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It's worth reading about the Canadian experiments with basic income in the 1970s: https://en.wikipedia.org/wiki/Mincome https://en.wikipedia.org/wiki/Mincome h

by bishnu 11y ago

It's worth reading about the Canadian experiments with basic income in the 1970s: https://en.wikipedia.org/wiki/Mincome https://en.wikipedia.org/wiki/Mincome http://news.nationalpost.com/full-comment/colby-cosh-what-the-poverty-advocates-forget-about-canadas-flirtation-with-a-basic-income http://news.nationalpost.com/full-comment/colby-cosh-what-th... The experiment allowed households to opt out, and after a while most did. However this result is convoluted by the fact that the income was not inflation indexed, and inflation rates in Canada in the 1970s got quite high. The main conclusion from this is, basic income is going to have to be VERY carefully implemented to work at all.

MCRed 11y ago
In the USA, if Basic Income were to be implemented, where would the money come from? Currently the rate of monetary inflation is quite high- we've gone from $11T to $18T in the monetary system during the Obama administration. If we were to start printing even more money to pay people a basic income, this monetary inflation would cause prices to rise to wipe out the benefit of the program, most likely. In fact, the reason people are suffering now is the level of monetary inflation (Which has been high going back to the Reagan era, so it's the fault of both parties. This is not a partisan issue- it's an economics one. And the problem is that politicians get elected by promising stuff, but to produce the stuff, they can't raise taxes, so they do the equivalent by printing money.)
- AngrySkillzz 11y ago
  > the reason people are suffering now is the level of monetary inflation I don't think any respectable economist actually agrees with you on that. The increase in the monetary base during QE was paired with a collapse in the money multiplier. Most of that cash stayed in reserve at banks (see 'Repeat After Me: Banks Cannot And Do Not "Lend Out" Reserves'). Price inflation is nowhere in sight; inflation is below historic levels and even slightly below the Fed's inflation target. As for the original question, the general idea seems to be eliminating most other forms of government welfare programs (TANF, SNAP, social security, etc.) since basic income will replace them, along with redistributive increases in income/capital gains/wealth taxes.
  - finance-geek 11y ago
    Depends on which inflation figure you count. When I think of inflation, I think of the largest costs first -- housing, which can easily be 30 to 50% of your earnings for most people. Check out the Housing Price Index -- does that look flat to you? http://us.spindices.com/indices/real-estate/sp-case-shiller-us-national-home-price-index http://us.spindices.com/indices/real-estate/sp-case-shiller-...
    - MarkMc 11y ago
      Well as house prices have shot up, interest rates have come down, so the cost of servicing a typical mortgage might be flat.
  - pdonis 11y ago
    > Most of that cash stayed in reserve at banks (see 'Repeat After Me: Banks Cannot And Do Not "Lend Out" Reserves'). This is a very misleading use of terminology. It is true that banks can't lend out "reserves", if by "reserves" you mean the 3% reserve that banks in the "upper reserve tranche" at the Fed (which is basically any bank you've ever heard of) have to keep in their accounts at the Fed and not lend out. But the actual balances of those banks at the Fed are far in excess of that 3% reserve requirement; they are being kept in "reserve" by the banks not because the Fed requires them to but because the banks choose not to lend it out. Why would they do that? They aren't saying, at least not publicly, but the obvious hypothesis is that it's because their expected rate of return from lending it is lower than the rate of interest the Fed pays on their balances. In other words, they are worried about borrowers defaulting and driving the banks into insolvency and then bankruptcy, and the government refusing to bail them out because it wouldn't be politically acceptable this time around. So the reason inflation has been so low is that most of the several trillion dollars the Fed has printed in the last few years has never actually been put into circulation. (The doublespeak about "collapse of the money multiplier" is just a roundabout way of saying the same thing.) Which says nothing at all about what would happen if that amount of money were put into circulation, as it certainly would be if printed money was used to fund a basic income program instead of "quantitative easing".
objectivistbrit 11y ago
Or New Zealand's research into the feasibility of implementing UBI: http://igps.victoria.ac.nz/WelfareWorkingGroup/Downloads/Working%20papers/Treasury-A-Guaranteed-Minimum-Income-for-New-Zealand%20.PDF http://igps.victoria.ac.nz/WelfareWorkingGroup/Downloads/Wor... Key takeaways: "An income of $300 per week is just over the average (mean) benefit income – therefore a plausible minimum income. However, paying a guaranteed income of $300 per week to every New Zealander aged 16 years and over, excluding superannuitants, comes at considerable fiscal cost. The fiscal cost of the GMI proposed in the first model (Model 1) is $44.5 billion (including the cost of all social transfers – in particular, New Zealand Superannuation payments, would cost $55.5 billion), requiring a flat personal tax rate of approximately 45.4%. Note that this tax rate and the others considered below are cost-neutral – not fiscally neutral – as personal taxes currently raise approximately $6 billion in excess of current social assistance costs." "Although the Gini coefficient improves under all models, many beneficiaries (including the disabled, carers and sole parents) currently receive more than $300 per week and would be made financially worse off under a GMI scheme. Therefore the GMIs considered could distribute money away from those most in need of government assistance and toward those who have choices and opportunities but choose not to work."
- chii 11y ago
  this is actually a really good read about it. Perhaps a lot of comments on HN is skewed towards the young tech worker who sees himself as victimized in a souless wage slavery, but we don't hear any opinions on UBI from the truly needy - the homeless, the chronic unemployed etc.
  - ddod 11y ago
    The "truly needy" is a subjective concept. Determining who should get more money from the government is always going to be a judgment call necessitating the presumption that we're not all equal. Most people who oppose welfare, corporate welfare, or their implementations do so because they perceive the recipients are not "truly needy". UBI is the only just and democratic way to provide welfare.
Patrick_Devine 11y ago
Here's another link: http://motherboard.vice.com/read/the-mincome-experiment-dauphin http://motherboard.vice.com/read/the-mincome-experiment-daup...

by bishnu 11y ago

MCRed 11y ago

In the USA, if Basic Income were to be implemented, where would the money come from? Currently the rate of monetary inflation is quite high- we've gone from $11T to $18T in the monetary system during the Obama administration. If we were to start printing even more money to pay people a basic income, this monetary inflation would cause prices to rise to wipe out the benefit of the program, most likely. In fact, the reason people are suffering now is the level of monetary inflation (Which has been high going back to the Reagan era, so it's the fault of both parties. This is not a partisan issue- it's an economics one. And the problem is that politicians get elected by promising stuff, but to produce the stuff, they can't raise taxes, so they do the equivalent by printing money.)

AngrySkillzz 11y ago
> the reason people are suffering now is the level of monetary inflation I don't think any respectable economist actually agrees with you on that. The increase in the monetary base during QE was paired with a collapse in the money multiplier. Most of that cash stayed in reserve at banks (see 'Repeat After Me: Banks Cannot And Do Not "Lend Out" Reserves'). Price inflation is nowhere in sight; inflation is below historic levels and even slightly below the Fed's inflation target. As for the original question, the general idea seems to be eliminating most other forms of government welfare programs (TANF, SNAP, social security, etc.) since basic income will replace them, along with redistributive increases in income/capital gains/wealth taxes.
- finance-geek 11y ago
  Depends on which inflation figure you count. When I think of inflation, I think of the largest costs first -- housing, which can easily be 30 to 50% of your earnings for most people. Check out the Housing Price Index -- does that look flat to you? http://us.spindices.com/indices/real-estate/sp-case-shiller-us-national-home-price-index http://us.spindices.com/indices/real-estate/sp-case-shiller-...
  - MarkMc 11y ago
    Well as house prices have shot up, interest rates have come down, so the cost of servicing a typical mortgage might be flat.
- pdonis 11y ago
  > Most of that cash stayed in reserve at banks (see 'Repeat After Me: Banks Cannot And Do Not "Lend Out" Reserves'). This is a very misleading use of terminology. It is true that banks can't lend out "reserves", if by "reserves" you mean the 3% reserve that banks in the "upper reserve tranche" at the Fed (which is basically any bank you've ever heard of) have to keep in their accounts at the Fed and not lend out. But the actual balances of those banks at the Fed are far in excess of that 3% reserve requirement; they are being kept in "reserve" by the banks not because the Fed requires them to but because the banks choose not to lend it out. Why would they do that? They aren't saying, at least not publicly, but the obvious hypothesis is that it's because their expected rate of return from lending it is lower than the rate of interest the Fed pays on their balances. In other words, they are worried about borrowers defaulting and driving the banks into insolvency and then bankruptcy, and the government refusing to bail them out because it wouldn't be politically acceptable this time around. So the reason inflation has been so low is that most of the several trillion dollars the Fed has printed in the last few years has never actually been put into circulation. (The doublespeak about "collapse of the money multiplier" is just a roundabout way of saying the same thing.) Which says nothing at all about what would happen if that amount of money were put into circulation, as it certainly would be if printed money was used to fund a basic income program instead of "quantitative easing".

objectivistbrit 11y ago

Or New Zealand's research into the feasibility of implementing UBI: http://igps.victoria.ac.nz/WelfareWorkingGroup/Downloads/Working%20papers/Treasury-A-Guaranteed-Minimum-Income-for-New-Zealand%20.PDF http://igps.victoria.ac.nz/WelfareWorkingGroup/Downloads/Wor... Key takeaways: "An income of $300 per week is just over the average (mean) benefit income – therefore a plausible minimum income. However, paying a guaranteed income of $300 per week to every New Zealander aged 16 years and over, excluding superannuitants, comes at considerable fiscal cost. The fiscal cost of the GMI proposed in the first model (Model 1) is $44.5 billion (including the cost of all social transfers – in particular, New Zealand Superannuation payments, would cost $55.5 billion), requiring a flat personal tax rate of approximately 45.4%. Note that this tax rate and the others considered below are cost-neutral – not fiscally neutral – as personal taxes currently raise approximately $6 billion in excess of current social assistance costs." "Although the Gini coefficient improves under all models, many beneficiaries (including the disabled, carers and sole parents) currently receive more than $300 per week and would be made financially worse off under a GMI scheme. Therefore the GMIs considered could distribute money away from those most in need of government assistance and toward those who have choices and opportunities but choose not to work."

chii 11y ago
this is actually a really good read about it. Perhaps a lot of comments on HN is skewed towards the young tech worker who sees himself as victimized in a souless wage slavery, but we don't hear any opinions on UBI from the truly needy - the homeless, the chronic unemployed etc.
- ddod 11y ago
  The "truly needy" is a subjective concept. Determining who should get more money from the government is always going to be a judgment call necessitating the presumption that we're not all equal. Most people who oppose welfare, corporate welfare, or their implementations do so because they perceive the recipients are not "truly needy". UBI is the only just and democratic way to provide welfare.

Patrick_Devine 11y ago

Here's another link: http://motherboard.vice.com/read/the-mincome-experiment-dauphin http://motherboard.vice.com/read/the-mincome-experiment-daup...