for residency programs. Hospitals would typically make a loss on residency programs otherwise; contrary to what some people believe, they're actually quite expensive to operate.
Not really. The AMA is often blamed for limiting the number of medical school slots available, but they have nothing to do with that - it's capped by the AAMC, which has been very deliberately raising the number of medical school positions in the US for over a decade now.
But even if that cap were lifted altogether, the number of practicing physicians would be completely unaffected, because we already have more MDs than we have residency slots available. Increasing residency programs would require funding, and currently Medicare is the source of funds for residency programs. Hospitals would typically make a loss on residency programs otherwise; contrary to what some people believe, they're actually quite expensive to operate.
>...Hospitals would typically make a loss on residency programs otherwise; contrary to what some people believe, they're actually quite expensive to operate.
How does that work? Residents make very little money and do a lot of work. How are they not a profit center for hospitals?
How does that work? Residents make very little money and do a lot of work. How are they not a profit center for hospitals?
> Residents make very little money and do a lot of work. How are they not a profit center for hospitals?
Residents start their first year knowing literally nothing about practicing medicine. Medical school teaches the foundation, but you learn the practice during residency. In addition, the ratio of attending physicians to residents is capped by law (i believe it's 3:1).
Would a startup want to hire three fresh-out-of-high-school interns for every full-time employee? I can't think of any company that does this. At some point they'd get up to speed, yes, but in the short term they'd be a huge drag.
Residents start their first year knowing literally nothing about practicing medicine. Medical school teaches the foundation, but you learn the practice during residency. In addition, the ratio of attending physicians to residents is capped by law (i believe it's 3:1).
Would a startup want to hire three fresh-out-of-high-school interns for every full-time employee? I can't think of any company that does this. At some point they'd get up to speed, yes, but in the short term they'd be a huge drag.
>Residents start their first year knowing literally nothing about practicing medicine.
If this is true, it really indicates that how we train medical practitioners needs to be reformed. (If true, maybe there should be different programs for people wanting to become medical researchers vs those who treat patients.)
>In addition, the ratio of attending physicians to residents is capped by law (i believe it's 3:1).
Are hospitals actually at that 3:1 ratio? The AAMC seems to be saying the limiting factor right now is the limits on medicare subsidies for residents: https://www.aamc.org/advocacy/gme/71178/gme_gme0012.html
>...Would a startup want to hire three fresh-out-of-high-school interns for every full-time employee?
Probably closer would be companies hiring engineering students straight out of college. Those college projects the students did generally aren’t anything like the work they will be doing. Companies don’t hire at a 3 to 1 ratio, but they do hire them and they pay them more than residents get paid and don’t get subsidies from the government to do so.
I was originally replying to your comment: >...Hospitals would typically make a loss on residency programs otherwise; contrary to what some people believe, they're actually quite expensive to operate.
Thinking about it, I guess if hospitals don’t bill patients for work done by residents, then they would obviously need to paid by the government (or someone else) but I don’t know if that is how it works.
If this is true, it really indicates that how we train medical practitioners needs to be reformed. (If true, maybe there should be different programs for people wanting to become medical researchers vs those who treat patients.)
>In addition, the ratio of attending physicians to residents is capped by law (i believe it's 3:1).
Are hospitals actually at that 3:1 ratio? The AAMC seems to be saying the limiting factor right now is the limits on medicare subsidies for residents: https://www.aamc.org/advocacy/gme/71178/gme_gme0012.html
>...Would a startup want to hire three fresh-out-of-high-school interns for every full-time employee?
Probably closer would be companies hiring engineering students straight out of college. Those college projects the students did generally aren’t anything like the work they will be doing. Companies don’t hire at a 3 to 1 ratio, but they do hire them and they pay them more than residents get paid and don’t get subsidies from the government to do so.
I was originally replying to your comment: >...Hospitals would typically make a loss on residency programs otherwise; contrary to what some people believe, they're actually quite expensive to operate.
Thinking about it, I guess if hospitals don’t bill patients for work done by residents, then they would obviously need to paid by the government (or someone else) but I don’t know if that is how it works.
If the public at large tells those lobbies to go screw, Congress will listen.
So start talking about how we need more doctors in the US.
So start talking about how we need more doctors in the US.
> The $10,000 left after the mandatory health payments would be a cut for many social security recipients
The easy way to do this is to give people a one-time election between social security and the basic income, so that nobody can object that they're not better off. Anybody who isn't at or close to retirement will choose the basic income because it begins paying immediately, the lifetime payments are higher and they wouldn't have to pay social security tax anymore. Then in 20 years or so there would be no one left on social security and it could be discontinued.
> Similar problems with Medicaid, it's worth a lot more than $3,000 to the people that are getting it (mostly because children).
It seems like your argument is that we can't do it because there are a relatively small number of people who would be better off under the existing system. But by that logic we could never change anything, even if the net benefits are very large, as long as there is anyone who is better off under the status quo.
The easy way to do this is to give people a one-time election between social security and the basic income, so that nobody can object that they're not better off. Anybody who isn't at or close to retirement will choose the basic income because it begins paying immediately, the lifetime payments are higher and they wouldn't have to pay social security tax anymore. Then in 20 years or so there would be no one left on social security and it could be discontinued.
> Similar problems with Medicaid, it's worth a lot more than $3,000 to the people that are getting it (mostly because children).
It seems like your argument is that we can't do it because there are a relatively small number of people who would be better off under the existing system. But by that logic we could never change anything, even if the net benefits are very large, as long as there is anyone who is better off under the status quo.
> It seems like your argument is that we can't do it because there are a relatively small number of people who would be better off under the existing system. But by that logic we could never change anything, even if the net benefits are very large, as long as there is anyone who is better off under the status quo.
I think this is an incredibly unfair and callous assessment of what's going on with catastrophic health care coverage. It's not about "the relatively small number of people who would be better off under the existing system." It's about the relatively small number people who are alive under the existing system who would be dead under the proposed one.
I think this is an incredibly unfair and callous assessment of what's going on with catastrophic health care coverage. It's not about "the relatively small number of people who would be better off under the existing system." It's about the relatively small number people who are alive under the existing system who would be dead under the proposed one.
That's actually an incredibly short-sighted risk calculation that intentionally weighs some unknowns as higher value than others.
For example, I can make the same kind of argument in the opposite direction: if UBI creates a disincentive within inner cities for fewer kids to become drug dealers, which creates less opportunities for violence, leading to significantly less deaths in the inner city, I think that you are making "an incredibly unfair and callous assessment" as well.
Saying that any plan that transfers risk from the current state to a different state that is potentially net better for all is to miss the point that we've already chosen a system that disadvantages SOMEONE... and to change it will probably disadvantage someone different.
For example, I can make the same kind of argument in the opposite direction: if UBI creates a disincentive within inner cities for fewer kids to become drug dealers, which creates less opportunities for violence, leading to significantly less deaths in the inner city, I think that you are making "an incredibly unfair and callous assessment" as well.
Saying that any plan that transfers risk from the current state to a different state that is potentially net better for all is to miss the point that we've already chosen a system that disadvantages SOMEONE... and to change it will probably disadvantage someone different.
We do not live in some Vulcan dystopia. The idea of essentially telling people, who are currently alive, "Yes, we can keep you alive, but by letting you die, there is some probability (which we don't really know and are just guessing at) that we can use the saved money to prevent 1.2 deaths" strikes me as the plot of a horror science fiction movie.
I am all for UBI, but like another poster said I don't think it works without universal health care if you get rid of all the other current transfer payments. It seems the author of the article agrees, but I don't see how the 3K for insurance makes the numbers add up.
I am all for UBI, but like another poster said I don't think it works without universal health care if you get rid of all the other current transfer payments. It seems the author of the article agrees, but I don't see how the 3K for insurance makes the numbers add up.
> The idea of essentially telling people, who are currently alive, "Yes, we can keep you alive, but by letting you die, there is some probability (which we don't really know and are just guessing at) that we can use the saved money to prevent 1.2 deaths" strikes me as the plot of a horror science fiction movie.
People hate having to make that choice. Hate it. But that doesn't make it go away. We could make cars safer in well-known obvious ways, but they would be more expensive and use more fuel. Many, many, many lives would be saved if we immediately stopped burning coal, but electricity would be more expensive, and then maybe some people would freeze to death because they can't afford heat, or because they became unemployed and lost medical coverage. And in some cases we may even be getting it wrong, but that doesn't get you out of having to make a hard decision.
People hate having to make that choice. Hate it. But that doesn't make it go away. We could make cars safer in well-known obvious ways, but they would be more expensive and use more fuel. Many, many, many lives would be saved if we immediately stopped burning coal, but electricity would be more expensive, and then maybe some people would freeze to death because they can't afford heat, or because they became unemployed and lost medical coverage. And in some cases we may even be getting it wrong, but that doesn't get you out of having to make a hard decision.
The UBI proposal in the article (one I find pretty weak, and I'm a huge proponent of UBI) is that you're getting $10k plus healthcare. So there's that.
But.
There is no part of the proposal that covers making sure coverage is equal in value to Medicare - in a private market I'm betting benefits start getting cut post-haste. UBI without universal healthcare is a nightmare, and is all but privatizing Medicare. Surprise!
Also, since children under 18 don't get UBI, they would have to be covered by their parents' $3k/annual buy. But again, privatized "universal" healthcare? No thanks.
But.
There is no part of the proposal that covers making sure coverage is equal in value to Medicare - in a private market I'm betting benefits start getting cut post-haste. UBI without universal healthcare is a nightmare, and is all but privatizing Medicare. Surprise!
Also, since children under 18 don't get UBI, they would have to be covered by their parents' $3k/annual buy. But again, privatized "universal" healthcare? No thanks.
We can have either basic income or open borders/mass immigration -- but I don't see how we can have both.
What if they just said "ok everyone born before 2017 will get the old system (social security, etc), and everyone born in 2017 or later will get the new system. This way everyone alive and voting isn't losing anything they were expecting before. There would be a period of 80-100 years during which both systems are intact, but this somewhat inefficient period would end, leaving only the basic income system.
Regarding social security, that's good; it removes the entire AARP membership as no-voters. You could actually finesse it a bit by saying that anyone born after 2000 (so, turning 18 in 2018) will not be charged FICA when employed, and will not be eligible for SS when they retire -- AND anyone born after 1990 (or perhaps even earlier?) can also opt out, stop paying FICA, start getting BI, and get a tax credit good for their FICA payments to date. Retirees would stop entering the SS system in 2065 and the last survivors would finally die around 2101. The SS system would have to be funded for the rest of the century but for a declining number of beneficiaries.
The other many, many forms of social payments and supplements need individual consideration. It's not all "welfare"; one small example that occurs to me is seriously handicapped (paraplegic, e.g.) people getting financial assistance to cover in-home care. Would the proposed BI adequately cover that? If it wouldn't, this small set of people would be significantly worse off.
The other many, many forms of social payments and supplements need individual consideration. It's not all "welfare"; one small example that occurs to me is seriously handicapped (paraplegic, e.g.) people getting financial assistance to cover in-home care. Would the proposed BI adequately cover that? If it wouldn't, this small set of people would be significantly worse off.
UBI isn't a plausible replacement for those, because extreme medical care, and care for the disabled, is priced so far out of range with the rest. I expect part of the steps towards UBI to involve further evolution of our systems for allocating those resources.
But insurance for those isn't.
Consider someone at the edges of the distribution of healthiness: say, someone born with severe mental and physical disabilities. A universal basic income will never take sufficient care of this person; his or her medical care will cost much much more than average, and there will be medically necessary non-medical care as well. I think we'd like to socialize those costs, using something like SSDI.
Just checked healthsherpa plan prices for a 64-year-old, and it came to almost $900/mo with a $5000 deductible. Maybe it's possible to radically reduce healthcare costs, but we should probably do that first before eliminating Medicare.
The problem is eliminating Medicare is essentially a prerequisite to meaningfully reducing healthcare costs. As long as there is a deep pocket to pay whatever outrageous prices people are charged, people will keep getting charged outrageous prices. Take away the money and the price would come down in a hurry.
Is it really Medicare, or medical insurance in general?
What you would need to solve this is socialized medical care supervised by the government, who takes from those who can contribute and gives to those who are in need. It wouldn't have to be completely run by the government but would have to be supervised by it.
What you would need to solve this is socialized medical care supervised by the government, who takes from those who can contribute and gives to those who are in need. It wouldn't have to be completely run by the government but would have to be supervised by it.
> Is it really Medicare, or medical insurance in general?
Medical insurance that works like Medicare obviously has the same problems. But imagine medical insurance where, instead of paying obscene premiums with a low deductible, you pay very low premiums with a deductible of several thousand dollars after which the insurance pays 80%. So if you get cancer you don't die of poverty but for pretty much anything else you're paying out of pocket, i.e. medical insurance, not a payment plan that hides true costs from everybody.
Now the thing that costs $10,000 in one place and $4,000 in the other place is a difference you care about, so you pay the $4,000 (and so does everybody else), causing total medical costs to fall. You also eliminate all the insurance paperwork in any year you don't blow the deductible, allowing doctors to lower their own costs significantly.
Medical insurance that works like Medicare obviously has the same problems. But imagine medical insurance where, instead of paying obscene premiums with a low deductible, you pay very low premiums with a deductible of several thousand dollars after which the insurance pays 80%. So if you get cancer you don't die of poverty but for pretty much anything else you're paying out of pocket, i.e. medical insurance, not a payment plan that hides true costs from everybody.
Now the thing that costs $10,000 in one place and $4,000 in the other place is a difference you care about, so you pay the $4,000 (and so does everybody else), causing total medical costs to fall. You also eliminate all the insurance paperwork in any year you don't blow the deductible, allowing doctors to lower their own costs significantly.
However, this leave people still exposed to diseases where the thing that maybe helps you does not cost $10,000 but $100,000 (not uncommon) or $1,000,000.
For instance, recently I read about carfilzomib or sipuleucel, both cancer medicines; $100,000 doesn't get you there yet.
For instance, recently I read about carfilzomib or sipuleucel, both cancer medicines; $100,000 doesn't get you there yet.
The only reason they can charge $100,000 is that there is a deep pocket to pay for it. It does not cost that much to manufacture the drug. It might cost that much to do the research, but if you want taxpayer funded research then do taxpayer funded research. There is no reason to launder the research subsidy through seven layers of bureaucracy.
The cost and structure of US healthcare is rather a different problem, although potentially both have to be solved to make it work there. In Europe health insurance in many countries is 100-200/month with a few hundred in deductible.
You get there by talking about it, and persuading people about it. There is no magical easy to way to bring about social change unless its profitable. And I'm not sure there are enough landlords foaming at the mouth for the legitimately juicy prospect of tenants with guaranteed paychecks to pay rent to push the issue against the tide of establishment profiteering resistance.
But rather than talk about it on HN (like this) talk about it on Facebook or when talking to friends and family IRL. That is how you actually spread these ideas.
But rather than talk about it on HN (like this) talk about it on Facebook or when talking to friends and family IRL. That is how you actually spread these ideas.
The consequences of making this change are huge and IMHO hard to fully predict - or at least it's hard to have a meaningful debate about what the impact could be. Walmart for example could have a disaster on their hands - a whole swath of jobs no one really wants to do could quickly find themselves lacking staff. And that's just one example
The Walmart example is a great one of why UBI is a good idea, though. Today they only have employees exclusively due to the "work or die" negotiation position of the workers there. With a UBI, Walmart will only have people filling positions when they offer wages that, at market value, justify the work being done.
Which would also coincidentally mean treating your employees better lets you pay them less, which sounds like a desirable natural motivating force in an economy.
I do not think anyone would argue UBI would not cause a dramatic shift in everything, and as a result the only way to really implement it is slowly - IE, you start people on small cash payments per month, and scale it up to (by most examples) the poverty level over the course of years or even a decade. That way, everyone has plenty of time to react to the economic consequences without a panic, in much the same way states are raising the minimum wage to $15 over 5 years.
Which would also coincidentally mean treating your employees better lets you pay them less, which sounds like a desirable natural motivating force in an economy.
I do not think anyone would argue UBI would not cause a dramatic shift in everything, and as a result the only way to really implement it is slowly - IE, you start people on small cash payments per month, and scale it up to (by most examples) the poverty level over the course of years or even a decade. That way, everyone has plenty of time to react to the economic consequences without a panic, in much the same way states are raising the minimum wage to $15 over 5 years.
I mostly agree. A few people would stick around to get the check and BI, but a lot of people would just say "Take this job and shove it!"
It doesn't.
I suspect this is poisoning the well.
I suspect this is poisoning the well.
Several years ago I thought a universal basic income would be a good idea but the longer I thought about it the more that went away. Now I can't even tell which problem it tries to solve. There won't be enough work for everyone in the future? Well then cut down working hours instead of having half the population work full time and pay for the other half. Some jobs don't provide enough income to make a living? Then have sufficient minimum wages, there is no point in doing any work that does not pay well enough to make a living. Also universality, what is the point? Above some income you are essentially just paying yourself. There might be a technical point because it keeps the rules simple but besides that I don't see in which way absolute universality is a feature. Reduce the overhead from many different social programs, for state and citizen? Fair point, but then again an universal basic income seems quite a huge hammer.
The proposed problem - and it's an elitist one - is that if you try to solve the basic income problem with minimum wages, the skill level required to be productive also rises, and eventually you get to the point where employers try hard to automate the job out of existence. The argument is that at some point, the skill level required to justify an income becomes so high, large portions of the populace become unable to meet that bar.
You can't simply cut down working hours, since the problem isn't that there aren't enough jobs for people - it's that there are people who are unable to be productive enough to fill a job.
The UBI gradually transfers responsibility for someone from the government to an employer, as opposed to a minimum wage + welfare system, where the transfer is a lot more sharp.
(I haven't decided if I agree with this, and how plausible it actually is - but I think this is the argument for why UBIs are necessary, and necessary now.)
You can't simply cut down working hours, since the problem isn't that there aren't enough jobs for people - it's that there are people who are unable to be productive enough to fill a job.
The UBI gradually transfers responsibility for someone from the government to an employer, as opposed to a minimum wage + welfare system, where the transfer is a lot more sharp.
(I haven't decided if I agree with this, and how plausible it actually is - but I think this is the argument for why UBIs are necessary, and necessary now.)
If there is a job that does not pay for a living, then there are two possible reasons. Customers actually value the work enough and pay enough for the product but the business owners take the money. In this case there should be a minimum wage cutting into the profits of the business owners making it a viable job.
On the other hand customers may not value the work enough and the job is just not viable, there is no market. Then you have to either bring the costs down by improving efficiency or automating it, or the job has to go away. Not paying a livable wage to the employers is just exploitation, giving benefits to the employers just means subsidizing the business owners and customers.
I am a bit unsure about the scenario when we just let the job go away and have a new unemployed we may have to support with benefits. Wouldn't it have been better to just subsidize the job a bit instead of having to pay for a new unemployed? But that of course creates incentives to underpay employees and take advantage of subsidies. It is probably harder to reason about this case because it is now a dynamic scenario and it is not obvious how things will turn out.
I am still struggling a bit to follow your thought process but I think you may have a point. I will probably have to add something later.
If we are in a situation where a part of the population is plainly unable to perform any work that pays for a living and we are unable to improve their skills, then we are really is some kind of trouble. They would essentially be like handicapped people. In analogy we would have a moral obligation to support them and it seems better to let them do some work not paying for a living and provide benefits on top of that instead of just having them fully on benefits. Kind of contradicting what I wrote above. And we are also back at the point from above of creating incentives to underpay employees.
The obvious solution would be to not get into this situation in the first place, to heavily invest into education and training. But if that is not good enough? How does reality compare to this scenario? What is the outlook? It is also not obvious to me whether a universal basic income or minimum wages and a conventional welfare system would provide better incentives. But I think I now at least understand the argument.
On the other hand customers may not value the work enough and the job is just not viable, there is no market. Then you have to either bring the costs down by improving efficiency or automating it, or the job has to go away. Not paying a livable wage to the employers is just exploitation, giving benefits to the employers just means subsidizing the business owners and customers.
I am a bit unsure about the scenario when we just let the job go away and have a new unemployed we may have to support with benefits. Wouldn't it have been better to just subsidize the job a bit instead of having to pay for a new unemployed? But that of course creates incentives to underpay employees and take advantage of subsidies. It is probably harder to reason about this case because it is now a dynamic scenario and it is not obvious how things will turn out.
I am still struggling a bit to follow your thought process but I think you may have a point. I will probably have to add something later.
If we are in a situation where a part of the population is plainly unable to perform any work that pays for a living and we are unable to improve their skills, then we are really is some kind of trouble. They would essentially be like handicapped people. In analogy we would have a moral obligation to support them and it seems better to let them do some work not paying for a living and provide benefits on top of that instead of just having them fully on benefits. Kind of contradicting what I wrote above. And we are also back at the point from above of creating incentives to underpay employees.
The obvious solution would be to not get into this situation in the first place, to heavily invest into education and training. But if that is not good enough? How does reality compare to this scenario? What is the outlook? It is also not obvious to me whether a universal basic income or minimum wages and a conventional welfare system would provide better incentives. But I think I now at least understand the argument.
> If we are in a situation where a part of the population is plainly unable to perform any work that pays for a living and we are unable to improve their skills, then we are really is some kind of trouble.
And that's exactly the situation UBI is intended to solve because that's where automation is taking us. In the near future, only the very intelligent or machines will work because the machines will put most people out of work leaving only room for the very skilled.
> The obvious solution would be to not get into this situation in the first place, to heavily invest into education and training.
That is not a solution because it assumes wrongly that everyone is capable of performing knowledge work; they aren't. A very large minority of people simply won't be able to do anything worth paying them for, they won't have the capacity to do anything we can't get machines to do for far cheaper. When the machines take over blue collar work, and they will, the economy will have to change to something like UBI for it to continue working.
And that's exactly the situation UBI is intended to solve because that's where automation is taking us. In the near future, only the very intelligent or machines will work because the machines will put most people out of work leaving only room for the very skilled.
> The obvious solution would be to not get into this situation in the first place, to heavily invest into education and training.
That is not a solution because it assumes wrongly that everyone is capable of performing knowledge work; they aren't. A very large minority of people simply won't be able to do anything worth paying them for, they won't have the capacity to do anything we can't get machines to do for far cheaper. When the machines take over blue collar work, and they will, the economy will have to change to something like UBI for it to continue working.
In parallel with everything relating to employment opportunities, I wonder if we are honestly doing enough about helping individuals with everything that goes with performing job tasks. Things like:
- being punctual
- staying healthy
- staying positive/motivated, not making excuses
- presenting and speaking well
- importance of attention to detail and initiative
Why should every job provide a 'living wage'? A high school kid working through the summer at an ice cream shop is learning to work, learning responsibility, and getting a little spending money - why would you want to outlaw that?
Nobody specifically wants to outlaw that. Literally nobody. Laws have to have a tradeoff between being too general and being too specific (and having too many special cases). Being too general means catching too many edge cases where it does more harm than good. Handling too many special cases creates a moral hazard where there's more benefit in finding loopholes or plainly ignoring poorly enforced parts of the laws than honest work.
Anecdotally, I did work as a kid, didn't learn anything useful, did not learn responsibility, a bit of money I didn't really need, and it felt like a waste of time and left a bad taste overall.
I fully believe that in many, possibly most cases, work is beneficial for kids (as long as they're not from poor families in which case there will be too much pressure to overwork, affecting school/homework and taking away whatever little time they have to enjoy childhood).
Anecdotally, I did work as a kid, didn't learn anything useful, did not learn responsibility, a bit of money I didn't really need, and it felt like a waste of time and left a bad taste overall.
I fully believe that in many, possibly most cases, work is beneficial for kids (as long as they're not from poor families in which case there will be too much pressure to overwork, affecting school/homework and taking away whatever little time they have to enjoy childhood).
I addressed this in other comments, I only want that a normal (full time) job pays for a living, I did not want to discuss all kind of edge cases and so it may not apply to your example. But if working at an ice cream shop is sufficiently easy to learn within a few days and the kid does all the same work including cleaning up and what not, how would you justify paying less than to a regular employee doing the same work and having to live on that income?
>The proposed problem - and it's an elitist one - is that if you try to solve the basic income problem with minimum wages, the skill level required to be productive also rises, and eventually you get to the point where employers try hard to automate the job out of existence.
"We'll just automate your job away" is one of the biggest empty threats along with "we'll just fire everybody, causing mass unemployment".
Employers fear a rising minimum wage because it eats into their profits. That fear translates into histrionics, threats and utopianistic predictions about the near future state of robot technology.
In the end when it happens they just deal with it and end up posting lower profits. As is the case in Seattle.
"We'll just automate your job away" is one of the biggest empty threats along with "we'll just fire everybody, causing mass unemployment".
Employers fear a rising minimum wage because it eats into their profits. That fear translates into histrionics, threats and utopianistic predictions about the near future state of robot technology.
In the end when it happens they just deal with it and end up posting lower profits. As is the case in Seattle.
Have you seen the new McD's ordering kiosks? They're definitely there, and I find I prefer them to the previous cashier experience.
That combination looks bad for fast food front of house workers...
That combination looks bad for fast food front of house workers...
I have. Have you seen the equivalents of McD's kiosks from 1890's Berlin?
https://en.wikipedia.org/wiki/Automat#/media/File:Stollwerck...
Those things are bound to replace most food service workers by the 1920s at the very latest.
https://en.wikipedia.org/wiki/Automat#/media/File:Stollwerck...
Those things are bound to replace most food service workers by the 1920s at the very latest.
Indeed!. In the last 126 years technology has not progressed very much. Why should it be different today?
Indeed. The question clearly isn't "do people even want automat restaurants?" it's just "did the technology to push a button and have food delivered reach some sort of tipping point in 2016?"
Did you also know that original automats from the 30s mostly went bankrupt in the same decades (60s/70s) that the inflation adjusted minimum wage was at its highest and Americans had the most disposable income?
Funny that.
Did you also know that original automats from the 30s mostly went bankrupt in the same decades (60s/70s) that the inflation adjusted minimum wage was at its highest and Americans had the most disposable income?
Funny that.
> There won't be enough work for everyone in the future? Well then cut down working hours instead of having half the population work full time and pay for the other half.
Which doesn't work when jobs require uncommon abilities or highly specialized training and thus either can't be done by the other people or would be highly inefficient to train them to do and then not have them working full time.
> Some jobs don't provide enough income to make a living? Then have sufficient minimum wages, there is no point in doing any work that does not pay well enough to make a living.
And then any jobs whose economic value is below that minimum wage disappear, leading back to the first problem.
> Also universality, what is the point? Above some income you are essentially just paying yourself.
You are. Which means it has a built in phase out -- you effectively stop getting it once you've paid more taxes than you receive in basic income. Adding another phase out causes the marginal tax rate on middle income people to be unreasonably high and takes money away from them that would otherwise have come from higher income people.
A universal basic income has rich people paying poor people and middle income people paying themselves. A basic income with a phase out instead has middle income people paying poor people so the rich can have a tax cut.
Which doesn't work when jobs require uncommon abilities or highly specialized training and thus either can't be done by the other people or would be highly inefficient to train them to do and then not have them working full time.
> Some jobs don't provide enough income to make a living? Then have sufficient minimum wages, there is no point in doing any work that does not pay well enough to make a living.
And then any jobs whose economic value is below that minimum wage disappear, leading back to the first problem.
> Also universality, what is the point? Above some income you are essentially just paying yourself.
You are. Which means it has a built in phase out -- you effectively stop getting it once you've paid more taxes than you receive in basic income. Adding another phase out causes the marginal tax rate on middle income people to be unreasonably high and takes money away from them that would otherwise have come from higher income people.
A universal basic income has rich people paying poor people and middle income people paying themselves. A basic income with a phase out instead has middle income people paying poor people so the rich can have a tax cut.
I won't address the first to points, they came already up in other comments and made me change my position a bit.
A universal basic income has rich people paying poor people and middle income people paying themselves. A basic income with a phase out instead has middle income people paying poor people so the rich can have a tax cut.
This does not have to be true. You can simply phase it out and then adjust the tax structure accordingly. It is a zero sum game, you lower taxes by the same amount you cut the basic income for that person. At the high end you take away 11k basic income and reduce taxes by 11k, somewhere in the middle you reduce the basic income and taxes by 6k each and at the lower end you do nothing.
With matching tax structures there is really no difference between paying an universal basic income to everyone or only paying it towards the lower income range. I am not disagreeing that a flat basic income might be a lot simpler than trying to carefully adjust tax rates.
A universal basic income has rich people paying poor people and middle income people paying themselves. A basic income with a phase out instead has middle income people paying poor people so the rich can have a tax cut.
This does not have to be true. You can simply phase it out and then adjust the tax structure accordingly. It is a zero sum game, you lower taxes by the same amount you cut the basic income for that person. At the high end you take away 11k basic income and reduce taxes by 11k, somewhere in the middle you reduce the basic income and taxes by 6k each and at the lower end you do nothing.
With matching tax structures there is really no difference between paying an universal basic income to everyone or only paying it towards the lower income range. I am not disagreeing that a flat basic income might be a lot simpler than trying to carefully adjust tax rates.
> With matching tax structures there is really no difference between paying an universal basic income to everyone or only paying it towards the lower income range.
If there is literally no difference then what benefit is to be gained from the added complexity?
One of the big advantages of a universal basic income is that it gives you effective progressive taxation without a complicated system amoral people can game. If you have different tax rates then it creates opportunities for tax arbitrage and rich people can avoid paying the higher rates by doing things like paying a middle income salary to their otherwise zero-income college-attending children who pay a lower rate.
But flat tax + UBI is inherently progressive, so that's it. No phase outs + no tax brackets does exactly what everyone wanted anyway, but everyone universally pays the same rate and receives the same UBI so there is nothing to game. You get one choice, what the flat tax rate should be, which sets the amount of the UBI and determines how progressive the system is. It takes away all the knobs that politicians who don't know what they're doing (or corrupt politicians who know exactly what they're doing) can use to screw up the economy or shift more of the tax burden from the rich to the middle class.
If there is literally no difference then what benefit is to be gained from the added complexity?
One of the big advantages of a universal basic income is that it gives you effective progressive taxation without a complicated system amoral people can game. If you have different tax rates then it creates opportunities for tax arbitrage and rich people can avoid paying the higher rates by doing things like paying a middle income salary to their otherwise zero-income college-attending children who pay a lower rate.
But flat tax + UBI is inherently progressive, so that's it. No phase outs + no tax brackets does exactly what everyone wanted anyway, but everyone universally pays the same rate and receives the same UBI so there is nothing to game. You get one choice, what the flat tax rate should be, which sets the amount of the UBI and determines how progressive the system is. It takes away all the knobs that politicians who don't know what they're doing (or corrupt politicians who know exactly what they're doing) can use to screw up the economy or shift more of the tax burden from the rich to the middle class.
I think these are exactly the right observations. It's no coincidence that a lot of advocacy for the UBI comes from the far right who want to use it as a pretext to dismantle the welfare state. Conventional social programs are not perfect, but they exist to address specific issues and mostly do their job well. The efficiency gains to be made here are minimal. The real cost savings are made by simply paying the needy less.
Just look at Murray's proposal. All social programs get eliminated and now a single mother with 3 kids has to make do with $10,000 a year? Impossible; a cruel joke. An elderly person on disability? They get half the money a healthy 22yo couple gets. This isn't a serious proposal.
Just look at Murray's proposal. All social programs get eliminated and now a single mother with 3 kids has to make do with $10,000 a year? Impossible; a cruel joke. An elderly person on disability? They get half the money a healthy 22yo couple gets. This isn't a serious proposal.
> a single mother with 3 kids has to make do with $10,000 a year?
Actually, under Murray's proposal, she has to make do with 10k per year plus whatever she can earn. If she's earning very, then she's probably doing all the childcare herself and her living costs are not much more than a single, childless woman. If she works full time, then her total income (earned and unearned) will be 30k at minimum.
I'm not saying I support the proposal, but I do think your rhetorical question mischaracterizes it.
Actually, under Murray's proposal, she has to make do with 10k per year plus whatever she can earn. If she's earning very, then she's probably doing all the childcare herself and her living costs are not much more than a single, childless woman. If she works full time, then her total income (earned and unearned) will be 30k at minimum.
I'm not saying I support the proposal, but I do think your rhetorical question mischaracterizes it.
The point is when you give the same subsidies to a healthy 22 year old who lives with his parents and a single mother of three, we're dealing with one of two situations:
1) the subsidies are sufficient for both groups to do OK. This is fine in theory, but taxes would have to go up by a lot to have the minimum take care of the needy with the largest expenses. The UBI would have to be closer to 25,000 USD. If it's politically impossible to raise taxes to the level needed to let poor people live in dignity today, then what are the odds the American people sign off on the massive tax hikes needed to fund a non-destitution basic income?
2) the UBI simply isn't sufficient. Some people are getting money they don't need and other people are getting much less than they need just to survive. Every dollar that goes to the first group means there's less for those who really need it. In other words, the proposed system is a cruel dismantling of the welfare state.
Raising 3 children is practically a full time job, just one that happens to be unpaid. With the UBI the minimum wage would go away, meaning that the single mother is going to make a few dollars an hour in her part time job. That will barely cover the cost of the car she needs to get to her job, and the cost of the babysitter. The suggestion that being a single mother isn't much more expensive than a being a single young adult is absurd. I really struggle to respond to this. Just think about it: a single person can share an apartment and bike everywhere, enjoy the simple bohemian lifestyle. Being a beach bum doesn't cost anything. Do side jobs and hustle whenever you need a few bucks. The single mother in contrast needs a car and a house with rooms, just to start. That's going to take a big chunk out of the 10,000. Just living nearby a school is already expensive, and not optional. And the children themselves cost money too, in a million little ways. Diapers, clothing, entertainment, food, trips to the doctor, the list is endless.
I don't believe I'm misrepresenting the situation, this is just how the math works out. If the UBI means giving money to people who don't really need it then taxes must go up by a lot or the poor are getting a really raw deal.
1) the subsidies are sufficient for both groups to do OK. This is fine in theory, but taxes would have to go up by a lot to have the minimum take care of the needy with the largest expenses. The UBI would have to be closer to 25,000 USD. If it's politically impossible to raise taxes to the level needed to let poor people live in dignity today, then what are the odds the American people sign off on the massive tax hikes needed to fund a non-destitution basic income?
2) the UBI simply isn't sufficient. Some people are getting money they don't need and other people are getting much less than they need just to survive. Every dollar that goes to the first group means there's less for those who really need it. In other words, the proposed system is a cruel dismantling of the welfare state.
Raising 3 children is practically a full time job, just one that happens to be unpaid. With the UBI the minimum wage would go away, meaning that the single mother is going to make a few dollars an hour in her part time job. That will barely cover the cost of the car she needs to get to her job, and the cost of the babysitter. The suggestion that being a single mother isn't much more expensive than a being a single young adult is absurd. I really struggle to respond to this. Just think about it: a single person can share an apartment and bike everywhere, enjoy the simple bohemian lifestyle. Being a beach bum doesn't cost anything. Do side jobs and hustle whenever you need a few bucks. The single mother in contrast needs a car and a house with rooms, just to start. That's going to take a big chunk out of the 10,000. Just living nearby a school is already expensive, and not optional. And the children themselves cost money too, in a million little ways. Diapers, clothing, entertainment, food, trips to the doctor, the list is endless.
I don't believe I'm misrepresenting the situation, this is just how the math works out. If the UBI means giving money to people who don't really need it then taxes must go up by a lot or the poor are getting a really raw deal.
I think you are probably right that a welfare system that does not consider the cost of dependents is likely misguided.
And we're in agreement that properly raising three kids is a tremendous undertaking that demands either a whole bunch of money or almost all of your time.
I take issue, though, with the idea that a family of 4 living on other people's money should spend so extravagantly. You do not need a car. You need a 2-bedroom home within 2 miles of a school. Housing will almost certainly be more than half of your expenses. Food for 4 people is a few thousand more. Clothing, entertainment, and diapers cost almost nothing (do not use disposable diapers except on special occasions). If you want to work part time then find another mom who will swap days with you or pay you to take her kids while she's working. I could see $10k turning out to be slightly less than what's really needed, but it shouldn't be considered "cruel joke" territory.
In the spirit of not paying people more than they need, I could suggest paying the young adult who gets free housing from her parents only $3k per year, but that opens a huge can of worms that'll have kids pretending to rent their own apartment to get more UBI while really living at their parent's house, etc.
Again, I think we're in agreement on the flaws of this UBI proposal. But I assert that, until such time as our society reaches a level of technological advancement where no one needs to work, the amount of extra work that working people are required to do to support nonworking people should be no more than the minimum amount to maintain their health and physical comfort. If you think people should get more than that, I'd like to know how you propose to decide how much.
And we're in agreement that properly raising three kids is a tremendous undertaking that demands either a whole bunch of money or almost all of your time.
I take issue, though, with the idea that a family of 4 living on other people's money should spend so extravagantly. You do not need a car. You need a 2-bedroom home within 2 miles of a school. Housing will almost certainly be more than half of your expenses. Food for 4 people is a few thousand more. Clothing, entertainment, and diapers cost almost nothing (do not use disposable diapers except on special occasions). If you want to work part time then find another mom who will swap days with you or pay you to take her kids while she's working. I could see $10k turning out to be slightly less than what's really needed, but it shouldn't be considered "cruel joke" territory.
In the spirit of not paying people more than they need, I could suggest paying the young adult who gets free housing from her parents only $3k per year, but that opens a huge can of worms that'll have kids pretending to rent their own apartment to get more UBI while really living at their parent's house, etc.
Again, I think we're in agreement on the flaws of this UBI proposal. But I assert that, until such time as our society reaches a level of technological advancement where no one needs to work, the amount of extra work that working people are required to do to support nonworking people should be no more than the minimum amount to maintain their health and physical comfort. If you think people should get more than that, I'd like to know how you propose to decide how much.
At the present technological level tough choices have to be made to divide the scarce resources we have. In my view this necessitates means-testing and a conventional welfare state. A UBI only makes sense to me when there is so much wealth in society everybody can be gifted a subsistence income, without having to cut other necessities such as healthcare, infrastructure, and so on.
As for the example: Rural poverty is a huge problem, and not everybody can live in cities. Without a car you're stuck in the house because you can't leave your kids unattended. You need to drive miles just for groceries. People around you live in squalor and substance abuse is ubiquitous. Finding a sitter on short notice? Forget it. Move? With what money? Living on a tight budget is easy when you're young, healthy, educated, etc. In the real world poverty doesn't look like that. You can make a back of the envelope calculation where 10k a year is sufficient for a one parent family of four, but I don't think it holds up in the face of all the struggles poor people face.
As for the example: Rural poverty is a huge problem, and not everybody can live in cities. Without a car you're stuck in the house because you can't leave your kids unattended. You need to drive miles just for groceries. People around you live in squalor and substance abuse is ubiquitous. Finding a sitter on short notice? Forget it. Move? With what money? Living on a tight budget is easy when you're young, healthy, educated, etc. In the real world poverty doesn't look like that. You can make a back of the envelope calculation where 10k a year is sufficient for a one parent family of four, but I don't think it holds up in the face of all the struggles poor people face.
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Why should people be entitled to three children they can't afford rather than a beach bum lifestyle? If anything we should incentive the latter; at least it doesn't hurt anyone else.
Because not everyone chooses to have multiple children they can't afford. Maybe their breadwinner partner died. Maybe they were going to be pushing it with two kids, but the second pregnancy was twins. Or the first was triplets. Or they had great family support that allowed them to work a couple of days, but those people moved elsewhere.
I don't think people should be jumping into parenthood without knowing what it really entails (costs and brutal demands on your time) so I'm sympathetic to your angle, but reality plays out differently. And kids are the result of some pretty basic urges that are obviously difficult for many to deal with appropriately (think ahead, get/use contraceptives, actually abstain, whatever).
I don't think people should be jumping into parenthood without knowing what it really entails (costs and brutal demands on your time) so I'm sympathetic to your angle, but reality plays out differently. And kids are the result of some pretty basic urges that are obviously difficult for many to deal with appropriately (think ahead, get/use contraceptives, actually abstain, whatever).
But if you give people direct financial incentives to have more children, as OP wants, that's what they'll do.
Look what the birth rate was 200 years ago when children were considered retirement investments (or elsewhere in the world where that's still true).
Look what the birth rate was 200 years ago when children were considered retirement investments (or elsewhere in the world where that's still true).
In Australia, we have (had) the "baby bonus". Seems a bit wrong. I'd rather support sticks to things like childcare subsidies and so on. I have two children in childcare 3 days a week and it would cost me over AU$600/wk without the subsidies.
Obviously there has to be a strong balance between an incentive that keeps a reasonable birthrate and one that overly encourages those desperate for money to procreate. The latter is disastrous for countless reasons.
Not sure how they'd balance it with a UBI.
Obviously there has to be a strong balance between an incentive that keeps a reasonable birthrate and one that overly encourages those desperate for money to procreate. The latter is disastrous for countless reasons.
Not sure how they'd balance it with a UBI.
From the article:
>Or consider the unemployed young man who fathers a child. Today, society is unable to make him shoulder responsibility. Under a UBI, a judge could order part of his monthly grant to be extracted for child support before he ever sees it. The lesson wouldn’t be lost on his male friends.
> Or consider teenage girls from poor neighborhoods who have friends turning 21. They watch—and learn—as some of their older friends use their new monthly income to rent their own apartments, buy nice clothes or pay for tuition, while others have to use the money to pay for diapers and baby food, still living with their mothers because they need help with day care.
The author seems to be proposing that child support for 3 children can/should be taken from their fathers' UBI grants. Therefore, the mother would receive a larger grant based on her number of children.
>Or consider the unemployed young man who fathers a child. Today, society is unable to make him shoulder responsibility. Under a UBI, a judge could order part of his monthly grant to be extracted for child support before he ever sees it. The lesson wouldn’t be lost on his male friends.
> Or consider teenage girls from poor neighborhoods who have friends turning 21. They watch—and learn—as some of their older friends use their new monthly income to rent their own apartments, buy nice clothes or pay for tuition, while others have to use the money to pay for diapers and baby food, still living with their mothers because they need help with day care.
The author seems to be proposing that child support for 3 children can/should be taken from their fathers' UBI grants. Therefore, the mother would receive a larger grant based on her number of children.
Assuming the father is a living US citizen whose identity and whereabouts the mother knows, of course.
Either way, that doesn't really affect the argument that a BI payment supposed to be a minimum for one person to live off is unlikely to stretch to paying for the food, living space and private health insurance costs for another three, even if another parent's minimum payment is also being garnished to help.
The author's arguments you've cited essentially amount to the view that children of single parents should be punished for their parents' life decisions. It looks particularly crass in the context of accompanying arguments in favour of spending money on adults who choose to "idle away their time" and including those fortunate enough to be "already living off other people’s money".
Either way, that doesn't really affect the argument that a BI payment supposed to be a minimum for one person to live off is unlikely to stretch to paying for the food, living space and private health insurance costs for another three, even if another parent's minimum payment is also being garnished to help.
The author's arguments you've cited essentially amount to the view that children of single parents should be punished for their parents' life decisions. It looks particularly crass in the context of accompanying arguments in favour of spending money on adults who choose to "idle away their time" and including those fortunate enough to be "already living off other people’s money".
Those quotes are about enforcing responsibility and repercussions for unwise decisions, and how that functions as deterrence. Taking money away from the father is framed as punishment, the mother getting money is just a happy coincedence (remember he excludes children from the UBI and then he sketches a scenario where a dad has to lose a lawsuit before having to pay). He doesn't concede that people in some situations simply need more money to live, because that concession would be fatal. After all, if some people need more money than others then you need to do means testing (oh wait, that's what every country is already doing and the root cause of all the inefficiency he seeks to eliminate), which is the exact opposite of the UBI.
That is certainly correct in many cases but I don't think you can get around gizmo's argument in the general case. The father could not simply leave the mother but for example die in an accident. A one size fits all solution seems really problematic considering the huge differences between personal circumstances.
Sorry, but isn't the premise of UBI that it is paid for everyone, including children? That mother of 3 would receive $40.000, wouldn't she ?
You're overthinking it a bit. What it does it remove the worry that you're going to starve or have no place to live, or take you from subsistence to a level that you can invest in the future. That's all. Perhaps that's enough.
Whether this "solves" anything depends. Initial experiments are very limited, but fairly positive. Giving money to people in rural India may not translate too well to giving money to people in New Delhi, much less people in Cleveland. But I think it's worth a try to see how things work out.
Whether this "solves" anything depends. Initial experiments are very limited, but fairly positive. Giving money to people in rural India may not translate too well to giving money to people in New Delhi, much less people in Cleveland. But I think it's worth a try to see how things work out.
What it does it remove the worry that you're going to starve or have no place to live, or take you from subsistence to a level that you can invest in the future. That's all. Perhaps that's enough.
If your income drops below 404.00 Euro per month plus rent in Germany, you get the difference. Nobody will become homeless, nobody will starve. At least in theory. They will bug you to get a job as quickly as possible, make you do courses to improve your skills. The authorities are said to be kind of control freaks, supposedly to avoid abuse.
So it is a basic income. Universal? Well, the authorities won't just let you develop you new product idea for two years. If you don't try to get a job, they will bug you a lot. If you don't play by the rules, they can even cut some of the benefits.
So maybe we should just add a program that allows you to ask for benefits for a certain amount of time so that you can develop a business idea. Maybe there are already things like that. You certainly can get support if you want to educate yourself, attend a university and so on.
If your income drops below 404.00 Euro per month plus rent in Germany, you get the difference. Nobody will become homeless, nobody will starve. At least in theory. They will bug you to get a job as quickly as possible, make you do courses to improve your skills. The authorities are said to be kind of control freaks, supposedly to avoid abuse.
So it is a basic income. Universal? Well, the authorities won't just let you develop you new product idea for two years. If you don't try to get a job, they will bug you a lot. If you don't play by the rules, they can even cut some of the benefits.
So maybe we should just add a program that allows you to ask for benefits for a certain amount of time so that you can develop a business idea. Maybe there are already things like that. You certainly can get support if you want to educate yourself, attend a university and so on.
Much of the appeal of UBI is that there is no massive government pork program to determine eligibility, track compliance with rules, etc. The "U" is important to many of us, provided it allows the disassembly of the massive bureaucracy present today.
>Well then cut down working hours.
This introduces inefficiency. One worker working 8 hours is more useful than 2 workers working 4 hours. While this might end up being a good trade off (as workers might be willing to sell 4 hours of work for less than half the price of 8 hours), attempting to legislate this would be a market distortion.
>Then have sufficient minimum wages. Minimum wages distort the market.
>Also universality, what is the point?
The "universality" has two components. One is that there are no strings attached (eg. you are not required to be seeking employment). The other one is that it is not dependent on your income. As I explained in another comment, making a BI decrease as ones income increases is equivalent to a progressive tax. As we already have a progressive tax system, we can achieve the same result by modify our tax brackets, which is mathematically equivalent but easier to understand.
This introduces inefficiency. One worker working 8 hours is more useful than 2 workers working 4 hours. While this might end up being a good trade off (as workers might be willing to sell 4 hours of work for less than half the price of 8 hours), attempting to legislate this would be a market distortion.
>Then have sufficient minimum wages. Minimum wages distort the market.
>Also universality, what is the point?
The "universality" has two components. One is that there are no strings attached (eg. you are not required to be seeking employment). The other one is that it is not dependent on your income. As I explained in another comment, making a BI decrease as ones income increases is equivalent to a progressive tax. As we already have a progressive tax system, we can achieve the same result by modify our tax brackets, which is mathematically equivalent but easier to understand.
This introduces inefficiency. One worker working 8 hours is more useful than 2 workers working 4 hours. While this might end up being a good trade off (as workers might be willing to sell 4 hours of work for less than half the price of 8 hours), attempting to legislate this would be a market distortion.
What does inefficiency matter if there is not enough work for everyone anyway? It may be a problem during the transition but I am not sure about that. But in the end two people working five hours each seems a better and fairer solution to me than one working eight hours and giving half of what he produced to the other guy for free.
Minimum wages distort the market.
Why? I am not arguing for arbitrarily high minimum wages, just high enough to be able to make a living. Working for less makes no sense - if you work full time and can not live from the income, what is the point? It's exploitation, slavery if you like. If the state provides benefits to make it a livable income, then the tax payers are just subsidizing your employer or customer. I am here not worrying about all the edge case, being frech out of school with little experience, already having enough money and voluntarily working for little or no money and whatnot.
The "universality" has two components. One is that there are no strings attached (eg. you are not required to be seeking employment).
This is feature and bug. It will for example remove incentives to get a job but it will also allow you to take time to develop a new product or something like that. I am neutral on that.
The other one is that it is not dependent on your income. As I explained in another comment, making a BI decrease as ones income increases is equivalent to a progressive tax. As we already have a progressive tax system, we can achieve the same result by modify our tax brackets, which is mathematically equivalent but easier to understand.
I am not sure what you want to say here, seems like it does no harm and provides no benefits.
What does inefficiency matter if there is not enough work for everyone anyway? It may be a problem during the transition but I am not sure about that. But in the end two people working five hours each seems a better and fairer solution to me than one working eight hours and giving half of what he produced to the other guy for free.
Minimum wages distort the market.
Why? I am not arguing for arbitrarily high minimum wages, just high enough to be able to make a living. Working for less makes no sense - if you work full time and can not live from the income, what is the point? It's exploitation, slavery if you like. If the state provides benefits to make it a livable income, then the tax payers are just subsidizing your employer or customer. I am here not worrying about all the edge case, being frech out of school with little experience, already having enough money and voluntarily working for little or no money and whatnot.
The "universality" has two components. One is that there are no strings attached (eg. you are not required to be seeking employment).
This is feature and bug. It will for example remove incentives to get a job but it will also allow you to take time to develop a new product or something like that. I am neutral on that.
The other one is that it is not dependent on your income. As I explained in another comment, making a BI decrease as ones income increases is equivalent to a progressive tax. As we already have a progressive tax system, we can achieve the same result by modify our tax brackets, which is mathematically equivalent but easier to understand.
I am not sure what you want to say here, seems like it does no harm and provides no benefits.
>What does inefficiency matter if there is not enough work for everyone anyway?
I am using the term "efficiency" in a technical sense. An inefficiency means that there exists an alternative way of distributing resources (including time) such that no one is worse off, and at least one person is better off. By this definition if their is an inefficient, then we would have a strictly better world if we could remove that inefficiency without causing any secondary effects.
Suppose we have a widget X that can be produced by person A in 8 hours, or by persons A and B in 10 man-hours (at 5 hours each). Further, assume that both A and B value their time at a constant $100/hr [0].
Suppose that we live in the second world, where A and B each spend 5 hours working on X. At the end of the day, A and B are both down by 5 hours of their time, and up by $500, and society is up by 1 X.
Suppose that, the next day, B hire A to do his share of the work. We have defined that A can do the entire job 8 hours, which means that this transaction only add 3 hours of work to A's day, meaning that A would be willing to do this for only $300. At the end of this day, A is down by 8 hours, and up by $800, B is up by $200, and society is up by 1 X. Again, A breaks even in this exchange, and society still has just as many Xs, however by B got $200 out of thin air.
We can modify the above example to where B pays A $400, in which case both A and B can $100 worth of value out of this exchange. This extra wealth is not just fictitious money. In doing this exchange, we saved 2 hours of human time, which is a real, limited, resource.
Of course, in the above situation, there is no way of deciding how exactly how much B should pay A, all we know is that any value between $300 and $500 produces an efficient system. However, we may, as a society prefer, the situation where the profit is split, and both A and B walk away with a surplus $100. In fact, we may prefer this possibility so much, that we are willing to destroy $2 of wealth somewhere else in the system to assure that A and B split the surplus. The argument for a BI is that a minimum wage achieves the desired result by destroying wealth (in the form of exchanges that never get made), whereas a BI can achieve the same desired goals while destroying less wealth. If that is the case, then a BI is strictly better than a minimum wage.
Of course, a BI itself introduces a market distortion (in the form of tax). The questions that need to be answered is how much wealth does the BI tax destroy, how much wealth does the minimum wage destroy, and how effective are both the BI and minimum wage at achieving the social goal of providing resources for all citizens.
>I am not sure what you want to say here, seems like it does no harm and provides no benefits.
In a society of perfectly rational actors, this would be correct. However, having multiple contributors to the effective marginal tax rate obscures the issue, and is how we get into situations where we have unreasonably high (in some cases >100%) rates.
[0] This is clearly a simplification, but it should not affect the analysis. The important thing is that there exists an "indifference" curve, whereby for any quantity of time, there exists a dollar value at which the worker is equally happy getting paid for doing the work as he is with doing nothing and not getting paid. The only potentially important assumption about this curve that I can think of is that the derivative is non-decreasing. This means that if I am willing to sell my first hour of labor at $100, I will sell my next hour for no less than $100, although I may need more than an extra $100 to be willing to spend an extra hour.
I am using the term "efficiency" in a technical sense. An inefficiency means that there exists an alternative way of distributing resources (including time) such that no one is worse off, and at least one person is better off. By this definition if their is an inefficient, then we would have a strictly better world if we could remove that inefficiency without causing any secondary effects.
Suppose we have a widget X that can be produced by person A in 8 hours, or by persons A and B in 10 man-hours (at 5 hours each). Further, assume that both A and B value their time at a constant $100/hr [0].
Suppose that we live in the second world, where A and B each spend 5 hours working on X. At the end of the day, A and B are both down by 5 hours of their time, and up by $500, and society is up by 1 X.
Suppose that, the next day, B hire A to do his share of the work. We have defined that A can do the entire job 8 hours, which means that this transaction only add 3 hours of work to A's day, meaning that A would be willing to do this for only $300. At the end of this day, A is down by 8 hours, and up by $800, B is up by $200, and society is up by 1 X. Again, A breaks even in this exchange, and society still has just as many Xs, however by B got $200 out of thin air.
We can modify the above example to where B pays A $400, in which case both A and B can $100 worth of value out of this exchange. This extra wealth is not just fictitious money. In doing this exchange, we saved 2 hours of human time, which is a real, limited, resource.
Of course, in the above situation, there is no way of deciding how exactly how much B should pay A, all we know is that any value between $300 and $500 produces an efficient system. However, we may, as a society prefer, the situation where the profit is split, and both A and B walk away with a surplus $100. In fact, we may prefer this possibility so much, that we are willing to destroy $2 of wealth somewhere else in the system to assure that A and B split the surplus. The argument for a BI is that a minimum wage achieves the desired result by destroying wealth (in the form of exchanges that never get made), whereas a BI can achieve the same desired goals while destroying less wealth. If that is the case, then a BI is strictly better than a minimum wage.
Of course, a BI itself introduces a market distortion (in the form of tax). The questions that need to be answered is how much wealth does the BI tax destroy, how much wealth does the minimum wage destroy, and how effective are both the BI and minimum wage at achieving the social goal of providing resources for all citizens.
>I am not sure what you want to say here, seems like it does no harm and provides no benefits.
In a society of perfectly rational actors, this would be correct. However, having multiple contributors to the effective marginal tax rate obscures the issue, and is how we get into situations where we have unreasonably high (in some cases >100%) rates.
[0] This is clearly a simplification, but it should not affect the analysis. The important thing is that there exists an "indifference" curve, whereby for any quantity of time, there exists a dollar value at which the worker is equally happy getting paid for doing the work as he is with doing nothing and not getting paid. The only potentially important assumption about this curve that I can think of is that the derivative is non-decreasing. This means that if I am willing to sell my first hour of labor at $100, I will sell my next hour for no less than $100, although I may need more than an extra $100 to be willing to spend an extra hour.
I obviously have to disagree with your analysis, let me offer an alternative. The difference between the two scenarios is the difference between value(X) + value(8 hours leisure time) and value(X) + 2 * value(3 hours leisure time). Therefore in case the value of 3 hours of leisure time exceeds half of the value of 8 hours of leisure time, i.e. the value of additional leisure time diminishes sufficiently quickly, the second scenario provides the better total value.
By restricting the entire world to the two actors wanting to produce one X one can keep money out of the equation. I argue your analysis fails or at least may fail because you don't assign a value to the leisure time. Also the assignment of monetary values obscures things, where is this money coming from? From selling the X to the society? In that case you will have to take into account that producing one X may take either 8 or 10 hours - will this raise the price or decrease the monetary value of an hour of work?
By restricting the entire world to the two actors wanting to produce one X one can keep money out of the equation. I argue your analysis fails or at least may fail because you don't assign a value to the leisure time. Also the assignment of monetary values obscures things, where is this money coming from? From selling the X to the society? In that case you will have to take into account that producing one X may take either 8 or 10 hours - will this raise the price or decrease the monetary value of an hour of work?
Because value(X) is constant, your observation boils down to a comparison of value(8 hours leisure time) and value(X) + 2 * value(3 hours leisure time).
I did consider the value of leisure time, which I arbitrarily set to $100/hr (I just called this time, but unsold time can be exchanged 1:1 for leisure time). You seem to be objecting to my assumption that the marginal value of time is constant for the workers. I agree with this objection (in fact, I raised it myself in the footnote). However, even without this simplifing assumption, there are still situations where selling ones time is a net positive.
>By restricting the entire world to the two actors wanting to produce one X one can keep money out of the equation.
My entire argument can be made without invoking money. Indeed, I believe the non monetary form is more compelling, but also more abstract. Again, I will invoke the idea indifference. We say that things X and Y have equal value to person A if she is just as happy receiving 1 X as she is receiving 1 Y. With this concept we can replace "money" with any object of value and have an equivalent analysis. Of course, the selected object would itself have diminishing returns, but this is equivalent to an increasing marginal value of ones time, which I have already addressed. Ultimately, to properly explore this route, I would formalize an abstract notion of "utility" as an equivalence class over indifference. I hope this explanation makes sense, doing it properly would take far to much effort to put into an internet comment.
>where is this money coming from, From selling the X to the society?
The above framework provides a nice way to sidestep this issue. Let U be the utility function. So U(5 hours) is the value of 5 hours of time. [0]. For simplicity, assume that A and B share a utility function.
Suppose that A and B are not selling X, but rather using it themselves (for simplicity, suppose that X is a widget that A and B can share without conflict). We know that X is worth at least 2 * U(5 hours). Suppose that 2 * U(5 hours) > U(8 hours). In this case, by my previous argument, it would be preferable for A to do all of the work, and B to barter something worth between U(8 hours) - U(5 hours) and U(5 hours) for his share of X.
Ultimately, this argument is just a rediscovery of the value of trade and specialization. To translate a minimum wage into this framework, we would define some artificial lower bound for the compensation A needs to be provided in a trade such as this. If this minimum value is less than U(8 hours) - U(5 hours) or U(5 hours), then we are just influencing how wealth gets distributed between A and B. However, if the minimum value to big, than the above trade is prohibited, even though we have seen that it is strictly beneficial.
>will this raise the price or decrease the monetary value of an hour of work?
What do you mean by "monetary value of an hour of work". Returning to a more realistic employer/employee example, there are two important monetary values: the value the employee gives to an hour of work, and the value the employer gives to an hour of work.
From the employer perspective, the value of an hour of work is V(X)/T, where V(X) is the value of X [1], and T is the time spent making it. V(X) is independent of how long it took to make, which means that as the work takes longer, the value of an hour goes down to the employer.
From the employee perspective, the issue is a question of their utility function. Assuming a reasonable utility function, I would expect the marginal value of an hour to increase to the employee. That is to say that the employee needs more money to be indifferent to working the last 2 hours than she does for any of the prior 2 hours. If this is the case, than the value of an hour to the employee goes up with the time.
[0] More formally, U(5 hours) is the equivalance class of objects for which the person would be indifferent to spending 5 hours of time to obtain.
[1] Or rather, V(X) is the labor-excluded profit of X.
I did consider the value of leisure time, which I arbitrarily set to $100/hr (I just called this time, but unsold time can be exchanged 1:1 for leisure time). You seem to be objecting to my assumption that the marginal value of time is constant for the workers. I agree with this objection (in fact, I raised it myself in the footnote). However, even without this simplifing assumption, there are still situations where selling ones time is a net positive.
>By restricting the entire world to the two actors wanting to produce one X one can keep money out of the equation.
My entire argument can be made without invoking money. Indeed, I believe the non monetary form is more compelling, but also more abstract. Again, I will invoke the idea indifference. We say that things X and Y have equal value to person A if she is just as happy receiving 1 X as she is receiving 1 Y. With this concept we can replace "money" with any object of value and have an equivalent analysis. Of course, the selected object would itself have diminishing returns, but this is equivalent to an increasing marginal value of ones time, which I have already addressed. Ultimately, to properly explore this route, I would formalize an abstract notion of "utility" as an equivalence class over indifference. I hope this explanation makes sense, doing it properly would take far to much effort to put into an internet comment.
>where is this money coming from, From selling the X to the society?
The above framework provides a nice way to sidestep this issue. Let U be the utility function. So U(5 hours) is the value of 5 hours of time. [0]. For simplicity, assume that A and B share a utility function.
Suppose that A and B are not selling X, but rather using it themselves (for simplicity, suppose that X is a widget that A and B can share without conflict). We know that X is worth at least 2 * U(5 hours). Suppose that 2 * U(5 hours) > U(8 hours). In this case, by my previous argument, it would be preferable for A to do all of the work, and B to barter something worth between U(8 hours) - U(5 hours) and U(5 hours) for his share of X.
Ultimately, this argument is just a rediscovery of the value of trade and specialization. To translate a minimum wage into this framework, we would define some artificial lower bound for the compensation A needs to be provided in a trade such as this. If this minimum value is less than U(8 hours) - U(5 hours) or U(5 hours), then we are just influencing how wealth gets distributed between A and B. However, if the minimum value to big, than the above trade is prohibited, even though we have seen that it is strictly beneficial.
>will this raise the price or decrease the monetary value of an hour of work?
What do you mean by "monetary value of an hour of work". Returning to a more realistic employer/employee example, there are two important monetary values: the value the employee gives to an hour of work, and the value the employer gives to an hour of work.
From the employer perspective, the value of an hour of work is V(X)/T, where V(X) is the value of X [1], and T is the time spent making it. V(X) is independent of how long it took to make, which means that as the work takes longer, the value of an hour goes down to the employer.
From the employee perspective, the issue is a question of their utility function. Assuming a reasonable utility function, I would expect the marginal value of an hour to increase to the employee. That is to say that the employee needs more money to be indifferent to working the last 2 hours than she does for any of the prior 2 hours. If this is the case, than the value of an hour to the employee goes up with the time.
[0] More formally, U(5 hours) is the equivalance class of objects for which the person would be indifferent to spending 5 hours of time to obtain.
[1] Or rather, V(X) is the labor-excluded profit of X.
Okay, after rethinking it once a gain I will move a bit towards your position. By increasing the required work for one X from 8 to 10 hours we are definitely introducing an inefficiency so we are losing something somewhere, we are doing 2 hours of unnecessary work. Assuming both agents can share the X or get to use half the X in both scenarios, we can just leave it out of the equation as mentioned before. If one gets the same value from X in both scenarios, then working 5 hours is strictly preferable over working 8 hours and not working is strictly preferable over working for 5 hours.
So this looks somewhat like the prisoner's dilemma. Let A and B be the scenario that agent A respectively agent B works 8 hours and AB the scenario that both agents work 5 hours each. Then the preferences for agent A are B > AB > A and for agent B they are A > AB > B. But that doesn't help much, no matter which transition you consider, one agent will be better off and one will be worse off.
So there is still a conflict. I acknowledge that an inefficiency gets introduced when the work is split but also want to maintain that 3 hours of leisure time twice is more valuable than 8 hours of leisure time once. Surly value can not increase and decrease at the same time. I am more certain that the inefficiency is real than what the shape of the value function for leisure time is so I will pick the former one and conclude that 8 hours of leisure time are - contrary to my earlier comment - more valuable than 3 hours of leisure time twice.
So do I have to say that maximizing the total value is the wrong metric? Do I have to try to assign a value to the fairness of work distribution? Why wouldn't that already show up in the individual value functions? I am a bit stuck here. But I may have a way around that, I am just not sure how good the argument is. One obvious problem is that in case agent A does all the work, then agent B has no means to transfer some of the additional value from his additional leisure time to A. Maybe he could give away some of his share of X.
But now I can no longer ignore the value function for X and that hopefully saves my argument and I avoid the conflict between decreasing and increasing total value without the need to explicitly appeal to the value of fair work work distribution because it is in the two value functions for X and leisure time. But I am not sure, I did not think this fully through.
I think in the end it boils down to nonlinearities between the individual and the global view, i.e. we can globally waste 2 hours of work but still increase the total value because we have to take the global set of things, split it up for all individuals, push them through the nonlinear value functions and then sum it up again. Now it is no longer necessary that a global loss of 2 hours results in a global loss of value even if all the individual value functions are monotone.
So this looks somewhat like the prisoner's dilemma. Let A and B be the scenario that agent A respectively agent B works 8 hours and AB the scenario that both agents work 5 hours each. Then the preferences for agent A are B > AB > A and for agent B they are A > AB > B. But that doesn't help much, no matter which transition you consider, one agent will be better off and one will be worse off.
So there is still a conflict. I acknowledge that an inefficiency gets introduced when the work is split but also want to maintain that 3 hours of leisure time twice is more valuable than 8 hours of leisure time once. Surly value can not increase and decrease at the same time. I am more certain that the inefficiency is real than what the shape of the value function for leisure time is so I will pick the former one and conclude that 8 hours of leisure time are - contrary to my earlier comment - more valuable than 3 hours of leisure time twice.
So do I have to say that maximizing the total value is the wrong metric? Do I have to try to assign a value to the fairness of work distribution? Why wouldn't that already show up in the individual value functions? I am a bit stuck here. But I may have a way around that, I am just not sure how good the argument is. One obvious problem is that in case agent A does all the work, then agent B has no means to transfer some of the additional value from his additional leisure time to A. Maybe he could give away some of his share of X.
But now I can no longer ignore the value function for X and that hopefully saves my argument and I avoid the conflict between decreasing and increasing total value without the need to explicitly appeal to the value of fair work work distribution because it is in the two value functions for X and leisure time. But I am not sure, I did not think this fully through.
I think in the end it boils down to nonlinearities between the individual and the global view, i.e. we can globally waste 2 hours of work but still increase the total value because we have to take the global set of things, split it up for all individuals, push them through the nonlinear value functions and then sum it up again. Now it is no longer necessary that a global loss of 2 hours results in a global loss of value even if all the individual value functions are monotone.
"Well then cut down working hours instead of having half the population work full time and pay for the other half" That doesn't work. The reality is, and I'm sorry to say, but the required IQ to be economically relevant is increasing every year. Your plan doesn't work because you can't spread out the work that way.
Increasing minimum wages will only just accelerate automation and exacerbate the problem.
My concern about UBI is that it won't properly track inflation and will quickly become not enough and all the welfare programs are gone, so people are doubly screwed.
Other than that, I like it. I'd like to see more "pay to go to school" programs, though. We'd end up with fewer Trumps...
Increasing minimum wages will only just accelerate automation and exacerbate the problem.
My concern about UBI is that it won't properly track inflation and will quickly become not enough and all the welfare programs are gone, so people are doubly screwed.
Other than that, I like it. I'd like to see more "pay to go to school" programs, though. We'd end up with fewer Trumps...
The reality is, and I'm sorry to say, but the required IQ to be economically relevant is increasing every year. Your plan doesn't work because you can't spread out the work that way.
That is only a real problem if the population does not keep up with this development. I can not tell whether requirements are (now) growing faster then capabilities but both certainly grew ever since. The other thing is that it seems to me that - at least to some extend - the capabilities are the controlling factor here. The economy can demand whatever it needs, if it is not available the economy will have to adopt.
Increasing minimum wages will only just accelerate automation and exacerbate the problem.
I did not mean to increase minimum wages more and more just to make any job viable, this of course only leads to inflation. I meant to let non-viable [EDIT: This read »no viable« before.] jobs die or automate. If people are not willing to pay enough for getting their lawn mowed - not sure if that is a good example - to make a living from it, then there never was a market for lawn mowing. Subsidizing it by the rest of the population with government benefits of any kind is not a solution.
That is only a real problem if the population does not keep up with this development. I can not tell whether requirements are (now) growing faster then capabilities but both certainly grew ever since. The other thing is that it seems to me that - at least to some extend - the capabilities are the controlling factor here. The economy can demand whatever it needs, if it is not available the economy will have to adopt.
Increasing minimum wages will only just accelerate automation and exacerbate the problem.
I did not mean to increase minimum wages more and more just to make any job viable, this of course only leads to inflation. I meant to let non-viable [EDIT: This read »no viable« before.] jobs die or automate. If people are not willing to pay enough for getting their lawn mowed - not sure if that is a good example - to make a living from it, then there never was a market for lawn mowing. Subsidizing it by the rest of the population with government benefits of any kind is not a solution.
> I meant to let no viable jobs die or automate.
Are you saying you'd outlaw self-service gas pumps and checkout stations? Robotic assembly lines and autonomous vehicles?
A large fraction of the population has no distinguishing skills. That segment of the population is going to find itself with ever fewer ways to earn a living.
Are you saying you'd outlaw self-service gas pumps and checkout stations? Robotic assembly lines and autonomous vehicles?
A large fraction of the population has no distinguishing skills. That segment of the population is going to find itself with ever fewer ways to earn a living.
That was meant to read »non-viable«, i.e. if customers are not willing to pay enough for a product or service so that a full time worker can live on the salary, then efficiency must improve, the job must be automate away entirely or the business must go out of business. I consider neither simply exploiting the employees nor subsidizing the business and customers by giving benefits to the employees a good solution.
Besides that I am not sure about you comment, I am not sure how you interpreted my comment with the spelling error. I am especially confused because your first paragraph sounds like you are arguing for automation, the second paragraphs sounds like you consider it harmful for unskilled workers. I don't want to outlaw any automation, quite the opposite, I would consider the ultimate goal a world where all work is done by robots and nobody has to work.
Besides that I am not sure about you comment, I am not sure how you interpreted my comment with the spelling error. I am especially confused because your first paragraph sounds like you are arguing for automation, the second paragraphs sounds like you consider it harmful for unskilled workers. I don't want to outlaw any automation, quite the opposite, I would consider the ultimate goal a world where all work is done by robots and nobody has to work.
What's wrong with letting the work be done at a market rate lower than the current (ideally abolished) minimum wage? I'd pay someone $5/hr to pull weeds, but I won't pay them $10 or $15/hr.
Now, in which system can a neighbor earn an extra $20 a week for a morning of work? In which system does my front garden look nicer from the sidewalk? Someone (probably a teen) gets some walking around money, the whole neighborhood gets a nicer sidewalk view, and I don't have to do an optional job that I dislike. Sounds like a winner all around to me, but no way is "pulling weeds" a full-time, live alone and without additional support career.
Now, in which system can a neighbor earn an extra $20 a week for a morning of work? In which system does my front garden look nicer from the sidewalk? Someone (probably a teen) gets some walking around money, the whole neighborhood gets a nicer sidewalk view, and I don't have to do an optional job that I dislike. Sounds like a winner all around to me, but no way is "pulling weeds" a full-time, live alone and without additional support career.
I mentioned that in another comment, there are certainly a lot of cases like your example where it makes no or not much sense to apply a minimum wage. I want the minimum wage to target specifically normal (full time) employment. An employer should not be able to pocket most of the money for say selling relatively expensive cloths but pay shitty wages to its sewers. You might argue that employees are free to negotiate wages and free to not accept bad conditions, but that easily fails if, for example, there is a surplus of possible employees. Sure, it is an important mechanism to reduce costs for consumers, but that should in my mind not come at the expenses of the employees.
I think that devolves into "I can hire Matt, the neighbor kid and pay him $5/hr, but I can't hire Matt Inc, the landscape company, because they aren't allowed to pay Matt [the neighbor kid] $5/hr"
All of which perpetuates the cash/grey economy (and the off-shoring of garment-making jobs in your example).
The thing about UBI is that it allows employees to turn down bad economic deals without starving. Sure, you can't live in a 2000 ft^2 house, drive a new car, eat and party out all the time, but you probably don't have to take a job with ridiculously bad conditions just so you can buy a can of beans or Ramen.
All of which perpetuates the cash/grey economy (and the off-shoring of garment-making jobs in your example).
The thing about UBI is that it allows employees to turn down bad economic deals without starving. Sure, you can't live in a 2000 ft^2 house, drive a new car, eat and party out all the time, but you probably don't have to take a job with ridiculously bad conditions just so you can buy a can of beans or Ramen.
But that seems not unreasonable on its own. Tipping a friend $20 because he helped carrying boxes when you moved as compared to hiring a professional mover for $20 seems like a valid difference to me. But you a right that this could maybe be turned into a good argument for an universal basic income because you may be able to sidestep some otherwise relatively difficult to solve gray area issues, but I am not sure, I haven't thought that through.
You think $40 is excessive for a morning's work? I really don't know what to say to that that won't attract the wrath of dang. Perhaps he can suggest some polite words...
I didn't say I thought $10/hr was "excessive". What I said was that that was more than I was willing to pay to have that particular problem solved.
There are all sorts of things that people will pay a handful of dollars for, but that they won't/can't pay $10/hr for. Mine was just a concrete example of a low skill required task that I don't enjoy and that someone whose basic needs were already covered might be interested in doing, much like I did when I was a kid/teen and wanted to earn some extra money.
There are all sorts of things that people will pay a handful of dollars for, but that they won't/can't pay $10/hr for. Mine was just a concrete example of a low skill required task that I don't enjoy and that someone whose basic needs were already covered might be interested in doing, much like I did when I was a kid/teen and wanted to earn some extra money.
Sorry. I thought you were saying that jobs that are currently viable should not be allowed to be automated away. I was wrong.
I am in favor of automation (for the same reasons you are, I think), and automation does harm unskilled workers.
Between the present day and the future golden age of robotics that we both desire is a period of time in which some fraction of the population, who have specialized skills that are hard to automate, will work for a living, while another fraction (probably larger than the first) of the population will have nothing to offer in return for money. I don't see any way around the first group subsidizing the existence of the second.
I am in favor of automation (for the same reasons you are, I think), and automation does harm unskilled workers.
Between the present day and the future golden age of robotics that we both desire is a period of time in which some fraction of the population, who have specialized skills that are hard to automate, will work for a living, while another fraction (probably larger than the first) of the population will have nothing to offer in return for money. I don't see any way around the first group subsidizing the existence of the second.
> If people are not willing to pay enough for getting their lawn mowed - not sure if that is a good example - to make a living from it, then there never was a market for lawn mowing.
You are actually in favor of outlawing lawn mowing as a job? My 14 year old kid can't take a $20 from my neighbor to get some fresh air and weekend spending money? Are you serious????
You are actually in favor of outlawing lawn mowing as a job? My 14 year old kid can't take a $20 from my neighbor to get some fresh air and weekend spending money? Are you serious????
If you are a professional lawn mower, there should be a minimum wage that ensures that you can live on that income. What is the point of mowing lawns all day long and not ending up with enough money to live? So kids mowing lawns bellow market rates because they don't have to live from that income are creating downward pressure on the price. And why wouldn't you pay market rates in the first place, same work, same pay? There seems also not to be such a huge difference to black labor - you cut some of the costs, taxes and insurances or living with your parents, and harm others trying to make a living with that job. It seems actually pretty difficult to have a balanced solution and as I acknowledged in another comment, this might actually be one of the stronger arguments for a universal basic income because it may allow to sidestep some of those difficult gray area problems.
> My concern about UBI is that it won't properly track inflation
Have the Fed stop causing inflation?
Have the Fed stop causing inflation?
>there is no point in doing any work that does not pay well enough to make a living
Artwork, open source software, charity work...
Artwork, open source software, charity work...
That is of course valuable to other people or the society and it may also be valuable to you because you enjoy doing it. But that is not what I meant. When you do some work to make a living, then you have to earn enough to live on the income. What is the point of working full time and then starving anyway? What you can do voluntarily is not affected in any way, you can make paintings and write open source software for no money as long as you want.
Wouldn't the price of everything raise accordingly, so that you basically can't afford anything with the basic income?
Only if the world were zero-sum, which it's not. Remember how only rich people used to have cell phones, and now billions of people have them? The price of most goods is close to the marginal cost of production, which means that giving more people money may actually lower the cost of many goods (by increasing volume). Artificially scarce goods, such as an apartment in SF, may get more expensive however since their price is set by the marginal ability to pay. The good news is, you don't have to live in SF.
I guess apartments in San Fransisco already cost more than what someone living off basic income could afford, so the prices should not be driven up at all. Indeed, people living there would presumably get a net reduction in income (from tax increases to pay for the BI), so the prices should go down.
If you read the article, the BI being proposed would drop off after you began earning more than $30k and the drop would stop at $60k in earned income. I imagine a rather high percentage of people living in San Francisco already earn well above $60k annually.
I've never understood why subsidies like this almost always come with income phaseouts. What's wrong with giving everyone a basic income? People who make a lot of money would more than repay it in taxes, and taxes would have to go up on higher earners, but that's not a real problem.
> People who make a lot of money would more than repay it in taxes, and taxes would have to go up on higher earners
Doesn't that amount to the same thing?
Doesn't that amount to the same thing?
The difference is you have to make more money first.
"Phase out" means middle income people receive lower benefits in exchange for higher income people paying lower taxes. It's just a code word for screwing over the middle class.
"Phase out" means middle income people receive lower benefits in exchange for higher income people paying lower taxes. It's just a code word for screwing over the middle class.
I didn't write the article and I am not for the so called UBI. I am very much against it. I am willing to be convinced otherwise, and the start of this article sounded not crazy to me, but I stopped at reading at some point because later remarks reflected enormous cognitive dissonance in the writer, suggesting they really haven't thought it through and full of baloney.
Seems like the median income is about 77k:
> .. Our own San Francisco Association of Realtors says that the city’s median household income is a mere $77,700
http://sf.curbed.com/2016/2/23/11101182/11-percent-of-househ...
> .. Our own San Francisco Association of Realtors says that the city’s median household income is a mere $77,700
http://sf.curbed.com/2016/2/23/11101182/11-percent-of-househ...
That's not a UBI scheme. That's just welfare.
It's all the same. Otherwise, you're going to increase taxes even more for people making more than the UBI to compensate. This is simply pushing numbers around on the page - either you're getting the UBI and paying it all back in taxes, or you're not getting the UBI and not paying it back in taxes.
No, it's not the same, because the big benefit of UBI is you don't have to pay a huge gaggle of bureaucrats to verify this person gets benefits and that person doesn't.
> Otherwise, you're going to increase taxes even more for people making more than the UBI to compensate.
There are funding options other than income tax.
There are funding options other than income tax.
The article proposes that we replace welfare programs, social security, etc, with this UBI. Then, at some point, it says this:
Government agencies are the worst of all mechanisms for dealing with human needs. They are necessarily bound by rules applied uniformly to people who have the same problems on paper but who will respond differently to different forms of help. Whether religious or secular, nongovernmental organization are inherently better able to tailor their services to local conditions and individual cases.
I find it ironic that this individual is for the so called UBI.
Government agencies are the worst of all mechanisms for dealing with human needs. They are necessarily bound by rules applied uniformly to people who have the same problems on paper but who will respond differently to different forms of help. Whether religious or secular, nongovernmental organization are inherently better able to tailor their services to local conditions and individual cases.
I find it ironic that this individual is for the so called UBI.
> I find it ironic that this individual is for the so called UBI.
Why do you find it ironic? UBI gives people money without telling them what to do with it. It lets the market (i.e. the people) decide what they need instead of the government.
For example, you can imagine a shelter that will provide food, housing and services for the disabled in exchange for their UBI, which doesn't cover the entire cost but covers most of it and the rest is covered by donations.
Why do you find it ironic? UBI gives people money without telling them what to do with it. It lets the market (i.e. the people) decide what they need instead of the government.
For example, you can imagine a shelter that will provide food, housing and services for the disabled in exchange for their UBI, which doesn't cover the entire cost but covers most of it and the rest is covered by donations.
Except that the marginal cost of production will go up because of the increased competition for scarce goods, of which every single produced item has some component, not the least of which is land and labor.
So yes, there is likely an inflationary effect, but it is impossible to accurately predict.
It also depends on the net change in people's overall income as most basic income proposals include scrapping piecemeal and overlapping welfare systems.
Personally I think I could be convinced if it was essentially a replacement and thus simple to administer, but would have to be coupled with strict immigration control for the first country to try it.
So yes, there is likely an inflationary effect, but it is impossible to accurately predict.
It also depends on the net change in people's overall income as most basic income proposals include scrapping piecemeal and overlapping welfare systems.
Personally I think I could be convinced if it was essentially a replacement and thus simple to administer, but would have to be coupled with strict immigration control for the first country to try it.
The price of everything would rise proportionally to the amount of consumption added to the economy - for example, if you funded this entirely by printing money, you'd get a combination of inflation and an equal amount of money going to everyone, causing a redistribution effect on its own. e.g. if you gave everyone $10,000 of newly-printed money, inflation would be very high, but unless it's 100% or more (doubtful) a poor person making $10,000 or less before the change would still have a higher standard of living - it's a redistributionary effect.
If you actually fund this by taxes, like most proposals say, you'd probably still have an inflationary effect (since the lower your income is, the likelier you are to spend each marginal dollar), but likely not enough to outweigh the extra money.
If you actually fund this by taxes, like most proposals say, you'd probably still have an inflationary effect (since the lower your income is, the likelier you are to spend each marginal dollar), but likely not enough to outweigh the extra money.
If you funded this with taxes (presumably on the wealthy) wouldn't you likewise see a deflationary affect on luxury goods?
Maybe? Probably not a major problem, though - I think the concern is more about the effects on the prices of non-discretionary spending items.
Only if the tax was so much higher than they're paying now that it would meaningfully impact their spending, which it wouldn't be.
If UBI was carried out as a series of one-time cash injections (such as QE), then yes it would simply lead to inflation as a large proportion of UBI recipients would have the propensity to spend that money immediately on rent, food, debt, releasing the cash into circulation and ramping up inflation. Spending would probably remain unchanged for middle/upper class folk who would view UBI income as negligible.
If UBI was carried out as an exercise in wealth redistribution through higher taxes on the upper/middle class, then the inflationary effects would not be quite as high, although I would still expect to see some inflationary effects as middle/upper class folk drew down spending on some durable/luxury goods, while lower class folk would increase spending on staple goods. I think the overall effect would be slightly positive inflation.
If UBI was carried out as an exercise in wealth redistribution through higher taxes on the upper/middle class, then the inflationary effects would not be quite as high, although I would still expect to see some inflationary effects as middle/upper class folk drew down spending on some durable/luxury goods, while lower class folk would increase spending on staple goods. I think the overall effect would be slightly positive inflation.
I'm upper middle class, and I can already barely afford to live in this country. What we need isn't more taxes but a more judicious use of taxes that are already being levied. An effective and workable UBI scheme would replace all other forms of means-tested social support payments, foreign aid, and expenditures on meaningless warfare overseas. In such a perfect-world version of the United States UBI suddenly becomes feasible. One may only dream.
I'm going to guess you either bought a house you can't afford or have more than 2 kids or have a lot of student loan debt. (Not judging at all) Correct?
Zero student debt, one kid, and I'll never own real estate, as I've explained in prior HN comments, i.e. https://news.ycombinator.com/item?id=11495713
I can barely afford to live in the US because I live in a pretty expensive part of it. I'll blindly guess that my zip code is the second most expensive one in NYC. My thesis is that you (and I, and my family, and everyone else who has ever lived) live only once. I refuse to live a gazillion miles away from work while wasting countless hours of my life commuting. This costs me, as the most desirable areas of Manhattan are also the most expensive.
To be able to afford such a lifestyle, I have to make a considerable amount of money. This leads to my family being ineligible for any kind of freebies from the government. We're forced to look on while other families receive handouts in the form of food stamps, free school lunches, free healthcare and subsidized housing. Many of those families cheat the system by finding loopholes in eligibility criteria. They sneak through and enjoy significant free comforts on my dime... and that of every other taxpayer in the country.
So yes, I can barely afford to live here because I'm being taxed to the gills while freebies are flying to countless others who don't deserve it. I'd much rather cancel the whole rigmarole and just flat out pay everyone the same basic income every year. At least my family will get its fair share of it.
I can barely afford to live in the US because I live in a pretty expensive part of it. I'll blindly guess that my zip code is the second most expensive one in NYC. My thesis is that you (and I, and my family, and everyone else who has ever lived) live only once. I refuse to live a gazillion miles away from work while wasting countless hours of my life commuting. This costs me, as the most desirable areas of Manhattan are also the most expensive.
To be able to afford such a lifestyle, I have to make a considerable amount of money. This leads to my family being ineligible for any kind of freebies from the government. We're forced to look on while other families receive handouts in the form of food stamps, free school lunches, free healthcare and subsidized housing. Many of those families cheat the system by finding loopholes in eligibility criteria. They sneak through and enjoy significant free comforts on my dime... and that of every other taxpayer in the country.
So yes, I can barely afford to live here because I'm being taxed to the gills while freebies are flying to countless others who don't deserve it. I'd much rather cancel the whole rigmarole and just flat out pay everyone the same basic income every year. At least my family will get its fair share of it.
That's interesting. My employer is also based in Manhattan. I live in Minnesota. I live in a 4-br home that costs me $800/mo including taxes in downtown Minneapolis. I go and work in Manhattan once every 3-6 months for a week or so. I could never live there though; I would be throwing my money away. I like certain aspects of NYC, but not enough to take such a paycut. There have been a lot of studies that show that what kind of home or city has almost no bearing on your happiness. You might reconsider.
Also, seriously, if someone is on food stamps or their kids are in the free lunch program, they are not advantaged, they are not comforted: they are living on the edge. Trust me.
On the other hand, I live in subsidized housing. The mortgage interest deduction is the largest (in terms of $) subsidized housing program on earth.
Also, seriously, if someone is on food stamps or their kids are in the free lunch program, they are not advantaged, they are not comforted: they are living on the edge. Trust me.
On the other hand, I live in subsidized housing. The mortgage interest deduction is the largest (in terms of $) subsidized housing program on earth.
Price of goods with limited supply will rise, where the price floor is mostly determined by how much people are willing to pay.
Price of goods with unlimited supply, where the price floor is determined by cost, will not rise.
Although everything kind of fall somewhere in between the two extremes -- rent will probably go up, whereas food not so much. And many things will not be affected because poor people will not buy them with or without BI.
Price of goods with unlimited supply, where the price floor is determined by cost, will not rise.
Although everything kind of fall somewhere in between the two extremes -- rent will probably go up, whereas food not so much. And many things will not be affected because poor people will not buy them with or without BI.
At some level definitely.
The whole concept of countries creating way too much currency to pay their bills is a good reflection of this -- Zimbabwe and Venezuela being two recent and current examples. The irony is that all of that "extra" money actually means the recipients become substantially poorer as the supply chains get fucked up.
If it is just a little extra injection, the outcome would not be as extreme. In the most general cases, my guess is somewhere with a tight housing market would see a lot of the money just flow to landlords, in a renter's market the money might flow to consumable goods like drugs and alcohol.
If social & welfare programs are removed in exchange for BI, it is possible all the money would just have to be spent on medical and education. I don't really know the math behind everything but it could just be a restructuring of things that are already occurring. Do extra marketing and "profit" costs exceed government waste? Who knows. Certainly the ability for the government to influence social behavior would be reduced by a lot.
The whole concept of countries creating way too much currency to pay their bills is a good reflection of this -- Zimbabwe and Venezuela being two recent and current examples. The irony is that all of that "extra" money actually means the recipients become substantially poorer as the supply chains get fucked up.
If it is just a little extra injection, the outcome would not be as extreme. In the most general cases, my guess is somewhere with a tight housing market would see a lot of the money just flow to landlords, in a renter's market the money might flow to consumable goods like drugs and alcohol.
If social & welfare programs are removed in exchange for BI, it is possible all the money would just have to be spent on medical and education. I don't really know the math behind everything but it could just be a restructuring of things that are already occurring. Do extra marketing and "profit" costs exceed government waste? Who knows. Certainly the ability for the government to influence social behavior would be reduced by a lot.
If UBI seems possible to pass within 5 years, that will be signal to ramp up investments in low-end rental properties. You have to do it before it's certain to pass (else the purchase price runs up), but I can't see anything happening to rents other than a sharp move up.
I still don't understand this argument. The vast majority of people who would receive the UBI are not homeless. They live somewhere now. Why would the same number of people suddenly demand substantially more housing?
Have you ever counted the number of families that live in a single low-end housing unit? It's not uncommon for it to be 2 or 3 in more expensive areas. If those families each get $20k/yr in UBI, many of them would be looking to move out on their own.
The families who live two and three to a housing unit are the ones who qualify for as much existing welfare as the UBI would provide. It would be trading food stamps for cash but you have to expect most people are still going to buy food.
Replacing housing assistance with the equivalent cash might even reduce rents because then people can decide they would rather live in cheaper housing and use that money to go to college.
The whole thing with a UBI is that unless you make it more progressive than the existing system, all you're really doing is replacing vouchers with cash. If you do make it more progressive (i.e. provide more cash than you would have provided vouchers) then you get the same economic consequences as providing more vouchers (i.e. possible price inflation), but it's still more economically efficient than providing more vouchers, because then people can choose between college or better housing or better medical coverage etc., instead of having the government decide for you.
Replacing housing assistance with the equivalent cash might even reduce rents because then people can decide they would rather live in cheaper housing and use that money to go to college.
The whole thing with a UBI is that unless you make it more progressive than the existing system, all you're really doing is replacing vouchers with cash. If you do make it more progressive (i.e. provide more cash than you would have provided vouchers) then you get the same economic consequences as providing more vouchers (i.e. possible price inflation), but it's still more economically efficient than providing more vouchers, because then people can choose between college or better housing or better medical coverage etc., instead of having the government decide for you.
If everyone is given money for a specific product and suppliers are universally aware of exactly how much people can spend on that product then, yes, that can happen.
However, under UBI, I think suppliers of goods and services would still be faced with the basic issue of not knowing exactly how much consumers value any given product and competition would still exist so prices would likely still be set by supply vs demand.
However, under UBI, I think suppliers of goods and services would still be faced with the basic issue of not knowing exactly how much consumers value any given product and competition would still exist so prices would likely still be set by supply vs demand.
Demand would rise though.
Not quite:
Consider a society with 2 members, Mr Rich (net worth $10M) and Mr. Poor (net worth $100). Mr. Rich is 100,000 X richer than Mr. Poor right now.
Institute a ridiculous UBI of $1M/year for everyone. At the end of the year, Mr. Poor has $1,000,100 and Mr Rich has $11M but Mr Rich is now only ~ 11 X richer than Mr Poor.
Now sure cheeseburgers at Micky-D's are now $700 but the fact has changed that before, Mr Rich could buy a hundred thousand burgers for every one Mr Poor could buy. Now he can only buy 11.
UBI works like gravity. Continually pulling the unequal towards a center. The rich will still stay rich, but unlike today where rich automatically makes richer, the force will be reversed. It will take "energy" to stay rich.
Consider a society with 2 members, Mr Rich (net worth $10M) and Mr. Poor (net worth $100). Mr. Rich is 100,000 X richer than Mr. Poor right now.
Institute a ridiculous UBI of $1M/year for everyone. At the end of the year, Mr. Poor has $1,000,100 and Mr Rich has $11M but Mr Rich is now only ~ 11 X richer than Mr Poor.
Now sure cheeseburgers at Micky-D's are now $700 but the fact has changed that before, Mr Rich could buy a hundred thousand burgers for every one Mr Poor could buy. Now he can only buy 11.
UBI works like gravity. Continually pulling the unequal towards a center. The rich will still stay rich, but unlike today where rich automatically makes richer, the force will be reversed. It will take "energy" to stay rich.
But what if Mr. Rich was rich because he owned a McDs? Now he's selling burgers for $700, and rolling around in his money like Scrooge McDuck.
Prices go up for two reasons, when they can and when they must. Which one do you think would be the factor here?
* Note, this is specifically in response to the parent's scenario - I actually doubt that a UBI like the one in the article would lead to appreciable inflation, as the current entitlement plans already spread around more money than this would.
Prices go up for two reasons, when they can and when they must. Which one do you think would be the factor here?
* Note, this is specifically in response to the parent's scenario - I actually doubt that a UBI like the one in the article would lead to appreciable inflation, as the current entitlement plans already spread around more money than this would.
I think the most popular opinion around here is that once Mr. Poor is liberated by the UBI from the impossible treadmill of minimum wage working-poor jobs and a legal system that is outright hostile to those of lesser means, he might make a few burgers of his own and compete with Mr. Rich's defacto monopoly instead of being his near-servant at his former Mcjob.
What are the pros and cons of this economic gravitational force?
Well that's the question, isn't it. What are the (un)intended consequences of forced leveling of inequality? Especially automatic and predictable forced leveling.
Right now, it seems that Mr. Rich eats as many burgers as he wants (which isn't many really) while all of the Mr. Poors who would be happy to eat them if they could afford them, and happy to make them if someone would buy them (and then could afford to eat them themselves) sit around hungry because there's a recession donchaknow.
Its almost as if the mass of Mr. Rich's on-paper money is blocking the natural signalling between the makers and the eaters so the cycle jams up. It seems like something that needs fixing. So how?
Right now, it seems that Mr. Rich eats as many burgers as he wants (which isn't many really) while all of the Mr. Poors who would be happy to eat them if they could afford them, and happy to make them if someone would buy them (and then could afford to eat them themselves) sit around hungry because there's a recession donchaknow.
Its almost as if the mass of Mr. Rich's on-paper money is blocking the natural signalling between the makers and the eaters so the cycle jams up. It seems like something that needs fixing. So how?
I didn't really see any weighing of the proposition here, just motivated reasoning. Such a one-sided view is especially scary because, at least to me, the cons for this are pretty apparent and serious.
What's one big negative of funneling even more money into the government? Further centralizing power in the government, which definitely cools my own fever to implement UBI, and definitely warrants some careful consideration. Since trust in government seems to be at an all time low, this point probably deserves some addressing [1].
[1]: http://www.people-press.org/2015/11/23/1-trust-in-government...
What's one big negative of funneling even more money into the government? Further centralizing power in the government, which definitely cools my own fever to implement UBI, and definitely warrants some careful consideration. Since trust in government seems to be at an all time low, this point probably deserves some addressing [1].
[1]: http://www.people-press.org/2015/11/23/1-trust-in-government...
For one, theories of economy were created in order to better serve the people's needs and wants using scarce resources - if they can be demonstrated (as in western Europe) to represent very large increases in the hedonic calculus, they are objectively superior. For two, a liberal democracy's functioning is premised on a degree of middle class participation: a large group of people with sufficient assets that they have a stake in the future (beyond entertainment value), but insufficient assets and numbers too great to corrupt the system towards their own ends.
> if they can be demonstrated (as in western Europe) to represent very large increases in the hedonic calculus, they are objectively superior.
The only way this could be true is the extraordinarily unlikely case where every individual provably had better experienced utility in one system than another, otherwise, the fact that there is no one objectively correct method of aggregating utilities across individuals to get a single measure of societal good means that there is no objectively correct ordering.
The only way this could be true is the extraordinarily unlikely case where every individual provably had better experienced utility in one system than another, otherwise, the fact that there is no one objectively correct method of aggregating utilities across individuals to get a single measure of societal good means that there is no objectively correct ordering.
Only if the government added money to the system without removing it elsewhere.
Any sane policy doesn't involve just printing money and giving it to people. It involves taking that money from someone else, through taxes, and THEN giving it to people.
Any sane policy doesn't involve just printing money and giving it to people. It involves taking that money from someone else, through taxes, and THEN giving it to people.
Translation: Socialism
We currently spend $1 for every $.60 we collect in taxes so clearly it's already way past your definition of 'sane'
The current government deficit is more than 500 billion. We can't currently pay for current government spending - not sure why you think the government would try and pay for a huge new entitlement when the political firestorm from that would probably kill it.
Its a really difficult analysis.
Take a food stuff. In theory the current price is the cross section of supply and demand (price equilibrium), your idea is that with BI we have just increased demand while supply remains unchanged naturally price equilibrium changes resulting in a price increase. However, with a growth in demand, the market should respond and supply should increase to meet the increased demand, thus readjusting price equalibrium. Obviously this is for a food stuff not something more finite like housing.
Still food stuffs or housing, we don't really live in a free capitalist market as much as we would like to believe. There are many government subsidies artificially impacting current supply/demand/price. One example, farm subsidies where farmers are paid to not grow crops/farm their land (~$1.3B/year). I think its ridiculous, but economists more knowledgeable than me (even if on the farmer's dime) argue its necessary to keep supply artificially low to keep prices artificially high otherwise the entire industry would fail and we would all be starving.
Assuming BI did have such an overall impact on the prices of everything or even just the basics (food stuffs, housing, gas, etc...) there are all types of mechanisms the government currently employees to artificially raise and lower prices and special interests won't be going away with BI.
Take a food stuff. In theory the current price is the cross section of supply and demand (price equilibrium), your idea is that with BI we have just increased demand while supply remains unchanged naturally price equilibrium changes resulting in a price increase. However, with a growth in demand, the market should respond and supply should increase to meet the increased demand, thus readjusting price equalibrium. Obviously this is for a food stuff not something more finite like housing.
Still food stuffs or housing, we don't really live in a free capitalist market as much as we would like to believe. There are many government subsidies artificially impacting current supply/demand/price. One example, farm subsidies where farmers are paid to not grow crops/farm their land (~$1.3B/year). I think its ridiculous, but economists more knowledgeable than me (even if on the farmer's dime) argue its necessary to keep supply artificially low to keep prices artificially high otherwise the entire industry would fail and we would all be starving.
Assuming BI did have such an overall impact on the prices of everything or even just the basics (food stuffs, housing, gas, etc...) there are all types of mechanisms the government currently employees to artificially raise and lower prices and special interests won't be going away with BI.
The Murray UBI plan is paid for in part by eliminating agricultural subsidies. So any stabilizing effect of these subsidies would go away. Would food producers keep their prices high, since each consumer has an extra 10k to spend? Or would prices collapse as growers, with no incentive to leave fields fallow, flood the market with cheaper food?
Not sure why this person is being downvoted. It seems like a perfectly logical question. If there's a good answer for it, people should be posting that here instead of downvoting.
Either that or every other income and minimum wage standard is lowered to compensate.
No. Just rents. Also the things that are monopolized by just a few manufacturers.
Competition would still apply?
Once again no answer to the main Question: What to do with people that blow their UBI by the 2nd of each month on SAAS Startups?
Let them starve? Go without Shelter?
Let them starve? Go without Shelter?
Pay out UBI daily? The technology exists, no reason not to do it that way.
Also the only way to make a basic income work is through a land or land value tax. Else you get massive inflation.
Also the only way to make a basic income work is through a land or land value tax. Else you get massive inflation.
I agree that paying daily would have benefits. Give someone with poor impulse control a lump sum, and it can disappear quickly (new TV, car, big night out, etc). The daily equivalent might resist that a little, though they could still be baited into loan arrangements.
How does the redistribution of wealth by using taxes on personal spending or on earned income to fund UBI cause inflation?
In difficult times people stop spending money, even with UBI. This means less income to spread around, the solution, print more money = inflation.
Second, under UBI a proportion of the population stops working and this increases over time as robots replace workers. Reducing earned income, lowering UBI cash availability. Solution? Print more money = inflation.
With a land value tax you get a known relatively unchanging set amount of $ based on land value. Balancing the inflation/deflation curve.
Second, under UBI a proportion of the population stops working and this increases over time as robots replace workers. Reducing earned income, lowering UBI cash availability. Solution? Print more money = inflation.
With a land value tax you get a known relatively unchanging set amount of $ based on land value. Balancing the inflation/deflation curve.
> In difficult times people stop spending money, even with UBI. This means less income to spread around, the solution, print more money = inflation.
This is... not really correct. It's true that expansionary monetary policy is often practiced in times of economic recession, but that's not really because there's 'less income to spread around'. And the reason expansionary monetary policy is practiced isn't to give people more income. (Printing money doesn't give individuals more income - if you want to do that, you need expansionary fiscal policy - that's the goal behind tax cuts).
So what does printing money do? Expansionary monetary policy reduces the costs of loans and investments. The goal is to spur long-term investment projects by making capital cheaper, which serves to jump-start the economy. But that has no direct connection to people's personal income. They're interconnected, sure - everything in the economy is, at some level. But the connection to inflation (and the connection to printing money) are completely different things.
This is... not really correct. It's true that expansionary monetary policy is often practiced in times of economic recession, but that's not really because there's 'less income to spread around'. And the reason expansionary monetary policy is practiced isn't to give people more income. (Printing money doesn't give individuals more income - if you want to do that, you need expansionary fiscal policy - that's the goal behind tax cuts).
So what does printing money do? Expansionary monetary policy reduces the costs of loans and investments. The goal is to spur long-term investment projects by making capital cheaper, which serves to jump-start the economy. But that has no direct connection to people's personal income. They're interconnected, sure - everything in the economy is, at some level. But the connection to inflation (and the connection to printing money) are completely different things.
Under UBI the payment and coverage of UBI would be one of, if not the, largest expenditures of government. Vital to getting votes will be keeping the amount received steady and high. And that might mean printing money if necessary.
With land tax the system is self correcting and balanced. With the taxes you mentioned you'd eventually get the inflationary spiral as a market correction.
With land tax the system is self correcting and balanced. With the taxes you mentioned you'd eventually get the inflationary spiral as a market correction.
> Vital to getting votes will be keeping the amount received steady and high. And that might mean printing money if necessary.
Maybe, but that's very different from what you said, which is that '[difficult times] means less income to spread around, the solution, print more money = inflation'.
> With land tax the system is self correcting and balanced.
Er, no - if anything, a property tax would reinforce inflation.
> With the taxes you mentioned you'd eventually get the inflationary spiral as a market correction.
Maybe you meant to respond to someone else? I didn't talk about any taxes. I only mentioned tax cuts as an actual example of expansionary fiscal policy to address the 'less income to spread around' problem, not as a proposal for funding income redistribution.
Maybe, but that's very different from what you said, which is that '[difficult times] means less income to spread around, the solution, print more money = inflation'.
> With land tax the system is self correcting and balanced.
Er, no - if anything, a property tax would reinforce inflation.
> With the taxes you mentioned you'd eventually get the inflationary spiral as a market correction.
Maybe you meant to respond to someone else? I didn't talk about any taxes. I only mentioned tax cuts as an actual example of expansionary fiscal policy to address the 'less income to spread around' problem, not as a proposal for funding income redistribution.
> Expansionary monetary policy reduces the costs of loans and investments
How does it do that? Suppose I want to borrow $1M to build a factory, but nobody (banks, venture capitalists, whatever) can afford to invest in my endeavor.
So the fed prints a bunch of money, causing 5% inflation. Now the bank can more easily afford to loan me $1M, because that $1M is worth less.
But now I need a $1.05M loan to build my factory.
How does it do that? Suppose I want to borrow $1M to build a factory, but nobody (banks, venture capitalists, whatever) can afford to invest in my endeavor.
So the fed prints a bunch of money, causing 5% inflation. Now the bank can more easily afford to loan me $1M, because that $1M is worth less.
But now I need a $1.05M loan to build my factory.
> How does it do that?
By lowering interest rates which encourages borrowing and thus spending and thus economic activity.
> So the fed prints a bunch of money, causing 5% inflation.
Printing money causes monetary inflation, but does not directly cause price inflation so you don't need 1.05M to build your factory. Printing money can eventually lead to price inflation if too much money is printed for too long, but that doesn't mean all money printing causes price inflation as that lever can be turned both ways. Lower interest rates to spur spending and get the economy moving again and then once out of danger raise them again.
By lowering interest rates which encourages borrowing and thus spending and thus economic activity.
> So the fed prints a bunch of money, causing 5% inflation.
Printing money causes monetary inflation, but does not directly cause price inflation so you don't need 1.05M to build your factory. Printing money can eventually lead to price inflation if too much money is printed for too long, but that doesn't mean all money printing causes price inflation as that lever can be turned both ways. Lower interest rates to spur spending and get the economy moving again and then once out of danger raise them again.
Why was I downvoted? I was just asking a question about monetary policy, hoping the GP (who clearly knows more than I) would come back and answer it.
what about the people that blow their daily ubi five minutes after getting it on a saas startup? let them starve or go homeless?
From the article:
> Some people will still behave irresponsibly and be in need before that deposit arrives, but the UBI will radically change the social framework within which they seek help: Everybody will know that everybody else has an income stream. It will be possible to say to the irresponsible what can’t be said now: “We won’t let you starve before you get your next deposit, but it’s time for you to get your act together. Don’t try to tell us you’re helpless, because we know you aren’t.”
> Some people will still behave irresponsibly and be in need before that deposit arrives, but the UBI will radically change the social framework within which they seek help: Everybody will know that everybody else has an income stream. It will be possible to say to the irresponsible what can’t be said now: “We won’t let you starve before you get your next deposit, but it’s time for you to get your act together. Don’t try to tell us you’re helpless, because we know you aren’t.”
The problem here is the assumption that everyone on Medicaid, Social Security, etc is capable of spending money responsibly. Take away their benefits and hand them some cash.
This will result in millions of vulnerable seniors and mentally disabled individuals being scammed out of their money each month. Whether it be "tech support" scammers or local fraudsters or even simply not being able to budget money (at a basic level) these folks will be in trouble.
I live with (and care for) a mentally disabled individual (IQ: ~60) that receives benefits through Social Security, Medicaid, and other government programs. If it were not for our help in managing these benefits she would spend her money (which is supposed to be for food/living expenses) on Amazon on $100 anime-themed coffee cups and similar widgets the moment she receives it.
Not to mention the fact that she will never understand how to sign up for such services or know who to trust when receiving services. If someone in a lab coat told her they were a government doctor and she "had to pay" for her upcoming appointment she'd likely just hand over all her money. There's no way to "educate" her out of this problem. I've taught her all sorts of things... many times and I'll have to teach her again and again.
It's not so dissimilar to walking an old person through accessing a web app/site over and over again ("no, that's the search bar"). Handing vulnerable people money every month won't solve their problems.
It's a great idea for the economy in general though! Just don't do away with government services for the needy. Especially medical care.
This will result in millions of vulnerable seniors and mentally disabled individuals being scammed out of their money each month. Whether it be "tech support" scammers or local fraudsters or even simply not being able to budget money (at a basic level) these folks will be in trouble.
I live with (and care for) a mentally disabled individual (IQ: ~60) that receives benefits through Social Security, Medicaid, and other government programs. If it were not for our help in managing these benefits she would spend her money (which is supposed to be for food/living expenses) on Amazon on $100 anime-themed coffee cups and similar widgets the moment she receives it.
Not to mention the fact that she will never understand how to sign up for such services or know who to trust when receiving services. If someone in a lab coat told her they were a government doctor and she "had to pay" for her upcoming appointment she'd likely just hand over all her money. There's no way to "educate" her out of this problem. I've taught her all sorts of things... many times and I'll have to teach her again and again.
It's not so dissimilar to walking an old person through accessing a web app/site over and over again ("no, that's the search bar"). Handing vulnerable people money every month won't solve their problems.
It's a great idea for the economy in general though! Just don't do away with government services for the needy. Especially medical care.
This is a solved problem (at least, it's solved about as well as you could expect we could do). Social Security has the notion of a REPY or "Representative Payee" for recipients deemed unable to spend their own money, a trustee who manages it on their behalf. It's similar to (but not the same as) the concept of a legal guardian.
All in all, the Social Security Administration has a huge amount of experience with all the details and problems involved in efficient day to day administration of a massive payments program like this, so there's no reason not to just reuse the existing bureaucratic infrastructure and just swap out the eligibility rules.
All in all, the Social Security Administration has a huge amount of experience with all the details and problems involved in efficient day to day administration of a massive payments program like this, so there's no reason not to just reuse the existing bureaucratic infrastructure and just swap out the eligibility rules.
And if you retain the SSA, one of the biggest arguments for UBI (dismantling wasteful government agencies) gets defenestrated.
Actually, SSA is very efficient.
SSA spends just a fraction of a percentage point of the benefits it distributes on administrative costs (ie, the existence and operation of SSA itself). But even the vast majority of that is for the means-tested SSI Title 16 program, not the simpler Title 2 SS programs. Since a UBI is much simpler than either of those, SSA could easily save even more -- there would certainly be plenty of consolidation and maybe downsizing possible after passage of UBI. But there's no reason to throw away the common infrastructure for payments that already exists.
SSA spends just a fraction of a percentage point of the benefits it distributes on administrative costs (ie, the existence and operation of SSA itself). But even the vast majority of that is for the means-tested SSI Title 16 program, not the simpler Title 2 SS programs. Since a UBI is much simpler than either of those, SSA could easily save even more -- there would certainly be plenty of consolidation and maybe downsizing possible after passage of UBI. But there's no reason to throw away the common infrastructure for payments that already exists.
I would expect the SSA to be the ones administering the UBI plan.
I wonder if this is bad because on the net it will make society less compassionate.
Maybe. Hopefully it lets us do a better job picking our compassionate response. Someone who can't get by with a sufficient regular income needs help of a different character than further handouts - giving more of the latter is not a sign of greater compassion.
Less compassionate to those undeserving of it, sure. Isn't that a good thing? I'm not a fan of UBI but this aspect might turn out to be really beneficial in reversing the perverse incentives and dysgenic effects of current social benefits programs.
> Less compassionate to those undeserving of it, sure. Isn't that a good thing?
Only if we want to continue to have addicts and the mentally ill homeless, abused, and taken advantage of.
Only if we want to continue to have addicts and the mentally ill homeless, abused, and taken advantage of.
Who's undeserving though? Someone lazy, sure. But someone impaired through birth defect or accident or mental illness? How do you determine whether someone is lazy but claiming anxiety/depression, or actually suffering?
how is that different from telling lazy bums today to get a job, but without extra layers of complexity?
I have another (hope not stupid) fundamental question: do we have to give people a different UBI based on their location (aka cost-of-life)? If no, it will be pretty hard to find a right value. If yes, should we also change it as soon as they relocate?
My preferred answer (although others may differ) is that it should be the same for everyone. If you can't afford to live where you are now, move somewhere cheaper or get a job. If you're jobless and can't afford an expensive city that means the economy is telling you to make room for someone who can make productive use of the limited space in an area that many need to be to work together.
If you want to stay near family and friends, find a nice cheap place an hour or two away, if you want a shorter commute that's a luxury, not a necessity, and you should work for it.
Basic incomes are for the minimum needed to live a decent life, living in a specific expensive location is a luxury you should have to work for.
If you want to stay near family and friends, find a nice cheap place an hour or two away, if you want a shorter commute that's a luxury, not a necessity, and you should work for it.
Basic incomes are for the minimum needed to live a decent life, living in a specific expensive location is a luxury you should have to work for.
>"If you can't afford to live where you are now, move somewhere cheaper or get a job. If you're jobless and can't afford an expensive city that means the economy is telling you to make room for someone who can make productive use of the limited space in an area that many need to be to work together."
That's exactly how it should work, even in a system with no UBI. Sadly, people see the state as the grand fixer and enabler of everything.
Eventually, we'd all realize that certain places simply cost more to live in due to reasons outside of everyone's control. E.g. maybe it's hard to create affordable safe housing in a very earthquake/tornado prone area. Or hard to deliver fresh healthy produce to a city in the middle of nowhere like a desert. I exaggerate, of course, but these minor details still affect prices to a certain extent. We can't have cosmic-justice.
That's exactly how it should work, even in a system with no UBI. Sadly, people see the state as the grand fixer and enabler of everything.
Eventually, we'd all realize that certain places simply cost more to live in due to reasons outside of everyone's control. E.g. maybe it's hard to create affordable safe housing in a very earthquake/tornado prone area. Or hard to deliver fresh healthy produce to a city in the middle of nowhere like a desert. I exaggerate, of course, but these minor details still affect prices to a certain extent. We can't have cosmic-justice.
That doesn't seem like a huge issue to me. Give everyone the same amount and then let them work harder to live where they want or relocate to a place where the UBI exceeds the cost of living.
There are already neighborhoods now where most people, including me, cannot afford to live, and I don't see it as a tremendous injustice.
There are already neighborhoods now where most people, including me, cannot afford to live, and I don't see it as a tremendous injustice.
I think this is a critical problem to solve with UBI. If you give people in expensive areas more money, more people might crowd into cities, intensifying the affordability crises in places like SF and NYC. Plus there are strong incentives to cheat the system and lie about your address, or even to live homeless in the most expensive cities to collect the higher UBI payments, etc.
So ideally we'd avoid this and everyone would get the same amount of money. But, if we continue to let city prices shoot up, we might end up in a place where people want a job but can't get one because they live somewhere cheap and can't afford to move to the city where all the jobs are on their smaller basic income payment.
With or without basic income, we're clearly on an unsustainable path of letting cities get so much more expensive so quickly.
So ideally we'd avoid this and everyone would get the same amount of money. But, if we continue to let city prices shoot up, we might end up in a place where people want a job but can't get one because they live somewhere cheap and can't afford to move to the city where all the jobs are on their smaller basic income payment.
With or without basic income, we're clearly on an unsustainable path of letting cities get so much more expensive so quickly.
It isn't nearly as much of a problem if you have your necessities covered by UBI and can spend your time however you want. It gives you all the time to be innovative that you need, and if there were actual meaningful work to be done going undone in cities, owners would subsidize the costs of moving rural workers in to attract talent.
Have them stop paying for SAAS Startups next month?
Many existing welfare systems fail in this same scenario. For any feasible welfare plan it is possible to invent scenarios where someone can torpedo themselves. The goal should just be to make it harder for external forces to hurt people, and maybe a bit more difficult to torpedo yourself.
At some point welfare programs must say something along the lines of "if you take help we give you and set it on fire, that's past the line, go find a charity or psychiatrist to help you"
Many existing welfare systems fail in this same scenario. For any feasible welfare plan it is possible to invent scenarios where someone can torpedo themselves. The goal should just be to make it harder for external forces to hurt people, and maybe a bit more difficult to torpedo yourself.
At some point welfare programs must say something along the lines of "if you take help we give you and set it on fire, that's past the line, go find a charity or psychiatrist to help you"
> "if you take help we give you and set it on fire, that's past the line, go find a charity or psychiatrist to help you"
Ideally, social service workers could still help these folks.
Ideally, social service workers could still help these folks.
This question is out of scope. UBI is meant to be unconditional income (to be allocated as each individual sees fit), not unconditional food, shelter, or other necessities.
> This question is out of scope. UBI is meant to be unconditional income (to be allocated as each individual sees fit), not unconditional food, shelter, or other necessities.
Well, if it's being paid for by eliminating programs which do provide food, shelter, and other necessities, then it's not really out of scope to ask how we're going to provide those.
Well, if it's being paid for by eliminating programs which do provide food, shelter, and other necessities, then it's not really out of scope to ask how we're going to provide those.
You could have a special program for those who can be shown to be mentally incapable of managing their ubi. If you don't pass the test, but accidentally waste your ubi and have no other income, there can be a loan program to be repaid at reasonably high interest rates out of your future ubi
And yes, if you are mentally capable but choose to waste your ubi, and can't repay the loan, we would let you starve. Same if you take your food stamps today and throw them in the river - we would let you starve
More realistically than administering some kind of test would be to force people to opt out of basic necessities care. So a person's UBI would be portioned off for food, health, state living facilities etc. so they would always have the bare minimum to survive. If I happened upon a person in need I would merely need to simply bring them to the nearest grocery store and their food needs would be taken care of. Since its opt out, they likely won't have the facilities to opt out.
My biggest concern is how you logistically provide money to people. What do you use to distribute it? Some sort of state owned bank? What about identification?
My biggest concern is how you logistically provide money to people. What do you use to distribute it? Some sort of state owned bank? What about identification?
Same question is valid for food stamps, EITC.
Essentially, yes. It should encourage them to make better choices in the future.
How is this different from our current situation with pensions?
If you created a department to give out money for emergencies, the number of people applying and the amount of paper work required would surely cost less than the current system for benefits?
Give them a $2 a month vps/cloud instance and ensure that Jekyll is installed on their laptop.
Why would one need a vps if using Jekyll?
They have to test deployment, of course!
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Put them in prison for all I care.
> A UBI will do the good things I claim only if it replaces all other transfer payments and the bureaucracies that oversee them.
Unfortunately, I have 2 problems with this:
1. Of the people that I see in SF who could use UBI, almost none of them seem the type who would clean up their acts with UBI. They have serious mental issues, and money means only 1 thing to them: a means to chemical substances. So what do you do when a guy blows his $2000 monthly stipend on hookers and blow and now is back on the streets? Arrest him? Send him to jail? Put him in a mental hospital? And who pays for that? And who provides him the services, if the bureaucrats who used to do it are gone?
2. What do you do about the millions who are employed in the service-providing sector (bureaucrats, non-profits, etc.) ? Right now they make decent money; you're now going to lay them off. Where will the jobs come from for them?
Unfortunately, I have 2 problems with this:
1. Of the people that I see in SF who could use UBI, almost none of them seem the type who would clean up their acts with UBI. They have serious mental issues, and money means only 1 thing to them: a means to chemical substances. So what do you do when a guy blows his $2000 monthly stipend on hookers and blow and now is back on the streets? Arrest him? Send him to jail? Put him in a mental hospital? And who pays for that? And who provides him the services, if the bureaucrats who used to do it are gone?
2. What do you do about the millions who are employed in the service-providing sector (bureaucrats, non-profits, etc.) ? Right now they make decent money; you're now going to lay them off. Where will the jobs come from for them?
> Where will the jobs come from for them?
That's a pretty weak criticism. Where are the jobs going to come from to employ the millions of people that used to be farmers (in 1875)? Where are the jobs going to come from to employ former delivery milkmen? Or what about the jobs for people that used to handle telephone call switching?
The same place they've always come from: economic dynamism. The solar industry, as one basic example, is adding 100,000 new jobs every four years at this point. In 20 years, that one industry will employ a million people - up from almost nothing in 2005.
We've got five million job openings presently. The labor market is quite healthy, with the U6 unemployment rate down to where it was before the recession.
Besides, unleashing all of that educated labor will result in increased innovation and economic growth, not less.
That's a pretty weak criticism. Where are the jobs going to come from to employ the millions of people that used to be farmers (in 1875)? Where are the jobs going to come from to employ former delivery milkmen? Or what about the jobs for people that used to handle telephone call switching?
The same place they've always come from: economic dynamism. The solar industry, as one basic example, is adding 100,000 new jobs every four years at this point. In 20 years, that one industry will employ a million people - up from almost nothing in 2005.
We've got five million job openings presently. The labor market is quite healthy, with the U6 unemployment rate down to where it was before the recession.
Besides, unleashing all of that educated labor will result in increased innovation and economic growth, not less.
> is adding 100,000 new jobs every four years at this point. In 20 years, that one industry will employ a million people
I think your math doesn't add up.
But going along with your line of thought: will UBI be phased in over 20 years? No. It'll happen over a year or two. Several million people will suddenly be off the rolls. That's not a gradual decline; that's a bloody step function. You will most definitely not have jobs for them. Creating jobs is hard, really hard.
I think your math doesn't add up.
But going along with your line of thought: will UBI be phased in over 20 years? No. It'll happen over a year or two. Several million people will suddenly be off the rolls. That's not a gradual decline; that's a bloody step function. You will most definitely not have jobs for them. Creating jobs is hard, really hard.
This is so right on the money.
1. This sounds like a variation of the welfare argument that has been around forever. Just because some may abuse a system does not make the ideas for the system invalid.
As globalization and automation advance you will see others who could benefit from it aside from the stereotypical homeless person.
2. If the premise for UBI is sound then many of the people you mention in the service sector will eventually be without jobs anyway. "Where will the jobs come from then?" is actually a great question to ask when considering the basis for implementing something like UBI.
In my opinion, the fundamental problem with UBI has to do with the perceived value of money. If everyone suddenly has $2,000 a month, that $2,000 will quickly have less purchasing power associated with it. On the other hand, if capital controls all of the means of production through automation, business will not have a market for their products as there will be no workers earning a salary to purchase the products. This is the biggest question for capitalism moving forward. I'm reminded of (the myth?) around Henry Ford and paying his workers more money. This may not have been done so his workers can afford a car, but by doubling the pay of his workers, the floor on wages in industrial Detroit followed. Whether or not it was his intention, the effect of workers having more money meant more sales. I feel like there is a lesson here for how we handle automation moving forward.
In my opinion, the fundamental problem with UBI has to do with the perceived value of money. If everyone suddenly has $2,000 a month, that $2,000 will quickly have less purchasing power associated with it. On the other hand, if capital controls all of the means of production through automation, business will not have a market for their products as there will be no workers earning a salary to purchase the products. This is the biggest question for capitalism moving forward. I'm reminded of (the myth?) around Henry Ford and paying his workers more money. This may not have been done so his workers can afford a car, but by doubling the pay of his workers, the floor on wages in industrial Detroit followed. Whether or not it was his intention, the effect of workers having more money meant more sales. I feel like there is a lesson here for how we handle automation moving forward.
In economics there is a saying: "There's no free lunch."
Basic Income gives people a free lunch.
What is the "opportunity cost" of that free lunch?
For those of you unfamiliar with "opportunity cost", here's an example:
- you have two passions at age 18: software and playing in rock bands. You want to become a professional in one of those fields. The rock band choice prevents you from being in a place long enough to be hired to write code. And vice versa.
- You choose to write code. Ten years later you are at the top of your game, age 32. You own a condo and are married and on an 'executive track' at the company you work for.
But had you chosen the 'rock band' career, who knows? Maybe you would have taken off and at age 32 have a string of hit records, millions of fans and million$ in wealth.
That's the 'opportunity cost' -- you cannot do both.
Okay back to Basic Income. A person receiving Basic Income could replace that income by working more. But they don't work more because, why should they?
The opportunity cost of Basic Income is that lost productivity in the economy, the lost output from that person. Who knows how large that economic benefit to society is, when it's replaced by "Basic Income for everyone."
Basic Income gives people a free lunch.
What is the "opportunity cost" of that free lunch?
For those of you unfamiliar with "opportunity cost", here's an example:
- you have two passions at age 18: software and playing in rock bands. You want to become a professional in one of those fields. The rock band choice prevents you from being in a place long enough to be hired to write code. And vice versa.
- You choose to write code. Ten years later you are at the top of your game, age 32. You own a condo and are married and on an 'executive track' at the company you work for.
But had you chosen the 'rock band' career, who knows? Maybe you would have taken off and at age 32 have a string of hit records, millions of fans and million$ in wealth.
That's the 'opportunity cost' -- you cannot do both.
Okay back to Basic Income. A person receiving Basic Income could replace that income by working more. But they don't work more because, why should they?
The opportunity cost of Basic Income is that lost productivity in the economy, the lost output from that person. Who knows how large that economic benefit to society is, when it's replaced by "Basic Income for everyone."
I'm surprised that so many people on HN support UBI, it sounds horrifying to me. Did you learn nothing from communism? By increasing taxes you decrease incentives for making wealth, and, more importantly, infringe on individual freedoms.
Infringing on human rights of the rich people is one of the worst things you can do for the economy, because they are the people with means of production, and they are the people with options to go somewhere else.
The premise that you are free to make as much money as you want and not be punished for it is one of the biggest things that made USA awesome in the first place.
The idea behind UBI is that we can now afford it because we have abundance of resources to support it. If that were the case, these resources would be available without the need to coerce people out of their money.
The only way to get those resources without taking away the freedom is to treat UBI as what it should be - a charity. Only when there's so much abundance that people are willingly giving away enough of their money to support everyone else, when it's a choice and not a coercion, will UBI have a chance at working without creepy and horrifying consequences.
Infringing on human rights of the rich people is one of the worst things you can do for the economy, because they are the people with means of production, and they are the people with options to go somewhere else.
The premise that you are free to make as much money as you want and not be punished for it is one of the biggest things that made USA awesome in the first place.
The idea behind UBI is that we can now afford it because we have abundance of resources to support it. If that were the case, these resources would be available without the need to coerce people out of their money.
The only way to get those resources without taking away the freedom is to treat UBI as what it should be - a charity. Only when there's so much abundance that people are willingly giving away enough of their money to support everyone else, when it's a choice and not a coercion, will UBI have a chance at working without creepy and horrifying consequences.
Did you at least read the article ? He writes about replacing the current welfare system with UBI.
About the taxes, I think you are wrong because you think in black and white. It's not binary, it's a spectrum and you want to have a balance, in USA the current system is very favorable to the rich.
About the taxes, I think you are wrong because you think in black and white. It's not binary, it's a spectrum and you want to have a balance, in USA the current system is very favorable to the rich.
In the previous discussion a commenter pretty much explained why this wouldn't work:
https://news.ycombinator.com/item?id=11807840
Also I think I can accept that a certain amount of taxes is a necessary evil. But let's treat it as such, and avoid taking more than absolutely necessary.
In my opinion UBI is a step way too far in the wrong direction.
https://news.ycombinator.com/item?id=11807840
Also I think I can accept that a certain amount of taxes is a necessary evil. But let's treat it as such, and avoid taking more than absolutely necessary.
In my opinion UBI is a step way too far in the wrong direction.
Why it is necessary evil ? You don't live alone in this world and I bet you profited enormously from the country, community that you live in.
Because taxes are mandatory, they are taken from people by force.
I am absolutely happy to give back to the community, when it's a voluntary decision, a choice I am free to make.
Yes, I did benefit from living in a society, but I never signed up to owing them something for the rest of my life.
It's beautiful when people are making a decision to contribute to society and help others, it's very different when they are coerced into it.
I am absolutely happy to give back to the community, when it's a voluntary decision, a choice I am free to make.
Yes, I did benefit from living in a society, but I never signed up to owing them something for the rest of my life.
It's beautiful when people are making a decision to contribute to society and help others, it's very different when they are coerced into it.
There is no spectrum. Taxes on private income are grossly authoritarian and should be abolished for basic justice.
Take care with your ideology(for you it's seems it's a religion), that's all I can say to you.
I'm pretty 'religious' about not violating people's human rights. I think we have a moral duty to speak our minds when we perceive an injustice being done, and we should not shirk from our duty out of fear of social rejection.
>The idea behind UBI is that we can now afford it because we have abundance of resources to support it. If that were the case, these resources would be available without the need to coerce business owners out of their money.
This isn't true. Think about providing clean water, to the world. That's estimated at $10 billion/yr back in 2000, probably $20B/yr now with inflation(1). We spent almost $19B/yr on bottled water(2), which is usually taken from public water sources that the companies very little for, ~$2/million liters(3). This is not a reason to coerce businesses of their money, more that we do have the resources, but need to use/distribute it more wisely.
1:http://www.nytimes.com/2000/11/23/world/price-of-safe-water-...
2:http://www.wsj.com/articles/water-water-everywherein-bottles...
3:http://blogs.reuters.com/breakingviews/2015/04/02/nestle-wad...
This isn't true. Think about providing clean water, to the world. That's estimated at $10 billion/yr back in 2000, probably $20B/yr now with inflation(1). We spent almost $19B/yr on bottled water(2), which is usually taken from public water sources that the companies very little for, ~$2/million liters(3). This is not a reason to coerce businesses of their money, more that we do have the resources, but need to use/distribute it more wisely.
1:http://www.nytimes.com/2000/11/23/world/price-of-safe-water-...
2:http://www.wsj.com/articles/water-water-everywherein-bottles...
3:http://blogs.reuters.com/breakingviews/2015/04/02/nestle-wad...
One of the author's main points was financial: he posits that (his idea of) a UBI would be much more inexpensive (and therefore require fewer taxes). Quote: "As of 2014, the annual cost of a UBI would have been about $200 billion cheaper than the current system. By 2020, it would be nearly a trillion dollars cheaper."
Also, FWIW, the author writes for a conservative think tank.
Also, FWIW, the author writes for a conservative think tank.
Not a fan of the decreasing benefits at $60k. That creates a huge donut hole for those making 59k and then get a 3% promotion. All of a sudden they've take a paycut. Make it a flat income. (Also, should be closer to $15 or $18k a year).
This proposal decreases benefits between $30k and $60k. The total delta in benefits would be $6.5k. Assuming this decrease occurs linearly, this comes out to a marginal tax of 21%.
The current marginal tax rate for someone (unmarried) making between 37k and 91k is 25% [0]
This means that over this $30k interval, people would be facing about a 46% effective marginal tax [1]. The current top bracket is only 39.6% and does not kick in (for unmarried individuals) until $415k.
While this proposal does create a silly marginal tax rate, it is still below 100%, which means that making more income still leads to more money in your pocket. Our current system, if you count the value of non-monotary aid, often exceeds a marginal rate of 100%, which is a far more serious problem.
I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets.
[0] https://www.irs.gov/pub/irs-drop/rp-15-53.pdf
[1] This number might be slightly different if the two taxes interact with each other.
The current marginal tax rate for someone (unmarried) making between 37k and 91k is 25% [0]
This means that over this $30k interval, people would be facing about a 46% effective marginal tax [1]. The current top bracket is only 39.6% and does not kick in (for unmarried individuals) until $415k.
While this proposal does create a silly marginal tax rate, it is still below 100%, which means that making more income still leads to more money in your pocket. Our current system, if you count the value of non-monotary aid, often exceeds a marginal rate of 100%, which is a far more serious problem.
I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets.
[0] https://www.irs.gov/pub/irs-drop/rp-15-53.pdf
[1] This number might be slightly different if the two taxes interact with each other.
My mistake. Still, I think it should be a flat UBI. The point shouldn't be to supplement income but to be income. Plus I think, politically it's a harder sell to provide levels is support ("WE DONT GET AS MUCH BECAUSE WE'RE SUCCESSFUL THATS BULLSHIT", etc.)
It would be really dumb to stack the taper on top of existing tax rates.
Which I guess doesn't mean it wouldn't happen.
Which I guess doesn't mean it wouldn't happen.
There's a 3.8% Obamacare surtax on investment income that adds onto the top bracket starting at $250K.
> I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets.
This was such a dumb sentence in an otherwise interesting post.
This was such a dumb sentence in an otherwise interesting post.
If I did not misread the article, the suggestion is do drop the benefits from 13k to 6.5k in the income range from 30k to 60k. That means you lose about 22 cents of benefits for every additional dollar of income so you will still have a net gain. I can not see how an increasing income can lead to a reduced net income unless the combination of decreasing benefits and increasing taxes exceeds one Dollar per additional Dollar of income.
The cut is gradual (so that each extra $1 you earn, less than $1 is reduced from your benefit). So you will never end up with a paycut by making more money.
I'm surprised UBI is getting all the attention and negative income tax is not receiving equal consideration.
A negative income tax would be one way to implement UBI. It sort of fits into the UBI umbrella.
Doesn't seem like the same thing to me. Negative income tax means you still need to find someone who will employ you, and also you don't get any benefit if you are above the threshold so it's not universal.
I don't think it is written in stone that you must have a job to receive a negative income tax. That would be one way to implement it, but you could also have an implementation that was based on some arbitrary level of income, where if you didn't reach that income, the government gave you the difference, even if it were the full amount (this would be a bad way to do it, but nonetheless). For sure, a negative income tax that required employment would not be a UBI. So they may overlap is a better statement than saying it falls under the umbrella.
It's also the case that a UBI is only pretend universal. There are people that will see either an increase in their effective tax rate or a decrease in their buying power (the latter if you fund it by printing money).
It's also the case that a UBI is only pretend universal. There are people that will see either an increase in their effective tax rate or a decrease in their buying power (the latter if you fund it by printing money).
> you still need to find someone who will employ you
Not necessarily. Negative income tax is one way to implement means-tested basic income.
One way to implement a NIT is you have a cutoff point (e.g. $20,000/year) and a rebate rate (e.g. 50%).
So, using the above rate, if your income is...
(a) $0/year ... you get $10,000/year
(b) $10k/year ... you get ($20k-$10k) x 0.5 = $5,000/year (your total income is $15k/year)
(c) $15k/year ... you get ($20k-$15k) x 0.5 = $2,500/year (your total income is $17.5k/year)
(d) $20k/year and up ... you get nothing
---
> you don't get any benefit if you are above the threshold so it's not universal
It's not universal in the sense that not everyone gets the government check, but it's universal in the sense that the same rule is applied to everyone.
Not necessarily. Negative income tax is one way to implement means-tested basic income.
One way to implement a NIT is you have a cutoff point (e.g. $20,000/year) and a rebate rate (e.g. 50%).
So, using the above rate, if your income is...
(a) $0/year ... you get $10,000/year
(b) $10k/year ... you get ($20k-$10k) x 0.5 = $5,000/year (your total income is $15k/year)
(c) $15k/year ... you get ($20k-$15k) x 0.5 = $2,500/year (your total income is $17.5k/year)
(d) $20k/year and up ... you get nothing
---
> you don't get any benefit if you are above the threshold so it's not universal
It's not universal in the sense that not everyone gets the government check, but it's universal in the sense that the same rule is applied to everyone.
True, but this would be a very different feel that the one being proposed. This system would be public assistance and so only poor people would get it. So it would come with the usual stigma.
When EVERYONE gets the same check then everyone can talk about it freely and be happy about the money. It may be that with the change in tax rate, higher income people don't really get a net change to their income so the result in similar, but the "feel" is dramatically different.
When EVERYONE gets the same check then everyone can talk about it freely and be happy about the money. It may be that with the change in tax rate, higher income people don't really get a net change to their income so the result in similar, but the "feel" is dramatically different.
It's about cash flow - NIT would be paid out approximately once per year, making it much less practical to work with.
I see lots of comments that suggest that a UBI wouldn't work because the rich have their money offshore, etc. However, I'm not so pessimistic. The parent article is about a plan for the US, and in the US, the rich do pay their taxes. According to the IRS [1], the top 10% make 48% of the total adjusted gross income in the US and pay over 70% of the total income tax.
Many aspects of the tax system don't make sense to me, but overall it just isn't true that in the US the rich don't pay their taxes.
Some rich Americans choose to renounce their citizenship each year and leave for other countries. The numbers are relatively small, and it involves extremely high tax penalties. (Something like 10 years of taxes and the payment of all capital gains realized or not.) This wouldn't make any difference to a UBI plan.
[1] https://www.irs.gov/pub/irs-soi/soi-a-ints-id1506.pdf
Many aspects of the tax system don't make sense to me, but overall it just isn't true that in the US the rich don't pay their taxes.
Some rich Americans choose to renounce their citizenship each year and leave for other countries. The numbers are relatively small, and it involves extremely high tax penalties. (Something like 10 years of taxes and the payment of all capital gains realized or not.) This wouldn't make any difference to a UBI plan.
[1] https://www.irs.gov/pub/irs-soi/soi-a-ints-id1506.pdf
The way I understand the motivation behind UBI is that it is inspired by the notion that we have (mostly) automated production of goods and therefore human work has been (mostly) delegated to machines. It is therefore perfectly reasonable for people to receive UBI so they can purchase all the robot-produced goods.
The reason I am skeptical of such a view is that production of goods is a tiny fraction of the work humans actually do. A lot of people these days work on solving problems, not on producing goods. And we are far from being short on problems to solve... Alzheimer's, clean energy, climate change...
Saying that humans should not need to work is like saying: This is it. We're done here. This is the world we want.
The reason I am skeptical of such a view is that production of goods is a tiny fraction of the work humans actually do. A lot of people these days work on solving problems, not on producing goods. And we are far from being short on problems to solve... Alzheimer's, clean energy, climate change...
Saying that humans should not need to work is like saying: This is it. We're done here. This is the world we want.
> Saying that humans should not need to work is like saying: This is it. We're done here. This is the world we want.
That's not what's being said. We're not done. This is not the world we want. We should be able to work on Alzheimer's, clean energy and climate change without worrying about where our next meal is coming from.
And, sure, many researches have salaries. But many potential researchers aren't employed, aren't trained, aren't educated. Think of the millions of folks whose passion for helping people, taking care of the planet or tinkering is getting sidelined while they work a cash register to save up for community college. Those people can use a basic income to find a better, more productive, more fulfilling and more useful position in life.
That's not what's being said. We're not done. This is not the world we want. We should be able to work on Alzheimer's, clean energy and climate change without worrying about where our next meal is coming from.
And, sure, many researches have salaries. But many potential researchers aren't employed, aren't trained, aren't educated. Think of the millions of folks whose passion for helping people, taking care of the planet or tinkering is getting sidelined while they work a cash register to save up for community college. Those people can use a basic income to find a better, more productive, more fulfilling and more useful position in life.
[deleted]
"As of 2014, the annual cost of a UBI would have been about $200 billion cheaper than the current system. By 2020, it would be nearly a trillion dollars cheaper."
Remarkable how much entitlement spending is booked in the near future.
Remarkable how much entitlement spending is booked in the near future.
I don't think this adds up. Here (https://www.nationalpriorities.org/budget-basics/federal-bud...) is federal spending for 2015. It shows a total federal spending of 3.8 trillion dollars. This is all spending, including 0.5 trillion on the military, 0.2 trillion in interest on debt, and tons of other spending on things that are not welfare or social-safety-net programs.
Meanwhile, $13k * 300m people, results in an expense of 3.9 trillion. Greater than the entire federal budget.
EDIT: I AM WRONG. The spending proposal from the article does not exceed the entire federal budget, because people who earn more than 30k of income get payed a smaller UBI. I did a rough calculation using the best numbers I could easily find describing the USA's income distribution (good numbers are hard to find). The result was that this proposal would likely cost just short of 3 trillion dollars. Significantly less than the entire 3.8 trillion dollar budget, but still more than we currently spend on entitlements.
Meanwhile, $13k * 300m people, results in an expense of 3.9 trillion. Greater than the entire federal budget.
EDIT: I AM WRONG. The spending proposal from the article does not exceed the entire federal budget, because people who earn more than 30k of income get payed a smaller UBI. I did a rough calculation using the best numbers I could easily find describing the USA's income distribution (good numbers are hard to find). The result was that this proposal would likely cost just short of 3 trillion dollars. Significantly less than the entire 3.8 trillion dollar budget, but still more than we currently spend on entitlements.
Spending on social security (most programs, minus food stamps...I think) is in the neighbourhood of $930 billion. Right now, that's delivered to 65 million people. Of 330 million people total, ~80% are over 21. And it would be safe to assume 50% would qualify (because 1 in three households make between 50k-100k and 1 in four make less than 24k).
That leaves 132 million people drawing from $930 billion, which means everyone gets $7153. For everyone to get $13,000, 71 million people would be allowed to qualify.
This doesn't take into account the taper at all, so it could be stretched to reach more people. But even if 60 million people receive 13k, which leaves ~2.5k for another 60 million, that's still less than 132 million and doesn't align with the author's 6.5k number.
All this is to say: I find the idea appealing because it reduces the cost of bureaucracy and creates autonomy, but I'm not sure if it's feasible.
Sources: https://www.ssa.gov/finance/2015/Overview%20SSA.pdf https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/i... http://www.npr.org/sections/money/2012/07/16/156688596/what-... https://en.wikipedia.org/wiki/Social_programs_in_the_United_...
That leaves 132 million people drawing from $930 billion, which means everyone gets $7153. For everyone to get $13,000, 71 million people would be allowed to qualify.
This doesn't take into account the taper at all, so it could be stretched to reach more people. But even if 60 million people receive 13k, which leaves ~2.5k for another 60 million, that's still less than 132 million and doesn't align with the author's 6.5k number.
All this is to say: I find the idea appealing because it reduces the cost of bureaucracy and creates autonomy, but I'm not sure if it's feasible.
Sources: https://www.ssa.gov/finance/2015/Overview%20SSA.pdf https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/i... http://www.npr.org/sections/money/2012/07/16/156688596/what-... https://en.wikipedia.org/wiki/Social_programs_in_the_United_...
There's another source of money not included here. The Fed creates money from nothing. That has to go somewhere. On top of the usual inflationary dollar creation of the Fed, they were doing "Quantitative Easing" for years to the tune of about $85-100 Billion per month given to banks in exchange for known worthless mortgages. So a good quarter of that $3.9 trillion could have been covered just by some "Quantitative Easing" programs for the poor.
Since the Fed stopped publishing M2, we don't know how much money is really being created. But it seems to me the logic of "Let's give money to the banks and they will loan it to the people" doesn't work. Here, the argument seems to be: Instead of giving money to the banks with expectations, we just give it directly to the people, cutting out the inefficient middle men entirely.
Since the Fed stopped publishing M2, we don't know how much money is really being created. But it seems to me the logic of "Let's give money to the banks and they will loan it to the people" doesn't work. Here, the argument seems to be: Instead of giving money to the banks with expectations, we just give it directly to the people, cutting out the inefficient middle men entirely.
I'm more sympathetic to innovative monetary policies than most people that have studied the topic, but the monetary base isn't a money tree and unfortunately virtually every claim you've made is false.
The M2 growth figures are available and published by Fed sources. They're nowhere near enough to underwrite a basic income, even if none of that newly created credit was being directed towards useful economic activity https://research.stlouisfed.org/fred2/series/M2
M2 isn't created by the Fed anyway, it's created by private banks choosing to extend credit to entities they believe are on average productive enough to repay them at prevailing interest rates. It's possible to deter banks from making future loans of course, but I can't imagine doing that to make room for untargeted handouts being a good idea
The monetary base the Fed actually is responsible for issuing is much smaller and has actually shrunk since 2014. https://research.stlouisfed.org/fred2/series/BASE
QE was a temporary large-scale response to financial shocks which is designed in principle to be reversible so it's about the worst way of funding the steady stream of expenditure required for BI imaginable.
It also consisted of the Fed buying up swapping the cash for existing financial assets in the form of government debt. If they're giving away the newly minted money instead, the amount the Fed can inject into the economy without generating unwanted inflation is much smaller. That might be desirable for a well targeted short term stimulus programme, but a BI certainly doesn't fall into that category (plus you don't get the fringe QE benefit of shrinking the govt debt/interest burden)
The M2 growth figures are available and published by Fed sources. They're nowhere near enough to underwrite a basic income, even if none of that newly created credit was being directed towards useful economic activity https://research.stlouisfed.org/fred2/series/M2
M2 isn't created by the Fed anyway, it's created by private banks choosing to extend credit to entities they believe are on average productive enough to repay them at prevailing interest rates. It's possible to deter banks from making future loans of course, but I can't imagine doing that to make room for untargeted handouts being a good idea
The monetary base the Fed actually is responsible for issuing is much smaller and has actually shrunk since 2014. https://research.stlouisfed.org/fred2/series/BASE
QE was a temporary large-scale response to financial shocks which is designed in principle to be reversible so it's about the worst way of funding the steady stream of expenditure required for BI imaginable.
It also consisted of the Fed buying up swapping the cash for existing financial assets in the form of government debt. If they're giving away the newly minted money instead, the amount the Fed can inject into the economy without generating unwanted inflation is much smaller. That might be desirable for a well targeted short term stimulus programme, but a BI certainly doesn't fall into that category (plus you don't get the fringe QE benefit of shrinking the govt debt/interest burden)
>The M2 growth figures are available and published by Fed sources.
Sorry, typo. I meant M3.
https://en.wikinews.org/wiki/US_Federal_Reserve_ceases_to_pu...
Sorry, typo. I meant M3.
https://en.wikinews.org/wiki/US_Federal_Reserve_ceases_to_pu...
He did specify certain caveats that would reduce the cost vs your estimate - adults over 21, and it would reduce as you made more, to a floor of 6500/yr. But yeah, probably still missing some piece.
I agree. (see my edit). I would love to be even more wrong - to the point where the proposal outlined in the article is clearly viable. So, if anyone has solid numbers demonstrating that, please do share.
You missed the part about people under 21, that should cut off another ~25% from your estimate. Medicare + Medicaid + Social Security is well over 2 billion, so I think it's pretty close.
I tried to get rid of people under 21 by reducing the population from 320M to 300M, but I guess I should look and see what the actual numbers are.
"People under 21 years of age made up over a quarter of the U.S. population (27.1%)"
(https://en.wikipedia.org/wiki/Demography_of_the_United_State...)
So the population over 21 is about 230M.
So the population over 21 is about 230M.
Indeed, he's probably subtracting the revenue from the tax from the "cost", which is misleading.
Why is that remarkable? We make promises to people in the past and then we're shocked when the bill comes due?
No one is ever shocked about all of the SS trust fund cash put into US treasuries (general fund deficit spending), but always shocked that "thats going to need to be paid back one day."
https://www.ssa.gov/news/press/factsheets/WhatAreTheTrust.ht...
> The Social Security trust funds hold money not needed in the current year to pay benefits and administrative costs and, by law, invest it in special Treasury bonds that are guaranteed by the U.S. Government. A market rate of interest is paid to the trust funds on the bonds they hold, and when those bonds reach maturity or are needed to pay benefits, the Treasury redeems them.
Trust fund stats: https://www.ssa.gov/oact/STATS/table4a3.html
The mind boggles. We've been living like a college student on credit cards, and the bill is coming due.
No one is ever shocked about all of the SS trust fund cash put into US treasuries (general fund deficit spending), but always shocked that "thats going to need to be paid back one day."
https://www.ssa.gov/news/press/factsheets/WhatAreTheTrust.ht...
> The Social Security trust funds hold money not needed in the current year to pay benefits and administrative costs and, by law, invest it in special Treasury bonds that are guaranteed by the U.S. Government. A market rate of interest is paid to the trust funds on the bonds they hold, and when those bonds reach maturity or are needed to pay benefits, the Treasury redeems them.
Trust fund stats: https://www.ssa.gov/oact/STATS/table4a3.html
The mind boggles. We've been living like a college student on credit cards, and the bill is coming due.
Social Security trust funds have been used to keep our dollar/treasuries inflated and are one of the biggest customers of those bonds. They will always have a buyer and part of the reason they are in demand since the mid 1930s. When people talk about removing SS they don't realize what it would do to treasuries as a product, demand would be much lower and so would the value of the dollar.
Social Security is the largest owner of US Debt: http://www.forbes.com/sites/mikepatton/2014/10/28/who-owns-t...
Social Security is the largest owner of US Debt: http://www.forbes.com/sites/mikepatton/2014/10/28/who-owns-t...
We should probably not position ourselves where we require an inflated dollar then, since those trust fund dollars are going to be drawn down as everyone ages onto Social Security.
I agree, it is a bit of a house of cards as they say. From the article:
The largest owner of U.S. debt is Social Security. Since the Social Security system is a government entity, how can the government own its own debt? Good question. This is where the “house of cards” theory resides. Some believe the federal government is merely moving the IOUs from one shell to another, hoping to escape the watchful eye of its citizens. In any event, Social Security owns about 16% of the debt followed by other federal government entities (13%), and the Federal Reserve (12%.
My guess is when it is time to pay or the money dries up, they are going to just disregard the Social Security debt owed or stretch it way out so the house of cards stays up a bit longer.
The largest owner of U.S. debt is Social Security. Since the Social Security system is a government entity, how can the government own its own debt? Good question. This is where the “house of cards” theory resides. Some believe the federal government is merely moving the IOUs from one shell to another, hoping to escape the watchful eye of its citizens. In any event, Social Security owns about 16% of the debt followed by other federal government entities (13%), and the Federal Reserve (12%.
My guess is when it is time to pay or the money dries up, they are going to just disregard the Social Security debt owed or stretch it way out so the house of cards stays up a bit longer.
> they are going to just disregard the Social Security debt owed or stretch it way out so the house of cards stays up a bit longer.
I disagree. Taxes with simply rise (as they should've long ago).
I disagree. Taxes with simply rise (as they should've long ago).
You can make the case for this as a simplification of social welfare, but btw hey - it's also a cure for the coming AI jobs apocalypse! Giving everyone 10k a year isn't going to help a worker replaced by robots. 10k doesn't get you far as an annual income. BI doesn't solve the jobs crisis.
You could view it, as subsidizing corporations to decrease wages. Taxpayers paying what the corporations don't have to. So it won't be surprising to see Basic income touted not just by the liberal crowd, but by the Wall St Journal's and corporate interests.
You could view it, as subsidizing corporations to decrease wages. Taxpayers paying what the corporations don't have to. So it won't be surprising to see Basic income touted not just by the liberal crowd, but by the Wall St Journal's and corporate interests.
Why won't 10k per year help a worker replaced by robots?
1> It's definitely enough for a single person to live comfortably on, though perhaps not in the house they lived in before getting lain-off. (I agree children can be a small problem and the proposal from the article does not consider them. But if you're not working and don't need to pay for professional childcare then the cost of a child per year is only a few thousand for food.)
2> It's 10k per year plus whatever you can earn. If you don't have that pesky minimum wage restricting job openings to only those tasks that the customer base values at >$12/hr, then you can rake in a good amount of money performing tasks that people don't value quite so much.
1> It's definitely enough for a single person to live comfortably on, though perhaps not in the house they lived in before getting lain-off. (I agree children can be a small problem and the proposal from the article does not consider them. But if you're not working and don't need to pay for professional childcare then the cost of a child per year is only a few thousand for food.)
2> It's 10k per year plus whatever you can earn. If you don't have that pesky minimum wage restricting job openings to only those tasks that the customer base values at >$12/hr, then you can rake in a good amount of money performing tasks that people don't value quite so much.
Maybe a silly question, but why $13,000? Why not $5,000? Why not $20,000?
How does the risk/reward tradeoff of this proposal change as that magic number changes?
Also:
> The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare.
What about education funding? What does corporate welfare entail? Defense spending, for example?
How does the risk/reward tradeoff of this proposal change as that magic number changes?
Also:
> The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare.
What about education funding? What does corporate welfare entail? Defense spending, for example?
This idea seems to be so cynical. So capitalists want to, flatten the distribution of social welfare: give more or less same money, but evenly to everyone. What will be achieved? Now it is received by the people who are deeply in need. You are not going to make much profit on them: people who are deeply in need are very frugal at spending their money, they are price-conscious by definition. Now everyone will get an even amount, and most Americans aren't poor by any standard, so the money will be spent to increase consumption of the non-essentials (increasing your profits), or to invest in stock (increasing your valuation). And then it is shown as a move to a better and more fair society.
They want 'good' consumers to consume more and multiply, and 'useless' poor people to die as quickly as possible (because $3000 is too little to pay for health insurance) and never have any children (because the UBI is not given to children, and so if you leave on UBI and have a child, you are instantly desperately poor, and no other means to support say, single moms, will exist). Social Darwinism, supply side!
What a cynicism!
They want 'good' consumers to consume more and multiply, and 'useless' poor people to die as quickly as possible (because $3000 is too little to pay for health insurance) and never have any children (because the UBI is not given to children, and so if you leave on UBI and have a child, you are instantly desperately poor, and no other means to support say, single moms, will exist). Social Darwinism, supply side!
What a cynicism!
people who are deeply in need are very frugal at spending their money
This article gives some of the logic behind redistributing income this way: https://www.washingtonpost.com/news/wonk/wp/2015/04/14/where...
The rich save more than the poor, and the more they have, they more they'll save. Money that's being saved isn't being spent, which means less business for everyone from the dry cleaner on the corner to the owner of a five-star hotel. In turn, that means less work for everybody and a lethargic economy.
To be sure, banks can invest the money that the wealthy save, which can stimulate the economy as well. Yet many observers... are worried that as a global society, we've accumulated too much in the way of savings already.
This article gives some of the logic behind redistributing income this way: https://www.washingtonpost.com/news/wonk/wp/2015/04/14/where...
The rich save more than the poor, and the more they have, they more they'll save. Money that's being saved isn't being spent, which means less business for everyone from the dry cleaner on the corner to the owner of a five-star hotel. In turn, that means less work for everybody and a lethargic economy.
To be sure, banks can invest the money that the wealthy save, which can stimulate the economy as well. Yet many observers... are worried that as a global society, we've accumulated too much in the way of savings already.
What i totally don't get from this chart, how can housing expenses be so high? It means about 1/3 if all spending spent on housing, which is about 4-5 trillion a year. Where all that money goes? Construction for example, employs less than 3% of U.S. workforce. Banking (profits from mortgages) make a significant part, but it's easy to calculate that don't get a terribly big chunk.
Also aren't many families living in paid out homes and don't spend anything on housing at all? 19.9% of all units in the USA are owner-occupied without a mortgage, and 12.4% are vacant. Meaning 22.71% of families are neither renting nor paying a mortgage (homeless aside). Which would imply that those who are spending anything on their housing, spend about 46%, if the average for all household is about 35% as the chart on your link suggests. Nearly half. Which is simply hard to believe. Was that the case, housing would have been the cornerstone of U.S. economy.
Total outstanding mortgage debt is 13.7 trillion, which is less than 1x total household income in the USA. So spending 35% of income on housing, all debt could be paid in 3 years even interest included. Because about 60% of people own their homes vs rent, even not counting that they pay typically more then renters, it could mean paying out all mortgages in 5 years, which certainly isn't the case.
Other way around, total value of all U.S. homes is 27.5 trillion, about 12.4% are unoccupied (if you are paying a mortgage on a second home you don't occupy, this isn't a housing expense, this is an investment). which leaves 24.1 trillion for occupied homes. If housing is 35% of all income of Americans, it means 5 years worth of all 'housing' expenses will pay for all homes in America - including those already paid out. And less than 4 years if you exclude those paid out.
Something is wrong here. I think these estimates are about 3x wrong.
http://www.fool.com/investing/general/2015/03/23/heres-the-a...
this chart suggests average share of income Americans pay in mortgage are ca. 14% of their income. renters probably pay less, but even if not, 22.7% pay nothing because they own their homes outright. Which leaves 10-11% of income spent on housing, not 35%. Even less if you remember that interest on mortgage is tax-deductible, so definitely under 10%.
Also aren't many families living in paid out homes and don't spend anything on housing at all? 19.9% of all units in the USA are owner-occupied without a mortgage, and 12.4% are vacant. Meaning 22.71% of families are neither renting nor paying a mortgage (homeless aside). Which would imply that those who are spending anything on their housing, spend about 46%, if the average for all household is about 35% as the chart on your link suggests. Nearly half. Which is simply hard to believe. Was that the case, housing would have been the cornerstone of U.S. economy.
Total outstanding mortgage debt is 13.7 trillion, which is less than 1x total household income in the USA. So spending 35% of income on housing, all debt could be paid in 3 years even interest included. Because about 60% of people own their homes vs rent, even not counting that they pay typically more then renters, it could mean paying out all mortgages in 5 years, which certainly isn't the case.
Other way around, total value of all U.S. homes is 27.5 trillion, about 12.4% are unoccupied (if you are paying a mortgage on a second home you don't occupy, this isn't a housing expense, this is an investment). which leaves 24.1 trillion for occupied homes. If housing is 35% of all income of Americans, it means 5 years worth of all 'housing' expenses will pay for all homes in America - including those already paid out. And less than 4 years if you exclude those paid out.
Something is wrong here. I think these estimates are about 3x wrong.
http://www.fool.com/investing/general/2015/03/23/heres-the-a...
this chart suggests average share of income Americans pay in mortgage are ca. 14% of their income. renters probably pay less, but even if not, 22.7% pay nothing because they own their homes outright. Which leaves 10-11% of income spent on housing, not 35%. Even less if you remember that interest on mortgage is tax-deductible, so definitely under 10%.
. . .
In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."
. . .
[0] - http://www.kiplingsociety.co.uk/poems_copybook.htm
In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."
. . .
[0] - http://www.kiplingsociety.co.uk/poems_copybook.htm
Something I haven't seen anyone else mention, if UBI is introduced won't that cause prices to increase? For example, supermarket 'own brands' are usually cheaper than branded products, but if everyone is getting a minimum income then those prices won't need to be as cheap, just cheaper than alternatives.
Eggs and milk aren't getting more expensive to produce. So, if the currently-cheapest brand increases its price, it's opening a window for new competition to sell at the old low price.
It's possible that anticompetitive forces would prevent that competition from emerging in many cases, but I would not say that it is obvious that prices will increase under UBI.
It's possible that anticompetitive forces would prevent that competition from emerging in many cases, but I would not say that it is obvious that prices will increase under UBI.
Except that it does become more expensive to produce those eggs. That is, assuming some of UBI gets paid for out of increased taxes that the farmer would have to pay.
UBI will just cause rents to go up. Rents in attractive locations are always as high as most tenants living there can afford. If you give people 1000$, rents for the poorest will just go up by up to $1000. Property prices will follow swiftly.
The only force working in opposite direction would be that some people will be able not to flock to attractive locations but I don't think it'll be enough to counter the obvious raise.
You'd have to tax property progressively and accept the drop in property price associated with it being less attractive for people who buy to rent. Apparently property prices are sort of holly cow in US so no-one in their right mind can afford doing anything that would harm that, even it it meant actually ending the poverty.
The only force working in opposite direction would be that some people will be able not to flock to attractive locations but I don't think it'll be enough to counter the obvious raise.
You'd have to tax property progressively and accept the drop in property price associated with it being less attractive for people who buy to rent. Apparently property prices are sort of holly cow in US so no-one in their right mind can afford doing anything that would harm that, even it it meant actually ending the poverty.
What I find strangely absent in most discussion of the UBI is how these fixed payments will hold up against inflation. Even simple arithmetic based on the Consumer Price Index over the past forty years will suggest that an amount like $10,000 US in 2016 dollars will likely be trivial cash in twenty years time. (And, arguably, it's already trivial cash today for just getting by.)
More than likely, the UBI will have no lasting impact, no matter how it is implemented, unless the buying power of the dollar is realistically accounted for in each year's handout. And I just don't see that happening.
More than likely, the UBI will have no lasting impact, no matter how it is implemented, unless the buying power of the dollar is realistically accounted for in each year's handout. And I just don't see that happening.
While it is an interesting idea it is going to have to be crafted in such a way that politicians don't just treat it like tax law and start carving out exceptions.
another area people need to look into is changing the direction of though that has crept into society which that "you deserve this, that, and this, as its your right" and instead get back to the days where people were encouraged to strive to return more to society than society gave them.
another area people need to look into is changing the direction of though that has crept into society which that "you deserve this, that, and this, as its your right" and instead get back to the days where people were encouraged to strive to return more to society than society gave them.
This was a bad trade, in my view. Government agencies are the worst of all mechanisms for dealing with human needs. They are necessarily bound by rules applied uniformly to people who have the same problems on paper but who will respond differently to different forms of help. Whether religious or secular, nongovernmental organization are inherently better able to tailor their services to local conditions and individual cases.
Yet, ironically, he is for a UBI.
Yet, ironically, he is for a UBI.
Kind of a meta comment, but it wouldn't surprise me at all if the basic income movement was (for the most part) started and promoted by an intelligence agency.
After reading about the literary magazines and abstract art that the CIA funded I started thinking what a current program would look like. I think it would look like how basic income is developing.
After reading about the literary magazines and abstract art that the CIA funded I started thinking what a current program would look like. I think it would look like how basic income is developing.
Could you be more specific? What literary magazines and abstract art did the CIA fund? What about the way basic income is developing gives you the impression that it's a CIA program? Without detail this seems like an unsupported conspiracy theory. What would be their incentive in this instance?
https://en.wikipedia.org/wiki/Abstract_expressionism#Abstrac...
https://theawl.com/literary-magazines-for-socialists-funded-...
Totally speculation at this point. Just the way that the movement arose. There were a few articles covering it. Then a few communities created around it. Then more and more research done on it. Its emergence was interesting.
https://theawl.com/literary-magazines-for-socialists-funded-...
Totally speculation at this point. Just the way that the movement arose. There were a few articles covering it. Then a few communities created around it. Then more and more research done on it. Its emergence was interesting.
At the very least it seems like UBI would further centralize power within government by simply funneling even more money into it. Depends on your POV whether or not you think this is a good thing.
> After reading about the literary magazines and abstract art that the CIA funded ...
Any links?
Any links?
I suppose the op meant this: http://www.independent.co.uk/news/world/modern-art-was-cia-w...
[deleted]
Here is one on socialist literary magazines.
https://theawl.com/literary-magazines-for-socialists-funded-...
https://theawl.com/literary-magazines-for-socialists-funded-...
We shouldn't be talking about government paying basic income. We should talk about millionaires and billionaires paying living wage to everyone working in their home and every employee in their companies that they share ownership in. That would be a better conversation to have.
And when they stop hiring people because they no longer require the labor of people who do not have specialized skill sets?
Some clarifications needed:
1) So, someone who has 8 kids gets the same exact income as someone who has 0 kids?
2) What happens when health insurance costs escalate?
1) So, someone who has 8 kids gets the same exact income as someone who has 0 kids?
2) What happens when health insurance costs escalate?
I feel surrounded by total idiots. None of the math adds up... Cost of living is not considered at all. I'm not against the basic idea but the proposals are beyond half-baked - they're idiotic. I get the feeling nobody writing this UBI stuff has any experience or understanding of the welfare systems they're aiming to replace.
The choice for the surtax is perverse: a major point of having a UBI as opposed to means-tested social benefit program is to maintain the marginal benefit of additional income; having a "surtax" that reduces the benefit progressively with income that kicks in at a fairly low income level and proceeds to increase up to a level that's still not a high income is a fairly horrible idea that defeats key elements of the basic idea of a UBI.
I'm not a fan of radical big-bang all-at-once UBI replacing other programs swap anyway (favoring a UBI tied to a dedicated revenue stream that displaces means-tested benefit programs as it ramps up, instead) but even among big-bang implementations this is particularly poorly designed.
(1) The "surtax", as discussed above.
(2) Because it relies on electronic deposit to a bank account, it relies on (but does not provide) a solution to the problem of the unbanked.
(3) The decision to apply it only to adults is dubious, but if you are going to have an age-qualified UBI, it should apply at a minimum to all legal adults -- everyone over 18.
(4) The benefit (after deducting the required health insurance purchase, which for those with no other income simply replaces Medicaid, which is eliminated [0]) is below poverty level. Which would make sense as an initial condition of a UBI which was built to grow over time, but this proposal doesn't appear to be -- its a proposal, therefore, to maintain, rather than alleviate, poverty.
(5) Apparently, the author prefers to fund the UBI for everyone largely by continuing the existing regressive, labor-pays-only, payroll taxes (Medicare is flat, Social Security is flat up to a limit, and then capped, making it -- and overall payroll taxes -- regressive overall), whose current regressive structure (including the flat structure of Medicare) is justified based on the idea that they are buy-ins to benefit programs that provide consistent (Medicare) or capped, contribution-determined (Social Security) benefits. Aside from there being no sane rationale that would justify this, it entirely eliminates UBI's utility as a system to help adapt the economy to deal with progressive automation and the dynamics of the labor market moving toward a larger pool of jobs that have lower returns and a narrowing highly (and increasingly-highly) paid pool of elite workers. Moral issues aside, payroll tax structure can't support the author's proposed UBI going forward.
Then again, I suspect that's the author's intent: kill Social Security, Medicare, Medicaid, etc., and replace them with something that cannot function in the long term. After all, this is a proposal for a social transfer program from an author who has written an entire book setting out supposedly universal laws that each individually (and, a fortiori, all combined) supposedly justify the conclusion that all social transfers are inherenty harmful and should be eliminated.
[0] The author indicates the healthcare component is too complex to discuss in the article, but this is also a particularly worrying component. Looking at what $3,000 gets you on the health insurance market, this mandatory insurance purchase replacing Medicaid might make the poorest of the poor significantly worse off by itself.
I'm not a fan of radical big-bang all-at-once UBI replacing other programs swap anyway (favoring a UBI tied to a dedicated revenue stream that displaces means-tested benefit programs as it ramps up, instead) but even among big-bang implementations this is particularly poorly designed.
(1) The "surtax", as discussed above.
(2) Because it relies on electronic deposit to a bank account, it relies on (but does not provide) a solution to the problem of the unbanked.
(3) The decision to apply it only to adults is dubious, but if you are going to have an age-qualified UBI, it should apply at a minimum to all legal adults -- everyone over 18.
(4) The benefit (after deducting the required health insurance purchase, which for those with no other income simply replaces Medicaid, which is eliminated [0]) is below poverty level. Which would make sense as an initial condition of a UBI which was built to grow over time, but this proposal doesn't appear to be -- its a proposal, therefore, to maintain, rather than alleviate, poverty.
(5) Apparently, the author prefers to fund the UBI for everyone largely by continuing the existing regressive, labor-pays-only, payroll taxes (Medicare is flat, Social Security is flat up to a limit, and then capped, making it -- and overall payroll taxes -- regressive overall), whose current regressive structure (including the flat structure of Medicare) is justified based on the idea that they are buy-ins to benefit programs that provide consistent (Medicare) or capped, contribution-determined (Social Security) benefits. Aside from there being no sane rationale that would justify this, it entirely eliminates UBI's utility as a system to help adapt the economy to deal with progressive automation and the dynamics of the labor market moving toward a larger pool of jobs that have lower returns and a narrowing highly (and increasingly-highly) paid pool of elite workers. Moral issues aside, payroll tax structure can't support the author's proposed UBI going forward.
Then again, I suspect that's the author's intent: kill Social Security, Medicare, Medicaid, etc., and replace them with something that cannot function in the long term. After all, this is a proposal for a social transfer program from an author who has written an entire book setting out supposedly universal laws that each individually (and, a fortiori, all combined) supposedly justify the conclusion that all social transfers are inherenty harmful and should be eliminated.
[0] The author indicates the healthcare component is too complex to discuss in the article, but this is also a particularly worrying component. Looking at what $3,000 gets you on the health insurance market, this mandatory insurance purchase replacing Medicaid might make the poorest of the poor significantly worse off by itself.
This will track inflation?
Basic income, like all compulsory income redistribution programs, is a disgusting authoritarian intrusion that should be rejected by all moral people.
Some sanity checks that UBI fails in every method I've seen: it's some combination of (usually multiple): 1) costs a huge amount more in taxation, 2) screws those most needing help, 3) is not universal, but simply a tax on rich to give to poor, or 4) does not address the economic consequences that negate a significant part of the claims. Simple checks for this one:
1) 236,000,000 Americans aged 21+ [1] times 13,000 each is $3 trillion needing gathered in taxed to hand out. Entire Federal receipts for 2015 was $3.25 trillion [2].
2) The author scraps all current transfer programs (common), including Social Security and Medicare. The plan requires 3K of the 10K to be for health insurance. Average Social Security payment is 14,784 [3]. So we screwed Social Security recipients, who more likely need the money than then average person getting the new free UBI.
3) Medicare currently spends around 900B, which I assume will still need covered, since people will still have medical needs. The 3K allocated above, times 236M people, is 708B, not enough to cover Medicare, and certainly not enough to replace all current health care insurance.
4) The transfer programs cut total at most 2T [2].
5) An analysis of his tax scheme, using [4]. The first 30K is not taxed (23.5% of households). Those above 60K get no UBI (46% of households). As such, I wonder if they still need to pay an additional 3K for insurance since they didn't get the 13K? We'll assume so. The rest we can assume has linear benefits from 30K (13K free money) to 60K (no free money). This means for each $2.3 earned over 30K, one loses $1 in free money, which I think would create a huge disincentive to jump this weird benefit gap. Here's [5]effective federal tax rates by quintile. Coupled with the income breakdown above, those under the 60K range will get tax breaks, meaning those above 60K will shoulder a decent amount more in taxes.
6) It would be interesting to chase down who will have to pay what to meet these requirements - it's late; perhaps I'll do that later.
7) Removing targeted money (for housing, for food for kids, etc), and simply giving cash allows people to spend on bad items. The reason many programs are targeted is to help ensure people buy the necessities first. I would expect UBI as posed here would realize this, and then add back targeted programs to avoid the bad effects, negating the claimed simplicity of UBI. Also, many poor get money from multiple programs, and removing those programs and giving everyone a fixed 10K would mean a lot of them now get a lot less (as I claimed, these plans screw the most needy quite often).
8) UBI will most likely make the entire country poorer: the report on Mincome gives an example of a previous UBI experiment causing a 13% reduction in hours worked. OECD reports show as benefits increase across countries, more people live off benefits as opposed to working. Basic economic theory also would make the same claim. If so, less production means we have less goods and services.
9) Counter to 8, prices will likely rise for things the poor buy, especially rent, forcing people back to work. This is also basic economic theory; currently someone willing to put forth X effort to trade for a place to stay will still do so, and giving that person free money (and everyone) will allow landlords to raise rent to consume some of the free money. Think of the common complaint that govt making money easy for houses or college causes those prices to climb faster than without the easy money - except now this applies to a lot more goods.
So, if we have limited resources, which we do, why not use them in targeted ways to alleviate problems instead of trying a ham-handed, one-size-tries-to-fit-all solution? This is my main complaint about UBI desires - it necessarily removes benefits from the most needy to give to the less needy by ignoring the level or situation (or even regional cost of living changes).
And if your reply is we simply raise taxes, then why not apply targeted benefits with those increased taxes? It still would provide help where most needed, instead of blind (and suboptimal) allocation.
[1] https://en.wikipedia.org/wiki/Demography_of_the_United_State...
[2] https://en.wikipedia.org/wiki/United_States_federal_budget
[3] https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/
[4] https://en.wikipedia.org/wiki/Household_income_in_the_United...
[5] https://www.cbo.gov/sites/default/files/cbofiles/attachments...
1) 236,000,000 Americans aged 21+ [1] times 13,000 each is $3 trillion needing gathered in taxed to hand out. Entire Federal receipts for 2015 was $3.25 trillion [2].
2) The author scraps all current transfer programs (common), including Social Security and Medicare. The plan requires 3K of the 10K to be for health insurance. Average Social Security payment is 14,784 [3]. So we screwed Social Security recipients, who more likely need the money than then average person getting the new free UBI.
3) Medicare currently spends around 900B, which I assume will still need covered, since people will still have medical needs. The 3K allocated above, times 236M people, is 708B, not enough to cover Medicare, and certainly not enough to replace all current health care insurance.
4) The transfer programs cut total at most 2T [2].
5) An analysis of his tax scheme, using [4]. The first 30K is not taxed (23.5% of households). Those above 60K get no UBI (46% of households). As such, I wonder if they still need to pay an additional 3K for insurance since they didn't get the 13K? We'll assume so. The rest we can assume has linear benefits from 30K (13K free money) to 60K (no free money). This means for each $2.3 earned over 30K, one loses $1 in free money, which I think would create a huge disincentive to jump this weird benefit gap. Here's [5]effective federal tax rates by quintile. Coupled with the income breakdown above, those under the 60K range will get tax breaks, meaning those above 60K will shoulder a decent amount more in taxes.
6) It would be interesting to chase down who will have to pay what to meet these requirements - it's late; perhaps I'll do that later.
7) Removing targeted money (for housing, for food for kids, etc), and simply giving cash allows people to spend on bad items. The reason many programs are targeted is to help ensure people buy the necessities first. I would expect UBI as posed here would realize this, and then add back targeted programs to avoid the bad effects, negating the claimed simplicity of UBI. Also, many poor get money from multiple programs, and removing those programs and giving everyone a fixed 10K would mean a lot of them now get a lot less (as I claimed, these plans screw the most needy quite often).
8) UBI will most likely make the entire country poorer: the report on Mincome gives an example of a previous UBI experiment causing a 13% reduction in hours worked. OECD reports show as benefits increase across countries, more people live off benefits as opposed to working. Basic economic theory also would make the same claim. If so, less production means we have less goods and services.
9) Counter to 8, prices will likely rise for things the poor buy, especially rent, forcing people back to work. This is also basic economic theory; currently someone willing to put forth X effort to trade for a place to stay will still do so, and giving that person free money (and everyone) will allow landlords to raise rent to consume some of the free money. Think of the common complaint that govt making money easy for houses or college causes those prices to climb faster than without the easy money - except now this applies to a lot more goods.
So, if we have limited resources, which we do, why not use them in targeted ways to alleviate problems instead of trying a ham-handed, one-size-tries-to-fit-all solution? This is my main complaint about UBI desires - it necessarily removes benefits from the most needy to give to the less needy by ignoring the level or situation (or even regional cost of living changes).
And if your reply is we simply raise taxes, then why not apply targeted benefits with those increased taxes? It still would provide help where most needed, instead of blind (and suboptimal) allocation.
[1] https://en.wikipedia.org/wiki/Demography_of_the_United_State...
[2] https://en.wikipedia.org/wiki/United_States_federal_budget
[3] https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/
[4] https://en.wikipedia.org/wiki/Household_income_in_the_United...
[5] https://www.cbo.gov/sites/default/files/cbofiles/attachments...
Murray is known for his eugenics arguments. He's pushing for economic Darwinism. The use of 'DNA' in his article belies his propensities. He uses pseudoscience to sell his brand of politics. Firing salvos for a Trump advisor.
I'm sorry libertarians, but you can't just throw a equal amount of cash at everybody and say good luck. Society just isn't that simple. Different people have different needs, and that's where the complex overhead of a bureaucracy comes in.
Stop trying to starve the beast already, and instead, help make it better. Or, admit at least, that you just don't give a damn about people who aren't like you.
Stop trying to starve the beast already, and instead, help make it better. Or, admit at least, that you just don't give a damn about people who aren't like you.
UBI isn't about libertarianism, it's about reducing the fucking stupid disincentives built into current benefits systems.
Instead of telling people that they can have this money only if they work less than 16 hours a week, or only if they stay disabled, just give them the money.
That way you don't need to employ doctors to see if someone is still as disabled as they were last year, and people who get a part time job can increase their hours without penalty.
Instead of telling people that they can have this money only if they work less than 16 hours a week, or only if they stay disabled, just give them the money.
That way you don't need to employ doctors to see if someone is still as disabled as they were last year, and people who get a part time job can increase their hours without penalty.
In the context of this article, it is very much about libertarianism (the strain of it that is willing to admit that we're facing a jobs crisis, at least). Check the article's author. They want to throw away any sort of a public social safety net, reduce taxes on the wealthy, throw the rest of us a bone and say good luck.
I'm very much for a UBI, but as a part of a comprehensive progressive agenda, and certainly not how the right-wingers want to do it.
I'm very much for a UBI, but as a part of a comprehensive progressive agenda, and certainly not how the right-wingers want to do it.
Right-wingers are mostly absent from this conversation.
The question at hand is "can we give people enough to amount to a comprehensive solution and thereby save administrative costs"?
I don't think any libertarian minded individuals actually believe in tossing out all safety nets and most likely don't care to reduce taxes on the wealthy either, at least not as a goal in and of itself.
I don't think any libertarian minded individuals actually believe in tossing out all safety nets and most likely don't care to reduce taxes on the wealthy either, at least not as a goal in and of itself.
Yes they do. Read the article and read up on the article's author. It's quite literally based around eliminating the costs of the social programs and instead throwing everybody a flat $10K/year.
I'm merely trying to discourage the ambiguous "they" labeling. I think the author is, indeed, a bit to on about the "you should help yourself" mentality. Some people can't or won't even if money is offered and many civilized people want to see those types cared for as well.
Even so, he's basically on your side in the sense that whatever UBI ends up being proposed for law, he would probably vote for it.
Personally, I think we can definitely eliminate the some of the costs of the social programs by giving everyone a flat $30-$40k per year.
The driving difference in thinking being that I believe that the only viable way to make basic income happen is to assess average living expenses across the board and provide that amount to everyone while retaining the former programs at a much smaller scale.
One of the big issues with the current system is that there is a lot of trouble in determining whether a person really needs the assistance of a program or not. UBI helps in that only those who can show a need beyond $30-$40k/yr need apply.
Even so, he's basically on your side in the sense that whatever UBI ends up being proposed for law, he would probably vote for it.
Personally, I think we can definitely eliminate the some of the costs of the social programs by giving everyone a flat $30-$40k per year.
The driving difference in thinking being that I believe that the only viable way to make basic income happen is to assess average living expenses across the board and provide that amount to everyone while retaining the former programs at a much smaller scale.
One of the big issues with the current system is that there is a lot of trouble in determining whether a person really needs the assistance of a program or not. UBI helps in that only those who can show a need beyond $30-$40k/yr need apply.
40,000 * 300 million = 12 trillion. US GDP is 17 trillion. The UBI wouldn't pay for the army, police, healthcare, infrastructure and so on. So the remaining 5 trillion can pay for that as well as for local government. So we're talking about a scenario where every citizen has the same income, regardless of contribution to society. It's an interesting idea, and if we can all work together as a society under these circumstances that would be great. In other words: a 40k UBI implies full communism. Pretty radical.
In my opinion, UBI is basically communism as a positive side-effect of kick ass capitalism. I tend to think of it in the Star Trek variety.
Not so much radical as a natural result of being really good at personal productivity.
It's not a bad thing to say, "we have gotten so good at being productive that we've made work essentially optional".
It's not a bad thing to say, "we have gotten so good at being productive that we've made work essentially optional".
I don't think I've seen a proposal for a UBI equivalent that doesn't intend it to replace social programs and be funded by the money saved.
But it might create even bigger disincentives that have a much more universal effect, which could be disasterous.
There are good reasons to think it won't.
People continue to work after they have enough money not to; people making $40K per year go to night school to try to increase their income.
Most people continue to want more after their basic needs are met.
And beyond money, work can give a sense of purpose and a connection to other people.
People continue to work after they have enough money not to; people making $40K per year go to night school to try to increase their income.
Most people continue to want more after their basic needs are met.
And beyond money, work can give a sense of purpose and a connection to other people.
But we're not talking about 'most' people. We're talking about all people. What about the people who think to themselves, I don't want to work, I want to live off welfare. Now there will be more of those people (especially since technology satisfies more and more leisure needs for just the price of an internet connection). Also as people grow up in such a society, they don't have that driving motive in the back of their mind that if they have to eventually find employment to survive. How will such people turn out as adults?
The promise of UBI is saving money and unlocking more human potential (by allowing more risk taking, or letting artists pursue their art, or whatever). But if you think of the need to be productive (for survival) as a force/pressure that has shaped the complex system we call society since the dawn of civilisation, then I can imagine that removing that force in a large nation could result in something extremely dysfunctional or even horrifying.
The promise of UBI is saving money and unlocking more human potential (by allowing more risk taking, or letting artists pursue their art, or whatever). But if you think of the need to be productive (for survival) as a force/pressure that has shaped the complex system we call society since the dawn of civilisation, then I can imagine that removing that force in a large nation could result in something extremely dysfunctional or even horrifying.
> But if you think of the need to be productive (for survival) as a force/pressure that has shaped...
That's why UBI is only now becoming a possibility.
The need for everyone to be productive is diminishing. The labor force participation rate has dropped enormously since 2000.
https://research.stlouisfed.org/fred2/series/CIVPART
That's why UBI is only now becoming a possibility.
The need for everyone to be productive is diminishing. The labor force participation rate has dropped enormously since 2000.
https://research.stlouisfed.org/fred2/series/CIVPART
I would expect them to get bored and find something interesting to do. Could be quite a positive. Regardless, most existing small studies and surveys show few people behave like this or intend to.
I worry that the small studies and surveys tell us nothing about the real dangers - from interaction and scale effects in a complex system.
It would be trivial to implement it slowly and dial it back if you saw adverse outcomes. Giving everyone $20 next year probably wouldn't destroy America.
(of course a slow implementation would have to overlap with existing benefits, not replace them)
(of course a slow implementation would have to overlap with existing benefits, not replace them)
The people who are likely to drop out of the labor market are almost certainly not the motivated, high-productivity workers that actually benefit society. High achievers tend to be motivated by things like passion, creativity, need for recognition, etc, not purely income.
> The people who are likely to drop out of the labor market are almost certainly not the motivated, high-productivity workers that actually benefit society
The people who are likely to drop out of their job are plumbers, dishwashers, garbage collectors, miners, mail carriers, highway maintainers, taxi drivers, manual fruit pickers and the rest of those performing soul-crushing jobs that actually allow society to keep running.
The people who are likely to drop out of their job are plumbers, dishwashers, garbage collectors, miners, mail carriers, highway maintainers, taxi drivers, manual fruit pickers and the rest of those performing soul-crushing jobs that actually allow society to keep running.
All solvable problems though, no?
If no one has to wash dishes in order to survive then you will have to offer a quite decent wage to get people to wash dishes else pay someone to finally make the washing of dishes completely automated.
Supply and demand should dictate that the worst issue will end up being the rising cost of having a night on the town.
Same thing for any other currently low value jobs. We will have to adjust to paying people properly, even above minimum wage, to do things that suck. I view this as a desirable outcome when considered against the current situation in which only the most glamorous jobs tend to pay well, even if the job is not necessarily most helpful.
Same thing for any other currently low value jobs. We will have to adjust to paying people properly, even above minimum wage, to do things that suck. I view this as a desirable outcome when considered against the current situation in which only the most glamorous jobs tend to pay well, even if the job is not necessarily most helpful.
so a minimum wage? great, so i'll pay half the dishwashers twice the previous wage for twice the work. or, if automation is possible, i'll pay one guy a minimum wage to look after dozens of dishwashing machines. result is less people working.
Not quite the same as a minimum wage. It's not enforced by bureaucrats, but by potential employees each individually deciding they have better uses for their time to do the work you're asking for the price you're offering.
If your workers are willing and able to do twice as much work in the same time for twice as much pay, you should likely make that switch anyway - at the least it'd save you bookkeeping, and it would be a better use of the workers' time.
And if people systematically decide that they have better things to do than a particular job, and we automate that job so we don't need people doing it, that seems like a win to me.
Whether it means less people working overall depends on how big these effects are, what the effects are on demand, and whether we couple it with other changes like a decreased minimum wage (which could lead to more people working on things which are more pleasant/fulfilling but less highly paid).
If your workers are willing and able to do twice as much work in the same time for twice as much pay, you should likely make that switch anyway - at the least it'd save you bookkeeping, and it would be a better use of the workers' time.
And if people systematically decide that they have better things to do than a particular job, and we automate that job so we don't need people doing it, that seems like a win to me.
Whether it means less people working overall depends on how big these effects are, what the effects are on demand, and whether we couple it with other changes like a decreased minimum wage (which could lead to more people working on things which are more pleasant/fulfilling but less highly paid).
Can't really lump plumbers in that group; they're very well compensated, and I wouldn't describe their jobs as soul-crushing. There are a lot of trade jobs that won't be easily automated; plumbing, electricians, welders, landscapers (it's really an art) etc.
13k is still poverty level, I imagine most would not be fully content at that level.
If a rich person feels that their wealth is threatened, they can evade the negative consequences of the scheme (taxes) by relocating their head office to the Caymans. On the other hand, if a middle class family is negatively impacted by the scheme - They cannot evade it; they can't afford to move to another country because they rely on their jobs for income.
If UBI is to be instated, we would also have to implement harsh laws to prevent the upper classes from evading taxes. Moving wealth to a tax haven should be made a criminal offence (with jail time).
Also, income (passive income in particular) should always be taxed based on the country of origin (from which the payment originated) instead of the complex network of case-by-case tax treaties that currently exist. A single, origin-based tax system would not have all the loopholes that a complex case-by-case system has. Any country that refuses to enter into the origin-based tax treaty should be kicked out of the UN and trade sanctions should be imposed.
In practice, a rich person is currently not bound by the laws of their own country; they are bound by the laws of the country whose laws are the most convenient for them - They can literally pick and choose how much tax they want to pay.