Why Should We Support the Idea of an Unconditional Basic Income?(medium.com)
medium.com
Why Should We Support the Idea of an Unconditional Basic Income?
https://medium.com/working-life/why-should-we-support-the-idea-of-an-unconditional-basic-income-8a2680c73dd3
211 comments
Unlike Capitalism, Globalization is Zero-sum WITHOUT http://en.wikipedia.org/wiki/Basic_income
Tax Corporate Revenues, Not Profits;
$12k per year x 320M people = $3.84 trillion, which is 22.9% of annual GDP.
That's a pretty steep price tag for a thousand dollars a month.
That's a pretty steep price tag for a thousand dollars a month.
Please take a look at the FAQ[1] on reddit and perhaps at this article[2] about calculating whether USA can afford BI.
[1]: http://en.reddit.com/r/basicincome/wiki/index
[2]: http://www.economonitor.com/dolanecon/2014/01/13/could-we-af...
[1]: http://en.reddit.com/r/basicincome/wiki/index
[2]: http://www.economonitor.com/dolanecon/2014/01/13/could-we-af...
First of all, you're only going to pay the adults. That eliminates about a quarter of the population. Second of all, you're still going to collect taxes, so many people will just have the income taxed back. Say, only people below median income end up keeping the money. This cuts the figure down to 1.44 trillion. This is still a lot (we currently spend about $850 billion on social security, which would presumably be replaced by basic income), but it's not unmanageable.
Depends on how that income gets taxed. At a certain level of income, the gains of basic income are lost to extra taxation. However you always know that if you get fired you have a safety net, so it provides value to you even if you get 0$ net effect.
That is a rather trivial analysis that assumes a system where everyone, regardless of income, got $12k more than they would otherwise.
It would be easy to set a tax system such that people got $12k as a minimum, but those who earned (say) $20k received $6k and by $50k there was no increase. I'm not suggesting a curve with those figures, that is purely for an example.
It would be easy to set a tax system such that people got $12k as a minimum, but those who earned (say) $20k received $6k and by $50k there was no increase. I'm not suggesting a curve with those figures, that is purely for an example.
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A lot of that money will be spent, going back into the economy.
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Because with more automation, if
we don't, then the population
will shrink, in principle to zero.
I always found the idea interesting, at the condition that we suppress all other forms of benefits. It is a simple and elegant way to solve the welfare trap and it also would be easier and cheaper to manage than the layers of benefits from various gvt agencies.
To me there are only two real risks. First the idea that this will lead more people to stop working instead of less, which would be counterproductive. And I find it worrying that the counter-argument is "people are working too hard anyway". It is impossible to guess what would happen but as all former communist countries know, it is not fun to have grand economic ideas experimented on a live population.
The second risk is that this could work in a closed society like Japan. But most western countries have mass immigration and such a system wouldn't survive very long the abuse it would inevitably trigger in an open society.
To me there are only two real risks. First the idea that this will lead more people to stop working instead of less, which would be counterproductive. And I find it worrying that the counter-argument is "people are working too hard anyway". It is impossible to guess what would happen but as all former communist countries know, it is not fun to have grand economic ideas experimented on a live population.
The second risk is that this could work in a closed society like Japan. But most western countries have mass immigration and such a system wouldn't survive very long the abuse it would inevitably trigger in an open society.
The idea of Basic Income goes hand in hand with the process of automation. There are millions of jobs that will go away due to automation. The counter-argument to "will basic income lead more people to stop working" is not "people are working too hard anyway" but rather "most people won't have a job...coming soon". What are all those people going to do once this happens? Find another job? Yeah right. Here [1] is an article discussing this very problem.
Also, I don't think the second risk you mention is really applicable. What's to stop a nation implementing BI from capping the number of immigrants it admits? Or am I misunderstanding you.
[1]: https://medium.com/basic-income/should-we-be-afraid-very-afr...
Also, I don't think the second risk you mention is really applicable. What's to stop a nation implementing BI from capping the number of immigrants it admits? Or am I misunderstanding you.
[1]: https://medium.com/basic-income/should-we-be-afraid-very-afr...
On your first point this is not a new problem. Machines replaced most humans in most factories decades ago. What is new is that the few humans left operating the machines or doing complex work too expensive to build a machine for, might get replaced by robots too. We absorbed the first wave of mechanisation. There is no reason we can't absorb a second wave. In fact the second wave already happened in western countries since these manufacturing jobs went to asia. It created mass unemployment for uneducated people that will remain a problem for a while (and which I believe is the primary reason for any rise in income inequality). And the only solution is more and better education. Not financial incentives.
On your second point, an open country only has limited control over its immigration. First illegal immigration is massive and difficult to control, and when people have lived in a country for many years it is hard to not give them documents. But the main reason is that the majority of immigration is an immigration countries have no control on. People marrying foreigners or legal immigrants bringing their family. These are rights that should certainly exist but are easy to abuse, particularly for originating countries where there is little vital records.
On your second point, an open country only has limited control over its immigration. First illegal immigration is massive and difficult to control, and when people have lived in a country for many years it is hard to not give them documents. But the main reason is that the majority of immigration is an immigration countries have no control on. People marrying foreigners or legal immigrants bringing their family. These are rights that should certainly exist but are easy to abuse, particularly for originating countries where there is little vital records.
The question I want answered is what's to stop the people who own the automation technology/patents/natural resource rights from leaving the country so they don't have to pay the taxes for everyone's minimum income?
That would be interesting. They'd be considered foreigners, and it'd hopefully erode the social relation of "property rights" to capital the government grants them.
One problem of minimum income is that it will make it very expensive to find people willing to do "dirty" work. Unless you think robots will take care of nursing (which is grueling and dirty when dealing with disabled people and it doesn't pay well), farm work (they already have trouble finding workers), cleaning, etc.
Automation isn't nowhere near to eliminating those and I'm guessing it would increase labor costs very disproportionately - diminishing marginal utility of income and all that. This would then make related products/services more expensive and further lower your global competitiveness.
This can be mitigated by immigration (ie. not granting minimum income to immigrants) but that has a bunch of issues on it's own.
Automation isn't nowhere near to eliminating those and I'm guessing it would increase labor costs very disproportionately - diminishing marginal utility of income and all that. This would then make related products/services more expensive and further lower your global competitiveness.
This can be mitigated by immigration (ie. not granting minimum income to immigrants) but that has a bunch of issues on it's own.
Maybe the "dirty" work should be better paid. It is convenient to have a large supply of workers that have to take any work to survive, so the "dirty" work gets done cheaply, but that doesn't make it right.
It depends on how you look at it I guess - a large supply of low skilled workers is what allows you to have access to many things you take for granted and removing that means that a lot of products and services aren't going to be accessible to general population.
Overall it would lower the standard of living for anyone not at the bottom of income bracket and not change much for the top.
Overall it would lower the standard of living for anyone not at the bottom of income bracket and not change much for the top.
On the flip side, there is lots of dirty work carried out that is not recognised by the current economy today.
Yes, automation.[0,1] We're approaching the knee in automation uptake. It can take decades to implement policies like this. Time flies.
[0] https://news.ycombinator.com/item?id=9555295
[1] https://news.ycombinator.com/item?id=9561068
[0] https://news.ycombinator.com/item?id=9555295
[1] https://news.ycombinator.com/item?id=9561068
What's to stop a nation implementing BI from capping the
number of immigrants it admits?
Rule changes are not even enough. European borders are impossible to secure against "illegal" or "unwanted" migration of individuals. They always have been. Even the GDR wasn't able to stop its people entirely from leaving for the west. And nobody wants to use their methods.
Of course, "illegal" immigrants can't apply for UBI. They would form a permanent underclass, who work for minimal wages, don't have any representation, no social security, and no social mobility.
Of course, "illegal" immigrants can't apply for UBI. They would form a permanent underclass, who work for minimal wages, don't have any representation, no social security, and no social mobility.
> What are all those people going to do once this happens? Find another job? Yeah right.
Yeah, right, exactly. Remembers farmers? You know that almost everyone was a farmer like 150 years ago in the now developed countries? When we started to automate farming jobs, people did not simply become unemployed and started dying off. They MOVED on, you know. And found opportunities to learn new skills and apply them elsewhere, which massively benefited society in the end.
It's the same VERY old story again. Yeah, the "wheel killed the jobs of slaves", but then humans started doing more stuff in the end and progressed on to greater things. Please stop with the old, overused rhetoric.
Yeah, right, exactly. Remembers farmers? You know that almost everyone was a farmer like 150 years ago in the now developed countries? When we started to automate farming jobs, people did not simply become unemployed and started dying off. They MOVED on, you know. And found opportunities to learn new skills and apply them elsewhere, which massively benefited society in the end.
It's the same VERY old story again. Yeah, the "wheel killed the jobs of slaves", but then humans started doing more stuff in the end and progressed on to greater things. Please stop with the old, overused rhetoric.
I also found the idea very interesting, but I don't necessarily agree with all the risks you have identified.
- "at the condition that we suppress all other forms of benefits": mostly agree, except for benefits related to disabilities. I would still make a distinction between people who are able to work, and people who not only cannot work but need help (sometimes costly help) just to stay alive, and everything in-between.
- "this will lead more people to stop working": could be, or it could be the opposite, but it's hard to know without experimenting. Single mothers or fathers working 2 or 3 jobs to make ends meet would probably keep at most one and spend more time with their kid(s). Students would probably just focus on their studies. But on the other hand unemployment benefits and related schemes are so badly designed (in general) that for lots of people currently collecting welfare, working would result either in the same purchasing power, or more likely a net decrease in purchasing power. I don't know the situation in US, but it certainly is like that in France. Unconditional Basic Income means every dollar earned on the job is a dollar (minus x% of taxes) extra spendable income. I believe money to be a better source of motivation than some vague sense of duty.
- "mass immigration": there are already societies living on nearly unconditional basic income, where the only condition is to have the right citizenship -> Qatar, etc. The result is not great for the poor immigrants doing the actual work. This is the IMHO the biggest issue with Unconditional Basic Income: how to make it work when getting it will never be quite that universal, but depends on which side of the border and/or citizenship you're standing?
EDIT: typo
- "at the condition that we suppress all other forms of benefits": mostly agree, except for benefits related to disabilities. I would still make a distinction between people who are able to work, and people who not only cannot work but need help (sometimes costly help) just to stay alive, and everything in-between.
- "this will lead more people to stop working": could be, or it could be the opposite, but it's hard to know without experimenting. Single mothers or fathers working 2 or 3 jobs to make ends meet would probably keep at most one and spend more time with their kid(s). Students would probably just focus on their studies. But on the other hand unemployment benefits and related schemes are so badly designed (in general) that for lots of people currently collecting welfare, working would result either in the same purchasing power, or more likely a net decrease in purchasing power. I don't know the situation in US, but it certainly is like that in France. Unconditional Basic Income means every dollar earned on the job is a dollar (minus x% of taxes) extra spendable income. I believe money to be a better source of motivation than some vague sense of duty.
- "mass immigration": there are already societies living on nearly unconditional basic income, where the only condition is to have the right citizenship -> Qatar, etc. The result is not great for the poor immigrants doing the actual work. This is the IMHO the biggest issue with Unconditional Basic Income: how to make it work when getting it will never be quite that universal, but depends on which side of the border and/or citizenship you're standing?
EDIT: typo
As every other basic income supporter you seem to pay attention only to good things that might happen. Complete disregard for the bad things that might happen. Basically you believe in unicorns and utopias. This is extremely vain. Vanity is the Devil's most favorite sin, as you might have heard from Al Pacino.
You couldn't actually not work in former socialist countries though. At least in the Soviet Union this was actively persecuted. (https://en.wikipedia.org/wiki/Parasitism_%28social_offense%2...)
But I do think think that countries which offer a great deal of socialized benefits (such as Finland, Sweden etc.) have a significant problem with a unemployment in the youngest generation of the labor force.
But I do think think that countries which offer a great deal of socialized benefits (such as Finland, Sweden etc.) have a significant problem with a unemployment in the youngest generation of the labor force.
> But I do think think that countries which offer a great deal of socialized benefits (such as Finland, Sweden etc.) have a significant problem with a unemployment in the youngest generation of the labor force.
Unemployment and youth unemployment are big problems in my area. I don't think the benefits are to blame though. It's just that ends don't meet and we don't have enough jobs.
In fact, there's been a strong push to get the unemployed to "do something" (however useless it is.. it's fine as long as they look busy..) and so now we have people who are more or less forced to work for 9eur a day in order to be eligible for the unemployment benefits. Which puts them well below the minimum wage for typical low income full time jobs.
I've been involved, and I know for a fact that many of these young people are very unhappy about this. They really would rather have a real job if they could.
EDIT: Finland
Unemployment and youth unemployment are big problems in my area. I don't think the benefits are to blame though. It's just that ends don't meet and we don't have enough jobs.
In fact, there's been a strong push to get the unemployed to "do something" (however useless it is.. it's fine as long as they look busy..) and so now we have people who are more or less forced to work for 9eur a day in order to be eligible for the unemployment benefits. Which puts them well below the minimum wage for typical low income full time jobs.
I've been involved, and I know for a fact that many of these young people are very unhappy about this. They really would rather have a real job if they could.
EDIT: Finland
It's curious how the traditional protestant work ethics (laziness is sinful, salvation through hard work, etc.) that have been so useful in the past centuries (Finland being one of the best examples of where a impoverish country can get through hard work and stubbornness) are kicking you in the back now that simply there is no more work to be done.
I suppose that universal income would be much easier to accept, politically and socially, in southern Europe, where living from the state doing the less work possible is already applauded and something a lot of people strive for. Of course, in order to implement something like universal income we would need to get our shit together first, and that is just not going to happen.
Anyway, I wonder if there is a country in the EU with a chance of implementing it in a generation. It should be a country without a big immigration problem, not overly protestant, not too big, with a grip on themselves and their politics... Ireland, maybe?
Outside the EU, Switzerland is the obvious choice (I heard that they are already looking into it). I hope they finally decide to do it as, if it works, it would probably trigger a lot of discussion in all Europe.
I suppose that universal income would be much easier to accept, politically and socially, in southern Europe, where living from the state doing the less work possible is already applauded and something a lot of people strive for. Of course, in order to implement something like universal income we would need to get our shit together first, and that is just not going to happen.
Anyway, I wonder if there is a country in the EU with a chance of implementing it in a generation. It should be a country without a big immigration problem, not overly protestant, not too big, with a grip on themselves and their politics... Ireland, maybe?
Outside the EU, Switzerland is the obvious choice (I heard that they are already looking into it). I hope they finally decide to do it as, if it works, it would probably trigger a lot of discussion in all Europe.
>(such as Finland, Norway, Sweden etc.)
Norway has an unemployment rate of 3.9%... that's lower than the US (much lower if you use U6 as a metric) or UK. In fact, it's one of the lowest in the world.
Source: http://en.wikipedia.org/wiki/List_of_countries_by_unemployme...
Norway has an unemployment rate of 3.9%... that's lower than the US (much lower if you use U6 as a metric) or UK. In fact, it's one of the lowest in the world.
Source: http://en.wikipedia.org/wiki/List_of_countries_by_unemployme...
Yes, it appears I was wrong lumping Norway into there, http://stats.oecd.org/index.aspx?queryid=36499.
> But I do think think that countries which offer a great deal of socialized benefits (such as Finland, Norway, Sweden etc.) have a significant problem with a unemployment in the youngest generation of the labor force.
Youth unemployment in Norway is significantly lower than in the US, using the data from ycharts which should be from here: http://ec.europa.eu/eurostat/statistics-explained/index.php/...
United states: 12.3%
Norway: 8.6%
https://ycharts.com/indicators/norway_youth_unemployment_rat...
https://ycharts.com/indicators/united_states_youth_unemploym...
Edit - I see someone else has already brought this up :)
Youth unemployment in Norway is significantly lower than in the US, using the data from ycharts which should be from here: http://ec.europa.eu/eurostat/statistics-explained/index.php/...
United states: 12.3%
Norway: 8.6%
https://ycharts.com/indicators/norway_youth_unemployment_rat...
https://ycharts.com/indicators/united_states_youth_unemploym...
Edit - I see someone else has already brought this up :)
Call me old fashion but a system that relies on coercion to get people to work isn't viable in my mind.
That is not old fashioned at all. What systems to get people to work do not rely on coercion? Even nature, which got us to work on the first place, did so by coercion.
The only way we can make a society more accommodating is to change the type of coercion to a more gentle one. I.e., instead of working to avoid starvation and being eaten by wild animals people now work to avoid going into debt, losing their preferred place to live and having to rely on food stamps (at least in the US). In a society with basic income they would be coerced to work though social pressure and the desire to have nice things. (Edit: The latter may seem like an intrinsic motivation but in a society with advertising it is one that is actively generated. Advertising may actually gain a new, vital role in getting people to work if a basic income program is implemented.)
The only way we can make a society more accommodating is to change the type of coercion to a more gentle one. I.e., instead of working to avoid starvation and being eaten by wild animals people now work to avoid going into debt, losing their preferred place to live and having to rely on food stamps (at least in the US). In a society with basic income they would be coerced to work though social pressure and the desire to have nice things. (Edit: The latter may seem like an intrinsic motivation but in a society with advertising it is one that is actively generated. Advertising may actually gain a new, vital role in getting people to work if a basic income program is implemented.)
No the alternative is to make people to work by incentives. It is the stick vs the carrot.
I am Swedish and my impression is that the avability of benefits is not the cause of the unemployment. Instead, there appears to be very few jobs left to go around for those who can not or choose not to go through a higher education. Many industries have become significantly more effective through the use of computers, eliminating much of the need for manual labor, for example.
> it is not fun to have grand economic ideas experimented on a live population.
True, but unfortunately there is no other way to test the validity of economic theories. You can't simulate a human society in a lab.
At best, you can start experimenting on a small subset of humans and expand once you're sure that it's safe. Guess what, there have been several UBI experiments in various places ranging from Namibia to Canada, and the results seem promising.
Japan does sound like a good place for large-scale experiments like this. But even that might be too ambitious for now, with 130 million lives at stake. Perhaps we should try Norway, Finland, Switzerland and/or Iceland first.
True, but unfortunately there is no other way to test the validity of economic theories. You can't simulate a human society in a lab.
At best, you can start experimenting on a small subset of humans and expand once you're sure that it's safe. Guess what, there have been several UBI experiments in various places ranging from Namibia to Canada, and the results seem promising.
Japan does sound like a good place for large-scale experiments like this. But even that might be too ambitious for now, with 130 million lives at stake. Perhaps we should try Norway, Finland, Switzerland and/or Iceland first.
The question is whether the money comes out of existing spending or is in addition to it. There's no reason that it couldn't be entirely sourced from existing spending (~36%+ of GDP in US, $6.2T).
One of the better article on subject. It's affordable, though it implies new huge tax. Like tax on land.
Though not sure if people would support that, once they saw the bill for their land. Changing status quo is hard.
Though I would suggest that universal free healthcare is some form of basic income. Maybe let's do it first?
Another less hardcore version is to expand http://en.wikipedia.org/wiki/Earned_income_tax_credit
E.g. Tax rate is negative on initial amount. E.g. You earn $2k and get additional $200 tax refund.
Though not sure if people would support that, once they saw the bill for their land. Changing status quo is hard.
Though I would suggest that universal free healthcare is some form of basic income. Maybe let's do it first?
Another less hardcore version is to expand http://en.wikipedia.org/wiki/Earned_income_tax_credit
E.g. Tax rate is negative on initial amount. E.g. You earn $2k and get additional $200 tax refund.
Warren Buffet is a huge fan of the EITC: http://www.wsj.com/articles/better-than-raising-the-minimum-...
> it implies new huge tax
There are countries (especially Northern Europe) that already spend a large amount of money for unemployment and social benefits. In those countries the basic income could be implemented in a cost-neutral manner, just refactoring how the the sum of money equal to the present benefits, is allotted.
There are countries (especially Northern Europe) that already spend a large amount of money for unemployment and social benefits. In those countries the basic income could be implemented in a cost-neutral manner, just refactoring how the the sum of money equal to the present benefits, is allotted.
Yes, but in USA it wouldn't be possible.
E.g. Total welfare spending in 2015 is $454.3 bln / 318 mln population ~= 1428 $/person/year. That's equivalent of basic income 119 $/month. Want to get to 1000 $/month? Need to increase welfare spending 10 fold.
http://www.usgovernmentspending.com/us_welfare_spending_40.h...
People who get larger number use also pension or health care money. Though I don't think it is a good idea or other people would support that.
E.g. Total welfare spending in 2015 is $454.3 bln / 318 mln population ~= 1428 $/person/year. That's equivalent of basic income 119 $/month. Want to get to 1000 $/month? Need to increase welfare spending 10 fold.
http://www.usgovernmentspending.com/us_welfare_spending_40.h...
People who get larger number use also pension or health care money. Though I don't think it is a good idea or other people would support that.
Wow your math sucks.
First let's take only adults, so it's 230 million, not 318 million population.
And then, let's say for people who earn more than $30 000, or something like that, per year, we increase their taxes the amount equivalent to what basic income would increase their earnings. Now, I am unsure how to estimate the size of this population, because for some reason I easily find only US household income distributions, not distributions per people. But let's guess this removes 60% of the adult population.
So we are left with something like 90 million.
And now we do your calculation: $454.3 bln / 318 = $5000/person/year, or $420/month.
Want to get close to 1000 $/month? Need to increase welfare spending 2-fold
First let's take only adults, so it's 230 million, not 318 million population.
And then, let's say for people who earn more than $30 000, or something like that, per year, we increase their taxes the amount equivalent to what basic income would increase their earnings. Now, I am unsure how to estimate the size of this population, because for some reason I easily find only US household income distributions, not distributions per people. But let's guess this removes 60% of the adult population.
So we are left with something like 90 million.
And now we do your calculation: $454.3 bln / 318 = $5000/person/year, or $420/month.
Want to get close to 1000 $/month? Need to increase welfare spending 2-fold
You didn't need the insult.
Most implementations would include an extra tax curve from no extra tax at $0 income up to $12k per year at say $55k.
The effect is that you need far less than population * $12k per year.
>People who get larger number use also pension or health care money.
I agree we shouldn't be using healthcare. But social security is almost a trillion per year, and it makes sense to phase it out. There's no reason for a forced pension contribution plan when everyone has a guaranteed income.
The effect is that you need far less than population * $12k per year.
>People who get larger number use also pension or health care money.
I agree we shouldn't be using healthcare. But social security is almost a trillion per year, and it makes sense to phase it out. There's no reason for a forced pension contribution plan when everyone has a guaranteed income.
So not only are you giving people money, you are actively incentivizing them not to work by taxing them heavily for doing so. Interesting.
The net income of people earning over, say $55k, would stay unchanged. No heavy taxing here.
Well, no you'd have $12k less. You may have earned $55k, but you would no longer have the initial $12k. So for doing nothing you have $12k, and for doing something you have $55k. Therefore, the value gained in doing something was only $43k even though you did $55k worth of work. That is a heavy tax?
That's a change in opportunity cost, not a tax. If you view anything that causes an increase in the opportunity cost of not working as a tax, you must believe that charities are actively taxing working people.
If a charity moves in and starts offering $1000 dollars worth of free food to anyone who makes below $20k a year, is that charity then taxing everyone who makes above that by $1000 per month?
Also if you do want to view an increase in opportunity cost as a tax increase, you have to look at the actual net increase. There are already benefits that low income people can get, food stamps, housing assistance, earned income tax credit etc... that would go away under a basic income. To properly asses the net opportunity cost increase you have to look at the value difference between these benefits and $12k.
As to your talk about disincentivizing work, the tax curve is just that a curve--instead of the current cliff that many low income workers face. Right now there are situations where are a low income worker can actually make less money by working (or less money by working slightly more) due to current means tested assistance programs.
Replacing means tested assistance with a tax curve and a basic income would ensure that every dollar earned would increase your net income. Again this isn't always the case under our current system.
If a charity moves in and starts offering $1000 dollars worth of free food to anyone who makes below $20k a year, is that charity then taxing everyone who makes above that by $1000 per month?
Also if you do want to view an increase in opportunity cost as a tax increase, you have to look at the actual net increase. There are already benefits that low income people can get, food stamps, housing assistance, earned income tax credit etc... that would go away under a basic income. To properly asses the net opportunity cost increase you have to look at the value difference between these benefits and $12k.
As to your talk about disincentivizing work, the tax curve is just that a curve--instead of the current cliff that many low income workers face. Right now there are situations where are a low income worker can actually make less money by working (or less money by working slightly more) due to current means tested assistance programs.
Replacing means tested assistance with a tax curve and a basic income would ensure that every dollar earned would increase your net income. Again this isn't always the case under our current system.
The only risk in my opinion is if to little people still pick up a job to satisfy the need for all. Also the basic income should need to be basic, so there is some insensitive to work (at least a little). Can be adjusted of course to compensate. IMPORTANT: legal and medical support has to be free for this to not cause epic issues. (And maybe some others I forgot.)
Give me $1000 a month and I'd be able to retire. I wouldn't be rich but with savings and so on I'd be able to manage. So it would cost perhaps $30000 more than that in lost income taxes too as well as lost productivity. I imagine very many people would do this.
The whole whole idea is stupid.
The whole whole idea is stupid.
So you want it or you don't?
Also if you make 1000 a month now, you probably dont pay much taxes.
Also if you make 1000 a month now, you probably dont pay much taxes.
And someone younger than you without savings would step in to fill your role. Youth unemployment in first world countries is very high right now.
I imagine the idea is great and most people are not like you. But that is just my imagination. On the other hand, the article presents very good arguments for the system and why would it work.
I would too. I'd do so immediately. And what would I do with all that leisure time? I'd teach the local children robotics with Arduinos and RasPis, just like I do now with every scrap of my meager free-time only then I'd get to do it every day.
Imagine how impoverished the world would become if thousands like me took to a life of such mooching!
Imagine how impoverished the world would become if thousands like me took to a life of such mooching!
The more of you who take this deal, the better I and everyone else is. You're so uninvested in what you do for a living you'd stop for $1K/mo? Good riddance. You're a drag on anyone who's actually trying to get shit done. The rest of us will be more productive, and happier, not fucking with you. We'll happily pay higher taxes to get you out of our way.
I'm generally a fan of this idea, as long as its implemented correctly.
At the moment lots of western countries, spend billions on welfare entitlement, and billions more administering a complex system, so that politicans can change particular benefits to win votes from certian groups of voters.
Under this system, all benefits are replaced with a single, universal level, so politicans can give rises either to everyone, or no one. (The only additional benefits should be for those with serve disabilities).
You also lose the withdrawal issues of going from out of work, to in work, you can get rid of things like minimum wages, as their not needed any more, and you can support a more flexible labour market.
Politicans cannot fight over, how particular benefits can change, say increase pensions, but cut unemployment.
If you also merge this into the tax system, with a flat tax as a negative income tax, it is even more efficient.
And eventually you also get what alot of people on the right want - a smaller, more efficient goverment, while doing what alot of people on the left want.
At the moment lots of western countries, spend billions on welfare entitlement, and billions more administering a complex system, so that politicans can change particular benefits to win votes from certian groups of voters.
Under this system, all benefits are replaced with a single, universal level, so politicans can give rises either to everyone, or no one. (The only additional benefits should be for those with serve disabilities).
You also lose the withdrawal issues of going from out of work, to in work, you can get rid of things like minimum wages, as their not needed any more, and you can support a more flexible labour market.
Politicans cannot fight over, how particular benefits can change, say increase pensions, but cut unemployment.
If you also merge this into the tax system, with a flat tax as a negative income tax, it is even more efficient.
And eventually you also get what alot of people on the right want - a smaller, more efficient goverment, while doing what alot of people on the left want.
I think if you could see close-up how these systems work now, you'd be convinced that it's completely not worth the vast cost (in time, energy, money) to try and figure out who "deserves" each of the many, many special benefits/allowances/exemptions available (plus it's incredibly difficult for potential recipients to figure out what they're eligible for, plus it imposes those costs on the people who aren't eligible, but end up having to jump through all the same hoops.)
Based on my experience in the last year working on healthcare.gov etc., I think it's become increasingly clear that the implementation of well-meaning policies intended to separate the deserving from the undeserving ends up adding an incredible amount of complexity and overhead, along with unintentional side effects, edge cases, and bad incentives.
That said, there's no way politically a basic income is going to fly in the US anytime soon. So since this is HN... is there any way to get to an MVP without having a sovereign state to experiment with? Or is this solely in the realm of public policy?
(I asked this a while back on another BI thread, trying again)
Based on my experience in the last year working on healthcare.gov etc., I think it's become increasingly clear that the implementation of well-meaning policies intended to separate the deserving from the undeserving ends up adding an incredible amount of complexity and overhead, along with unintentional side effects, edge cases, and bad incentives.
That said, there's no way politically a basic income is going to fly in the US anytime soon. So since this is HN... is there any way to get to an MVP without having a sovereign state to experiment with? Or is this solely in the realm of public policy?
(I asked this a while back on another BI thread, trying again)
In addition, every rule to catch the "undeserving" will catch some people who really do need the help and who you were trying to help in the first place.
> So since this is HN... is there any way to get to an MVP without having a sovereign state to experiment with? Or is this solely in the realm of public policy?
Possibly a daft idea, but what if a company paid by the hour worked (or some other measure of work produced), but had a minimum that was always paid even if you didn't work.
Rules:
1. Nobody gets fired for not working.
2. You can get fired if you attack / something else normally fireable not related to your work itself.
3. No other jobs on the side? Less sure about that one. Could be interesting to support people trying something new but with the ability to do work on the side for you or come back. Paradoxically, I think that knowing you can leave but come back reduces the chance you'll leave forever. Quite a few careers allow sabbaticals of a year for this reason.
Sort of similar to:
1. Everyone gets BI
2. You don't get it if you're in prison
3. You can't go and live in another country and still receive it
> So since this is HN... is there any way to get to an MVP without having a sovereign state to experiment with? Or is this solely in the realm of public policy?
Possibly a daft idea, but what if a company paid by the hour worked (or some other measure of work produced), but had a minimum that was always paid even if you didn't work.
Rules:
1. Nobody gets fired for not working.
2. You can get fired if you attack / something else normally fireable not related to your work itself.
3. No other jobs on the side? Less sure about that one. Could be interesting to support people trying something new but with the ability to do work on the side for you or come back. Paradoxically, I think that knowing you can leave but come back reduces the chance you'll leave forever. Quite a few careers allow sabbaticals of a year for this reason.
Sort of similar to:
1. Everyone gets BI
2. You don't get it if you're in prison
3. You can't go and live in another country and still receive it
There's been a few aid projects towards impoverished villages in Africa that have a BI setup. There's also Alaska and some other natural resource based payments.
In general I think BI is the social safety net equivalent of Greenspun's Tenth Rule:
Any sufficiently complicated social welfare program contains an ad hoc, informally-specified, bug-ridden, slow implementation of half of Basic Income.
So getting there may be a case of slowly making existing benefits more universal, more cash based etc. I think one suggestion was to just keep lowering the retirement age as BI and state pensions are roughly analogous.
In general I think BI is the social safety net equivalent of Greenspun's Tenth Rule:
Any sufficiently complicated social welfare program contains an ad hoc, informally-specified, bug-ridden, slow implementation of half of Basic Income.
So getting there may be a case of slowly making existing benefits more universal, more cash based etc. I think one suggestion was to just keep lowering the retirement age as BI and state pensions are roughly analogous.
> unintentional side effects, edge cases, and bad incentives.
I'm reminded of Department of Agriculture v. Moreno (http://en.wikipedia.org/wiki/Department_of_Agriculture_v._Mo...). Congress passed a law refusing food stamps to people who lived in shared housing with non-relatives. Of course this was targeting hippies (which is illegitimate in itself--to quote the majority, "a bare congressional desire to harm a politically unpopular group cannot constitute a legitimate governmental interest"), but it naturally hit the very poor especially hard.
I'm reminded of Department of Agriculture v. Moreno (http://en.wikipedia.org/wiki/Department_of_Agriculture_v._Mo...). Congress passed a law refusing food stamps to people who lived in shared housing with non-relatives. Of course this was targeting hippies (which is illegitimate in itself--to quote the majority, "a bare congressional desire to harm a politically unpopular group cannot constitute a legitimate governmental interest"), but it naturally hit the very poor especially hard.
Couldn't anyone just start a non-profit with an endowment like a college? All profits get proportionally distrubuted to each citizen, and anything unclaimed in reinvested to grow the pot further.
I think the toughest part of the MVP is the 'citizenship verification' or whatever method you use to make sure people don't collect more than once. Partnering with an identity theft protection company might be a good way to outsource authentication.
I think the toughest part of the MVP is the 'citizenship verification' or whatever method you use to make sure people don't collect more than once. Partnering with an identity theft protection company might be a good way to outsource authentication.
My MVP is to eliminate federal taxes on the first $50k a year in income.
One reason why I am currently not so much in favor of UBI is immigration. I have three uncommon beliefs about immigration:
First, I don't believe the idea of human rights allows a state to tell people where they are allowed or forbidden to live.
Secondly, I don't believe immigration controls are ultimately feasible. In the US this is obvious in the big population of illegal immigrants, other countries are also discovering that they can't really stop people from entering and that hunting down and deporting hundreds of thousands of people is harder than it looks.
Thirdly, I don't believe a society can save money by withholding social welfare to someone who lives among them. The cost in health care, crime, and lost potential may very well outpace the savings.
I also believe a UBI would force countries to try and tighten their immigration controls. The problem is not so much that the immigrants wouldn't ultimately benefit that society, but the upfront payments and increased financial risks are just scary as hell.
First, I don't believe the idea of human rights allows a state to tell people where they are allowed or forbidden to live.
Secondly, I don't believe immigration controls are ultimately feasible. In the US this is obvious in the big population of illegal immigrants, other countries are also discovering that they can't really stop people from entering and that hunting down and deporting hundreds of thousands of people is harder than it looks.
Thirdly, I don't believe a society can save money by withholding social welfare to someone who lives among them. The cost in health care, crime, and lost potential may very well outpace the savings.
I also believe a UBI would force countries to try and tighten their immigration controls. The problem is not so much that the immigrants wouldn't ultimately benefit that society, but the upfront payments and increased financial risks are just scary as hell.
I agree on 1 and 2, but don't see how 3 follows. If you live as an "illegal immigrant" you are playing life on a higher difficulty level already. UBI wouldn't apply to non-citizens.
Of course you might argue that it very well should, but that to me is a different argument that comes at a way later stage.
EDIT: I believe this argument is confusing how the world should be with how the world can feasibly be at this point in time. Baby-steps :)
Of course you might argue that it very well should, but that to me is a different argument that comes at a way later stage.
EDIT: I believe this argument is confusing how the world should be with how the world can feasibly be at this point in time. Baby-steps :)
The biggest problem with paying welfare to immigrants is that it has to be paid upfront, long before there is a profit or cost reduction compared to not paying it.
The problems with not paying are manifold: They are an underclass, without most rights and very poor. A proper healthcare system can't refuse them treatments, for all sorts of reasons, and poverty and lack of rights just increase health care costs. Then there is the lost potential: Those people do have children, often naturalized, or not, living in the country, but not getting the care, food and education they need, which also means they don't fulfill their potential benefits to society.
I think refusing children basic welfare is about the stupidest thing a society can do. Both for financial and for humanistic reasons. It is completely irrelevant whose children they are.
The problems with not paying are manifold: They are an underclass, without most rights and very poor. A proper healthcare system can't refuse them treatments, for all sorts of reasons, and poverty and lack of rights just increase health care costs. Then there is the lost potential: Those people do have children, often naturalized, or not, living in the country, but not getting the care, food and education they need, which also means they don't fulfill their potential benefits to society.
I think refusing children basic welfare is about the stupidest thing a society can do. Both for financial and for humanistic reasons. It is completely irrelevant whose children they are.
"And the Gods of the Copybook Headings, I notice, outlast them all."
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."
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."
In principle I like the idea, but :
- the System (corporations / politicians) will never allow it
- we're on a planet with limited resources and all economic theories fail to acknowledge that
- the System (corporations / politicians) will never allow it
- we're on a planet with limited resources and all economic theories fail to acknowledge that
The basis of economics is to study unlimited needs with limited resources, so all economic theories take that into account.
I'd say that simple understandings of economic theories fail to acknowledge limited physical resources. But most "theories" I know don't even talk about limited physical resources.
Economic growth is about "value", not necessarily "consumption of physical resources".
Economic growth is about "value", not necessarily "consumption of physical resources".
The planet offers basically unlimited resources. Assuming the population stops growing, as it is predicted, and settles at some reasonable number, then only limit is the expiration date of the sun.
I read somewhere that the max number of sustainable human pop on earth is around one billion ...
And unlimited resources, you have to be ready to wait about 500 millions years to get oil to renew !
And unlimited resources, you have to be ready to wait about 500 millions years to get oil to renew !
"In Russia, they thought everyone should have bread. That was a decision made by those in power, and they then tried to make that happen, whether everyone wanted bread or not. This did not work so well, and there were shortages."
So they produced bread, but then there were shortages? This doesn't make sense.
There is something that we could call "The Central-Planner's Dilemma".
People need shoes. Hence, there are people who will be looking to get into the business of supplying shoes. If you find a way to get shoes, and then sell them for more than it cost you, you can buy nice things and that impresses the ladies. You get entire firms dedicated to small problems like shoes for kids, business shoes, variations that suit people with wide feet. Market economies are like the mold on your bathroom ceiling - they just happen.
In Russia, the government went to great lengths to stifle that dynamic. They said: all people will need shoes, so the government will supply shoes to meet their need. Everyone will work together to give the government all the resources to do this. If you try divert resources from our project by getting into the shoe business, we'll shoot you.
So it's a new game. Now if you want to get the ladies, you need to become the resource allocation guy.
But let's assume that you are the planner, and that your motives are pure. You're a really good guy, and you do this for the sheer love of people having shoes. Here's the Dilemma: how do you convert the need of the people to the reality of the goods you're getting to them. This is crazy difficult.
To start with, how do you get signal about what the people need? This is hard. You could have a shot at it, by judging birth rates in regions, and getting height variation. You could send out teams to measure foot dimensions and then run statistical variance on sizes.
Then you'd needs to communicate that intent to the factories. And then the factories need to execute at producing the things that they should be producing. And then you need to somehow get the goods from the different factories through to the correct regions.
You're doing all this through a fog of politics, because jobs in resource-allocation are the only game in town, and everyone wants a piece of it.
The Alan Greenspan biography includes a neat section where he got to meet /the/ Russian central planner after the thaw. As in - the guy who sits in the room and decides how many shoes to produce. He describes a complicated mechanisms he set up to plan things. It's a good read.
So they produced bread, but then there were shortages? This doesn't make sense.
There is something that we could call "The Central-Planner's Dilemma".
People need shoes. Hence, there are people who will be looking to get into the business of supplying shoes. If you find a way to get shoes, and then sell them for more than it cost you, you can buy nice things and that impresses the ladies. You get entire firms dedicated to small problems like shoes for kids, business shoes, variations that suit people with wide feet. Market economies are like the mold on your bathroom ceiling - they just happen.
In Russia, the government went to great lengths to stifle that dynamic. They said: all people will need shoes, so the government will supply shoes to meet their need. Everyone will work together to give the government all the resources to do this. If you try divert resources from our project by getting into the shoe business, we'll shoot you.
So it's a new game. Now if you want to get the ladies, you need to become the resource allocation guy.
But let's assume that you are the planner, and that your motives are pure. You're a really good guy, and you do this for the sheer love of people having shoes. Here's the Dilemma: how do you convert the need of the people to the reality of the goods you're getting to them. This is crazy difficult.
To start with, how do you get signal about what the people need? This is hard. You could have a shot at it, by judging birth rates in regions, and getting height variation. You could send out teams to measure foot dimensions and then run statistical variance on sizes.
Then you'd needs to communicate that intent to the factories. And then the factories need to execute at producing the things that they should be producing. And then you need to somehow get the goods from the different factories through to the correct regions.
You're doing all this through a fog of politics, because jobs in resource-allocation are the only game in town, and everyone wants a piece of it.
The Alan Greenspan biography includes a neat section where he got to meet /the/ Russian central planner after the thaw. As in - the guy who sits in the room and decides how many shoes to produce. He describes a complicated mechanisms he set up to plan things. It's a good read.
I agree that the Russia bread story makes no sense. There's actually not enough bread in either Capitalist America either, since people also starve.
This video is a must-see for people interested in UBI - Milton Friedman, in 1968, on a negative income tax: https://www.youtube.com/watch?v=xtpgkX588nM
Have the economic consequences been studied on a deeper level? There are so many complex correlations in economics that I'm afraid Basic Income can lead to some kind of disaster that's not so obvious at a first glance. How does it affect the national export/import, monetary value, growth, tax income, GDP, housing market, demand/supply on jobs/goods in different sectors etc etc?
This article touches those things, which is refreshing compared to most things written about BI, but I would still like to see a real study.
This article touches those things, which is refreshing compared to most things written about BI, but I would still like to see a real study.
Not trying to be glib, but you can probably find lots of papers over the past few decades that try to tackle those questions
https://scholar.google.com/scholar?hl=en&q=basic+income&btnG...
https://scholar.google.com/scholar?hl=en&q=basic+income&btnG...
If you'd told me ten years ago I would ever support a basic income, I would have laughed. My thought would have been, "People getting paid without doing anything? Absurd!" But, in the past few years I've thoroughly changed my mind on this, and a number of other fronts. I now fully support a basic income (though I think a debate needs to happen about how much that basic income ought to be and how it ought to be funded, I'm well past the point where I think we should be discussing whether it ought to happen).
Partly this has been because I did some traveling (a lot of traveling; fulltime for four years, in a motorhome). I spent a lot of time in places that aren't Silicon Valley or other thriving metropolis. Detroit, Slab City, New Orleans, a variety of rural places. There are people who have been completely pushed out of the legitimate economy or merely scrape by at the very bottom, for a variety of reasons. And, it's not a small number of people. It is huge swaths of the population (as much as 39%, based on the poverty line, but more or less, depending on how you define it). That's not sustainable, ethical, or efficient.
The CEO to worker pay gap has also contributed to my changing view on this. When a full-time (or part-time who holds another job) Walmart worker doesn't earn enough to rent a tiny apartment and pay for basic expenses, while the CEO makes orders of magnitude more, it becomes apparent there needs to be other ways to push the income down. If corporations won't behave ethically by choice, there needs to be outside pressure. Increasing efficiency and increasing revenue has not resulted in improved quality of life for workers; and that is mostly reflected across the board. It is not merely egregious examples like Walmart. Even many "good" companies have horrible pay gaps and little loyalty to their employees (while expecting loyalty and dedication in return).
And, that doesn't really even begin to address the changing nature of work. Many skilled work roles, those jobs that the American middle class was built on, have disappeared from the US economy in my lifetime, and this hasn't been reflected in a subsequent increase in pay or benefits for lower-skilled labor jobs that replaced them (and some of those jobs were not replaced...they just don't exist anymore). All while real estate prices and rents have gone through the roof. So, again, large swaths of the population, the kind of people who could have been middle class home owners in previous generations with reasonable retirement savings, are now renters who live paycheck to paycheck, or worse, live on credit. There's certainly room to talk about why the real estate market is as lopsided as it is. And, there may be room to talk about increasing skills in people who currently work low-skill jobs (though, evidence indicates there are many categories of job that are simply not going to exist in the future). Again, it's not sustainable, ethical, or efficient to have so many people living in poverty.
Finally, we already spend a couple trillion dollars on welfare programs. The increased cost for extending that type of benefit to everyone, while removing the bureaucracy of maintaining the existing programs (eligibility compliance and case workers, etc.), is actually not as dramatic as it first seems.
Partly this has been because I did some traveling (a lot of traveling; fulltime for four years, in a motorhome). I spent a lot of time in places that aren't Silicon Valley or other thriving metropolis. Detroit, Slab City, New Orleans, a variety of rural places. There are people who have been completely pushed out of the legitimate economy or merely scrape by at the very bottom, for a variety of reasons. And, it's not a small number of people. It is huge swaths of the population (as much as 39%, based on the poverty line, but more or less, depending on how you define it). That's not sustainable, ethical, or efficient.
The CEO to worker pay gap has also contributed to my changing view on this. When a full-time (or part-time who holds another job) Walmart worker doesn't earn enough to rent a tiny apartment and pay for basic expenses, while the CEO makes orders of magnitude more, it becomes apparent there needs to be other ways to push the income down. If corporations won't behave ethically by choice, there needs to be outside pressure. Increasing efficiency and increasing revenue has not resulted in improved quality of life for workers; and that is mostly reflected across the board. It is not merely egregious examples like Walmart. Even many "good" companies have horrible pay gaps and little loyalty to their employees (while expecting loyalty and dedication in return).
And, that doesn't really even begin to address the changing nature of work. Many skilled work roles, those jobs that the American middle class was built on, have disappeared from the US economy in my lifetime, and this hasn't been reflected in a subsequent increase in pay or benefits for lower-skilled labor jobs that replaced them (and some of those jobs were not replaced...they just don't exist anymore). All while real estate prices and rents have gone through the roof. So, again, large swaths of the population, the kind of people who could have been middle class home owners in previous generations with reasonable retirement savings, are now renters who live paycheck to paycheck, or worse, live on credit. There's certainly room to talk about why the real estate market is as lopsided as it is. And, there may be room to talk about increasing skills in people who currently work low-skill jobs (though, evidence indicates there are many categories of job that are simply not going to exist in the future). Again, it's not sustainable, ethical, or efficient to have so many people living in poverty.
Finally, we already spend a couple trillion dollars on welfare programs. The increased cost for extending that type of benefit to everyone, while removing the bureaucracy of maintaining the existing programs (eligibility compliance and case workers, etc.), is actually not as dramatic as it first seems.
I agree with you, but how do you propose going about giving this underclass the leverage they need to make this happen? Short of encouraging them to kill rich people of course, which anyway would get you killed or neutralized long before you had any hope of success. Our system is simply not set up to reliably make changes for the benefit of people with no leverage over it in the first place.
One idea is to make S&P as a company and every citizen under a certain (family) income bracket are allocated non-tradeable equal share in that company. Every listed company is to pay an amount equal to some formula derived from its share price and market value. The money collected every year in the pool is then divided among all shareholders equally.
- Mandate all entities to get listed and traded. Otherwise tax at a punishable rate. - Simplify reporting obligations so listing is not painful. - Reduce corporate tax to a fixed amount under-20 percent and income-tax under-15 percent so companies and individuals have incentive to register and get listed.
This would ties the single most important metric of capitalism, share price, to the democracy that makes capitalism possible at first place. Also all derivatives or executive compensation, investor returns are related to share price.
The division is periodically reassessed as people join or leave pool.
- Mandate all entities to get listed and traded. Otherwise tax at a punishable rate. - Simplify reporting obligations so listing is not painful. - Reduce corporate tax to a fixed amount under-20 percent and income-tax under-15 percent so companies and individuals have incentive to register and get listed.
This would ties the single most important metric of capitalism, share price, to the democracy that makes capitalism possible at first place. Also all derivatives or executive compensation, investor returns are related to share price.
The division is periodically reassessed as people join or leave pool.
It's almost as if we need some sort of . . . vanguard . . . for the proletariat.
I have no idea. Systems of oppression do tend to do whatever it takes to maintain the status quo.
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The underclass can't. The system's default state as it functions now is to eliminate the "extra" people with depravation. Soon technology will make nearly everyone extra. So the best case scenario for the current system is that these extra people are quietly starved out while a very very few prosper beyond current imagination. History does not suggest it will play out this way. Far more likely is a revolution that will make the French revolution of recent history seem like a mild heckling.
Many of the rich are worthless rent-seekers who probably deserve no less but some of those rich will be the people who bring the technology in the first place. If a revolution happens it will wipe out most of human progress. Enlightened self interest by the people on top is probably our best chance.
I'm with Joe on this one. We're in the tough spot of discovering that our present economic system is becoming unsustainable and all the other ones we've tried so far have been much worse. UBI is the best idea I've heard so far.
Many of the rich are worthless rent-seekers who probably deserve no less but some of those rich will be the people who bring the technology in the first place. If a revolution happens it will wipe out most of human progress. Enlightened self interest by the people on top is probably our best chance.
I'm with Joe on this one. We're in the tough spot of discovering that our present economic system is becoming unsustainable and all the other ones we've tried so far have been much worse. UBI is the best idea I've heard so far.
I live in New Orleans. Black male unemployment (excluding those jailed) is hovering around 50%.
And, among people who are employed, they are often paid so poorly as to still be below the poverty line.
I supported guaranteed basic income as well, but then I read this article and it suggested to tax me more. I'm firmly in tax less, not more camp.
I lived outside the USA for 6 years. There's definitely a cost to doing so- for instance, not having Amazon or the inexpensive goods we often have. But that cost is less than a doubling of my taxes. A basic income as proposed in the article, as I understand it, would triple income taxes. (or have the same effect via inflation if they just print the money.)
> * A basic income as proposed in the article, as I understand it, would triple income taxes.*
You don't understand it.
You don't understand it.
Yes, I forgot about the magical money tree. You know, social security, "war on poverty" and all that counted on the magical money tree too. And you know what you got? More poverty?
When are you guys going to stop making the same mistake over and over again? There really is no excuse for it.
When are you guys going to stop making the same mistake over and over again? There really is no excuse for it.
Some one needs to pay for it. Well this is where things like minimum wage and guaranteed income go wrong. Why would any one work more hard to make a extra money, only to be taxed and given to people who don't wish to even try working and want to have fun all the time.
Guess what happens to such societies. People who want to make more money go elsewhere where they are valued better. Eventually back in their original country everybody gets equally poor over time.
Guess what happens to such societies. People who want to make more money go elsewhere where they are valued better. Eventually back in their original country everybody gets equally poor over time.
Truthfully, all first world countries are gradually applying more and more welfare laws so there's no where to really escape to unless you want to live in say the Saychelles or Cyphrus or another tax-haven.
Now its certainly fine for your money to live in the Saychelles, but many people value their home country for its people and you don't get that value without actually living amongst them.
Now its certainly fine for your money to live in the Saychelles, but many people value their home country for its people and you don't get that value without actually living amongst them.
>>Truthfully, all first world countries are gradually applying more and more welfare laws so there's no where to really escape to unless you want to live in say the Saychelles or Cyphrus or another tax-haven.
I come from a country(India) where generations of some very smart people have left to come and stay in the US. Guess Why? For a lot of time, it was pointless to even start a business in India(Given taxes and regulations). Add to this welfare laws like reservations, subsidies and freebies. You get at least 5 to 6 decades of very brilliant people leaving the country to never return again. The brain drain is still on, it hasn't stopped yet. All due to welfare policies.
Its taking decades more to fix that problem. I can assure you all those welfare laws ultimately led to far bigger problem they tried to solve.
US born citizens have no first hand experience of this. Nor do they have an idea of what it feels to live in such a country.
These words may look harsh. But the reality on the ground for such societies is very far from what you might have read in the books or articles online.
I come from a country(India) where generations of some very smart people have left to come and stay in the US. Guess Why? For a lot of time, it was pointless to even start a business in India(Given taxes and regulations). Add to this welfare laws like reservations, subsidies and freebies. You get at least 5 to 6 decades of very brilliant people leaving the country to never return again. The brain drain is still on, it hasn't stopped yet. All due to welfare policies.
Its taking decades more to fix that problem. I can assure you all those welfare laws ultimately led to far bigger problem they tried to solve.
US born citizens have no first hand experience of this. Nor do they have an idea of what it feels to live in such a country.
These words may look harsh. But the reality on the ground for such societies is very far from what you might have read in the books or articles online.
"All due to welfare policies."
Really, all due to welfare policies? It doesn't have anything to do with India's colonial history, corruption, inconsistency in the legal infrastructure for new business vs. old established business, etc.? (I'm genuinely asking. I am not at all an expert on India's business climate, but I know that most of my friends who have immigrated to the US from other places, including India, to start companies did so for a wide variety of reasons, and none of them ever said it was because of welfare.)
Really, all due to welfare policies? It doesn't have anything to do with India's colonial history, corruption, inconsistency in the legal infrastructure for new business vs. old established business, etc.? (I'm genuinely asking. I am not at all an expert on India's business climate, but I know that most of my friends who have immigrated to the US from other places, including India, to start companies did so for a wide variety of reasons, and none of them ever said it was because of welfare.)
You need to ask why people ask for bribes. What happens when there are not enough opportunities/jobs/good-paying-jobs. Everybody tries to squeeze as much as they possibly can out whatever opportunity they can, any way they can. Because the perception is opportunities being scanty, and earning opportunities being rare, anybody would act at the same level of dishonesty.
In a society of abundance stealing/corruption rarely makes sense.
In a society of abundance stealing/corruption rarely makes sense.
What percentage of government revenue and GDP is being lost to Mandal, etc, versus the coal scam, the power scam in Delhi that Kejriwal tried to expose, the cell spectrum scam, etc, freebies to Reliance and Ambani?
Like I mentioned above, the root of corruption is lack of opportunities.
If there are things in abundance, the desperation that drives people to resort to corruption reduces.
If there are things in abundance, the desperation that drives people to resort to corruption reduces.
You can't seriously tell me Ambani and Raja were lacking in opportunities.
Do you seriously think Raja is the only guy who got all the money? Or when a traffic constable demands bribe, do you think they keep all the money for themselves. That kind of money goes into every one's pocket.
How do you think political parties can distribute free laptops and televisions. What do you have to say of those people who literally brave a stampede for these freebies, free liquor and food.
I hope this was as simple as a few people greedy people stealing all the money, it would all end by just putting them in prison. In reality this is a more serious and deep problem.
How do you think political parties can distribute free laptops and televisions. What do you have to say of those people who literally brave a stampede for these freebies, free liquor and food.
I hope this was as simple as a few people greedy people stealing all the money, it would all end by just putting them in prison. In reality this is a more serious and deep problem.
> The increased cost for extending that type of benefit to everyone, while removing the bureaucracy of maintaining the existing programs (eligibility compliance and case workers, etc.), is actually not as dramatic as it first seems.
You are missing one part, though. If you start giving cash for everyone, it's very likely this will result in raising prices for all commodities. And there you go for a another downward spiral, where you have to readjust the basic income every couple of years to make up for the inflated prices.
Ever heard of minimum wage? Yeah, that one did not work as expected either (and created massive unemployment when the threshold was set too high as well).
You are missing one part, though. If you start giving cash for everyone, it's very likely this will result in raising prices for all commodities. And there you go for a another downward spiral, where you have to readjust the basic income every couple of years to make up for the inflated prices.
Ever heard of minimum wage? Yeah, that one did not work as expected either (and created massive unemployment when the threshold was set too high as well).
> it's very likely this will result in raising prices for all commodities.
Why is that? There wouldn't be any more money in circulation. It's not like a state would print money to supply basic income. It would have to be tax funded, so most likely other public spending would have to be reduced, and taxes would be increased.
If the basic income represents a progressive transfer from high-income to low-income (most likely) then you will see an income in spending simply due to the fact that high-income earners would probably save/invest the last $1000 rather than spending it on essentials such as food, but if the same money was distributed it is more likely to be spent. This is normally considered a good thing, (one of the most positive aspects of a progressive tax system).
Why is that? There wouldn't be any more money in circulation. It's not like a state would print money to supply basic income. It would have to be tax funded, so most likely other public spending would have to be reduced, and taxes would be increased.
If the basic income represents a progressive transfer from high-income to low-income (most likely) then you will see an income in spending simply due to the fact that high-income earners would probably save/invest the last $1000 rather than spending it on essentials such as food, but if the same money was distributed it is more likely to be spent. This is normally considered a good thing, (one of the most positive aspects of a progressive tax system).
> Why is that?
Because the market adjust prices based on an equilibrium between what people usually earn and how much they are willing to spend. If you increase the money supply (not talking about nation-wide, but individual base) then there is nothing preventing manufacturers from raising their prices up and take advantage of it, while still being fair ("after all, everyone has minimum income now so they should be able to afford it anyway").
Unless, you know, you have to fix the prices of commodities. And then, penuries and shortages occur. History likes to rhyme.
Because the market adjust prices based on an equilibrium between what people usually earn and how much they are willing to spend. If you increase the money supply (not talking about nation-wide, but individual base) then there is nothing preventing manufacturers from raising their prices up and take advantage of it, while still being fair ("after all, everyone has minimum income now so they should be able to afford it anyway").
Unless, you know, you have to fix the prices of commodities. And then, penuries and shortages occur. History likes to rhyme.
Pricing is decided mostly by supply and demand not by will. Your rent doesnt increase when you get a payraise and your landlord finds out about it.
Food is a very competitive industry, and unless you are suggesting that to keep it balanced we need some people to not eat, its unlikely that people spending more money on food will raise food prices to a point where it is unattainable.
I dont get this "prices go up" argument at all, is there a name to it? (dont say its inflation because that is related to money supply, not market supply/demand)
Food is a very competitive industry, and unless you are suggesting that to keep it balanced we need some people to not eat, its unlikely that people spending more money on food will raise food prices to a point where it is unattainable.
I dont get this "prices go up" argument at all, is there a name to it? (dont say its inflation because that is related to money supply, not market supply/demand)
Yes, it's called demand. And inflation is an example of it, you increase the money supply, then there are more dollars chasing a given commodity-- more demand for that commodity per dollar, or looked at the other way, more supply of dollars relate to that commodity.
If we paid for this basic income via inflation -- increasing the money supply-- the result is that, for instance, food would go up. Not so much that it is "unattainable" as you point out, but it will go up a bit more than the net effect of the basic income, wiping it out, plus a bit more due to inefficiencies that always happen when you try to distort the market.
If we paid for this basic income via inflation -- increasing the money supply-- the result is that, for instance, food would go up. Not so much that it is "unattainable" as you point out, but it will go up a bit more than the net effect of the basic income, wiping it out, plus a bit more due to inefficiencies that always happen when you try to distort the market.
>If we paid for this basic income via inflation -- increasing the money supply
No one here is arguing that a basic income should be paid for through inflation.
There is a difference between inflation and income redistribution.
>but it will go up a bit more than the net effect of the basic income, wiping it out
Yes, if we paid for it by inflation, but the argument is to pay for through some kind of income/wealth redistribution. Food should have basically the same effect, and you'll note that they haven't driven up the price of food a bit more than their net effect.
No one here is arguing that a basic income should be paid for through inflation.
There is a difference between inflation and income redistribution.
>but it will go up a bit more than the net effect of the basic income, wiping it out
Yes, if we paid for it by inflation, but the argument is to pay for through some kind of income/wealth redistribution. Food should have basically the same effect, and you'll note that they haven't driven up the price of food a bit more than their net effect.
>No one here is arguing that a basic income should be paid for through inflation.
Actually, I kind of am!
I suggest that we absurdly just give $1MM to everyone and ask what would happen to prices. They'd skyrocket of course. But what else would happen?
Consider an economy with just 2 people. One with a net worth of $7500 and the other with $10MM. Give them each $1MM. What happens to their wealth relative to each other? The less the first guy has, the more it does for him. (Even if its done simply by "printing money".)
"Give everyone a million bucks" doesn't seem so outrageous to me after all. Sounds like swinging a giant scythe at inequality if you ask me.
Its like a fine work of un-dodge-able flat tax and a social safety net all in one. This is why I like UBI.
Actually, I kind of am!
I suggest that we absurdly just give $1MM to everyone and ask what would happen to prices. They'd skyrocket of course. But what else would happen?
Consider an economy with just 2 people. One with a net worth of $7500 and the other with $10MM. Give them each $1MM. What happens to their wealth relative to each other? The less the first guy has, the more it does for him. (Even if its done simply by "printing money".)
"Give everyone a million bucks" doesn't seem so outrageous to me after all. Sounds like swinging a giant scythe at inequality if you ask me.
Its like a fine work of un-dodge-able flat tax and a social safety net all in one. This is why I like UBI.
The problem is that the $10MM likely isn't held in cash, it would be held in primarily assets like stocks that are resistant to inflation.
Currently the government is spending via inflation far more than it takes in from taxes. So, if you want to add $3.6Trillion to the budget-- more than doubling it-- in order to give everyone in the USA $12k a year, it's going to have to come from somewhere.... and I don't think you can get that much by raising taxes. Since income from taxes is around $1.4T [1] you're talking about more than tripling those taxes.
For many people who are on a lower income that alone will wipe out much of the improvement from basic income.
And for people who have a lot more money, tripling income taxes will produce all kinds of consequences that lead to reduced tax income. (Laffer curve and all that.)
For instance, I would simply move to another country, form a corporation there, and earn all my income thru that corporation. And I'm not even rich, but I'm currently giving up %20 of my income-- you start taking %60 and I consider that slavery.
So, whether you intend to or not, you're talking about inflation... because you can't pass something like that size of a tax increase.
[1] https://en.wikipedia.org/wiki/United_States_federal_budget#/...
Edit- I see you edited. Yes, food stamps have driven up the price of food, this is one of the things that's making it hard for people to make ends meet-- food is too expensive, and even for poor people their taxes are too high, not just income but all the built in taxes that show up in the price of food, etc, because the companies have to pay taxes, they have to pay their employees more so their employees can pay taxes, etc.
Raising taxes raises prices too, because it raises costs for everybody.
Price increases come from many factors, including supply vs demand, but also cost of production. And all income and corporate taxes, as well as burdensome regulations, increase the cost of production.
For many people who are on a lower income that alone will wipe out much of the improvement from basic income.
And for people who have a lot more money, tripling income taxes will produce all kinds of consequences that lead to reduced tax income. (Laffer curve and all that.)
For instance, I would simply move to another country, form a corporation there, and earn all my income thru that corporation. And I'm not even rich, but I'm currently giving up %20 of my income-- you start taking %60 and I consider that slavery.
So, whether you intend to or not, you're talking about inflation... because you can't pass something like that size of a tax increase.
[1] https://en.wikipedia.org/wiki/United_States_federal_budget#/...
Edit- I see you edited. Yes, food stamps have driven up the price of food, this is one of the things that's making it hard for people to make ends meet-- food is too expensive, and even for poor people their taxes are too high, not just income but all the built in taxes that show up in the price of food, etc, because the companies have to pay taxes, they have to pay their employees more so their employees can pay taxes, etc.
Raising taxes raises prices too, because it raises costs for everybody.
Price increases come from many factors, including supply vs demand, but also cost of production. And all income and corporate taxes, as well as burdensome regulations, increase the cost of production.
>For many people who are on a lower income that alone will wipe out much of the improvement from basic income.
Every argument I've ever seen for a basic income calls for a tax curve so that you pay zero taxes and get $12k a year if you make no income. Then you pay more the higher you go up to a break even point somewhere around the median income of $55k.
> So, if you want to add $3.6Trillion to the budget
Again it's not going to be anywhere near that. Because of the tax curve, less than half of the country will get any extra money, and only a fairly small fraction would get the whole amount.
Then you have to take into consideration the programs it will replace--social security is almost a trillion a year by itself. Food stamps, cash aid, housing assistance and other programs to help the poor (not including medicaid) are another $500 billion. All of those programs would unnecessary.
You're not going to need to do anything close to tripling taxes.
>For instance, I would simply move to another country, form a corporation there, and earn all my income thru that corporation.
Again this won't triple your income tax. But ignoring that, what you're suggesting is not an option most people have. Also you can only exclude about $100k or so in foreign earned income, and if you want to renounce your citizenship, you have to pay the exit tax.
>Laffer curve and all that.
Yes, but you can find studies that put the optimal taxation rate anywhere from 35% all the way up to 75%.
> Yes, food stamps have driven up the price of food
You're argument wasn't that a basic income would drive up the cost of food, but that it would drive up the cost to the point that it would wipe out the effect of the basic income. If that logic was true, that giving cash payments to lower income people would drive up prices to the point that it had no net effect, then food stamps should have done the same--they have demonstrably not done so.
Every argument I've ever seen for a basic income calls for a tax curve so that you pay zero taxes and get $12k a year if you make no income. Then you pay more the higher you go up to a break even point somewhere around the median income of $55k.
> So, if you want to add $3.6Trillion to the budget
Again it's not going to be anywhere near that. Because of the tax curve, less than half of the country will get any extra money, and only a fairly small fraction would get the whole amount.
Then you have to take into consideration the programs it will replace--social security is almost a trillion a year by itself. Food stamps, cash aid, housing assistance and other programs to help the poor (not including medicaid) are another $500 billion. All of those programs would unnecessary.
You're not going to need to do anything close to tripling taxes.
>For instance, I would simply move to another country, form a corporation there, and earn all my income thru that corporation.
Again this won't triple your income tax. But ignoring that, what you're suggesting is not an option most people have. Also you can only exclude about $100k or so in foreign earned income, and if you want to renounce your citizenship, you have to pay the exit tax.
>Laffer curve and all that.
Yes, but you can find studies that put the optimal taxation rate anywhere from 35% all the way up to 75%.
> Yes, food stamps have driven up the price of food
You're argument wasn't that a basic income would drive up the cost of food, but that it would drive up the cost to the point that it would wipe out the effect of the basic income. If that logic was true, that giving cash payments to lower income people would drive up prices to the point that it had no net effect, then food stamps should have done the same--they have demonstrably not done so.
there is nothing preventing manufacturers from raising their prices up and take advantage of it, while still being fair
Yes, there is: Competition.
Bread is now $1 a loaf. If everyone starts selling bread at $2 a loaf, and I can keep it at $1, I'll be making bank.
Sure, for $0.01 to $0.02, that doesn't count. But UBI is not a lot of money; $1k / month, without any other welfare programs. It's not like everyone wins the lottery.
Yes, there is: Competition.
Bread is now $1 a loaf. If everyone starts selling bread at $2 a loaf, and I can keep it at $1, I'll be making bank.
Sure, for $0.01 to $0.02, that doesn't count. But UBI is not a lot of money; $1k / month, without any other welfare programs. It's not like everyone wins the lottery.
The competition will not need to undercut to make bank... there is increased demand relative to supply, causing prices to rise, and the competition will like the higher prices as well.
If premium breadco sells for $2.10 a loaf now and generic bread for $1.89, then possibly the new equilibrium will result in prices of $3.10 and $2.89. There's competition... but the new price has gone up.
If generic bread kept its old price the demand would be so high that they couldn't supply it--- AND their costs are going to go up as well so they wouldn't be able to keep their old price anyway.
We've seen this over and over as the government has inflated the dollar over the years.
In fact, I think the argument could be made that the entire lack of recovery in the past 8 years is due to the level of inflation wiping out and gains from winding down the housing bubble.
If premium breadco sells for $2.10 a loaf now and generic bread for $1.89, then possibly the new equilibrium will result in prices of $3.10 and $2.89. There's competition... but the new price has gone up.
If generic bread kept its old price the demand would be so high that they couldn't supply it--- AND their costs are going to go up as well so they wouldn't be able to keep their old price anyway.
We've seen this over and over as the government has inflated the dollar over the years.
In fact, I think the argument could be made that the entire lack of recovery in the past 8 years is due to the level of inflation wiping out and gains from winding down the housing bubble.
On some products, there may be increased demand, but the idea is that the basic income should be small enough that those products are very essential (basic food, housing, ...). We would have to assume that people eat both before and after BI reform.
From my perspective (inside an expansive welfare state) the idea of basic income is a simplification rather than an expansion of the welfare state. The de-facto minimum income in Sweden today is probably higher than the would-be unconditional basic income. Today, the "minimum income" in Sweden is earned by people on minimum pensions, or those who have been unemployed longer than the unemployment benefits last. The income they actually receive is a very complicated combination of at least four or five different programs (social assistance, minimum pensions, disability, unemployment benefits, housing support, government child support, ...). The total for a single parent is around what a full time US (federal) minimum wage job pays, and I don't even want to think about what the administration overhead cost is on that.
From my perspective (inside an expansive welfare state) the idea of basic income is a simplification rather than an expansion of the welfare state. The de-facto minimum income in Sweden today is probably higher than the would-be unconditional basic income. Today, the "minimum income" in Sweden is earned by people on minimum pensions, or those who have been unemployed longer than the unemployment benefits last. The income they actually receive is a very complicated combination of at least four or five different programs (social assistance, minimum pensions, disability, unemployment benefits, housing support, government child support, ...). The total for a single parent is around what a full time US (federal) minimum wage job pays, and I don't even want to think about what the administration overhead cost is on that.
Although I really like the idea of minimum income, elkanjos point has to be addressed. Just yesterday there was an article about trailer parks ownership. They will simply increase rent to what their clientele can afford.
In the end you'll still be filling the deep pockets.
Perhaps instead of providing minimum income or in addition to minimum income government should just compete in basic needs market. I.e. government provided low income housing with capped rent.
In the end you'll still be filling the deep pockets.
Perhaps instead of providing minimum income or in addition to minimum income government should just compete in basic needs market. I.e. government provided low income housing with capped rent.
"Although I really like the idea of minimum income, elkanjos point has to be addressed. Just yesterday there was an article about trailer parks ownership. They will simply increase rent to what their clientele can afford."
Actually, I think that's one of the arguments for a basic income. It will lift some of those people out of the class that is subject to the whims of slumlords and trailer park owners, decreasing demand for the lowest tier of housing.
And, there are many other reasons for the trailer park situation being what it is (I lived in a trailer park for a little over a year in my motorhome before moving back into a fixed house; I'm actually more familiar with that world than most folks, certainly moreso than most folks on HN). The article you've mentioned even covered a lot of them. There is a poverty trap in the US, and once you're in it, there are a lot of factors that work to keep you in it. A basic income would lift a large number of working class people out of it.
I do think there needs to be conversations, both nationally and at the municipal level, about real property and the rent economy, particularly in major cities. Things are currently highly skewed (possibly dangerously skewed) in favor of capital owners, such that in many major cities, even people who still have decent jobs may have trouble affording home ownership or event renting.
Actually, I think that's one of the arguments for a basic income. It will lift some of those people out of the class that is subject to the whims of slumlords and trailer park owners, decreasing demand for the lowest tier of housing.
And, there are many other reasons for the trailer park situation being what it is (I lived in a trailer park for a little over a year in my motorhome before moving back into a fixed house; I'm actually more familiar with that world than most folks, certainly moreso than most folks on HN). The article you've mentioned even covered a lot of them. There is a poverty trap in the US, and once you're in it, there are a lot of factors that work to keep you in it. A basic income would lift a large number of working class people out of it.
I do think there needs to be conversations, both nationally and at the municipal level, about real property and the rent economy, particularly in major cities. Things are currently highly skewed (possibly dangerously skewed) in favor of capital owners, such that in many major cities, even people who still have decent jobs may have trouble affording home ownership or event renting.
Why don't we just cut taxes for everyone who makes less than $50k a year? Cut them to zero for all of those people. At least federal taxes, but it would be nice if there was a moratorium or movement to do it for state taxes as well.
For someone making $50k a year, right now they are paying around $7.5k in federal taxes. That right there is close to the $12k the Basic Income would provide.
And this would be a lot easier and simple bill and thus hopefully less contentious-- just make the minimum exemption $50k. Could even be one line maybe.
I think this would be much more effective.... and I don't think that the basic income will replace all the other bureaucracy etc.
For instance, the welfare programs primary job is to hand out money, and it costs them $75 in administrative overhead to hand out $25! Do you think a new federal bureaucracy is going to be more efficient? IT might be a bit in the early years, but of course these things grow as people need to build fiefdoms for themselves etc. etc.
And can you imagine the howls from the federal employees unions if you try and get rid of the Welfare and other federal programs to be replaced with Basic income?
If you don't get rid of them then basic income is just going on top of them.
And if you don't eliminate taxes for poor people, then they're going to end up paying higher taxes too to pay for basic income.
That's the absurd thing right now-- people working part time and getting welfare are still paying taxes.
Since welfare loses %75 of those taxes, it would be much more efficient to just let them keep the money in the first place!
Eliminate taxes on everyone making $50k or less and you have a program I can get behind. Give that 5 years and see if we still need to think about Basic Income.
For someone making $50k a year, right now they are paying around $7.5k in federal taxes. That right there is close to the $12k the Basic Income would provide.
And this would be a lot easier and simple bill and thus hopefully less contentious-- just make the minimum exemption $50k. Could even be one line maybe.
I think this would be much more effective.... and I don't think that the basic income will replace all the other bureaucracy etc.
For instance, the welfare programs primary job is to hand out money, and it costs them $75 in administrative overhead to hand out $25! Do you think a new federal bureaucracy is going to be more efficient? IT might be a bit in the early years, but of course these things grow as people need to build fiefdoms for themselves etc. etc.
And can you imagine the howls from the federal employees unions if you try and get rid of the Welfare and other federal programs to be replaced with Basic income?
If you don't get rid of them then basic income is just going on top of them.
And if you don't eliminate taxes for poor people, then they're going to end up paying higher taxes too to pay for basic income.
That's the absurd thing right now-- people working part time and getting welfare are still paying taxes.
Since welfare loses %75 of those taxes, it would be much more efficient to just let them keep the money in the first place!
Eliminate taxes on everyone making $50k or less and you have a program I can get behind. Give that 5 years and see if we still need to think about Basic Income.
> Why don't we just cut taxes for everyone who makes less than $50k a year? Cut them to zero for all of those people.
If you are referring to federal income taxes, specifically, that's actually an increase for many of those people. (Because of refundable credits, particularly EITC.)
> For someone making $50k a year, right now they are paying around $7.5k in federal taxes.
Please show your work here.
> For instance, the welfare programs primary job is to hand out money, and it costs them $75 in administrative overhead to hand out $25! Do you think a new federal bureaucracy is going to be more efficient?
No, the primary function of welfare administration is to prevent the wrong people from getting money, not handing out money. Handing out money is easy, doing the work to apply the conditional criteria which determine who is not entitled to money, and who, of those entitled to money, is entitled to less than the maximum benefit and how much less is the costly part. Which is exactly the function that UBI eliminates.
(You could do UBI through the tax system as a universal, refundable credit; except for the first year, having it be trailing this way is the same, in effect, as providing it up front.)
> And if you don't eliminate taxes for poor people, then they're going to end up paying higher taxes too to pay for basic income.
Not necessarily. You can raise taxes on one subset of the income spectrum without either raising or eliminating it elsewhere (for instance, you could raise the rate at the top tax bracket, add another bracket on top of that at a still higher rate, and eliminate the favorable tax treatment of capital gains versus other income, without raising taxes on the poor.)
If you are referring to federal income taxes, specifically, that's actually an increase for many of those people. (Because of refundable credits, particularly EITC.)
> For someone making $50k a year, right now they are paying around $7.5k in federal taxes.
Please show your work here.
> For instance, the welfare programs primary job is to hand out money, and it costs them $75 in administrative overhead to hand out $25! Do you think a new federal bureaucracy is going to be more efficient?
No, the primary function of welfare administration is to prevent the wrong people from getting money, not handing out money. Handing out money is easy, doing the work to apply the conditional criteria which determine who is not entitled to money, and who, of those entitled to money, is entitled to less than the maximum benefit and how much less is the costly part. Which is exactly the function that UBI eliminates.
(You could do UBI through the tax system as a universal, refundable credit; except for the first year, having it be trailing this way is the same, in effect, as providing it up front.)
> And if you don't eliminate taxes for poor people, then they're going to end up paying higher taxes too to pay for basic income.
Not necessarily. You can raise taxes on one subset of the income spectrum without either raising or eliminating it elsewhere (for instance, you could raise the rate at the top tax bracket, add another bracket on top of that at a still higher rate, and eliminate the favorable tax treatment of capital gains versus other income, without raising taxes on the poor.)
Its often helpful to start from where we are, and change things a little. That is more comfortable notion, if nothing else.
But when the system is patently not helping those it needs to help, perhaps a new system is desirable. Most government programs were new systems once. Replacing them should not be any more disruptive than inventing them in the first place.
Basic Income is superior to all the others, in my opinion, because it is trivial to see that it will help the most desperate, and it can be administrated trivially (send everybody a check). There's something wonderfully egalitarian about that. The patronizing approach hasn't worked so well; lets try trusting people with their own lives this time.
But when the system is patently not helping those it needs to help, perhaps a new system is desirable. Most government programs were new systems once. Replacing them should not be any more disruptive than inventing them in the first place.
Basic Income is superior to all the others, in my opinion, because it is trivial to see that it will help the most desperate, and it can be administrated trivially (send everybody a check). There's something wonderfully egalitarian about that. The patronizing approach hasn't worked so well; lets try trusting people with their own lives this time.
You can't buy food with a piece of paper saying how much you didn't have to pay in taxes.
OMG, at this ant the other responses. Because you didn't have to pay it in taxes, you can buy food with the pieces of paper you... didn't pay in taxes!
Ok, I'm out. I think you guys don't care about the poor at all, you reject economics out of hand and are just pursuing an ideology. Good luck with that.
Ok, I'm out. I think you guys don't care about the poor at all, you reject economics out of hand and are just pursuing an ideology. Good luck with that.
> They will simply increase rent to what their clientele can afford
I may be crazy but wouldn't one of the ideas of basic income be that, for example, more people would afford to not live in freaking trailer parks? Depending on how it was funded, there should be less demand for large houses and more demand for small houses and apartments, meaning more such housing should be built (thereby reducing the demand for trailer parks).
I may be crazy but wouldn't one of the ideas of basic income be that, for example, more people would afford to not live in freaking trailer parks? Depending on how it was funded, there should be less demand for large houses and more demand for small houses and apartments, meaning more such housing should be built (thereby reducing the demand for trailer parks).
If anything it would increase the demand for trailer parks. The average rent of a trailer now if I read that article right is $400-$500, that's already half of your basic income. The income of someone who lives there is also around $1000/mo, so the only thing that would change is that there'd be more of them, so demand would increase and the rent would go up.
I can't tell you why trailer parks are a thing in the U.S. In The Netherlands poor people simply live in apartment complexes. Though those are equally depressing. I can't remember ever seeing a serious apartment complex in the U.S. though. Only downtown with rich people in them. Perhaps I'm biased and have only seen richer parts.
I can't tell you why trailer parks are a thing in the U.S. In The Netherlands poor people simply live in apartment complexes. Though those are equally depressing. I can't remember ever seeing a serious apartment complex in the U.S. though. Only downtown with rich people in them. Perhaps I'm biased and have only seen richer parts.
The vast majority of low income people in the US do live in apartment complexes. There are apartments in almost every town in the US, except for the most wealthy or the most rural places.
Trailer parks are just a picturesque (for lack of a better term) stereotype. Apartment complexes are so ordinary that discussing them isn't interesting.
Trailer parks are just a picturesque (for lack of a better term) stereotype. Apartment complexes are so ordinary that discussing them isn't interesting.
Yeah, there are plenty of apartment complexes for lower income people.
Trailer parks are a thing mostly because they allow for more privacy than an apartment--no upstairs neighbors.
Trailer parks are a thing mostly because they allow for more privacy than an apartment--no upstairs neighbors.
Do you think on $1,000 month people are getting out of the trailer parks? There aren't a lot of $500 a month apartments out there-- and if there are, they will disappear quick as everyone can now more easily afford them, so prices will go up.
IT's not like prices would go up only on trailer parks.
IT's not like prices would go up only on trailer parks.
Yes, the people who currently work, but live in trailer parks, would likely be lifted out of poverty and the necessity to live in a trailer park by an additional $1000/month per adult in the household. Would it lift all of the families in trailer parks out of poverty? Of course not. But, it would be a reasonably impressive start on the problem.
It's also worth recognizing the other impacts of a basic income. People who are currently trapped in their jobs and locations would find themselves with the ability to relocate for better opportunities or lower housing costs. The more money you have, the less of the poverty traps you fall prey to on a daily basis. So, remove the check cashing scams, the expensive credit scams, the rent-to-own scams, etc. from the lives of a huge swath of the population and you free a lot of them from being stuck in poverty. There's reasonably good research on this from various studies and pilot projects that simply give money to poor people and watched the results.
More money won't cure the problems of trailer parks and slumlords but it will give more people more options. And more options means competitive pressure begins to be effective. Markets work when people have options. Right now, the very poorest people in our communities have no options, and thus have no way to vote with their dollars.
It's also worth recognizing the other impacts of a basic income. People who are currently trapped in their jobs and locations would find themselves with the ability to relocate for better opportunities or lower housing costs. The more money you have, the less of the poverty traps you fall prey to on a daily basis. So, remove the check cashing scams, the expensive credit scams, the rent-to-own scams, etc. from the lives of a huge swath of the population and you free a lot of them from being stuck in poverty. There's reasonably good research on this from various studies and pilot projects that simply give money to poor people and watched the results.
More money won't cure the problems of trailer parks and slumlords but it will give more people more options. And more options means competitive pressure begins to be effective. Markets work when people have options. Right now, the very poorest people in our communities have no options, and thus have no way to vote with their dollars.
The lack of competition that allowed the trailer park owners to do that was caused by local government restrictions on building new trailer parks. Local governments artificially restricting the supply of affordable housing isn't necessarily going to be fixed by a basic income.
However, in a normal market increased demand will drive up the price, and developers will move in to build more housing. The increase in supply will then drive down prices until they reach an equilibrium.
However, in a normal market increased demand will drive up the price, and developers will move in to build more housing. The increase in supply will then drive down prices until they reach an equilibrium.
"Ever heard of minimum wage? Yeah, that one did not work as expected either (and created massive unemployment when the threshold was set too high as well)."
Citation needed. Your assertions do not match my understanding of the facts about the result of the minimum wage. (Though I would have agreed with you ten years ago, a better understanding of it has altered my opinion significantly.)
Citation needed. Your assertions do not match my understanding of the facts about the result of the minimum wage. (Though I would have agreed with you ten years ago, a better understanding of it has altered my opinion significantly.)
When you raise the minimum wage, you don't change any of the other aspects of the business affected by it. So, say you have 15 employees making $10 an hour to keep your company afloat. (Just to keep things simple ,this is about the logic of it.) Now the minimum wage goes up to $15. What are you going to do? You would be losing money with a %50 increase in your costs. Most likely what you will do is lay off 5 employees (The weakest 5) and keep the remaining 10-- but now they have to do the work of 15. Remember the alternative is closing the business and they all lose their jobs. Plus if some don't like the workload there are many people who just got laid off (you laid off 5) who would happily take their jobs.
When you set a minimum wage- or engage in any kind of price fixing- you distort the market and historically that has always hurt the poorest people the most.
Looked at another way, minimum wage is the wage below which you will be unemployed rather than allowed to work.
A minimum wage is a penalty that keeps workers unemployed if they don't have sufficient marketable skills to overcome it.
Imagine if the minimum wage was $100 an hour. How many of us would be unemployed?
People seem to imagine that there's just a lot of money out there and the only reason that anyone might not have enough is that people are being greedy. This is zero sum theory, and it is not true in economics. It's nice to imagine that you're "foreign the rich people to give up the money they are hoarding"... but you're hitting businesses that are on the margins. What's the average margin for a business? IT's not the %50 that intel enjoys-- a grocery store maybe makes %3.
What do you think a business that is clearing %3 net is going to do when you increase labor costs by %50? (in this example.)
Edit: You can disagree with my position, or even find an error in my argument, but I'm tired of spending time explaining things and giving examples like this only to be downvoted for ideological reasons... constantly. Is a circle jerk what you really want HN to be? I don't think any rational person can say that my comment wasn't a quality explanation for the position.
When you set a minimum wage- or engage in any kind of price fixing- you distort the market and historically that has always hurt the poorest people the most.
Looked at another way, minimum wage is the wage below which you will be unemployed rather than allowed to work.
A minimum wage is a penalty that keeps workers unemployed if they don't have sufficient marketable skills to overcome it.
Imagine if the minimum wage was $100 an hour. How many of us would be unemployed?
People seem to imagine that there's just a lot of money out there and the only reason that anyone might not have enough is that people are being greedy. This is zero sum theory, and it is not true in economics. It's nice to imagine that you're "foreign the rich people to give up the money they are hoarding"... but you're hitting businesses that are on the margins. What's the average margin for a business? IT's not the %50 that intel enjoys-- a grocery store maybe makes %3.
What do you think a business that is clearing %3 net is going to do when you increase labor costs by %50? (in this example.)
Edit: You can disagree with my position, or even find an error in my argument, but I'm tired of spending time explaining things and giving examples like this only to be downvoted for ideological reasons... constantly. Is a circle jerk what you really want HN to be? I don't think any rational person can say that my comment wasn't a quality explanation for the position.
I hear this "What if the minimum wage was raised to some ridiculous amount" argument from conservative people all the time. (I think they parrot it from conservative AM radio talk show hosts)
That is a loaded question. The minimum wage does not have to be increased to some ridiculous amount, but it does have to be high enough to keep the people off of government benefits.
Additionally, if raising the minimum wage by a modest amount causes a business model to crash and burn, then that's a flaw which needs to be corrected. Maybe that business model wasn't so robust after all?
If a business depends on an exploitative minimum wage to be profitable, that business needs a new business model. If that means more automation and robotics, so be it. It is not good public policy to pay exploitative wages that force employees to go on government assistance at the expense of the taxpayers.
That is a loaded question. The minimum wage does not have to be increased to some ridiculous amount, but it does have to be high enough to keep the people off of government benefits.
Additionally, if raising the minimum wage by a modest amount causes a business model to crash and burn, then that's a flaw which needs to be corrected. Maybe that business model wasn't so robust after all?
If a business depends on an exploitative minimum wage to be profitable, that business needs a new business model. If that means more automation and robotics, so be it. It is not good public policy to pay exploitative wages that force employees to go on government assistance at the expense of the taxpayers.
I don't disagree with your argument.
On the other hand... Currently, employers that pay a less than living wage are subsidized in effect - the government (tax payers) makes up the difference in the form of food stamps, healthcare, etc. Is it right that businesses should get subsidized labor?
On the other hand... Currently, employers that pay a less than living wage are subsidized in effect - the government (tax payers) makes up the difference in the form of food stamps, healthcare, etc. Is it right that businesses should get subsidized labor?
It's actually the other way around. These employers are basically subsidizing the social services. If the best job Jimmy can get pays minimum wage, then logically, if Jimmy couldn't even get that job, he wouldn't earn a living wage; he'd earn nothing. If Jimmy had the opportunity to earn a living wage, after all, he would go get the job that pays that living wage and quit Wal-Mart. But, since Wal-Mart is the best job Jimmy can get, the net effect of Jimmy earning minimum wage at Wal-Mart is that he costs the state less money in social services than he would with no job at all. Wal-Mart, therefore, is the one subsidizing the state and not the other way around.
I don't agree that Walmart is subsidizing the state but I could see an angle that is similar.
If the government stopped paying workers any benefits, would the cost of the worker's labor go up? If it didn't, that would indicate that employers were paying the market rate (speaking strictly from a economics perspective). I think running this experiment would confirm your argument that Jimmy would become unemployable as his market value would not increase, just his "cost".
I still think minimum wage should be increased but now I'm less sure if it a good idea/solution.
The elephant in the room is that jobs are going the way of the dodo bird. At some point there will be very few jobs left and the market value of labor will fall to near zero. At that point employers will have no customers either. Even if an individual employer can see that far ahead (like Henry Ford did) and raises his wages, he will be at a disadvantage to other employers who don't raise their wages. Forcing all employers to a higher minimum wage will get around that - but only for a while. Eventually those jobs will be automated and we'll be back to the no wages/no customers situation.
If the government stopped paying workers any benefits, would the cost of the worker's labor go up? If it didn't, that would indicate that employers were paying the market rate (speaking strictly from a economics perspective). I think running this experiment would confirm your argument that Jimmy would become unemployable as his market value would not increase, just his "cost".
I still think minimum wage should be increased but now I'm less sure if it a good idea/solution.
The elephant in the room is that jobs are going the way of the dodo bird. At some point there will be very few jobs left and the market value of labor will fall to near zero. At that point employers will have no customers either. Even if an individual employer can see that far ahead (like Henry Ford did) and raises his wages, he will be at a disadvantage to other employers who don't raise their wages. Forcing all employers to a higher minimum wage will get around that - but only for a while. Eventually those jobs will be automated and we'll be back to the no wages/no customers situation.
I respectfully disagree with this line of thinking. The goal of a society is to eliminate as many people from needing government benefits as possible, and to ensure that only those who are truly unemployable receive government benefits.
Employers must pay a wage which ensures that basic needs are met.
> The goal of a society is to eliminate as many people from needing government benefits as possible, and to ensure that only those who are truly unemployable receive government benefits.
Not only do I disagree that this is the goal of society, I don't see any reason to think that this should be the goal of society.
> Employers must pay a wage which ensures that basic needs are met.
It seems to me that this is a paternalistic and feudalistic approach that presumes that every member of society must be dependent on a particular employer.
Not only do I disagree that this is the goal of society, I don't see any reason to think that this should be the goal of society.
> Employers must pay a wage which ensures that basic needs are met.
It seems to me that this is a paternalistic and feudalistic approach that presumes that every member of society must be dependent on a particular employer.
And if you require employers to pay a living wage, then more and more people become unemployable.
Actually, the thing I like about basic income is that it gives you the freedom to eliminate minimum wage laws. People wouldn't have to work degrading jobs for subsistence pay, because they would already get subsistence pay, but if they earned even $3 an hour, that would be on top of basic income rather than in place of it.
Actually, the thing I like about basic income is that it gives you the freedom to eliminate minimum wage laws. People wouldn't have to work degrading jobs for subsistence pay, because they would already get subsistence pay, but if they earned even $3 an hour, that would be on top of basic income rather than in place of it.
That's palpably not true. We all get roads, police, fire, regulated utilities. Absolutely nobody is trying to wean us from those.
It takes a change in thinking to accept the basic income. I'm afraid a generation will have to grow old and die before it gains traction, because of the ingrained thinking that 'full employment' is a good or useful societal goal.
It takes a change in thinking to accept the basic income. I'm afraid a generation will have to grow old and die before it gains traction, because of the ingrained thinking that 'full employment' is a good or useful societal goal.
You mean the generation that remembers what the USSR was like? I'm not being flippant, I'm being serious. The entire leftist political agenda, including Basic Income is basic marxism and the arguments for it are the same ones we had in over a century ago.
We've had a century of experimentation with it, from Fascism in germany ("to protect our farmers") to communism in Russia to socialism in the UK to all manner of variations in South America.
It hasn't worked.
Why is it leftists who are always going on as if they're the only ones who care about the poor, refuse to learn the lessons of history and economics?
History isn't a science, but economics is, and the reasons these things will fail are always pointed out-- as they were in this comment section-- and always ignored (as they were downvoted here on HN).
As a result more and more damage is done.
And when you see the damage the next generation of 20 year old leftists calls for socialism to fix the damage of socialism!
So yeah, when you're over 40 and you've been around the merry go round once you see what's going on.
OH, and by the way, one thing was constant- in all of these situations the people at the top profited. The politburo made out, and so that's why they support it.
It's how they exploit the poor.
We've had a century of experimentation with it, from Fascism in germany ("to protect our farmers") to communism in Russia to socialism in the UK to all manner of variations in South America.
It hasn't worked.
Why is it leftists who are always going on as if they're the only ones who care about the poor, refuse to learn the lessons of history and economics?
History isn't a science, but economics is, and the reasons these things will fail are always pointed out-- as they were in this comment section-- and always ignored (as they were downvoted here on HN).
As a result more and more damage is done.
And when you see the damage the next generation of 20 year old leftists calls for socialism to fix the damage of socialism!
So yeah, when you're over 40 and you've been around the merry go round once you see what's going on.
OH, and by the way, one thing was constant- in all of these situations the people at the top profited. The politburo made out, and so that's why they support it.
It's how they exploit the poor.
We can paint it with the socialism brush, and write it off. Or we can recognize that today is a very different economic situation from, well, pretty much any time in history. We've got automation, and technology, and a burgeoning unemployed and unemployable population of non-technologists. We can try to prop up the quaint systems of the past (full employment, work or starve). Or we can change our system to one that is kinder, economical, and raises the standard of living for everybody.
As I said, I believe folks will have to grow old and die. Until then, we'll hear only FUD stories and scare tactics.
As I said, I believe folks will have to grow old and die. Until then, we'll hear only FUD stories and scare tactics.
Tell me, there's been various minimum wage enacted in the U.S. since the 1930's. If a minimum wage is so bad for the economy, wow come during the last ~80 years, the U.S. has been the world's foremost leading economic engine?
How come the minimum wage has been raised many times throughout history, and somehow business keeps trucking along?
Nobody is suggesting raising the minimum wage to $100/hour, that's a false argument.
The market is full of distortions. Indeed the entire creation of the ideology of capitalism was about how best to regulate and harness the powerful market forces.
How come the minimum wage has been raised many times throughout history, and somehow business keeps trucking along?
Nobody is suggesting raising the minimum wage to $100/hour, that's a false argument.
The market is full of distortions. Indeed the entire creation of the ideology of capitalism was about how best to regulate and harness the powerful market forces.
This happens a lot in over crowded markets too. In the Indian IT scenario, there are a lot of freshers every year in the market who will work for almost any starting salary(I was one such a guy at one point in time). So nobody in the chain would complain excessively about their salary, doing so would mean they are welcome to leave. The company would lose nothing as there is enough supply of workers ready to work at the price they want. The employee loses out on the longer run.
Re: edit
This is the irony of this. You are writing well thought out explanations, but since it's not leftist enough, you get downvoted at a community which spent non-trivial amount of time trying to raise "quality of discussion", and even more time talking about "quality of discussion".
This is the irony of this. You are writing well thought out explanations, but since it's not leftist enough, you get downvoted at a community which spent non-trivial amount of time trying to raise "quality of discussion", and even more time talking about "quality of discussion".
Or perhaps you read a bunch of pretty words that seem to make sense? They got citations and proper syllogisms and all that jazz. Communist rhetoric always makes sense. It makes sense to your feelings, at least.
Don't equate communism with a minimum wage, that's just intellectually dishonest.
Same rhetoric used by the same people. liberty, equality, fraternity and all that jazz. You just don't know human nature. Especially the low part of its spectrum.
You should not need a citation for anything here. Look at what unions do in general when they get powerful enough in a specific company - they enforce high salaries, protect jobs and protest against any reduction of personnel, making it very expensive for the management to keep the current staff, and very hesitant to hire more (increased costs vs fixed returns, and lack of flexibility to adjust the workforce vs the ups and downs of the company's economic activity).
There's enough case studies out there about the pernicious effects of such policies - they should serve as a warning that you don't solve ANY economic issue with a single bullet.
There's enough case studies out there about the pernicious effects of such policies - they should serve as a warning that you don't solve ANY economic issue with a single bullet.
Are you a troll? Besides the sentence "you should not neer a citation" should never be uttered, you deflect criticism on an unfounded argument with another unfounded argument. Tour first comment was unduly down voted but this one is just blabber.
You're forgetting about competition.
Let's say that every low wage worker becomes suddenly 10% more productive so they start making 10% more money. Would prices all suddenly rise 10% so that none of the workers would see any benefit?
This isn't the same as inflation, and will be handled by competitive forces in the market.
Let's say that every low wage worker becomes suddenly 10% more productive so they start making 10% more money. Would prices all suddenly rise 10% so that none of the workers would see any benefit?
This isn't the same as inflation, and will be handled by competitive forces in the market.
> You are missing one part, though. If you start giving cash for everyone, it's very likely this will result in raising prices for all commodities.
Only if you aren't taking cash from someone to pay for it; UBI doesn't conjure money from nowhere, it redistributes it. The things disproportionately demanded by those who are better off with UBI will have some rise in prices (but not enough that they fail to be more affordable to those purchasing them in normal cases) and the things disproportionately demanded by those who are worse off will have some decline in prices.
> And there you go for a another downward spiral, where you have to readjust the basic income every couple of years to make up for the inflated prices.
What you probably want to with BI isn't target a particular standard of living, but target just below the inflation tipping point set by production technology and market factors, where BI is just below the level where it would lead to runaway inflation because of people leaving the workforce reducing supply (the real inflation danger, rather than redistribution of income spiking demand). This is sort of a fiscal version of what central banks do for monetary policy in managing interest rates. (BI is essentially self-limiting to this point in the long-run, in that if you don't tail-chase by increasing nominal amount inflation will drive the value of BI down to the sustainable level. But there's lots of disruption in that adjustment, so if you are going to have BI, you want to actively manage it to avoid overshooting by too much and to correct more quickly than inflation would correct it.)
The resulting standard of living that is sustainable with BI probably won't be what most BI advocates would like to see anytime soon, because production won't support it; but it should rise with advances in technology.
Only if you aren't taking cash from someone to pay for it; UBI doesn't conjure money from nowhere, it redistributes it. The things disproportionately demanded by those who are better off with UBI will have some rise in prices (but not enough that they fail to be more affordable to those purchasing them in normal cases) and the things disproportionately demanded by those who are worse off will have some decline in prices.
> And there you go for a another downward spiral, where you have to readjust the basic income every couple of years to make up for the inflated prices.
What you probably want to with BI isn't target a particular standard of living, but target just below the inflation tipping point set by production technology and market factors, where BI is just below the level where it would lead to runaway inflation because of people leaving the workforce reducing supply (the real inflation danger, rather than redistribution of income spiking demand). This is sort of a fiscal version of what central banks do for monetary policy in managing interest rates. (BI is essentially self-limiting to this point in the long-run, in that if you don't tail-chase by increasing nominal amount inflation will drive the value of BI down to the sustainable level. But there's lots of disruption in that adjustment, so if you are going to have BI, you want to actively manage it to avoid overshooting by too much and to correct more quickly than inflation would correct it.)
The resulting standard of living that is sustainable with BI probably won't be what most BI advocates would like to see anytime soon, because production won't support it; but it should rise with advances in technology.
Its not a foregone conclusion that commodities will rise in price if everybody has a bit more money. The rich have a whole lot more money. So the influx may raise prices, but never as much as to make the BI useless. In fact they'd have to go up infinitely to make any money useless, right?
And its entirely likely the money will be conjured up from nowhere - minted for the purpose. This solves two problems. One is that taxes need not be raised to cover the cost. The other is, it becomes a small builtin inflation that serves to redistribute wealth. That's a good thing in America at the moment.
And if the BI isn't universal, if its means-tested, then you're missing the point entirely. The testing of means is flawed, very expensive, and inaccurate. Its always gamed to disincentivize folks from getting a job, which is probably a bad thing. And it turns it into a patronizing system again, where big brother decides who's worthy.
And its entirely likely the money will be conjured up from nowhere - minted for the purpose. This solves two problems. One is that taxes need not be raised to cover the cost. The other is, it becomes a small builtin inflation that serves to redistribute wealth. That's a good thing in America at the moment.
And if the BI isn't universal, if its means-tested, then you're missing the point entirely. The testing of means is flawed, very expensive, and inaccurate. Its always gamed to disincentivize folks from getting a job, which is probably a bad thing. And it turns it into a patronizing system again, where big brother decides who's worthy.
> Its not a foregone conclusion that commodities will rise in price if everybody has a bit more money.
Yes, it pretty much is. If everyone has more money at t1 than at t0, and nothing else changes, then you've got more dollars chasing the same goods and you would expect that the price of goods would increase.
> The rich have a whole lot more money.
That's not relevant to anything.
> So the influx may raise prices, but never as much as to make the BI useless.
That's what I said: "The things disproportionately demanded by those who are better off with UBI will have some rise in prices (but not enough that they fail to be more affordable to those purchasing them in normal cases)"
> And its entirely likely the money will be conjured up from nowhere - minted for the purpose.
Every UBI proposal I've seen has called for it to be funded by some combination of replacing existed tax-funded programs and increased progressive taxation. So, as actually proposed, it would not be funded by money conjured from nowhere. (If it is, however, the expected effect on market-specific price levels is still the same as a tax-based funding mechanism, after you adjust for the increase in overall price levels resulting from the overall increase in the money supply in the "mint new money" approach.)
> And if the BI isn't universal, if its means-tested, then you're missing the point entirely.
That's fine, I didn't suggested doing that, so I don't see the relevance.
Yes, it pretty much is. If everyone has more money at t1 than at t0, and nothing else changes, then you've got more dollars chasing the same goods and you would expect that the price of goods would increase.
> The rich have a whole lot more money.
That's not relevant to anything.
> So the influx may raise prices, but never as much as to make the BI useless.
That's what I said: "The things disproportionately demanded by those who are better off with UBI will have some rise in prices (but not enough that they fail to be more affordable to those purchasing them in normal cases)"
> And its entirely likely the money will be conjured up from nowhere - minted for the purpose.
Every UBI proposal I've seen has called for it to be funded by some combination of replacing existed tax-funded programs and increased progressive taxation. So, as actually proposed, it would not be funded by money conjured from nowhere. (If it is, however, the expected effect on market-specific price levels is still the same as a tax-based funding mechanism, after you adjust for the increase in overall price levels resulting from the overall increase in the money supply in the "mint new money" approach.)
> And if the BI isn't universal, if its means-tested, then you're missing the point entirely.
That's fine, I didn't suggested doing that, so I don't see the relevance.
Think about it like this: if you give everybody some money, but they already have 1000 X that much money in the bank, then prices don't go up much. The rich have a lot of money, and they're buying stuff too. They matter as much as anybody; no, they matter 100X as much as everybody else.
All tax plans are of course entirely fictional of course.
And as for means-testing, the line about limiting it to folks above/below a certain income certainly sounds like meanstesting. What else could that have meant?
OH! I meant to respond to the parent comment. Sorry for the confusion!
All tax plans are of course entirely fictional of course.
And as for means-testing, the line about limiting it to folks above/below a certain income certainly sounds like meanstesting. What else could that have meant?
OH! I meant to respond to the parent comment. Sorry for the confusion!
> raising prices for all commodities
If one takes a look at prices in each century, prices for each type of commodity vary a lot. For example, in the 1960 you could rent a house where I live for the same price you paid buying 5L milk. Since then the cheapest rents has gone up by factor of thousands, but milk has only gone up by factor of 8. During that time period, many reforms has happen including minimum wages, the strong middle class, and many efforts to reduces poverty.
If one takes a look at prices in each century, prices for each type of commodity vary a lot. For example, in the 1960 you could rent a house where I live for the same price you paid buying 5L milk. Since then the cheapest rents has gone up by factor of thousands, but milk has only gone up by factor of 8. During that time period, many reforms has happen including minimum wages, the strong middle class, and many efforts to reduces poverty.
> in the 1960 you could rent a house where I live for the same price you paid buying 5L milk.
Really? Then your 5L milk must have been seriously overpriced, or nobody wanted to live wherever that was.
Really? Then your 5L milk must have been seriously overpriced, or nobody wanted to live wherever that was.
The economy is more dynamic than that. Sure, there will be short-term effects as the policy is rolled out, but new producers will enter the market to meet the increase the quantity demanded in the medium term.
Also for pure commodities, producers are all price-takers. That means that price doesn't necessarily get driven upwards.
Also for pure commodities, producers are all price-takers. That means that price doesn't necessarily get driven upwards.
Oh well, looking at history and drawing parallels from the 19th century, we will probably get something like a basic income, or perhaps a massive police state. Either way, something will have to change. At least assuming that satisfaction with current administration and economy is not going to increase.
It is good that we start to discuss such ideas.
It is good that we start to discuss such ideas.
I like the idea of a basic income on principle, and this article has some great arguments for it. (Though I agree it is far from being paid for--and a land tax essentially means it only gets paid to the landless, so you'd need to exempt "reasonable" owner-occupied land).
But let's simulate how it would look in the real world. I think mindless consumerism would go way up, especially in the lower classes. Advertising in all media would simply encourage this. The well-off would buy stock in Walmart and low end electronics makers with their extra income, thus capturing the income of the less savvy. Without local manufacturing, much of the distributed income would go to China. Paternalism and its religious affiliates would rise up again to capture the income of the not-yet-emancipated (by that I mean women and children). With perceived abundance and linear income, the birth rate would rise.
So I think we need to solve some of these issues first. Education should be the beneficiary for the first trillion in new taxes. Hopefully that could mitigate the consumerism and prompt more entrepreneurialism, as well as reduce the paternalism and birth rate. As mentioned, doing universal health care right would amount to the same thing as a universal income as well (more security, less worry, more productivity). So I wonder if those two aren't bigger priorities.
But let's simulate how it would look in the real world. I think mindless consumerism would go way up, especially in the lower classes. Advertising in all media would simply encourage this. The well-off would buy stock in Walmart and low end electronics makers with their extra income, thus capturing the income of the less savvy. Without local manufacturing, much of the distributed income would go to China. Paternalism and its religious affiliates would rise up again to capture the income of the not-yet-emancipated (by that I mean women and children). With perceived abundance and linear income, the birth rate would rise.
So I think we need to solve some of these issues first. Education should be the beneficiary for the first trillion in new taxes. Hopefully that could mitigate the consumerism and prompt more entrepreneurialism, as well as reduce the paternalism and birth rate. As mentioned, doing universal health care right would amount to the same thing as a universal income as well (more security, less worry, more productivity). So I wonder if those two aren't bigger priorities.
In the UK the government has recently being trying to increase the birthrate by giving more money to those who have kids, so its interesting to see you suggest this would be a problem with BI.
I assume this is a general problem with advanced economies as I read an article recently that said kids in school were being given better info on how to get pregnant in some countries, in another attempt to lift the birth rate.
I assume this is a general problem with advanced economies as I read an article recently that said kids in school were being given better info on how to get pregnant in some countries, in another attempt to lift the birth rate.
This is simply wrong & it is not government policy moreover UK is the most densely populated country in Europe after Malta. There is a benefit payment given in respect of all children under 16 who have parents earning less than around 60K pounds pa.
The UK may be densely populated, but if it doesn't produce enough children then its demographics will be top heavy and there won't be enough people of working age to support those in retirement. We're currently below the replacement rate.
If you pay people to do something, that is generally considered by economists to incentivize that behaviour, so how is giving thousands of pounds to families not a government policy to encourage people to have kids?
They did recently limit the payments to people earning more than 60,000 pounds a year, but the average wage is less than half of that.
If you pay people to do something, that is generally considered by economists to incentivize that behaviour, so how is giving thousands of pounds to families not a government policy to encourage people to have kids?
They did recently limit the payments to people earning more than 60,000 pounds a year, but the average wage is less than half of that.
On the other hand, the article choose a pretty high monthly value ($1k). Going with $600 or $800 should greatly alleviate this problem.
The appeal to UBI for me has always, apart from being a good way to stop welfare traps and increase income equality now, is that it marks the beginning of the new phase in our economic system: one from a cash-work model to a material-existence model. I do subscribe to the total job automation theory being every so increasingly talked about, and what these proposals tell me is that government and to a larger extent society is beginning to see that we can indeed provide for everyone using our productivity gains. The cash part of the deal I think is just a carry-on from our ageing economic system that will be replaced by some other form of value transfer mechanism which honestly, I can't imagine what would look like.
One thing I've always wondered about the basic income is wont it just mean prices go up because people are greedy? Take the article about trailer parks that was on here a week ago: The business owners said that they had to be careful when raising prices to make sure tenants can still afford it. If their tenants suddenly get an extra $1000/month, what's to stop them putting the rent up by $1000/month?
The reason trailer park owners can keep raising prices is because cities won't allow new trailer parks to be built. This artificially restricts demand. Local governments artificially restricting the supply of affordable housing isn't necessarily going to be fixed by a basic income.
However, if people have an extra $1000 a month, many of them can afford other types of housing. Increased demand for this newly affordable housing will drive up the price, and developers will move in to build more housing. The increase in supply would then drive down prices until they reach an equilibrium.
However, if people have an extra $1000 a month, many of them can afford other types of housing. Increased demand for this newly affordable housing will drive up the price, and developers will move in to build more housing. The increase in supply would then drive down prices until they reach an equilibrium.
People that wouldn't work wouldn't have to live in highly contested areas with a high rent. Workers could afford them, others would live outside of those expensive areas, keep their guaranteed income and decide what to do with their lives.
There's some discussion here:
http://www.reddit.com/r/basicincome/wiki/index#wiki_wouldn.27t_basic_income_just_cause_inflation.3F
What's to stop them? Generally the same thing that stops people from price gouging elsewhere - competitors offering better service and / or price.
Unless someone is being forced to pay, getting greedy isn't a great way to stay in business. Indeed, it's a pretty reliable way of getting driven out of business. After all, nothing attracts competition faster than fat and easy profits.
Unless someone is being forced to pay, getting greedy isn't a great way to stay in business. Indeed, it's a pretty reliable way of getting driven out of business. After all, nothing attracts competition faster than fat and easy profits.
I was shocked by the "magic of markets" analysis. When there's no more bread, people make more bread ? Nope, bread becomes more expensive. Especially with automation : it's harder for new baker to start in the market, so those in the market get more powerful. That's concentration.
Basic income will make less poor but more slaves. Slaves that will be dependent on those (I assume it's the state) who define the exact amount of that uncondional income. Since a huge part of the population will be out of the "producer", thus the producer will have more power.
What must be done instead is to make sure power doesn't get concentrated. But this means less efficiency : one big optimised company is surely more efficient that ten smaller ones. With less power, the workforce can still negociate, the workforce can still share the remaining work, those who have no job still have a chance to get one if they want/need to. With basic income, there's no need to do that anymore...
So I don't like that basic income.
For example, there's a lot of unemployment in my country. People gets some allowance to live. The problem is that the lack of work is not acknowledged => those people are stigmatized. Anyway, they do get an allowance, kind of your basic income. The problem is that because of the unemployment, the employer are in a very strong position to pay people less (since many do want/need a job). So work valuation diminishes...
Competition is the problem, if companies would compete less, then basic income could work. There would be more space for choice : do I work or not ? can I share my work ?
Basic income means : let's detach ourselves from the consequences of competition.
Basic income will make less poor but more slaves. Slaves that will be dependent on those (I assume it's the state) who define the exact amount of that uncondional income. Since a huge part of the population will be out of the "producer", thus the producer will have more power.
What must be done instead is to make sure power doesn't get concentrated. But this means less efficiency : one big optimised company is surely more efficient that ten smaller ones. With less power, the workforce can still negociate, the workforce can still share the remaining work, those who have no job still have a chance to get one if they want/need to. With basic income, there's no need to do that anymore...
So I don't like that basic income.
For example, there's a lot of unemployment in my country. People gets some allowance to live. The problem is that the lack of work is not acknowledged => those people are stigmatized. Anyway, they do get an allowance, kind of your basic income. The problem is that because of the unemployment, the employer are in a very strong position to pay people less (since many do want/need a job). So work valuation diminishes...
Competition is the problem, if companies would compete less, then basic income could work. There would be more space for choice : do I work or not ? can I share my work ?
Basic income means : let's detach ourselves from the consequences of competition.
Basic income can also mean other things. Some people just are so unique that don't need to compete.
Some examples of unemployed people that did not have an income other that the support of his family, friends or government in a part of (or all) his life:
Vincent Van Gogh, too clumsy to farm
John Steinbeck, housed by his father that provides also paper and material
Harper Lee, sabbatical payed by friends
J.K. Rowling, writing whereas on welfare.
... and many others
Take in mind that you don't have just competition, there is also collaboration, and teaming, and life-changers. Some people just born in poverty. This would not be his choice if they could. Some born in a poor rural environment somewhere in Misissipi, other in a manger in the middle of nowhere. Some of those people are between the most influent people in the history of the humanity.
People seem to worry about that basic income could lead to a lot of people scratching his bellies all day (and this is true) but don't always notice that this will also reveal a hidden minory of fine gem crafters in art, music, literature or poetry that are just roting now and could be free to create huge economic values instead.
Some examples of unemployed people that did not have an income other that the support of his family, friends or government in a part of (or all) his life:
Vincent Van Gogh, too clumsy to farm
John Steinbeck, housed by his father that provides also paper and material
Harper Lee, sabbatical payed by friends
J.K. Rowling, writing whereas on welfare.
... and many others
Take in mind that you don't have just competition, there is also collaboration, and teaming, and life-changers. Some people just born in poverty. This would not be his choice if they could. Some born in a poor rural environment somewhere in Misissipi, other in a manger in the middle of nowhere. Some of those people are between the most influent people in the history of the humanity.
People seem to worry about that basic income could lead to a lot of people scratching his bellies all day (and this is true) but don't always notice that this will also reveal a hidden minory of fine gem crafters in art, music, literature or poetry that are just roting now and could be free to create huge economic values instead.
I am interested in this idea. As I understand it, it's a long-held idea with some support from the center, left, and right.
Having said that, last week I read through an analysis piece -- 6-8 page pdf -- that I found on a financial site. I found out some interesting things that supporters don't emphasize.
The problem, as I understand it, is that UBI is fine in theory and as a high-level idea. Once you start actually thinking about applying it? The words could mean dang near anything. Is it across the board? Are there exceptions? Would you use a reverse income tax, direct payments, or other mechanism to deliver it? What sorts of incentives does it provide to the working poor? If you really wanted to eventually replace hourly occupation, wouldn't it make more sense to begin providing it to those who have worked their entire lives? Begin direct payments to retirees and then slowly decrease the retirement age as the years pass?
Those are just questions I made up after reading the article. Apologies if I botched it. But I was impressed with the fact that there is a ginormous gap between the slogan of UBI and whatever it actually might end up becoming. A big enough gap that politicians could say they support it and actually give you pretty much anything. There's also not a huge amount of real-world data here.
So my position is "cautiously optimistic". Let's do some limited experiments with this to see how the real-world politics play out and what the difference between the PR package and the actual deliverable is. In the U.S., the states have traditionally been the "laboratories of democracy", but if folks don't like that, there has to be other ways to do a bunch of limited trials.
What I am not in support of is some huge national movement built around a slogan where I'm forced to make a yes-no decision for the rest of the citizenry. Here's hoping it doesn't play out like that.
Having said that, last week I read through an analysis piece -- 6-8 page pdf -- that I found on a financial site. I found out some interesting things that supporters don't emphasize.
The problem, as I understand it, is that UBI is fine in theory and as a high-level idea. Once you start actually thinking about applying it? The words could mean dang near anything. Is it across the board? Are there exceptions? Would you use a reverse income tax, direct payments, or other mechanism to deliver it? What sorts of incentives does it provide to the working poor? If you really wanted to eventually replace hourly occupation, wouldn't it make more sense to begin providing it to those who have worked their entire lives? Begin direct payments to retirees and then slowly decrease the retirement age as the years pass?
Those are just questions I made up after reading the article. Apologies if I botched it. But I was impressed with the fact that there is a ginormous gap between the slogan of UBI and whatever it actually might end up becoming. A big enough gap that politicians could say they support it and actually give you pretty much anything. There's also not a huge amount of real-world data here.
So my position is "cautiously optimistic". Let's do some limited experiments with this to see how the real-world politics play out and what the difference between the PR package and the actual deliverable is. In the U.S., the states have traditionally been the "laboratories of democracy", but if folks don't like that, there has to be other ways to do a bunch of limited trials.
What I am not in support of is some huge national movement built around a slogan where I'm forced to make a yes-no decision for the rest of the citizenry. Here's hoping it doesn't play out like that.
There are basically just two important sides to this: In an expansive welfare state (say a Nordic country) there are large transfers tax money between people. Some of these transfers are unconditional, for example every child (parent) is given around $150/month, regardless of family income.
These transfers are pretty expensive. The reasoning behind giving it to every child is that it is supposed to be directed to the child, and there shouldn't be any stigma associated with it. You could argue that if this money was directed only to parents below a certain income , the same amount of money could do a lot more good
This is the core of this issue: unconditional basic income is a very expensive kind of transfer. Even the vast bureaucracy required to ensure money goes to those who need it in a regular welfare state is a lot less expensive than a basic income reform.
This is the core of this issue: unconditional basic income is a very expensive kind of transfer. Even the vast bureaucracy required to ensure money goes to those who need it in a regular welfare state is a lot less expensive than a basic income reform.
I thought it was actually relatively cheap intervention as there is only a minor admin overhead. Do you have links to more detailed analysis? Am interested in learning more.
(2014) ?
If there's $2.98 trillion per year to spend, put it into space travel. We should be colonizing other worlds. With more resources available, there's more work available. More work means more demand for jobs - and life is infinitely better when you are being paid for the value you provide to society than what is really quasi-welfare.
I think the incentive to keep the income would greatly reduce minor crimes. Just imagine what positive effect would that have on the society
Would the basic income only apply to high income countries or worldwide? Because I feel that it would be extremely unfair and maybe even unethical to give every US citizen a basic income for life, while people elsewhere die from hunger.
My worry about this would be that in order to prevent mass fraud of the system, we would have to have a national ID card system, which is something I've always instinctively opposed.
Sadly I think that UBI supporters tend to the false impression that everybody would be:
1) Frugal. 2) Responsible.
I just don't have that much faith in (roughly) half the population. What happens when people have too many kids and are still too impoverished? Is there going to be a "reasonable limit" to the number of kids you can have? Women could have as many as 20 kids or more. Is that really going to work? What happens when they are drug addicts (or worse free-to-play video games addicts) who cannot control their spending?
For me personally I love the idea of UBI, but I just don't think that it can work on a practical level. The examples that explain how to generate the required money to pay for it don't seem very feasible to me. You cannot add VAT. That is borderline "perpetual motion machine" logic right there. At the most basic level you will just have to tax the wealthy more one way or another. That is it. The only option. The question is: are they ok with that?
1) Frugal. 2) Responsible.
I just don't have that much faith in (roughly) half the population. What happens when people have too many kids and are still too impoverished? Is there going to be a "reasonable limit" to the number of kids you can have? Women could have as many as 20 kids or more. Is that really going to work? What happens when they are drug addicts (or worse free-to-play video games addicts) who cannot control their spending?
For me personally I love the idea of UBI, but I just don't think that it can work on a practical level. The examples that explain how to generate the required money to pay for it don't seem very feasible to me. You cannot add VAT. That is borderline "perpetual motion machine" logic right there. At the most basic level you will just have to tax the wealthy more one way or another. That is it. The only option. The question is: are they ok with that?
UBI will likely encourage unsustainable population growth. So, population growth dis-incentives need to be part of the package.
If you like the idea of giving such an income (or cash transfer) to people but the idea of an unconditional basic income seems too far away, you can contribute to newincentives.org which is providing cash transfers to poor pregnant HIV mothers. Achieves two goals: reduces HIV and puts money in very needy hands.
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