And then, towards the end where it starts looking at numbers, it starts saying things like
> But by excluding 45 million retirees who already receive a basic income through Social Security, the cost falls to $2.7 trillion. And if the benefit is phased out for households earning more than $100,000 (that would be 20 percent of the U.S.'s 115 million households, or about 70 million people, assuming three to a household), the cost declines to about $2 trillion. You could confine the program to adults and shrink the price tag even more, possibly to as low as $1.5 trillion.
Yes, you can reduce the amount paid out by making it not a universal basic income scheme any more. But that rather misses the point.
(The correct thing to say here is: Yes, a universal basic income sufficient to keep everyone out of poverty would be really expensive. Taxes would need to go up a lot, which would leave wealthier people less well off than they are now. If you don't want a large-scale redistribution of wealth, then you don't want a BI scheme sufficient to keep everyone out of poverty. But you might still want to consider a BI scheme that's not sufficient to keep everyone out of poverty, to simplify and to reduce poverty traps. No one would have to be much worse off then. But it wouldn't be enough for anyone to live on, and would still need supplementing by other safety nets.)
You get $700 / month from the government for basic income. Your social security, welfare, unemployment, disability, etc is reduced by $700 / month. Reducing all of those programs by the first $700 would effectively gut each of them enough to finally make some reforms without inducing panic in everyone who uses them.
If you were to implement the Fair Tax, which includes a stipend for basic needs, you'd get bipartisan support as well. The only difference is that you increase the stipend to the level of the BI.
For kids, you give the parents their basic income until they hit school age and then the BI goes towards funding their school. This would also enable people who wanted to utilize private schools a much easier choice by essentially becoming a voucher.
No loan could utilize the BI as security...except for student loans. That would allow driving down of interest rates as well as default aversion too. Payments could be automatically extract from the BI since student loans would finally be secured against something other that expected future earnings.
That said, agree with your main point that making BI deductible from [mostly] retained existing benefit entitlements is the least messy way of introducing it, but it also makes it more politically difficult since it's paid for purely by tax increases.
No, you wouldn't. Flat tax proposals and national sales tax proposals like the "FairTax", have support almost exclusively on the right (and each particular such proposal has minority support on the right.) You won't get bipartisan support for any of them.
I thought the idea was that it be enough to live on.
What happens to Medicare under that scenario? Some medical procedures, particularly for old people, can exceed that.
Current federal government revenues top out at $3 trillion. Dividing it by a rough population number of 300 million (and ignoring the fact that portion of it comes from corporate income tax, excise taxes, etc.), the revenues collected stand at $10,000 a year a citizen. Distributing $8,400 a year back requires rather deep cuts to every single entitlement program and then some (defense, USPS, air traffic controllers, national parks, etc.)
If you were to implement the Fair Tax, which includes a stipend for
basic needs, you'd get bipartisan support as well
> But by excluding 45 million retirees who already receive a basic income through Social Security, the cost falls to $2.7 trillion.
These retirees can be excluded from the calculation because they are already being paid, they wouldn't add any additional cost to the system.
You are entirely correct.. but I think you're missing the point.
Think of that first description as the marketing pitch to the general public. By saying it is universal and "free" to administer, it gets people behind it who don't think through the consequences.. which is a large chunk of the target audience. They are also the people who could put amicable politicians in power and keep them there.
But a "no-strings-attached" basic income would force politicians to give up the one thing they desire more than anything: power. So the second description with the actual mechanics of it, is for those people who actually get to administer the "free" program and tie their strings to groups, situations, and behaviors they want to punish or promote.
I am as free market as they come and find myself intrigued by the UBI... but the thing that prevents me from supporting it is that politicians and political systems DO NOT give up power so the "we can get rid of everything else" line is obviously a lie.
I tend to think the exact opposite is true: a universal basic income is conceivably one of the most massive power grabs imaginable.
If this comes to pass in America, you're going to have a large chunk of the population COMPLETELY dependent on the government's teat. And ultimately, a population that's dependent on the government for their means of survival (even if its spun as "no strings attached") is indirectly under total political control.
Yes you can save money by cutting these programs, but that argument doesn't add up for me yet because you still have to pay EVERY person in the country. (or is it every adult)
Actually you can pay for it. Exactly because any regular ordinary person can pay for it. Exactly because abundance is inherently free. (For the rest of the comment I'll redefine the label "you" to be one single ordinary person who wants to make a basic income happen IRL.) [0]
Abundance is free because it defeats the fundamental condition required for a scarcity-allocating market. That fundamental condition is: there is not enough for everybody. For example, try selling stray kittens in a neighborhood overrun with stray cats. No scarcity, no market price. In contrast, basic income requires abundance otherwise you have no business trying to universally share something you don't have enough of. Everybody can't have formula one race cars and red bottom heels. So just to be explicit:
With a universal basic income, you should only seek to share only those things you have in abundance. And since abundance is free, you are merely
**seeking to share free shit**.
**Abundance cycles**B) You give the tiny house to a handy builder-type who redirects the savings in rent towards spending more time building, you guessed it, more tiny houses. You use the remaining $10K to cover materials for the initial THOWs that the builder builds from scratch.
**Ride free** **Gotta eat** **Zap that** **Highly contagious** **Umm, water?** **No fossils** **Better markets** **Zero net cost** (nee Shit's free yo!) **tl;dr** tl;dr($tl;dr) Because abundance cycles
*p.s.* =====
[00] precedent https://www.reddit.com/r/BasicIncome/comments/3m8x3d/hey_guy...
[01] http://www.tumbleweedhouses.com/pages/plans
[02] http://www.tumbleweedhouses.com/products/amish-barn-raiser
[03] http://www.mrmoneymustache.com/2016/01/28/the-man-who-gets-h...
[04] http://www.mrmoneymustache.com/2015/08/31/electric-bike-revi...
[05] http://www.lowtechmagazine.com/2012/10/electric-velomobiles....
[06] http://www.mrmoneymustache.com/2014/10/20/aquaponics/
[08] http://www.mealsquares.com/faq.html
[09] http://static1.squarespace.com/static/52524dbbe4b0b242f8ce4c...
[10] http://defyingnormal.com/blog/2014/08/26/tour-solar-setup-va...
[11] http://simonthorpesideas.blogspot.com.au/2015/05/science-and...
[12] http://science.howstuffworks.com/environmental/green-tech/re...
[13] http://www.lightsail.com/
[14] https://myriadrf.org/projects/novena-rf/
[15] http://www.technologyreview.com/news/516571/build-your-own-i...
If by year 10 the economy still functions as desired, we keep UBI. Otherwise we taper it off again.
Otherwise, it will be nearly impossible to taper "off" in the event of a failure.
It's easy to start giving people money that they never had, but once they have a taste, it's going to be hard to take it away.
You can't dismantle those until you're at the 90+% range of any reasonable UBI payout.
As soon as you give people as little as 100$/month you will see some people tweeting about all the tricks they found to make it enough. Of course it wont be enough to bring most from poverty and those who can live off that will often start off some possessions, but the goal is to lower the bar of entry into that situation.
Only under these conditions can we transition from the bullshit-job economy we have and make sure that the general automation of production will benefit most instead of a few.
Does anyone advocate giving it to everyone?
What about children? Does a child get the same as an adult?
What about non-citizens who are in the nation legally?
What about non-citizens who are in the nation illegally?
What about citizen children of non-citizens who are in the nation illegally?
There are consequences to saying yes to any of these we need to think through, but perhaps more importantly, is there even a chance of passing some of these (could you imagine the Republican attack on answering yes to either of the last two?).
[What about children? Does a child get the same as an adult?]
Yes, but the funds are stored in an account and are inaccessible to them until a certain age is met (or they qualify as an independent, similar to how the FAFSA (doesn't) work).
[What about non-citizens who are in the nation legally?]
No.
[What about non-citizens who are in the nation illegally?]
No.
[What about citizen children of non-citizens who are in the nation illegally?]
Yes.
> What about children? Does a child get the same as an adult?
Maybe; if so, the child's allotment goes to the legal guardian (and, like the guardian's own UBI, is treated as income for tax and other purposes), but you also eliminate child-care related tax deductions and credits.
> What about non-citizens who are in the nation legally? What about non-citizens who are in the nation illegally?
I would lean toward saying citizens and legal permanent residents (green card holders) get UBI. Others do not (note that this includes non-immigrant work visa holders, like H-1Bs), though in the odd case of a non-UBI-eligible (but legally present) parent with a UBI-eligible child, the parent would be eligible to draw the child's UBI, just as a parent with their own UBI eligibility with a UBI-eligible child would.
> What about citizen children of non-citizens who are in the nation illegally?
That's...trickier. My preference would be that the citizen child would get an allotment, but that the guardian would have to normalize status to draw that allotment. The details of that are more for a discussion of immigration policy than UBI policy though.
An even trickier question is non-resident citizens, and particularly non-resident U.S. citizen children of non-resident non-citizens.
But, the big problem is the idea that the UBI should initially be sufficient to lift everyone out of poverty. The immediate goal should be to have a UBI which reduces poverty and addresses the fact that capital increasing takes the reward of economic growth, rather than it being broadly distributed. The long-term goal should be to displace and go beyond existing means-tested anti-poverty programs in lifting people out of poverty, but the best way to do that is to build a system that grows naturally.
As an example: eliminate preferential treatment of capital income in income taxation, maintaining otherwise general structure of the existing progressive income tax system, and set aside a portion of the total income tax revenue equal to the initial increase in tax revenue for the "Common Welfare Fund".
90% of the new money in the fund is distributed as UBI by equal division among qualified recipients (e.g., all citizens and LPRs, if that's the group defined to receive the UBI), the remainder is retained as a stabilization fund (with returns on the stabilization fund treated as "new money" in future years, and rules providing for some distribution from the stabilization fund to current benefits to reduce calculated benefit declines.)
Each year, reduce the actual minimum hourly wage from its nominal level (which I'm presuming gets inflation-indexed before this) by 1/2000 of the annual UBI level (for wages covered by overtime mandates, the minimum overtime wage is calculated first, and then reduced for the UBI) -- over time, the UBI displaces the minimum wage.
Other (e.g., means-tested) benefit programs aren't directly eliminated (immediately), but income from the UBI is treated as normal income for both income tax and benefit calculation purposes, so (assuming economic growth such that real tax revenues pre capita increase faster than inflation), even with eligibility criteria indexed for inflation, growing UBI will reduce the proportion of the population eligible for any such programs, eventually to 0 as the UBI crosses the maximum threshold for each program, allowing the programs to be retired.
If you consider as a method to introduce an income floor it makes sense. At 100k+ I really don't need any sort of basic income. A senior citizen getting paid social security is already getting the money out of that bucket (arguably that bucket should be phased out and everyone should be entitled to their basic income instead, perhaps with extra breaks for seniors).
I really don't support just giving out 30k a year to everyone. I can see the logic in giving out money to get everyone to that level (or whatever sensible number). I also think it's sensible to say that the benfit doesn't just go away if you start a job making 35k a year, but it does start to reduce as your income goes up. This gives you an incentive to work, even if your job isn't that high paying, but makes the program cheaper by not giving out money to people who really don't need it.
Basic income is known to create a large disincentive for work. In previous experiments (Mincome) labor supply dropped by about 10% - double what happened during the great recession.
This means that fewer working mothers can find child care, fewer laborers to mow your lawn, fewer nurses, fewer teachers, etc. No matter how much money you give to people, fewer services provided makes us all become poorer. That's simple arithmetic.
First of all, even if the people in positions like this were only working for sustenance and UBI provides it for them, it doesn't mean some wouldn't want to continue working to make even MORE money. UBI is a baseline, not welfare. If previously a lawn mowing job was only enough for rent and food, maybe now with UBI it'd be enough for rent, food, and the occasional dinner and a movie. Ain't nothing wrong with that.
But you're right, at least some people would definitely completely exit the work force. Well, that just means the salaries of the rest would go up. Simple economics. Does that mean that some working families can no longer afford to pay a new immigrant bottom dollar to mow their lawn and instead have to pitch in themselves? Maybe so. Is that so bad.
Okay, you say, but what about those working mothers that are barely making enough money to be able to afford the most basic child care while they make their income? Good news - UBI also helps THEM too so either they no longer need to work if all they're doing is getting by to keep a roof over the child's head, or they have enough extra to pay for the increase in child care.
I'm not saying "don't worry about, it'll all sort itself out". This is a very complex policy with millions of consequences to our societies - intended and unintended. A lot of research must be done, and also experimentation. But to say that with UBI everyone would be worse off is ridiculous bordering on propagandistic.
Many here believe that if people weren't forced to work for income, they would be doing things that are more valuable but also more difficult to monetize (at least initially but perhaps generally), like open source development. There is an underlying belief that vast creative talents are untapped or wasted because of the need to work for money. It's the intellectual's dream lifestyle. One that used to be possible for writers and academics.
Other reasons are largely an afterthought. That's why basic job for example is not a convincing counterargument despite the numbers. This is not really about helping the poor, that would be an auxiliary benefit at best.
[1] https://www.chrisstucchio.com/blog/2013/basic_income_vs_basi...
Many people never get a chance to discover a passionate relationship with work. Collectively, when we kick the habit of forcing people into doing things out of fear (with money) means that a lot of people are gonna be feeling like fish out of water. Generations of slaves don't just jump out of their chains eager to get working again.
Isn't this the exact effect you would want, if you are instituting basic income partly as a response to structural unemployment as a result of automation?
> fewer working mothers can find child care, fewer laborers to mow your lawn, fewer nurses, fewer teachers, etc.
Maybe these jobs start paying more. How is that bad? With basic income, more mothers would be able to stay home with their kids, more people would care for their own homes, and the nurses and teachers we need would see bigger paychecks.
Net, I don't see how society is worse off under that arrangement. It sounds a lot like how life was in this country before huge income disparities made hiring servants normal for people with means.
> It's not just wealthier people who will be worse off - it's everyone.
You assert this, but your comment doesn't successfully back up your assertion.
Suppose country A consists of 99 peasants and 1 plutocrat. The peasants work full-time and the plutocrat consumes their entire economic output living a life of fabulous luxury. Country B consists of 100 people who work part-time and live simple lives that they can afford. Country A produces more goods and services and has a higher GDP than country B - let's say twice as high. Nevertheless it is reasonable to consider country B better-off.
Edit: The above is probably conflating some unrelated issues, so let's just simplify: country A works full-time (40hrs/week) and spends their leisure time expensively, country B works part-time (20hrs/week) and spends their leisure time cheaply. Country A's GDP is twice that of country B in the obvious way. Is country A really better off than country B? (If you're going to make a revealed preferences argument about working hours then bear in mind that there are very few less-than-full-time jobs on offer, partly an artifact of the way current regulations treat full- and part-time jobs)
Someone going out to work and paying a large fraction of their income for child care is counted, whereas someone staying home and looking after their children is not. Only the first has value in an economic sense. Is it the only work that has value in a moral sense?
So what? Those people spent their time on things they valued more than the money they could earn by selling it. This just shows that they were underpaid for the value of their time through the threat of imminent pain of starvation or homelessness.
The market will adjust and pay those people more if the value they create and the profits reapable from their labor make that paid labor worth it.
Low value jobs will go away.
Some of that freed time will be spent on consuming, no doubt, but much will be spent on longer horizon value adding activities like schooling or starting businesses or more efficient uses like taking care of children.
"... found that only new mothers and teenagers worked substantially less. Mothers with newborns stopped working because they wanted to stay at home longer with their babies, and teenagers worked less because they weren't under as much pressure to support their families, which resulted in more teenagers graduating."
And that does not sound bad at all and it rather counters the lack of supply of nannies (if there was such).
(Quotes from wikipedia: https://en.wikipedia.org/wiki/Mincome)
From http://archive.irpp.org/po/archive/jan01/hum.pdf
Meanwhile, other studies have shown productivity actually increased when basic income was instituted amongst extreme poverty - http://www.bignam.org/BIG_pilot.html
You also gloss over the fact that it allowed mothers to stay home with their children. The benefit to society and productivity of stronger families shouldn't be understated.
Finally, you assume that people would stop cutting lawns, nursing, and providing childcare – why?
1: The Rise and Fall of American Growth: http://press.princeton.edu/titles/10544.html
This is, in fact, precisely backwards. There are plenty of jobs that people simply cannot do because they cannot make a living at them both through lack of money as well as lack of stability. Social workers, elderly healthcare support, child care, etc. are all very poorly paid and basically not worth doing if you have any other choice.
With a UBI, people can work those jobs for very small amounts of money knowing that they are covered.
Not sure where you got your numbers from. Wikipedia suggest that it was not even half that.
>The results showed an impact on labor markets, with working hours dropping one percent for men, three percent for married women, and five percent for unmarried women.
Anyway, per https://en.wikipedia.org/wiki/Mincome, this 5 year study has many qualifiers placed upon why the drop in labor, with the more interesting of these involving child care, education, and mental health: The results showed an impact on labor markets, with working hours dropping one percent for men, three percent for married women, and five percent for unmarried women. However, some have argued these drops may be artificially low because participants knew the guaranteed income was temporary. These decreases in hours worked may be seen as offset by the opportunity cost of more time for family and education. Mothers spent more time rearing newborns, and the educational impacts are regarded as a success. Students in these families showed higher test scores and lower dropout rates. There was also an increase in adults continuing education. ... Manitoban economist Evelyn Forget conducted an analysis of the program in 2009 which was published in 2011. She found that only new mothers and teenagers worked substantially less. Mothers with newborns stopped working because they wanted to stay at home longer with their babies, and teenagers worked less because they weren't under as much pressure to support their families, which resulted in more teenagers graduating. In addition, those who continued to work were given more opportunities to choose what type of work they did. Forget found that in the period that Mincome was administered, hospital visits dropped 8.5 percent, with fewer incidents of work-related injuries, and fewer emergency room visits from accidents and injuries. Additionally, the period saw a reduction in rates of psychiatric hospitalization, and in the number of mental illness-related consultations with health professionals.
Its unacceptable that food in the US is 2x the cost of that of china, for instance.
http://www.numbeo.com/cost-of-living/compare_countries_resul...
The idea that the people employed in the bureaucracy managing the current mess of programs losing their job is a silly concern. Why should we keep paying people for unnecessary bullshit jobs? Why should we employ people to check and ensure that other people aren't secretly working? Let those people do something more productive.
I would like Basic Income to be a bit more than $10,000 per year, though. Ideally, especially when the number of jobs available falls due to increased automation, I'd like the Basic Income to provide a comfortable income. People can and will still work to increase their income further, but when robots do more and more of the work for us, there's no reason to punish people for being unable to compete with robots.
I get the sense that liberals and conservatives have wildly different conceptions of what a Basic Income would mean in practice.
Conservatives and libertarians may like the idea of giving a single no-strings-attached check every month to everyone and anyone and sending them on their way. Liberals I imagine expect a basic income will be enough to guarantee food, clothing and housing and perhaps some means of allocating portions to those categories, which is more or less what we have now.
A legislative mandate neatly solves that problem. The analogy doesn't hold.
Well, that's one of the major problems with this scheme: a whole lotta people will as well. In much the same way that we currently hear "I can't raise my family on minimum wage!" we will hear "I can't raise my family on my UBI!" Anyone who can't see how UBI increases will become a promise of every presidential hopeful hasn't been paying attention.
When the people realize they can vote themselves money... something something, I can't remember the rest.
---
I also get a kick out of how people think welfare programs will be eliminated by UBI, and that's why it won't be so expensive to implement. So what happens when someone on UBI has their car break down or, as will often be the case, just flat-out doesn't budget properly and now they can't buy groceries? We're just going to let them starve? Of course not. There will be a safety net below the UBI.
These used to be major expenses, and much more expensive than today, adjusted to inflation (stuff got cheaper partially due to globalisation & partially greater automation).
Anecdotal experience. My anecdotal experience is the opposite where the liberals I know believe increasing the minimum wage is that "next big step forward." They won't even give the idea of Basic Income a chance.
UBI proponents have a lot of work to do putting together and coherently articulating a realistic, plausible route from where we are to where UBI hopes to get us. Most have been good at articulating a great picture of why a mature UBI system would be great, but much less good at painting a picture of how you get from here to there in a believable way.
I'm sure you'd like the $10k/yr + working option better if rice and dog food don't sound like appealing staples.
Basically, the reason he sees Basic Income as something of particular interest to conservatives is that he's hijacking the term to describe conservative policies of trying to punish people into work regardless of how realistic it is for them to find a job.
Don't forget that public sector unions (ie. the people administering all the existing entitlement programs) are a major liberal constituency.
> I would like Basic Income to be a bit more than $10,000 per year, though. Ideally, especially when the number of jobs available falls due to increased automation, I'd like the Basic Income to provide a comfortable income.
There are plenty of places in the country where $10k is more than enough to live on. One of the biggest benefits of UBI would be that we can start moving more people to the massive areas of our country where there's low COL and few jobs.
That's not basic, though. I don't think there are many towns (maybe none) in the USA where you can't stay warm, dry, safe, and clean with a soft bed and a healthy diet for $700 per month.
Because human services jobs employ thousands of people (a state like New York has 40k+ people in public sector social services and at least that many private sector) and control thousands of votes.
Democrats will have a hard time supporting it, because those unionized workers will get them voted out.
It's also very telling about what "basic income" really is. Conservatives don't give a shit about social welfare, this is just another scheme to enrich their pals and undermine the social safety net.
Huh?! That makes no sense: how is giving everyone a sufficient income to survive undermining the social safety net? How is increasing taxes on the wealthy enriching their pals?
The Fed can raise interest rate to shrink the money supply for banks and borrowers while give more direct cash to expand the money supply via basic income. This can be in addition to the government's budget spending on basic income.
An interesting outcome is the deflation of the asset bubble as rate increases. The money supply expansion via direct cash counters the deflation in economy. This should reverse the trend of the great wealth transfer to the asset holders in the last 20 years.
Next, the Fed avoid targeting zero inflation, because it's currently impossible to hit that number so exactly, and they desire to avoid deflationary spirals. The past 150 years has shown across hundreds of countries that the current solution is vastly better than the boom and bust cycles previous, and has also demonstrated the benefit of fiat over commodity (like gold). There are ample papers showing this in the econ literature, and is the primary reason not a single country tries to use previous methods.
Next, new money is added through asset purchases, not giveaways, so it's erroneous to think this money can just be handed to individuals as cash, unless perhaps those individuals were selling assets to the Fed of equal value.
Next, the target is usually around 2%, and the money supply is around 2T, resulting in 400B a year, or, 2K a year per adult, which is nice, but hardly a basic income. It's more like a tax break. It's hardly going to change wealth transfers, since most people will just consume it, and the wealth would go back to companies, mostly the ones you decry above.
Finally, when the Fed targets low inflation, that would dry up the basic income, and I don't think giving people such a variable and uncertain income would do well for planning and stability. Soon people would clamor and elect politicians that guaranteed the Fed would pay X per year, defeating the entire mechanism the Fed uses to stabilize markets.
Let them eat cake?
> ...they desire to avoid deflationary spirals.
I've never really understood this. Dropping prices (see the recent changes in oil prices) are really good for the impoverished, at least in the short run. If we are really talking about a post-scarcity economy, wouldn't deflation indicate efficiency and be a good thing?
Besides FOMC, loan is a bigger money creation mechanism. With 10% fractional reserve, the banks can lend out 10X of what they have. In that case interest rate dictates how much loan actually lent out and how much money actually created. By raising or lowering interest rate, the Fed increases or decreases the overall loan amount. Lowered interest rate encourages bigger loan amount, vastly increases the money supply for assets, leading to the current asset bubble.
Basic income can become another mechanism for the Fed to inject money. The Fed can buy less treasury, raise rate, and give out more in basic income.
People spending the extra money and companies earning them are good. Companies earning money via products and services are good. This encourages more products and services, and more employment. Instead the new money created now are given to the asset holders and locked up in assets.
Edit: QE was another money creation mechanism and it hugely benefited the banks. The Fed bought assets at inflated price from the banks with created money.
Uh, no. Quite the contrary. Since the abolition of the gold standard, our economies were prone to fluctuations like they haven't been in decades. Because then the (central) banks can meddle with the quantity of our money to their liking.
For instance, why would landlords not raise rents knowing that everyone now has this cash?
As for landlords specifically: the renters already have $x they are not using for rent, so why don't the landlords get that? If there is no good or service that absorbs all the money right now, there's no reason to think there would be one for the marginal money of a basic income scheme.
Rent is not some basic formula derived from the average income.
Rent increases now, due to inflation. The general public have to give more despite not getting the created money. Landlords got the benefit of rising rent due to inflation and rising housing price due to lower interest rate to create more money.
Basic income just shifts the inflated money to everyone instead of just the asset holders.
So lower-income housing landlords do raise their rents. Grocery stores raise prices on their beef. Low-end used cars get more expensive. More dollars chase the same quantity of goods and services.
But basic income continues into the long run. It becomes a business opportunity to undercut those inflated prices, to capture more of the basic income flow for yourself. An entrepreneur builds lower-income housing and charges lower than the prevailing rents, immediately poaching business from the opportunist landlords, who now have to compete with one another to keep tenants.
As additional competitors enter the market, the economic allocations change to match the newer distribution of incomes. More businesses that serve lower-income people become viable, so more economic activity occurs to cater to that sector. Fewer businesses that serve higher-income people remain viable, because they are taxed more. It slowly becomes more expensive to be rich, and less expensive to be poor.
In the long run, wealth distribution flattens and is less self-reinforcing. More than a few people would be willing to walk a higher wire if they were given a stronger safety net, choosing risky entrepreneurship rather than safer employment. Prices only remain high if existing businesses are protected from competition.
What would happen (if you funded this by printing money rather than taxation) is that the value of the dollar would fall by (monetary value of basic income payment) / (total number of circulating dollars), creating a redistribution effect similar to that of a taxation scheme, but less planned out.
I don't see any moral justification for a software engineer earning more than someone collecting waste [1]. In fact, it is normal that as our society gets more educated and the supply of unskilled workers goes down, a lot of hard manual labor will become expensive. This is already the case with mining, for example. The fact that we software engineers do a job that we like and is well paid at the same time is a very lucky (for us) historical accident.
On the other hand, I see in basic income an opportunity to also do unalienated work. For example, I'd very happily use BI to take buy some time off and to do a kinda "libre software retreat", hacking on free projects for a while without needing to bargain with an employer that owns everything that comes out of my head.
[1] Excluding the cost of education, let's assume university is free as in a few places in Europe.
That's because moral justification isn't at the center of our society. The market is. Many attempts have been made to switch from the market to something else, not many were brilliant.
The "lucky historical accident" you cite isn't one... It's just the way our society was built.
Also you could argue on many different levels. To me, long studies meant delayed enjoyment of life, less freedom until 23, etc... You get less immediately, more later.
In the end, the question is really: "Do we want to use social engineering (as it's called) and try to build a brand new society, when all other attempts lead to poverty and war?"
In general I agree. However, besides education costs (I have quite many friends who have a sizeable loan), software engineers also enter the workforce quite a bit later. E.g., taking Netherlands as an example:
- Waste collector: age 12-16 VMBO
- Software engineer: age 12-18 VWO, age 18-23 BA+MA university
Also, very few students actually finish university in time. So, they are usually 24 or 25 when they are on the market. So, there would be less opportunity to build up a pension at equal wages.
Garbage Disposal people earn over $100k. Software engineers earn about $80k. A job that can be outsourced or automated is not valuable. http://money.cnn.com/2016/02/24/news/economy/trash-workers-h...
Do you see a moral justification for paying a doctor more than a receptionist? I see none for paying them the same.
"Dirty" jobs being paid more certainly does sound a little more ethical than today, where those with little options have to work those dirty jobs to keep their house and to eat, and they are paid low.
Labor supply = Labor servicing consumption + labor servicing investment
Rearranging this implies:
Labor providing investment = labor supplied - labor providing consumption
Simple arithmetic shows we now have less resources devoted to investment. So how will this innovation actually occur? I realize demand for it might go up, but if supply doesn't increase correspondingly, so what?
In the long run, any menial task is supposed to be automated away completely. In short term, what you described already happened in area like Post-doc and game industry (or humanities degree, if you will ...).
Can you imagine what kind of autonomous robot would it take to be able to do regular plumbing work, in cramped spaces, with low visibility, requiring relatively significant physical efforts? The software side of it can definitely be solved (though not easy at all). The hardware side would require significant breakthroughs, if the device is going to be cost-effective even compared to a highly-paid certified plumber.
Same applies to electricians, and in certain degree to car mechanics, too. We have large swaths of infrastructure built with maintenance by humans in mind. These humans are not exactly easy to replace with robots.
Some not-very-intellectual jobs (plumbers are everyone's favourite example, which makes me suspect there aren't many others) pay pretty well. But most don't.
Some jobs that usually pay pretty well: Software developer. Lawyer. Doctor. Quant. Corporate executive.
Some jobs that usually pay pretty badly: Cleaner. Waiter. Shop-floor sales person. Bank cashier.
I think these are more representative than comparing adjunct professors with plumbers.
Second, if you go to places like Netherlands, Norway and Japan you'll see that it's not about money. Higher education prepares workers to do more complex, more efficient and more productive jobs.
Also, the society is more conscious about not having someone to do stupid things for them like collecting their trays after they eat at the McDonadls, this is YOUR responsibility as a member of a society, to look for others as well.
So in Amsterdam for example, street cleaning and trash collection are done with specialized vehicles. In Denmark, subways are autonomous.
I like to believe that as you increase education and income, the people that would be considered "dumb" in an very unequal society will spend their time developing technologies to automate tasks no one likes to perform and increase productivity.
Also, while I've never been to Norway or Netherlands, I think you're underestimating the number of "dirty jobs" that support you. Who's tilling the land? Mining the minerals? Excavating land? Driving the garbage trunks? Emptying the lobster traps? De-greasing the engines? Tending the public spaces?
I'm not against legalized prostitution, but I think its a strong strike against any claims of higher responsibility towards society.
Yes, many of these things might be automated one day, but that seems far away (a century at least). Your parent's question is valid and, as far as I'm concerned, there's no place on earth that comes remotely close to what you seem to be describing.
Some jobs, such as cleaning, and collecting waste, literally deal with dirt. I don't think he was using "dirty" as an insult.
That strikes me as an extraordinary claim.
Its why a pit deputy (coal miner) in the UK can charge £2k for a single weekend shift.
To play devil's advocate, why? If my time is more valuable than a McDonald's worker's, why should I be wasting it on cleaning up trays?
Your argument could easily be extended to saying that restaurants are in general frivolous. Isn't feeding yourself a fundamental responsibility as a member of society? Except that destroying restaurants would actually be quite economically negative.
This is really why I want this to happen on a large enough scale to see if it really works or not.
In the US, we could already make great strides with removing the hard floor by simply implementing universal, primary health care coverage, free/low-cost higher education and wages that keep up with inflation. I feel that BI in some form is inevitable and the next logical step of civilized society, however, given the incredible resistance to providing universal health care, I do not see BI happening in my lifetime.
I don't see that happening to be honest but I do see something worse...
Won't the price of everything go up for those that don't currently need the welfare system? Is this a sort of stealth tax increase on the middle class?
I live in the UK and pay a lot into the system but I am by no means rich. I don't claim anything except child benefit (dunno how I qualify but I do... for £80 a month or something).
If you remove the need for someone currently on welfare to take a min-wage job then that means the job either doesn't get done or the salary for it must go up. So, if it goes up, then that company's price will go up or they face going out of business.
If they manage to stay in business, I will need to pay more to use their service than I did before but if they go out of business because I am not willing to pay it, they end up claiming welfare and my tax goes up to pay for it.
Honestly, I don't see an upside for anyone except those that can't/won't work!
It all makes sense if you think about welfare not as "these slouches are rewarded for the laziness" but as a price you pay so that unemployed people are not forced into violent property expropriation from you.
When large swaths of population don't have an access to money-making jobs, it significantly affects middle class well-being.
Of course you can "get yours" and double down on police and live behind electric fences South Africa style, but that's not pretty.
As to "who would do the dirty work." You probably didn't mean it this way, but the question implies that we have to keep people down in order to do the work that "we" need them to do.
When something is in short supply, you compete for it. UBI would bring competition to employers, especially at the lower incomes. Part of that competition would be with "not working," but it would also be with other employers, as it would then be easier for people to look for or prepare for other jobs, and it would make it easier for people on the bottom rungs to expect better treatment.
More costly dirty jobs encourage automation and they will be automated away. The trend has started long ago. It used to take 3 people per garbage truck to collect trash, one driver and 2 people physically pick up the trash cans. Then it was 2 as better trucks came along. Now it's one driver per truck, as the truck has mechanical arms to collect the trash.
With driverless trucks in the horizon, it is not far fetch to have one driver overseeing 2 to a small fleet driverless trucks to collect garbage on a street in parallel.
So who will do the dirty jobs? I presume ways are found in which to make them less distasteful. They are not about "dirtyness" per se, but about application of high dexterity manual labour on various tasks.
"Worst" case scenario. You end up having to import a bunch more foreigners to do those jobs at the lower wages.
Being a big inefficient government and redistributing wealth are not mutually exclusive.
Basic Income is interesting because (a) it removes the requirements for administration of social security and policing of fraud, and (b) because some people think increased automation/AI will create increased unemployment so a different approach would be beneficial.
I'm not aware of evidence to support a view that poor implementation of particular social security programs is a driver.
I don't think the problem with basic income is an ideological one, its a numbers one. There simply isn't enough money to implement it without massively increasing taxes.
I live in Scotland and they love the fact that they can raise taxes here now... they openly talk about it and very few people I know bat an eyelid!
But it's the curse of socialism imo: As long as you tax people earning more than me then I am fine with it.
Sadly, something I have heard too often
Edit: Spelling
Other approaches (e.g. minimum guaranteed income for the jobless and tax credits for the working poor) look like a far better use of resources.
That number sounds higher than it would effectively be:
1) The population is ~320m, but ~65m of those are under the age of 16 (add on another 8m if you say under 18), who presumably don't need the same $2600/month right from when they are babies. That shaves of $2.8trillion
2) Some people currently on benefits will get to keep all of the $2,600, some people will break even receiving $2,600 and paying an extra $2,600 in tax, and at the richer end of the spectrum they will receive $2,600 and pay more than $2,600 back, to balance it out across society. Even before you start counting the extra money you get from taxing the rich with more than the free income they receive, if you draw a line at the median of society and say that everyone richer than that pays back the $2,600 they receive each month in tax (i.e. saying the richest half don't need this basic income) then that's $3.8trillion that is technically being given out but immediately bein taken back by the Government. (Hopefully they negotiate good bank fees! Obviously the benefit to this seemingly pointless giving out and taking back of money is not having to deal with the legwork of judging who deserves benefits.)
So that's cut almost $10trillion down to ~$3.8trillion that's actually being given out.
3) Now take off current welfare costs. Wikipedia says "Total Social Security and Medicare expenditures in 2013 were $1.3 trillion" and I'm too lazy to find a figure that doesn't include Medicare. Let's imagine that it's split 50/50, we have $3.2trillion left to find.
And this is when you start moving the line we drew down the middle of society and figuring out what % of the $2,600 different levels of society should get to keep or have to pay back in tax or have to pay extra in tax. If you think the rough amount of welfare spent on society currently is right then you can balance it so that less people get supported and less taxes are needed. If you think more people should receive more support and richer people should pay even higher taxes to cover that then it can be pushed in that direction.
The simplest way to logically think "can it be balanced?" is to imagine that 100% of the population gets given $2,600 (or whatever amount) each month, and 100% gets taxed that exact same amount. Everyone is receiving that basic income, and (other than relatively small admin costs) the program is break even. Then you just play with numbers, always balancing both sides, to redistribute wealth from richer people to poorer people (which is already what the welfare system does).
(For the avoidance of doubt, an ideological problem can be a serious real problem. If a basic income can't be implemented without a tax increase that voters would never tolerate, that's a good reason not to do it. If it can't be implemented without a tax increase that would wreck the economy, that's also a good reason not to do it, but I think that would rightly be called a numbers problem rather than an ideological one.)
There's nothing infeasible about spending $10 trillion a year. The US can quite literally print and spend as much as it likes in dollar terms. The only limiting factor is inflation.
As soon as public spending starts causing ~> 12% inflation year on year you need to start worrying about "can the country afford this?". Not until then. The government certainly wasn't worrying about the total dollar number during the war or the last bank bailout.
Yeah and, for sure, it won't pass... considering how conservative we are, plus the legal side of the proposal is not so clear in where the money will come from.
It's not some kind of endorsement of it as a good or feasible idea, unfortunately. As you point out, most pro basic-income people I've talked with here tend to hand-wave the "how do we pay for it" question as "implementation detail" or some idealistic rhetoric ("tax the rich more!") which is not encouraging me to vote in favor.
I would be happy to give my vote to a proposal that included a budget proposition, or a rational analysis of feasibility. The current one doesn't (http://initiative-revenudebase.ch/initiative/)
https://www.youtube.com/watch?v=0Z760XNy4VM
What happened next is absolutely astonishing. When the mice had nothing to do and nothing to work for, their society collapsed upon itself. Females stopped caring for their young. Betas began guarding the elite females, despite them not breeding with anyone. Fights broke out for no reason whatsoever. Mice stopped eating.
Their population peaked at 2200, and then died off extremely quickly.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1644264/
It was a big, fat, giant mess. And it's exactly what will happen to us if we don't have something to work and live for. Hell, it's already happening.
I don't think humanity survives with basic income as planned. We fall apart when we have nothing to do. We're no better than mice - we are still just animals with a larger hierarchy.
I'd rather see unproductive humans digging and re-filling holes in the ground than getting paid to do nothing. Or something like the biking experiment in Black Mirror.
Yet we need to do something as automation grows. Society is in for some serious decisions, and no country currently has the leadership to be able to tackle them.
I'd rather people get paid to do nothing than people getting paid to do pointless tasks. I've seen some amazing things people made in their spare time, but I can't imagine anyone making something worthwhile digging and re-filling holes.
There's nothing in your mouse anecdote which justifes this conclusion. Humans are, as I'm sure you're well aware, quite different from mice.
Also, in that experiment isn't there a complete excess of resources? We certainly don't have that, opulence would still be expensive and out of reach of a BI.
Also, it's one experiment, that I haven't seen replicated, done in an age when you had to show up those darn commies, that Capitalism is the best.
Accepting for the sake of argument that this is true (which, a single, non-replicated experiment on mice is far from sufficient to establish), it has nothing to do with Unconditional Basic Income, which does not provide unlimited quantities of anything, or otherwise make it so that humans don't have "something to live and work for".
I can't see how they could believe this. First of all a minimum wage becomes unimportant as you should hypothetically have enough money to support the kind of lifestyle a minimum wage job would provide without working. Secondly, as it's no longer financially critical to them, people won't be as inclined to take on minimum wage type jobs - which will force the wage up anyway so that the business can attract employees. So it should take care of itself. As for paid family leave (I presume they mean maternity/paternity leave?) you won't need that as your basic income will ensure you still have money coming in. And if the company wants to retain your services after your leave they will offer it anyway. The key point in these examples is that even if you don't get a higher minimum wage or paid family leave it's no longer going to have a big effect on you as you have your UBI to rely on.
Also, it doesn't seem to me like there is a left/right split on this elsewhere in the world. This leads me to believe that the problem is the highly partisan US political system. The right is obviously going to support UBI as it would significantly reduce government size - the left can't be seen to be agreeing with the right. I think it's a kind of childishly schoolyard thing you see a lot in US politics (he likes that so I don't).
It's considered a distraction because it's a political pipe dream that has a very low chance of being implemented.
The reason the left doesn't like it is fourfold:
* The pretext for basic income presumes that we have a lack of spending because we've run out of things to spend money on. This couldn't be further from the truth. American infrastructure is crumbling and yet politicians still want to restrict necessary spending, choking off demand and killing jobs.
* The pretext for basic income also presumes that we have a wide variety of cheap goods that don't need much US labor because of efficient markets and automation. We don't. We have a wide variety of cheap goods not requiring US labor because China intentionally undervalues its currency. China can pull the plug on that at any point and trigger a torrential level of inflation in the US.
* The last time the US faced this problem of high unemployment due to artificially suppressed demand (in the 30s) it was successfully fixed with federal job guarantees that ended up providing useful employment and getting a huge amount of useful infrastructure built that we still use today.
* However much you try to deny it or dress it up, people actually want jobs - for more than just the income.
For example, say I'm a landlord. If everyone all of a sudden had an additional "base" income, why wouldn't I increase my rents to absorb at least a portion of that? Then, only people who had a job would still be able to afford to rent from me, while those on the basic income would be unable to afford it. I'm not out either way.
So you would say you need to introduce legislation to stop me from doing that, but the free market would abhor that and likely accuse you of being a communist. So you can't. So I'm failing to see the point of the whole exercise?
That's the opposite of what's being proposed: the minimum income comes from the government, not employers. Minimum income can replace minimum wage.
For example, say I'm a landlord. If everyone all of a sudden had an additional "base" income, why wouldn't I increase my rents to absorb at least a portion of that? Then, only people who had a job would still be able to afford to rent from me, while those on the basic income would be unable to afford it. I'm not out either way.
Sure, but now that you've raised the price, there's an opportunity to undercut you that didn't exist before. The result ultimately depends on the supply and demand of housing. Just think of it like a bunch of slightly-richer people moving into the neighborhood. Prices will rise, but not enough to take all the new residents' extra money.
If you live in an area where there is a housing shortage, then yes, the market will drive things higher, but then a UBI lets people be a bit more mobile so people may move out of high rent areas more easily, also potentially driving up wages because less people are around to do needed work, but then as everyone gets pushed up, the tax will start to pull things back down. The whole point is income redistribution , especially in a society thats starts getting more and more automated.
The whole reason the debate is becoming so prominent now is just because minimum-wage jobs and even non minimum wage jobs will be replaced by robots/ai. The goods may even become cheaper.
What if I spend my basic income on drugs and hookers? are you willing to let me starve? what about my kids? If not, then the basic income can't actually replace the existing social programs.
If nobody need to work, then if employers want employees, they have to pay more to get them, which makes prices rise, which makes your 'basic' income insufficient again.
I don't get it.
* Only the cost of labor will increase, the cost of other inputs to making goods or providing services will not.
* The cost of labor will not increase uniformly, but rather it will increase most at the low end (people who are more likely to refuse employment due to basic income) and less at the high end. A software engineer making $120k is not likely to decide to stop working because he now gets $10k from the government. However a part-time fry cook making $6k a year might.
Its like the Alaska Permanent Fund[1], but with a broader -- and by design growing with the economy -- revenue base.
> What if I spend my basic income on drugs and hookers? are you willing to let me starve? what about my kids? If not, then the basic income can't actually replace the existing social programs.
Sure, it can still replace existing social benefit programs. For your kids, well, we already have provisions for taking children from the care of parents that abuse or fail to provide for them, and putting them in the care of the State with the parent responsible for support costs; allowing either redirecting the children's basic income from the parent to the new support provider (in a system where children have basic income) or diverting some defined portion the parent's basic income (in a system where children do not get allotted their own BI) to pay support costs is quite natural; this doesn't create an additional social benefit program.
As for you, some BI supporters would let you starve. Others might support having transitional food/shelter programs (which would be an additional short-term benefit program) available to avoid people falling through the cracks, but make the beneficiary responsible for the cost (possibly diverting some share of future BI payments until that debt was paid).
> If nobody need to work, then if employers want employees, they have to pay more to get them, which makes prices rise, which makes your 'basic' income insufficient again.
Under realistic assumptions about elasticity, Basic Income would have some effect on accelerating price inflation of goods demanded at the low end of the income distribution, which would mean that the quality of life any level of UBI could sustain with no outside income would be somewhat less than one would expect with the same amount of income before the UBI became available. But overall, those receiving the UBI would be able to afford more than without it.
Further, UBI can cut employer costs (while it reduces economic duress to work, it also reduces the need for a minimum wage and many UBI proposals have it replace the minimum wage; it also means bad-fit employees will have less resistance to moving on, and that people will generally have more freedom to seek optimum job fits -- which are good for workers, but also most productive for employers.)
And most people don't just work enough to meet basic necessities if they are capable of getting more, so most people able to do economically useful work probably would even with a UBI that met basic needs -- people like luxuries.
My guess is UBI is going to help very few people, most people's troubles are going to continue anyways. Unless you are seriously ill, or physically disabled, or stuck in warzone Africa you need to accept the fact you are responsible for yourself. In fact merely acknowledging this fact is likely to do more to fix your problems can free cash from the government.
If and when UBI happens, Rich won't need it, those middle class people with some responsibility will get some marginal upgrade on their income. Most people with no responsibility will spend it away on things they don't as always. They will continue to blame rich people for their problems, and consider rich people as evil for not endlessly doling out free cash for their parties.
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."'
:Rudyard Kipling [0]
Take for instance the amount spent on the bank bailouts, which were supposedly done to help stimulate the economy. If you'd just let the banks fail, you could have spent the same money giving everybody a check for somewhere around 20K (the number is debatable).
Hate poverty? The U.S. has spent more than 5 Trillion on it over the last few decades. That's another 20K or so per man, woman, and child. The national debt is closing in on 20T. Would you rather have a balanced budget and a check for 100K? (I understand the math is way fuzzy here. It's to make a point.)
We're reaching the point where the average person who supports helping the poor can figure out that we could have just set up an endowment for each poor person when they were born and spent less money than this. And at the same time we would get rid of a lot of folks doing useless overhead simply because the system is so complex.
For those reasons and more I like the UBI idea.
But ideas are worthless. Execution is everything. We need about a thousand different experiments -- ran for 10 or 20 years -- before we can begin to start saying what might work or not work. When I look at other charitable causes (aid to Africa comes to mind first), the rhetoric got way out ahead of the actual results for many, many decades. Tons of time, effort, and money were spent on strategies that didn't work but sounded pretty cool. We'd be idiots not to recognize that this is the danger here too.
The first question we have to ask is this: What is UBI? Is it a reliable income in place of a bunch of other services? Or is it in addition to a bunch of other services? The difference matters. Once that's defined, I sure would like to see if a majority of people doing nothing "rubs off" on ambitious, driven people. Or maybe it works the other way around. Maybe a small percentage of ambitious, driven people, in a society without external pressures, can persuade more and more folks to find meaning in helping others. Beats me. Sure will be fun to learn more.
Slogans are great. Results are better.
The recent Freakonomics episode on the topic talked about a Canadian experiment "Mincome" from the 70s. There were some interesting results. Worth a listen.
"FORGET: One of the findings was that high-school completion rates had increased, and we discovered that boys, in particular, in low-income families had been under a fair amount of pressure to become self-supporting as quickly as they could. When mincome came along, some of the families decided that they could allow their sons to stay in high school just a little bit longer. So instead of quitting school at age 16 and getting their first full-time job, these boys stayed in school until they were 18, until they graduated from high school and took their first full-time job a little bit later."
The bailouts were asset swaps, repaid with a gain for the taxpayer [1]. They were not cash giveaways. Comparing this to simply giving cash to people is ludicrous.
The most at risk was about 2T, with only 650B actually out at any time, which at your claim of 20K per person, only pays for 32 million people. You're off by an order of magnitude (completely ignoring that the bailouts were asset swaps, not giveaways).
>Hate poverty? The U.S. has spent more than 5 Trillion on it over the last few decades. That's another 20K or so per man, woman, and child
Over the course of decades. It's not 20K in a year. It's more like 1/40th ($500) of that a year. And the only places I can find a number this large includes Medicare/SS payouts. Are you going to remove these programs (especially Mecicare/Medicaid) with your conversion to a once in a lifetime check per person?
> The national debt is closing in on 20T. Would you rather have a balanced budget and a check for 100K?
That's nonsense. Adding massively more to spending via UBI is not going to balance the budget or reduce the debt, and I don't know what magic lets you take 20T of debt (the biggest holder being SS, and large amounts to the Fed and loans to US investors, such as retirement funds) and simply divide by 320M people to get 100K (actually, this is 62.5K) in a check. Nothing in this line of numerology makes any sense. These uses are nowhere near exchangeable.
>(I understand the math is way fuzzy here. It's to make a point.)
The math isn't fuzzy. It's simply wrong, from the starting values, to the calculations, to the conclusions.
>The reason UBI has such broad appeal is that, well, people are able to do basic math.
Unfortunately this basic math is not coupled to reality, ignores very important and well tested economic ideas backed by 100+ years of empirical data, and is ignores the downsides and costs involved.
And so far, I fail to see many UBI proponents that are able to do basic math. A few can, but mostly they are full of numerology and ignoring the meaning of various amounts.
I've yet to see a UBI that doesn't either require massive tax hikes to the point of possibly destroying the economy or leave those needing assistance now in much worse shape.
>Slogans are great. Results are better.
Intellectually honest claims checking is better, and it helps avoid chasing impossible or unlikely or destructive plans.
1. How do you implement this whithout border control - if you create a basic income that is higher than ~1/2 the world's income the amount of illegal immigration will be huge
2. Will we really have the will to tell people who are starving because they lost their stipend to drugs or gambling "too bad"?
2. It's at least no worse than today for those people. Support groups will still exist. If you distribute money frequently (e.g. weekly) it might help a little in preventing catastrophic situations where people lose it all. My concern here is that the payday loan industry grows instead of shrinking (tough to predict these types of things).
One smart bread merchant will probably say "Hey I used to sell this for $1.50, I can do better than $100" and prices it at $90. Now everyone buys bread from him.
The other merchants feel the price pressure and the cycle continues, with the price settling down to something likely higher than $1.50 (to reflect the increased price of labor input as a result of basic income) but not so high that it totally eats the increased income.
So yes, things will cost more after basic income (after all you'd likely need some sort of inflation to find the money to give away). But in an efficient market they will not cost so much more than people are not still effectively richer than they were before. It does not change the intrinsic value of most things, it just makes certain inputs (namely labor) more expensive.
Yes, UBI in most of its incarnations is a deliberately engineered inflationary spiral - a one way ticket to Venezuela. Everyone simply ignores the issue.
There's the 10% for each entitlement that need the full entitlement, and there are dozens of entitlements, hundreds, so 10% of hundreds of programs will just be too many people to allow a basic blanket income to cover their entitlements.
All that said, my favorite version of this is the "negative income tax". We have something kind of like it already, but the EITC would have to be expanded significantly before it was actually something like a negative income tax, and that means cuts to other programs.
Money is not the universally effective solution to health care in this country. We already spend double, as a percent of GDP ,compared to any other country.
I think we're going to run into some problems on the supply side with a universal basic income. Some prices will rise due to increased consumption. This will make capital investment (e.g Research and Development, New Factories, Upgrading Production Equipment) more costly. Eventually you'll burn the furniture to heat the house and then things will start to fall apart and get into an inflationary spiral. It does have the benefit going for it that it is less complex to administer though, while our health care system is enormously complex and grows ever more complex with the more money that gets spent on it.
Note that the poor will obviously get fewer benefits if BI is only funded from cuts to programs the benefit the poor.
Example: lets say we eliminate program X that currently has a means test limiting it to the poorest 20% of the population. If we, as the article suggests, use that money to fond some fraction of BI for the poorest 80% of the population, then one can trivially see that we have distributed 3/4 of the money for program X away from the poorest 20%.
Now there are significant savings from reducing overhead, but unless program X is 75% overhead, it's still a net loss in realized benefits for the poor.
In order to make BI palatable to the US left, you will need to fund it at least partly through raising taxes.
1. What should UBI be in San Francisco? 2. What should UBI be in Detroit? 3. Should they be the same? 4. What happens if they're not the same? 5. What happens if they're the same?
And in this situation there is nothing stopping land owners from absorbing the basic income. This means that revenue generated by land owning (not necessarily land owning itself) would have to be heavily taxed. Maybe even taxed progressively to avoid economies of scale in land owning and prevent a very few from owning all the land.
Or we could terraform celestial bodies in the Solar system.
It is important to note that land itself is limited, not housing. As long as we can continue building even higher and deeper housing is not actually limited.
The whole "exempt" thing needs to go.
The idea with UBI is that you no longer make the government assistance a merit based assistance and instead everyone gets it equally. For those with large incomes the small amount of UBI will be a pittance. For those with little or no income it will be a lifeline. In both cases the amount would be exactly the same.
One counter-argument is that by freeing up people to pursue their interests, there will be more good businesses opened as well, which will be profitable in the long run. The other is that a person would not pursue a project that is not well-received for a long period of time due to negative feedback.
Neither of these fully answers the problem though of what the system would do to stop people falling off the economic grid and the impact on GDP/taxable income this would have. Any thoughts?
Unless those jobs can be automated completely, of course. But then, GDP is fine, taxes will probably focus more on corporations, and people will be freed from the degrading bullshit jobs, free to look for something better. And that, I think, is also a good thing. Let the robots do the stupid work, while we're off doing more fun stuff.
Make sure technology makes everybody's lives better. Isn't that the entire point?
How is this any different than what we have currently? It could be argued that many employed persons are currently destroying wealth through unethical practices encouraged by profit/rent seeking that is prevalent in contemporary economy.
A basic income as you have noted will also allow for people to open 'good businesses' without as much of a pressure to turn a profit. Ideally society would start to look down upon the "I work for <expletive>'s people/companies because I need to pay the bills" attitude that is pervasive today and people would start taking their responsibilities to themselves, their community and our greater environment more seriously.
I think you're making a lot of assumptions here. Does the pressure to make money force a venture to be good? Certainly some products are not good, and we have many examples open source projects that are fantastic. Plus there is still social pressure to be doing interesting things with your time, but it's my guess that very creative people don't even need any outside encouragement.
Think about the consequences: Even if it was proven financial suicide for the country (Governments can always print more money I suppose and let the next generation deal with the fallout), what political party would have a manifesto abolishing or reducing it? It would be political suicide.
Overall, tastes are infinite, I'd love to drive a tesla and live in a (multi?)million dollar mansion, but I can't. They are too expensive for me - meaning my work and labor doesn't produce enough value (or may be not valued appropriately - but this a whole other topic) to exchange for those things I want. If we want more people to drive teslas and live in mansions, everybody who will be getting UBI needs to get productive to increase the amounts of teslas and mansions in existence.
Image everyone has $10 on island A. Island B sells coconuts and the going rate for a coconut is $1. Based on other bills the islanders need to pay for, $1 fits the average budget and is what people are willing to pay for coconuts.
Now make everyone on island A have $100. The demand for coconuts rises but people on island B soon realize they can make more money by raising prices even though they sell less units. They eventually increase the price of coconuts to $10 because that ends up being the price point at which the Island B people are making the most money.
Therefore by increasing the income of everyone by a factor of 10, you end up increase the prices by a factor of 10. There is some lag time where prices will balance out though, so if you just kept doing this every month you might have a period of faux prosperity but you would also be creating runaway inflation.
I try hard not to be cynical, but I wonder if this isn't a ruse to accomplish exactly that.
I mean the US is known for being "frugal" when it comes to helping people. See the medical system for example, or the treatment that veterans get. Why the sudden surge in generosity, why the sudden desire to redistribute income?
Weren't these anathema just recently, even to some democrats?
Also the fact that it keeps coming up in the media makes me slightly suspicious.
Why is this being promoted so much right now? I bet there are PR firms out there calling newspaper reporters and bloggers, to promote coverage of this idea on behalf of who knows which group or organization. [1]
In most developed EU countries, a "social" income is given to unemployed people. In Belgium, it varies between 550€/month and 850€/month, depending on the situation. People lose this income as soon as they start to work, that means that a part-time job with an income of about 1000€/month is really unattractive. With a basic income, unemployed workers could be stimulated to accept this kind of low-pay jobs, as the pay will add up to their basic income.
With the increase of productivity we got in the last 50 years, the hours worked by low-skilled workers must be lowered, or we will face endlessly increasing unemployment rates. An universal basic income can stimulate this.
So yes, 10k a year would still leave people below the current poverty line. But over 45 million americans already live below the poverty line. So evidence suggest it actually is enough to survive by some standard and may be a good place to start since it's likely that people will be able to find some supplementary income through work.
In the long term the goal would be to significantly increase quality of living for all and hopefully change the horrifying numbers I just presented.
America has about 11 million people who legally are forbidden from having a job. Many get black market jobs paying less than minimum wage, and still have money left over to send back home.
Additionally, if you wanted to live a middle class lifestyle, you would have a job. That's the incentive to keep working. The basic income is to keep people at an above-poverty income level, not to keep everyone at middle class. In fact, the mere definition of the term means you couldn't have everyone at middle class.
You are free to fend for yourself in many parts of the world. But not if you like that blue passport.
- I want a job, but I have no transportation
- I want a job, but I have no skills
- I want the money from a job, and I'm willing to show up to a job, but I never actually do the work. If you fire me, I will go get another guaranteed job.
- I show up to the job and do the work, but my manager hates me and fires me. I guess I will go get another guaranteed job.
- I show up to the job and do the work, but all the managers in this town have an unspoken agreement that they will report people of my (skin color, gender, orientation, whatever) as not doing the work, so I have been fired multiple times.
- Bureaucracy managing the guaranteed jobs program replaces the bureaucracy managing the programs eliminated by Basic Income.
I'm in favor of more spending on maintenance and public works, but I don't think a guaranteed jobs program will work as well as basic income.
For example: rent. Wouldn't landlords managing properties at the low end of the market price, raise those prices knowing people both 1. have more distribution control over their money (cash vs. coupons for things) and 2. More people in their target market have cash to pay.
Compulsory basic income requires throwing people who refuse to hand over currency they receive in private trade in prison, where they are kept in small enclosures, and often develop mental illness, and suffer physical and sexual abuse. Techies should not support such a dark, authoritarian vision for the future.
When you give everyone in the economy a $10000 basic income you drive demand without driving supply. This graph[1] demonstrates how we estimate the relationship between the two, as well as price. As you'll notice, an increase in demand without an associated increase in supply results in an increase in prices. Essentially we might expect that over time the $10000, with market forces as the causation, will become the new N=0 point. Your basic salary becomes worthless. Any economic freedoms that you have created are fleeting in nature.
A stricter socialist approach seems to be the better one: instead of investing that money into people's pockets, you invest it in job creation in services that assist these people. For example: aggressive funding of soup kitchens. The poorest of the poorest might not have money in their pockets, but it might be possible to provide even advanced (e.g. internet) services to them in such a way that they don't require money. This solution conveys no economic freedom - an ingredient for misery.
Point is: I don't know and honestly, we don't know.
Helping the impoverished is one of the most important goals of our race; but racing into poorly thought out solutions might result in the impoverished being no better off in the long run. I'd love to hear some counterarguments because the basic salary, at least superficially, has the attractive quality of being simple to implement.
[1]: https://upload.wikimedia.org/wikipedia/commons/thumb/7/7a/Su...
In both cases you're driving up demand, which is what in turn drives up supply. Supply doesn't magically materialize - either someone pays for it with money, or someone pays for it with time not spent earning money, to provide those services or products. As your own graph demonstrates, quantity goes up regardless. What's your "new N=0 point" on the graph?
My point here is not that there aren't issues with funding demand for services with inelastic supply (where large increases in price only lead to small increases in quantity, meaning little good was done.) There are such issues. Instead, my point is that these are not UBI specific issues. They're valid concerns with housing programs and rent controls today, for example.
The real difference of consideration between UBI vs other social welfare programs (when taken as a whole), is how demand might change (lowering in some places while increasing in others) when the ones actually consuming the services get to direct where the dollars are spent, instead of government policymakers.
In theory, replacing social welfare programs with UBI might drive demand away from elastically supplied goods and services, towards inelasticly supplied goods and services. It's far from a given, though - we have plenty of existing government programs for such inelastic things as housing. If you see some fundamental flaw of UBI that would cause demand to shift this way, I've missed it, so please do share.
I'm more concerned by the other factors:
On the one hand, those in need of services in many cases the ones in the best position to know what they need, so the money for those services may be spent more efficiently - especially if there's less waste in red tape bureaucracy, from government organizations unfettered from the pressures of capitalism.
On the other, if you haven't learned how to manage your money, don't know about the things that could best help your situation, or are in the grips of addiction, it may be difficult for you to spend your money wisely.
My understanding is that direct cash influxes to the poor in 3rd world countries has worked pretty well. It's not perfectly analogous to helping out the poor in 1st world countries via UBI, but I'm fairly hopeful it's analogous enough.
Again: the solution is to talk to someone. There are many who go through what you do, and there are many people out there who can help. You're not alone.
I mean, by all means, do it, experiment on your society, take all the risks foreseen and unforeseen. if you manage to make first 50 years in glory (or 100 to be sure), you have my attention. just please, please don't shove it down my throat in country where me or my family lives. Please. Thank you.
where is the push for better education and more accessible healthcare? Fixing those guarantees a brighter future for mankind, period. this is roulette where you can lose a lot, gain a lot too.
It's just the new generation of kids flirting with communism.
We detached this subthread from https://news.ycombinator.com/item?id=11619113 and marked it off-topic.
Good luck with this basic income fantasy. Might as well try to negotiate reparations for slavery.
How about you finish what was started FIRST - and don't give me this "we can do multiple things at the same time" nonsense. This is six years later. The need for health care is pretty much universally understood. Giving people free money would never get out of congress.
2. https://en.wikipedia.org/wiki/Basic_income_around_the_world provides impetus to https://en.wikipedia.org/wiki/Social_mobility
3. https://en.wikipedia.org/wiki/Dominant_minority will OPPOSE UBI because they fear you'll NOT be subservient to them
4. UBI is prudent distribution of cash, not wealth
