22 ms·

A Guaranteed Income for Every American

195 points by hourislate 10y ago

arcanus 10y ago
"As of 2014, the annual cost of a UBI would have been about $200 billion cheaper than the current system. By 2020, it would be nearly a trillion dollars cheaper." Remarkable how much entitlement spending is booked in the near future.
- toomuchtodo 10y ago
  Why is that remarkable? We make promises to people in the past and then we're shocked when the bill comes due? No one is ever shocked about all of the SS trust fund cash put into US treasuries (general fund deficit spending), but always shocked that "thats going to need to be paid back one day." https://www.ssa.gov/news/press/factsheets/WhatAreTheTrust.htm https://www.ssa.gov/news/press/factsheets/WhatAreTheTrust.ht... > The Social Security trust funds hold money not needed in the current year to pay benefits and administrative costs and, by law, invest it in special Treasury bonds that are guaranteed by the U.S. Government. A market rate of interest is paid to the trust funds on the bonds they hold, and when those bonds reach maturity or are needed to pay benefits, the Treasury redeems them. Trust fund stats: https://www.ssa.gov/oact/STATS/table4a3.html https://www.ssa.gov/oact/STATS/table4a3.html The mind boggles. We've been living like a college student on credit cards, and the bill is coming due.
  - drawkbox 10y ago
    Social Security trust funds have been used to keep our dollar/treasuries inflated and are one of the biggest customers of those bonds. They will always have a buyer and part of the reason they are in demand since the mid 1930s. When people talk about removing SS they don't realize what it would do to treasuries as a product, demand would be much lower and so would the value of the dollar. Social Security is the largest owner of US Debt: http://www.forbes.com/sites/mikepatton/2014/10/28/who-owns-the-most-u-s-debt/#34ed09131907 http://www.forbes.com/sites/mikepatton/2014/10/28/who-owns-t...
    - toomuchtodo 10y ago
      We should probably not position ourselves where we require an inflated dollar then, since those trust fund dollars are going to be drawn down as everyone ages onto Social Security.
      - drawkbox 10y ago
        I agree, it is a bit of a house of cards as they say. From the article: The largest owner of U.S. debt is Social Security. Since the Social Security system is a government entity, how can the government own its own debt? Good question. This is where the “house of cards” theory resides. Some believe the federal government is merely moving the IOUs from one shell to another, hoping to escape the watchful eye of its citizens. In any event, Social Security owns about 16% of the debt followed by other federal government entities (13%), and the Federal Reserve (12%. My guess is when it is time to pay or the money dries up, they are going to just disregard the Social Security debt owed or stretch it way out so the house of cards stays up a bit longer.
        toomuchtodo 10y ago
        > they are going to just disregard the Social Security debt owed or stretch it way out so the house of cards stays up a bit longer. I disagree. Taxes with simply rise (as they should've long ago).
- mac01021 10y ago
  I don't think this adds up. Here (https://www.nationalpriorities.org/budget-basics/federal-budget-101/spending/ https://www.nationalpriorities.org/budget-basics/federal-bud...) is federal spending for 2015. It shows a total federal spending of 3.8 trillion dollars. This is all spending, including 0.5 trillion on the military, 0.2 trillion in interest on debt, and tons of other spending on things that are not welfare or social-safety-net programs. Meanwhile, $13k * 300m people, results in an expense of 3.9 trillion. Greater than the entire federal budget. EDIT: I AM WRONG. The spending proposal from the article does not exceed the entire federal budget, because people who earn more than 30k of income get payed a smaller UBI. I did a rough calculation using the best numbers I could easily find describing the USA's income distribution (good numbers are hard to find). The result was that this proposal would likely cost just short of 3 trillion dollars. Significantly less than the entire 3.8 trillion dollar budget, but still more than we currently spend on entitlements.
  - trishume 10y ago
    Indeed, he's probably subtracting the revenue from the tax from the "cost", which is misleading.
  - danjoc 10y ago
    There's another source of money not included here. The Fed creates money from nothing. That has to go somewhere. On top of the usual inflationary dollar creation of the Fed, they were doing "Quantitative Easing" for years to the tune of about $85-100 Billion per month given to banks in exchange for known worthless mortgages. So a good quarter of that $3.9 trillion could have been covered just by some "Quantitative Easing" programs for the poor. Since the Fed stopped publishing M2, we don't know how much money is really being created. But it seems to me the logic of "Let's give money to the banks and they will loan it to the people" doesn't work. Here, the argument seems to be: Instead of giving money to the banks with expectations, we just give it directly to the people, cutting out the inefficient middle men entirely.
    - notahacker 10y ago
      I'm more sympathetic to innovative monetary policies than most people that have studied the topic, but the monetary base isn't a money tree and unfortunately virtually every claim you've made is false. The M2 growth figures are available and published by Fed sources. They're nowhere near enough to underwrite a basic income, even if none of that newly created credit was being directed towards useful economic activity https://research.stlouisfed.org/fred2/series/M2 https://research.stlouisfed.org/fred2/series/M2 M2 isn't created by the Fed anyway, it's created by private banks choosing to extend credit to entities they believe are on average productive enough to repay them at prevailing interest rates. It's possible to deter banks from making future loans of course, but I can't imagine doing that to make room for untargeted handouts being a good idea The monetary base the Fed actually is responsible for issuing is much smaller and has actually shrunk since 2014. https://research.stlouisfed.org/fred2/series/BASE https://research.stlouisfed.org/fred2/series/BASE QE was a temporary large-scale response to financial shocks which is designed in principle to be reversible so it's about the worst way of funding the steady stream of expenditure required for BI imaginable. It also consisted of the Fed buying up swapping the cash for existing financial assets in the form of government debt. If they're giving away the newly minted money instead, the amount the Fed can inject into the economy without generating unwanted inflation is much smaller. That might be desirable for a well targeted short term stimulus programme, but a BI certainly doesn't fall into that category (plus you don't get the fringe QE benefit of shrinking the govt debt/interest burden)
Roritharr 10y ago
Once again no answer to the main Question: What to do with people that blow their UBI by the 2nd of each month on SAAS Startups? Let them starve? Go without Shelter?
- dnautics 10y ago
  Same question is valid for food stamps, EITC.
- teddyh 10y ago
  From the article: > Some people will still behave irresponsibly and be in need before that deposit arrives, but the UBI will radically change the social framework within which they seek help: Everybody will know that everybody else has an income stream. It will be possible to say to the irresponsible what can’t be said now: “We won’t let you starve before you get your next deposit, but it’s time for you to get your act together. Don’t try to tell us you’re helpless, because we know you aren’t.”
  - dnautics 10y ago
    I wonder if this is bad because on the net it will make society less compassionate.
    - brbsix 10y ago
      Less compassionate to those undeserving of it, sure. Isn't that a good thing? I'm not a fan of UBI but this aspect might turn out to be really beneficial in reversing the perverse incentives and dysgenic effects of current social benefits programs.
      - toomuchtodo 10y ago
        > Less compassionate to those undeserving of it, sure. Isn't that a good thing? Only if we want to continue to have addicts and the mentally ill homeless, abused, and taken advantage of.
      - 10y ago
throwaway13337 10y ago
"The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare." How the hell does that happen politically? I would love to see basic income replacing a large portion of social programs in the states but no one seems to be talking about how we get from where we are to where we want to be, realistically.
- VonGuard 10y ago
  The thing is, I don't think it can happen politically. What is going on now is just the research stage so that we have some sort of data point for UBI supporters to latch onto. There are all sorts of groups inside the UBI tent, and many of them disagree with each other violently, but we're so far from a UBI that for now, everyone can agree on it in the broadest possible way. I, personally, have a completely different take on all of this from most UBI'ers. I take the long view: in 50 years, physical labor could be eliminated. WTF do we do when this happens? Do we relegate half of society to be homeless? Or do we begin the slow march towards eliminating work altogether. Few talk about this scenario, and those that do often tack on "... and then Skynet takes over and robots enslave us all." Yet, it's still a very valid discussion to be having. I think all this UBI research and interest is in furtherance of the elimination of work, altogether. That's not something that will happen over night, or even in 10 years, but in order for it to happen, humanity needs to begin gathering the data points necessary to enact a solution to the end of work problem. In the short term, this would eliminate social safety nets, but let's be honest, this is NEVER going to happen in America without a revolution of some kind. Whenever that happens, hopefully the UBI research will be far enough along to support a movement to enact it.
  - CuriousSkeptic 10y ago
    I fear the question will be answered with some very dark times. Indeed what will people do, when most of them aren't actually "necessary", and what will they agree to, given that most of them will also be driven by fear of becoming one of those unnecessary ones? As things stands, politically, and culturally, it's more likely to become som dystopian story of cleansing. Walled communities of elites keeping the poor outside of civilized society, and perhaps even death camps. So I really do hope that we, along the way, not only get data on the economics of it, but also a new ethical mainstream regarding entitlement. Capitalism will be a rather dangerous as framework of ethics in a world where economic value is derived entirely from capital. Only the elite can justify their existance on that framework. I'm currently aligned with the geo-libertarian view of things, as an example of a dissenting UBI-proponent. It seems the "mainstream" UBI thinking at the moment is rather socialistic in nature. Don't really see how that can fare much better than the capitalistic views when faced with the proposition that 10% is supposed to pay for the other 90%
jkelsey 10y ago
I'm sorry libertarians, but you can't just throw a equal amount of cash at everybody and say good luck. Society just isn't that simple. Different people have different needs, and that's where the complex overhead of a bureaucracy comes in. Stop trying to starve the beast already, and instead, help make it better. Or, admit at least, that you just don't give a damn about people who aren't like you.
- DanBC 10y ago
  UBI isn't about libertarianism, it's about reducing the fucking stupid disincentives built into current benefits systems. Instead of telling people that they can have this money only if they work less than 16 hours a week, or only if they stay disabled, just give them the money. That way you don't need to employ doctors to see if someone is still as disabled as they were last year, and people who get a part time job can increase their hours without penalty.
  - Tycho 10y ago
    But it might create even bigger disincentives that have a much more universal effect, which could be disasterous.
    - leereeves 10y ago
      There are good reasons to think it won't. People continue to work after they have enough money not to; people making $40K per year go to night school to try to increase their income. Most people continue to want more after their basic needs are met. And beyond money, work can give a sense of purpose and a connection to other people.
      - Tycho 10y ago
        But we're not talking about 'most' people. We're talking about all people. What about the people who think to themselves, I don't want to work, I want to live off welfare. Now there will be more of those people (especially since technology satisfies more and more leisure needs for just the price of an internet connection). Also as people grow up in such a society, they don't have that driving motive in the back of their mind that if they have to eventually find employment to survive. How will such people turn out as adults? The promise of UBI is saving money and unlocking more human potential (by allowing more risk taking, or letting artists pursue their art, or whatever). But if you think of the need to be productive (for survival) as a force/pressure that has shaped the complex system we call society since the dawn of civilisation, then I can imagine that removing that force in a large nation could result in something extremely dysfunctional or even horrifying.
Tycho 10y ago
I'm surprised UBI is getting all the attention and negative income tax is not receiving equal consideration.
- maxerickson 10y ago
  A negative income tax would be one way to implement UBI. It sort of fits into the UBI umbrella.
  - Tycho 10y ago
    Doesn't seem like the same thing to me. Negative income tax means you still need to find someone who will employ you, and also you don't get any benefit if you are above the threshold so it's not universal.
    - maxerickson 10y ago
      I don't think it is written in stone that you must have a job to receive a negative income tax. That would be one way to implement it, but you could also have an implementation that was based on some arbitrary level of income, where if you didn't reach that income, the government gave you the difference, even if it were the full amount (this would be a bad way to do it, but nonetheless). For sure, a negative income tax that required employment would not be a UBI. So they may overlap is a better statement than saying it falls under the umbrella. It's also the case that a UBI is only pretend universal. There are people that will see either an increase in their effective tax rate or a decrease in their buying power (the latter if you fund it by printing money).
    - redthrow 10y ago
      > you still need to find someone who will employ you Not necessarily. Negative income tax is one way to implement means-tested basic income. One way to implement a NIT is you have a cutoff point (e.g. $20,000/year) and a rebate rate (e.g. 50%). So, using the above rate, if your income is... (a) $0/year ... you get $10,000/year (b) $10k/year ... you get ($20k-$10k) x 0.5 = $5,000/year (your total income is $15k/year) (c) $15k/year ... you get ($20k-$15k) x 0.5 = $2,500/year (your total income is $17.5k/year) (d) $20k/year and up ... you get nothing --- > you don't get any benefit if you are above the threshold so it's not universal It's not universal in the sense that not everyone gets the government check, but it's universal in the sense that the same rule is applied to everyone.
Mz 10y ago
This was a bad trade, in my view. Government agencies are the worst of all mechanisms for dealing with human needs. They are necessarily bound by rules applied uniformly to people who have the same problems on paper but who will respond differently to different forms of help. Whether religious or secular, nongovernmental organization are inherently better able to tailor their services to local conditions and individual cases. Yet, ironically, he is for a UBI.
dpweb 10y ago
You can make the case for this as a simplification of social welfare, but btw hey - it's also a cure for the coming AI jobs apocalypse! Giving everyone 10k a year isn't going to help a worker replaced by robots. 10k doesn't get you far as an annual income. BI doesn't solve the jobs crisis. You could view it, as subsidizing corporations to decrease wages. Taxpayers paying what the corporations don't have to. So it won't be surprising to see Basic income touted not just by the liberal crowd, but by the Wall St Journal's and corporate interests.
- mac01021 10y ago
  Why won't 10k per year help a worker replaced by robots? 1> It's definitely enough for a single person to live comfortably on, though perhaps not in the house they lived in before getting lain-off. (I agree children can be a small problem and the proposal from the article does not consider them. But if you're not working and don't need to pay for professional childcare then the cost of a child per year is only a few thousand for food.) 2> It's 10k per year plus whatever you can earn. If you don't have that pesky minimum wage restricting job openings to only those tasks that the customer base values at >$12/hr, then you can rake in a good amount of money performing tasks that people don't value quite so much.
dclowd9901 10y ago
Not a fan of the decreasing benefits at $60k. That creates a huge donut hole for those making 59k and then get a 3% promotion. All of a sudden they've take a paycut. Make it a flat income. (Also, should be closer to $15 or $18k a year).
- ido 10y ago
  The cut is gradual (so that each extra $1 you earn, less than $1 is reduced from your benefit). So you will never end up with a paycut by making more money.
- gizmo686 10y ago
  This proposal decreases benefits between $30k and $60k. The total delta in benefits would be $6.5k. Assuming this decrease occurs linearly, this comes out to a marginal tax of 21%. The current marginal tax rate for someone (unmarried) making between 37k and 91k is 25% [0] This means that over this $30k interval, people would be facing about a 46% effective marginal tax [1]. The current top bracket is only 39.6% and does not kick in (for unmarried individuals) until $415k. While this proposal does create a silly marginal tax rate, it is still below 100%, which means that making more income still leads to more money in your pocket. Our current system, if you count the value of non-monotary aid, often exceeds a marginal rate of 100%, which is a far more serious problem. I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets. [0] https://www.irs.gov/pub/irs-drop/rp-15-53.pdf https://www.irs.gov/pub/irs-drop/rp-15-53.pdf [1] This number might be slightly different if the two taxes interact with each other.
  - maxerickson 10y ago
    It would be really dumb to stack the taper on top of existing tax rates. Which I guess doesn't mean it wouldn't happen.
  - shasta 10y ago
    > I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets. This was such a dumb sentence in an otherwise interesting post.
danbruc 10y ago
Several years ago I thought a universal basic income would be a good idea but the longer I thought about it the more that went away. Now I can't even tell which problem it tries to solve. There won't be enough work for everyone in the future? Well then cut down working hours instead of having half the population work full time and pay for the other half. Some jobs don't provide enough income to make a living? Then have sufficient minimum wages, there is no point in doing any work that does not pay well enough to make a living. Also universality, what is the point? Above some income you are essentially just paying yourself. There might be a technical point because it keeps the rules simple but besides that I don't see in which way absolute universality is a feature. Reduce the overhead from many different social programs, for state and citizen? Fair point, but then again an universal basic income seems quite a huge hammer.
- blazespin 10y ago
  "Well then cut down working hours instead of having half the population work full time and pay for the other half" That doesn't work. The reality is, and I'm sorry to say, but the required IQ to be economically relevant is increasing every year. Your plan doesn't work because you can't spread out the work that way. Increasing minimum wages will only just accelerate automation and exacerbate the problem. My concern about UBI is that it won't properly track inflation and will quickly become not enough and all the welfare programs are gone, so people are doubly screwed. Other than that, I like it. I'd like to see more "pay to go to school" programs, though. We'd end up with fewer Trumps...
  - danbruc 10y ago
    The reality is, and I'm sorry to say, but the required IQ to be economically relevant is increasing every year. Your plan doesn't work because you can't spread out the work that way. That is only a real problem if the population does not keep up with this development. I can not tell whether requirements are (now) growing faster then capabilities but both certainly grew ever since. The other thing is that it seems to me that - at least to some extend - the capabilities are the controlling factor here. The economy can demand whatever it needs, if it is not available the economy will have to adopt. Increasing minimum wages will only just accelerate automation and exacerbate the problem. I did not mean to increase minimum wages more and more just to make any job viable, this of course only leads to inflation. I meant to let non-viable [EDIT: This read »no viable« before.] jobs die or automate. If people are not willing to pay enough for getting their lawn mowed - not sure if that is a good example - to make a living from it, then there never was a market for lawn mowing. Subsidizing it by the rest of the population with government benefits of any kind is not a solution.
blazespin 10y ago
This will track inflation?
arbre 10y ago
Wouldn't the price of everything raise accordingly, so that you basically can't afford anything with the basic income?
- paul 10y ago
  Only if the world were zero-sum, which it's not. Remember how only rich people used to have cell phones, and now billions of people have them? The price of most goods is close to the marginal cost of production, which means that giving more people money may actually lower the cost of many goods (by increasing volume). Artificially scarce goods, such as an apartment in SF, may get more expensive however since their price is set by the marginal ability to pay. The good news is, you don't have to live in SF.
  - vilhelm_s 10y ago
    I guess apartments in San Fransisco already cost more than what someone living off basic income could afford, so the prices should not be driven up at all. Indeed, people living there would presumably get a net reduction in income (from tax increases to pay for the BI), so the prices should go down.
    - Mz 10y ago
      If you read the article, the BI being proposed would drop off after you began earning more than $30k and the drop would stop at $60k in earned income. I imagine a rather high percentage of people living in San Francisco already earn well above $60k annually.
      - gozur88 10y ago
        That's not a UBI scheme. That's just welfare.
        Mz 10y ago
        The article proposes that we replace welfare programs, social security, etc, with this UBI. Then, at some point, it says this: Government agencies are the worst of all mechanisms for dealing with human needs. They are necessarily bound by rules applied uniformly to people who have the same problems on paper but who will respond differently to different forms of help. Whether religious or secular, nongovernmental organization are inherently better able to tailor their services to local conditions and individual cases. I find it ironic that this individual is for the so called UBI.
Cozumel 10y ago
Something I haven't seen anyone else mention, if UBI is introduced won't that cause prices to increase? For example, supermarket 'own brands' are usually cheaper than branded products, but if everyone is getting a minimum income then those prices won't need to be as cheap, just cheaper than alternatives.
- mac01021 10y ago
  Eggs and milk aren't getting more expensive to produce. So, if the currently-cheapest brand increases its price, it's opening a window for new competition to sell at the old low price. It's possible that anticompetitive forces would prevent that competition from emerging in many cases, but I would not say that it is obvious that prices will increase under UBI.
  - derekp7 10y ago
    Except that it does become more expensive to produce those eggs. That is, assuming some of UBI gets paid for out of increased taxes that the farmer would have to pay.
dba7dba 10y ago
We shouldn't be talking about government paying basic income. We should talk about millionaires and billionaires paying living wage to everyone working in their home and every employee in their companies that they share ownership in. That would be a better conversation to have.
- mac01021 10y ago
  And when they stop hiring people because they no longer require the labor of people who do not have specialized skill sets?
dba7dba 10y ago
We shouldn't be talking about government paying basic income. We should talk about millionaires and billionaires paying living wage to everyone working in their home and every employee in their companies that they share ownership in. That would be a better conversation to have.
TrevorJ 10y ago
ten thousand dollars a year isn't going to really do anything but enable people to remain in minimum wage jobs though.
- gregw134 10y ago
  A lot of people only make 15-20k/year. It would do a lot for them.
Shivetya 10y ago
While it is an interesting idea it is going to have to be crafted in such a way that politicians don't just treat it like tax law and start carving out exceptions. another area people need to look into is changing the direction of though that has crept into society which that "you deserve this, that, and this, as its your right" and instead get back to the days where people were encouraged to strive to return more to society than society gave them.
hackaflocka 10y ago
Some clarifications needed: 1) So, someone who has 8 kids gets the same exact income as someone who has 0 kids? 2) What happens when health insurance costs escalate?
fzeroracer 10y ago
I am all for Basic Income but the way the author wants to implement it would be a disaster. My mother is fully disabled and unable to work as a result of her stroke and she relies on Medicaid, Food Stamps and SSI to live. $13000 per person would be lower than what she gets right now and that's without considering the insurance issues. These changes would quite literally kill or leave homeless a large amount of America's disabled, poor or elderly population. If Basic Income is to work then it needs to be actually liveable and adjusted based upon the CoL in each area.
- marcoperaza 10y ago
  >If Basic Income is to work then it needs to be actually liveable and adjusted based upon the CoL in each area. There's a good argument to be made for a larger sum for the disabled who cannot work. But I'd be extremely opposed to any regional adjustments. If individual cities and states want to supplement the UBI, then that's up to them, but people moving out of high-cost areas and into low-cost ones is part of the natural ebb and flow that keeps the cost of living reasonable. And can you imagine what a CoL adjusted UBI for San Francisco would look like? A massive ripoff of the rest of the country.
  - newjersey 10y ago
    > There's a good argument to be made for a larger sum for the disabled who cannot work. But I'd be extremely opposed to any regional adjustments. If individual cities and states want to supplement the UBI, then that's up to them, but people moving out of high-cost areas and into low-cost ones is part of the natural ebb and flow that keeps the cost of living reasonable. And can you imagine what a CoL adjusted UBI for San Francisco would look like? A massive ripoff of the rest of the country. I don't know what the solution is here but if in this hypothetical reality, the garden state didn't supplement but California did then I'd move to California in a heartbeat. I am sure I'd be broke even with any supplement in San Diego but at least I'll be broke in San Diego. Edit: I cannot support any discrimination in basic income based on "ability to work". I'd rather the whole thing fail. I'd rather we never have basic income implemented at all than this bastardization go through. Personally, I'm all for death panels. We should not try to keep everyone alive at all costs. If I get in a freak accident and it'd cost me $10M+ to keep me alive with little to no chance of a full recovery, please let me die. Something we need to discuss separately from universal basic income is the need to reduce cost in healthcare. I'd gladly support expanding Medicare to everyone without having to qualify. We would need significantly greater penalties for Medicare fraud and add incentives for whistleblowers and make it easier to report fraud. I'm OK with "lite" Medicare that drops expensive procedures and lets patients suffering from rare cases fending for themselves in order to cut costs especially if there is little chance that the patient will ever recover fully.
Roboprog 10y ago
If only all of the things that needed doing for the common good were actually being done now, either by robots, or by a small number of people with machine assistance, this discussion might make more sense. Once the roads are fixed, and the parks are clean, the disabled are cared for, etc, etc, etc. THEN maybe we should have a discussion about "Basic Income". Our current technology is NOT "The Culture". There is still work to do, it is "simply" (not so simple) a matter of clawing back some cash from those who benefitted most from a stable society. The WSJ's "10K" plan just sounds like a scam to cut more government jobs while throwing out a small consolation prize to prevent outright rebellion.
avz 10y ago
The way I understand the motivation behind UBI is that it is inspired by the notion that we have (mostly) automated production of goods and therefore human work has been (mostly) delegated to machines. It is therefore perfectly reasonable for people to receive UBI so they can purchase all the robot-produced goods. The reason I am skeptical of such a view is that production of goods is a tiny fraction of the work humans actually do. A lot of people these days work on solving problems, not on producing goods. And we are far from being short on problems to solve... Alzheimer's, clean energy, climate change... Saying that humans should not need to work is like saying: This is it. We're done here. This is the world we want.
- deleted 10y ago
  [deleted]
- rexpop 10y ago
  > Saying that humans should not need to work is like saying: This is it. We're done here. This is the world we want. That's not what's being said. We're not done. This is not the world we want. We should be able to work on Alzheimer's, clean energy and climate change without worrying about where our next meal is coming from. And, sure, many researches have salaries. But many potential researchers aren't employed, aren't trained, aren't educated. Think of the millions of folks whose passion for helping people, taking care of the planet or tinkering is getting sidelined while they work a cash register to save up for community college. Those people can use a basic income to find a better, more productive, more fulfilling and more useful position in life.
youngButEager 10y ago
In economics there is a saying: "There's no free lunch." Basic Income gives people a free lunch. What is the "opportunity cost" of that free lunch? For those of you unfamiliar with "opportunity cost", here's an example: - you have two passions at age 18: software and playing in rock bands. You want to become a professional in one of those fields. The rock band choice prevents you from being in a place long enough to be hired to write code. And vice versa. - You choose to write code. Ten years later you are at the top of your game, age 32. You own a condo and are married and on an 'executive track' at the company you work for. But had you chosen the 'rock band' career, who knows? Maybe you would have taken off and at age 32 have a string of hit records, millions of fans and million$ in wealth. That's the 'opportunity cost' -- you cannot do both. Okay back to Basic Income. A person receiving Basic Income could replace that income by working more. But they don't work more because, why should they? The opportunity cost of Basic Income is that lost productivity in the economy, the lost output from that person. Who knows how large that economic benefit to society is, when it's replaced by "Basic Income for everyone."
apo 10y ago
Maybe a silly question, but why $13,000? Why not $5,000? Why not $20,000? How does the risk/reward tradeoff of this proposal change as that magic number changes? Also: > The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare. What about education funding? What does corporate welfare entail? Defense spending, for example?
TACIXAT 10y ago
Kind of a meta comment, but it wouldn't surprise me at all if the basic income movement was (for the most part) started and promoted by an intelligence agency. After reading about the literary magazines and abstract art that the CIA funded I started thinking what a current program would look like. I think it would look like how basic income is developing.
- Pyxl101 10y ago
  Could you be more specific? What literary magazines and abstract art did the CIA fund? What about the way basic income is developing gives you the impression that it's a CIA program? Without detail this seems like an unsupported conspiracy theory. What would be their incentive in this instance?
  - TACIXAT 10y ago
    https://en.wikipedia.org/wiki/Abstract_expressionism#Abstract_expressionism_and_the_Cold_War https://en.wikipedia.org/wiki/Abstract_expressionism#Abstrac... https://theawl.com/literary-magazines-for-socialists-funded-by-the-cia-ranked-93e65a5a710a#.a618zmt10 https://theawl.com/literary-magazines-for-socialists-funded-... Totally speculation at this point. Just the way that the movement arose. There were a few articles covering it. Then a few communities created around it. Then more and more research done on it. Its emergence was interesting.
- mac01021 10y ago
  > After reading about the literary magazines and abstract art that the CIA funded ... Any links?
  - deleted 10y ago
    [deleted]
  - Pamar 10y ago
    I suppose the op meant this: http://www.independent.co.uk/news/world/modern-art-was-cia-weapon-1578808.html http://www.independent.co.uk/news/world/modern-art-was-cia-w...
poppow 10y ago
Murray is known for his eugenics arguments. He's pushing for economic Darwinism. The use of 'DNA' in his article belies his propensities. He uses pseudoscience to sell his brand of politics. Firing salvos for a Trump advisor.
dragonwriter 10y ago
The choice for the surtax is perverse: a major point of having a UBI as opposed to means-tested social benefit program is to maintain the marginal benefit of additional income; having a "surtax" that reduces the benefit progressively with income that kicks in at a fairly low income level and proceeds to increase up to a level that's still not a high income is a fairly horrible idea that defeats key elements of the basic idea of a UBI. I'm not a fan of radical big-bang all-at-once UBI replacing other programs swap anyway (favoring a UBI tied to a dedicated revenue stream that displaces means-tested benefit programs as it ramps up, instead) but even among big-bang implementations this is particularly poorly designed. (1) The "surtax", as discussed above. (2) Because it relies on electronic deposit to a bank account, it relies on (but does not provide) a solution to the problem of the unbanked. (3) The decision to apply it only to adults is dubious, but if you are going to have an age-qualified UBI, it should apply at a minimum to all legal adults -- everyone over 18. (4) The benefit (after deducting the required health insurance purchase, which for those with no other income simply replaces Medicaid, which is eliminated [0]) is below poverty level. Which would make sense as an initial condition of a UBI which was built to grow over time, but this proposal doesn't appear to be -- its a proposal, therefore, to maintain, rather than alleviate, poverty. (5) Apparently, the author prefers to fund the UBI for everyone largely by continuing the existing regressive, labor-pays-only, payroll taxes (Medicare is flat, Social Security is flat up to a limit, and then capped, making it -- and overall payroll taxes -- regressive overall), whose current regressive structure (including the flat structure of Medicare) is justified based on the idea that they are buy-ins to benefit programs that provide consistent (Medicare) or capped, contribution-determined (Social Security) benefits. Aside from there being no sane rationale that would justify this, it entirely eliminates UBI's utility as a system to help adapt the economy to deal with progressive automation and the dynamics of the labor market moving toward a larger pool of jobs that have lower returns and a narrowing highly (and increasingly-highly) paid pool of elite workers. Moral issues aside, payroll tax structure can't support the author's proposed UBI going forward. Then again, I suspect that's the author's intent: kill Social Security, Medicare, Medicaid, etc., and replace them with something that cannot function in the long term. After all, this is a proposal for a social transfer program from an author who has written an entire book setting out supposedly universal laws that each individually (and, a fortiori, all combined) supposedly justify the conclusion that all social transfers are inherenty harmful and should be eliminated. [0] The author indicates the healthcare component is too complex to discuss in the article, but this is also a particularly worrying component. Looking at what $3,000 gets you on the health insurance market, this mandatory insurance purchase replacing Medicaid might make the poorest of the poor significantly worse off by itself.
dreamdu5t 10y ago
I feel surrounded by total idiots. None of the math adds up... Cost of living is not considered at all. I'm not against the basic idea but the proposals are beyond half-baked - they're idiotic. I get the feeling nobody writing this UBI stuff has any experience or understanding of the welfare systems they're aiming to replace.
discardorama 10y ago
> A UBI will do the good things I claim only if it replaces all other transfer payments and the bureaucracies that oversee them. Unfortunately, I have 2 problems with this: 1. Of the people that I see in SF who could use UBI, almost none of them seem the type who would clean up their acts with UBI. They have serious mental issues, and money means only 1 thing to them: a means to chemical substances. So what do you do when a guy blows his $2000 monthly stipend on hookers and blow and now is back on the streets? Arrest him? Send him to jail? Put him in a mental hospital? And who pays for that? And who provides him the services, if the bureaucrats who used to do it are gone? 2. What do you do about the millions who are employed in the service-providing sector (bureaucrats, non-profits, etc.) ? Right now they make decent money; you're now going to lay them off. Where will the jobs come from for them?
- adventured 10y ago
  > Where will the jobs come from for them? That's a pretty weak criticism. Where are the jobs going to come from to employ the millions of people that used to be farmers (in 1875)? Where are the jobs going to come from to employ former delivery milkmen? Or what about the jobs for people that used to handle telephone call switching? The same place they've always come from: economic dynamism. The solar industry, as one basic example, is adding 100,000 new jobs every four years at this point. In 20 years, that one industry will employ a million people - up from almost nothing in 2005. We've got five million job openings presently. The labor market is quite healthy, with the U6 unemployment rate down to where it was before the recession. Besides, unleashing all of that educated labor will result in increased innovation and economic growth, not less.
  - fapjacks 10y ago
    This is so right on the money.
  - discardorama 10y ago
    > is adding 100,000 new jobs every four years at this point. In 20 years, that one industry will employ a million people I think your math doesn't add up. But going along with your line of thought: will UBI be phased in over 20 years? No. It'll happen over a year or two. Several million people will suddenly be off the rolls. That's not a gradual decline; that's a bloody step function. You will most definitely not have jobs for them. Creating jobs is hard, really hard.
jondubois 10y ago
I like the idea of UBI, but the problem with schemes to improve wealth equality is that usually the middle class ends up footing almost all of the bill. If a rich person feels that their wealth is threatened, they can evade the negative consequences of the scheme (taxes) by relocating their head office to the Caymans. On the other hand, if a middle class family is negatively impacted by the scheme - They cannot evade it; they can't afford to move to another country because they rely on their jobs for income. If UBI is to be instated, we would also have to implement harsh laws to prevent the upper classes from evading taxes. Moving wealth to a tax haven should be made a criminal offence (with jail time). Also, income (passive income in particular) should always be taxed based on the country of origin (from which the payment originated) instead of the complex network of case-by-case tax treaties that currently exist. A single, origin-based tax system would not have all the loopholes that a complex case-by-case system has. Any country that refuses to enter into the origin-based tax treaty should be kicked out of the UN and trade sanctions should be imposed. In practice, a rich person is currently not bound by the laws of their own country; they are bound by the laws of the country whose laws are the most convenient for them - They can literally pick and choose how much tax they want to pay.
- prawn 10y ago
  Not even necessarily middle class. In Australia, many families who I'd consider middle class use family trusts, negative gearing and the like to minimise tax. The group just below that cops the worst of it, IMO.
- arebop 10y ago
  Does it really matter if a billionaire stacks up billions in some Cayman account? If so, it is straightforward to use inflation to redistribute those digits. What I care about is a billionaire who buys up all the land in my country. The land can't be hidden and is therefore easy to tax. I care about a billionaire who eats gold leaf ice cream sundaes while the children across town are malnourished, but it is easy to tax gold and food sales at restaurants and groceries. The big problem historically with sales tax has been that it is regressive, but with basic income that doesn't matter any more. There's no problem I know about with land taxes except misguided concern for the elderly and corrupt loopholes. Why not stop even trying to tax financial abstractions and just address hoarding?
jboggan 10y ago
. . . In the Carboniferous Epoch we were promised abundance for all, By robbing selected Peter to pay for collective Paul; But, though we had plenty of money, there was nothing our money could buy, And the Gods of the Copybook Headings said: "If you don't work you die." . . . [0] - http://www.kiplingsociety.co.uk/poems_copybook.htm http://www.kiplingsociety.co.uk/poems_copybook.htm
rayalez 10y ago
I'm surprised that so many people on HN support UBI, it sounds horrifying to me. Did you learn nothing from communism? By increasing taxes you decrease incentives for making wealth, and, more importantly, infringe on individual freedoms. Infringing on human rights of the rich people is one of the worst things you can do for the economy, because they are the people with means of production, and they are the people with options to go somewhere else. The premise that you are free to make as much money as you want and not be punished for it is one of the biggest things that made USA awesome in the first place. The idea behind UBI is that we can now afford it because we have abundance of resources to support it. If that were the case, these resources would be available without the need to coerce people out of their money. The only way to get those resources without taking away the freedom is to treat UBI as what it should be - a charity. Only when there's so much abundance that people are willingly giving away enough of their money to support everyone else, when it's a choice and not a coercion, will UBI have a chance at working without creepy and horrifying consequences.
- papapra 10y ago
  Did you at least read the article ? He writes about replacing the current welfare system with UBI. About the taxes, I think you are wrong because you think in black and white. It's not binary, it's a spectrum and you want to have a balance, in USA the current system is very favorable to the rich.
  - rayalez 10y ago
    In the previous discussion a commenter pretty much explained why this wouldn't work: https://news.ycombinator.com/item?id=11807840 https://news.ycombinator.com/item?id=11807840 Also I think I can accept that a certain amount of taxes is a necessary evil. But let's treat it as such, and avoid taking more than absolutely necessary. In my opinion UBI is a step way too far in the wrong direction.
    - papapra 10y ago
      Why it is necessary evil ? You don't live alone in this world and I bet you profited enormously from the country, community that you live in.
aminok 10y ago
Basic income, like all compulsory income redistribution programs, is a disgusting authoritarian intrusion that should be rejected by all moral people.
ChrisLomont 10y ago
Some sanity checks that UBI fails in every method I've seen: it's some combination of (usually multiple): 1) costs a huge amount more in taxation, 2) screws those most needing help, 3) is not universal, but simply a tax on rich to give to poor, or 4) does not address the economic consequences that negate a significant part of the claims. Simple checks for this one: 1) 236,000,000 Americans aged 21+ [1] times 13,000 each is $3 trillion needing gathered in taxed to hand out. Entire Federal receipts for 2015 was $3.25 trillion [2]. 2) The author scraps all current transfer programs (common), including Social Security and Medicare. The plan requires 3K of the 10K to be for health insurance. Average Social Security payment is 14,784 [3]. So we screwed Social Security recipients, who more likely need the money than then average person getting the new free UBI. 3) Medicare currently spends around 900B, which I assume will still need covered, since people will still have medical needs. The 3K allocated above, times 236M people, is 708B, not enough to cover Medicare, and certainly not enough to replace all current health care insurance. 4) The transfer programs cut total at most 2T [2]. 5) An analysis of his tax scheme, using [4]. The first 30K is not taxed (23.5% of households). Those above 60K get no UBI (46% of households). As such, I wonder if they still need to pay an additional 3K for insurance since they didn't get the 13K? We'll assume so. The rest we can assume has linear benefits from 30K (13K free money) to 60K (no free money). This means for each $2.3 earned over 30K, one loses $1 in free money, which I think would create a huge disincentive to jump this weird benefit gap. Here's [5]effective federal tax rates by quintile. Coupled with the income breakdown above, those under the 60K range will get tax breaks, meaning those above 60K will shoulder a decent amount more in taxes. 6) It would be interesting to chase down who will have to pay what to meet these requirements - it's late; perhaps I'll do that later. 7) Removing targeted money (for housing, for food for kids, etc), and simply giving cash allows people to spend on bad items. The reason many programs are targeted is to help ensure people buy the necessities first. I would expect UBI as posed here would realize this, and then add back targeted programs to avoid the bad effects, negating the claimed simplicity of UBI. Also, many poor get money from multiple programs, and removing those programs and giving everyone a fixed 10K would mean a lot of them now get a lot less (as I claimed, these plans screw the most needy quite often). 8) UBI will most likely make the entire country poorer: the report on Mincome gives an example of a previous UBI experiment causing a 13% reduction in hours worked. OECD reports show as benefits increase across countries, more people live off benefits as opposed to working. Basic economic theory also would make the same claim. If so, less production means we have less goods and services. 9) Counter to 8, prices will likely rise for things the poor buy, especially rent, forcing people back to work. This is also basic economic theory; currently someone willing to put forth X effort to trade for a place to stay will still do so, and giving that person free money (and everyone) will allow landlords to raise rent to consume some of the free money. Think of the common complaint that govt making money easy for houses or college causes those prices to climb faster than without the easy money - except now this applies to a lot more goods. So, if we have limited resources, which we do, why not use them in targeted ways to alleviate problems instead of trying a ham-handed, one-size-tries-to-fit-all solution? This is my main complaint about UBI desires - it necessarily removes benefits from the most needy to give to the less needy by ignoring the level or situation (or even regional cost of living changes). And if your reply is we simply raise taxes, then why not apply targeted benefits with those increased taxes? It still would provide help where most needed, instead of blind (and suboptimal) allocation. [1] https://en.wikipedia.org/wiki/Demography_of_the_United_States https://en.wikipedia.org/wiki/Demography_of_the_United_State... [2] https://en.wikipedia.org/wiki/United_States_federal_budget https://en.wikipedia.org/wiki/United_States_federal_budget [3] https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/ https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/ [4] https://en.wikipedia.org/wiki/Household_income_in_the_United_States https://en.wikipedia.org/wiki/Household_income_in_the_United... [5] https://www.cbo.gov/sites/default/files/cbofiles/attachments/effective_rates_0.pdf https://www.cbo.gov/sites/default/files/cbofiles/attachments...
scotty79 10y ago
UBI will just cause rents to go up. Rents in attractive locations are always as high as most tenants living there can afford. If you give people 1000$, rents for the poorest will just go up by up to $1000. Property prices will follow swiftly. The only force working in opposite direction would be that some people will be able not to flock to attractive locations but I don't think it'll be enough to counter the obvious raise. You'd have to tax property progressively and accept the drop in property price associated with it being less attractive for people who buy to rent. Apparently property prices are sort of holly cow in US so no-one in their right mind can afford doing anything that would harm that, even it it meant actually ending the poverty.
cathartes 10y ago
What I find strangely absent in most discussion of the UBI is how these fixed payments will hold up against inflation. Even simple arithmetic based on the Consumer Price Index over the past forty years will suggest that an amount like $10,000 US in 2016 dollars will likely be trivial cash in twenty years time. (And, arguably, it's already trivial cash today for just getting by.) More than likely, the UBI will have no lasting impact, no matter how it is implemented, unless the buying power of the dollar is realistically accounted for in each year's handout. And I just don't see that happening.
todd8 10y ago
I see lots of comments that suggest that a UBI wouldn't work because the rich have their money offshore, etc. However, I'm not so pessimistic. The parent article is about a plan for the US, and in the US, the rich do pay their taxes. According to the IRS [1], the top 10% make 48% of the total adjusted gross income in the US and pay over 70% of the total income tax. Many aspects of the tax system don't make sense to me, but overall it just isn't true that in the US the rich don't pay their taxes. Some rich Americans choose to renounce their citizenship each year and leave for other countries. The numbers are relatively small, and it involves extremely high tax penalties. (Something like 10 years of taxes and the payment of all capital gains realized or not.) This wouldn't make any difference to a UBI plan. [1] https://www.irs.gov/pub/irs-soi/soi-a-ints-id1506.pdf https://www.irs.gov/pub/irs-soi/soi-a-ints-id1506.pdf
anovikov 10y ago
This idea seems to be so cynical. So capitalists want to, flatten the distribution of social welfare: give more or less same money, but evenly to everyone. What will be achieved? Now it is received by the people who are deeply in need. You are not going to make much profit on them: people who are deeply in need are very frugal at spending their money, they are price-conscious by definition. Now everyone will get an even amount, and most Americans aren't poor by any standard, so the money will be spent to increase consumption of the non-essentials (increasing your profits), or to invest in stock (increasing your valuation). And then it is shown as a move to a better and more fair society. They want 'good' consumers to consume more and multiply, and 'useless' poor people to die as quickly as possible (because $3000 is too little to pay for health insurance) and never have any children (because the UBI is not given to children, and so if you leave on UBI and have a child, you are instantly desperately poor, and no other means to support say, single moms, will exist). Social Darwinism, supply side! What a cynicism!
- dragons 10y ago
  people who are deeply in need are very frugal at spending their money This article gives some of the logic behind redistributing income this way: https://www.washingtonpost.com/news/wonk/wp/2015/04/14/where-the-poor-and-rich-spend-really-spend-their-money/ https://www.washingtonpost.com/news/wonk/wp/2015/04/14/where... The rich save more than the poor, and the more they have, they more they'll save. Money that's being saved isn't being spent, which means less business for everyone from the dry cleaner on the corner to the owner of a five-star hotel. In turn, that means less work for everybody and a lethargic economy. To be sure, banks can invest the money that the wealthy save, which can stimulate the economy as well. Yet many observers... are worried that as a global society, we've accumulated too much in the way of savings already.
  - anovikov 10y ago
    What i totally don't get from this chart, how can housing expenses be so high? It means about 1/3 if all spending spent on housing, which is about 4-5 trillion a year. Where all that money goes? Construction for example, employs less than 3% of U.S. workforce. Banking (profits from mortgages) make a significant part, but it's easy to calculate that don't get a terribly big chunk. Also aren't many families living in paid out homes and don't spend anything on housing at all? 19.9% of all units in the USA are owner-occupied without a mortgage, and 12.4% are vacant. Meaning 22.71% of families are neither renting nor paying a mortgage (homeless aside). Which would imply that those who are spending anything on their housing, spend about 46%, if the average for all household is about 35% as the chart on your link suggests. Nearly half. Which is simply hard to believe. Was that the case, housing would have been the cornerstone of U.S. economy. Total outstanding mortgage debt is 13.7 trillion, which is less than 1x total household income in the USA. So spending 35% of income on housing, all debt could be paid in 3 years even interest included. Because about 60% of people own their homes vs rent, even not counting that they pay typically more then renters, it could mean paying out all mortgages in 5 years, which certainly isn't the case. Other way around, total value of all U.S. homes is 27.5 trillion, about 12.4% are unoccupied (if you are paying a mortgage on a second home you don't occupy, this isn't a housing expense, this is an investment). which leaves 24.1 trillion for occupied homes. If housing is 35% of all income of Americans, it means 5 years worth of all 'housing' expenses will pay for all homes in America - including those already paid out. And less than 4 years if you exclude those paid out. Something is wrong here. I think these estimates are about 3x wrong. http://www.fool.com/investing/general/2015/03/23/heres-the-average-americans-mortgage-payment-by-ag.aspx http://www.fool.com/investing/general/2015/03/23/heres-the-a... this chart suggests average share of income Americans pay in mortgage are ca. 14% of their income. renters probably pay less, but even if not, 22.7% pay nothing because they own their homes outright. Which leaves 10-11% of income spent on housing, not 35%. Even less if you remember that interest on mortgage is tax-deductible, so definitely under 10%.

195 points by hourislate 10y ago

"As of 2014, the annual cost of a UBI would have been about $200 billion cheaper than the current system. By 2020, it would be nearly a trillion dollars cheaper." Remarkable how much entitlement spending is booked in the near future.

toomuchtodo 10y ago
Why is that remarkable? We make promises to people in the past and then we're shocked when the bill comes due? No one is ever shocked about all of the SS trust fund cash put into US treasuries (general fund deficit spending), but always shocked that "thats going to need to be paid back one day." https://www.ssa.gov/news/press/factsheets/WhatAreTheTrust.htm https://www.ssa.gov/news/press/factsheets/WhatAreTheTrust.ht... > The Social Security trust funds hold money not needed in the current year to pay benefits and administrative costs and, by law, invest it in special Treasury bonds that are guaranteed by the U.S. Government. A market rate of interest is paid to the trust funds on the bonds they hold, and when those bonds reach maturity or are needed to pay benefits, the Treasury redeems them. Trust fund stats: https://www.ssa.gov/oact/STATS/table4a3.html https://www.ssa.gov/oact/STATS/table4a3.html The mind boggles. We've been living like a college student on credit cards, and the bill is coming due.
- drawkbox 10y ago
  Social Security trust funds have been used to keep our dollar/treasuries inflated and are one of the biggest customers of those bonds. They will always have a buyer and part of the reason they are in demand since the mid 1930s. When people talk about removing SS they don't realize what it would do to treasuries as a product, demand would be much lower and so would the value of the dollar. Social Security is the largest owner of US Debt: http://www.forbes.com/sites/mikepatton/2014/10/28/who-owns-the-most-u-s-debt/#34ed09131907 http://www.forbes.com/sites/mikepatton/2014/10/28/who-owns-t...
  - toomuchtodo 10y ago
    We should probably not position ourselves where we require an inflated dollar then, since those trust fund dollars are going to be drawn down as everyone ages onto Social Security.
    - drawkbox 10y ago
      I agree, it is a bit of a house of cards as they say. From the article: The largest owner of U.S. debt is Social Security. Since the Social Security system is a government entity, how can the government own its own debt? Good question. This is where the “house of cards” theory resides. Some believe the federal government is merely moving the IOUs from one shell to another, hoping to escape the watchful eye of its citizens. In any event, Social Security owns about 16% of the debt followed by other federal government entities (13%), and the Federal Reserve (12%. My guess is when it is time to pay or the money dries up, they are going to just disregard the Social Security debt owed or stretch it way out so the house of cards stays up a bit longer.
      - toomuchtodo 10y ago
        > they are going to just disregard the Social Security debt owed or stretch it way out so the house of cards stays up a bit longer. I disagree. Taxes with simply rise (as they should've long ago).
mac01021 10y ago
I don't think this adds up. Here (https://www.nationalpriorities.org/budget-basics/federal-budget-101/spending/ https://www.nationalpriorities.org/budget-basics/federal-bud...) is federal spending for 2015. It shows a total federal spending of 3.8 trillion dollars. This is all spending, including 0.5 trillion on the military, 0.2 trillion in interest on debt, and tons of other spending on things that are not welfare or social-safety-net programs. Meanwhile, $13k * 300m people, results in an expense of 3.9 trillion. Greater than the entire federal budget. EDIT: I AM WRONG. The spending proposal from the article does not exceed the entire federal budget, because people who earn more than 30k of income get payed a smaller UBI. I did a rough calculation using the best numbers I could easily find describing the USA's income distribution (good numbers are hard to find). The result was that this proposal would likely cost just short of 3 trillion dollars. Significantly less than the entire 3.8 trillion dollar budget, but still more than we currently spend on entitlements.
- trishume 10y ago
  Indeed, he's probably subtracting the revenue from the tax from the "cost", which is misleading.
- danjoc 10y ago
  There's another source of money not included here. The Fed creates money from nothing. That has to go somewhere. On top of the usual inflationary dollar creation of the Fed, they were doing "Quantitative Easing" for years to the tune of about $85-100 Billion per month given to banks in exchange for known worthless mortgages. So a good quarter of that $3.9 trillion could have been covered just by some "Quantitative Easing" programs for the poor. Since the Fed stopped publishing M2, we don't know how much money is really being created. But it seems to me the logic of "Let's give money to the banks and they will loan it to the people" doesn't work. Here, the argument seems to be: Instead of giving money to the banks with expectations, we just give it directly to the people, cutting out the inefficient middle men entirely.
  - notahacker 10y ago
    I'm more sympathetic to innovative monetary policies than most people that have studied the topic, but the monetary base isn't a money tree and unfortunately virtually every claim you've made is false. The M2 growth figures are available and published by Fed sources. They're nowhere near enough to underwrite a basic income, even if none of that newly created credit was being directed towards useful economic activity https://research.stlouisfed.org/fred2/series/M2 https://research.stlouisfed.org/fred2/series/M2 M2 isn't created by the Fed anyway, it's created by private banks choosing to extend credit to entities they believe are on average productive enough to repay them at prevailing interest rates. It's possible to deter banks from making future loans of course, but I can't imagine doing that to make room for untargeted handouts being a good idea The monetary base the Fed actually is responsible for issuing is much smaller and has actually shrunk since 2014. https://research.stlouisfed.org/fred2/series/BASE https://research.stlouisfed.org/fred2/series/BASE QE was a temporary large-scale response to financial shocks which is designed in principle to be reversible so it's about the worst way of funding the steady stream of expenditure required for BI imaginable. It also consisted of the Fed buying up swapping the cash for existing financial assets in the form of government debt. If they're giving away the newly minted money instead, the amount the Fed can inject into the economy without generating unwanted inflation is much smaller. That might be desirable for a well targeted short term stimulus programme, but a BI certainly doesn't fall into that category (plus you don't get the fringe QE benefit of shrinking the govt debt/interest burden)

Roritharr 10y ago

Once again no answer to the main Question: What to do with people that blow their UBI by the 2nd of each month on SAAS Startups? Let them starve? Go without Shelter?

dnautics 10y ago
Same question is valid for food stamps, EITC.
teddyh 10y ago
From the article: > Some people will still behave irresponsibly and be in need before that deposit arrives, but the UBI will radically change the social framework within which they seek help: Everybody will know that everybody else has an income stream. It will be possible to say to the irresponsible what can’t be said now: “We won’t let you starve before you get your next deposit, but it’s time for you to get your act together. Don’t try to tell us you’re helpless, because we know you aren’t.”
- dnautics 10y ago
  I wonder if this is bad because on the net it will make society less compassionate.
  - brbsix 10y ago
    Less compassionate to those undeserving of it, sure. Isn't that a good thing? I'm not a fan of UBI but this aspect might turn out to be really beneficial in reversing the perverse incentives and dysgenic effects of current social benefits programs.
    - toomuchtodo 10y ago
      > Less compassionate to those undeserving of it, sure. Isn't that a good thing? Only if we want to continue to have addicts and the mentally ill homeless, abused, and taken advantage of.
    - 10y ago

throwaway13337 10y ago

"The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare." How the hell does that happen politically? I would love to see basic income replacing a large portion of social programs in the states but no one seems to be talking about how we get from where we are to where we want to be, realistically.

VonGuard 10y ago
The thing is, I don't think it can happen politically. What is going on now is just the research stage so that we have some sort of data point for UBI supporters to latch onto. There are all sorts of groups inside the UBI tent, and many of them disagree with each other violently, but we're so far from a UBI that for now, everyone can agree on it in the broadest possible way. I, personally, have a completely different take on all of this from most UBI'ers. I take the long view: in 50 years, physical labor could be eliminated. WTF do we do when this happens? Do we relegate half of society to be homeless? Or do we begin the slow march towards eliminating work altogether. Few talk about this scenario, and those that do often tack on "... and then Skynet takes over and robots enslave us all." Yet, it's still a very valid discussion to be having. I think all this UBI research and interest is in furtherance of the elimination of work, altogether. That's not something that will happen over night, or even in 10 years, but in order for it to happen, humanity needs to begin gathering the data points necessary to enact a solution to the end of work problem. In the short term, this would eliminate social safety nets, but let's be honest, this is NEVER going to happen in America without a revolution of some kind. Whenever that happens, hopefully the UBI research will be far enough along to support a movement to enact it.
- CuriousSkeptic 10y ago
  I fear the question will be answered with some very dark times. Indeed what will people do, when most of them aren't actually "necessary", and what will they agree to, given that most of them will also be driven by fear of becoming one of those unnecessary ones? As things stands, politically, and culturally, it's more likely to become som dystopian story of cleansing. Walled communities of elites keeping the poor outside of civilized society, and perhaps even death camps. So I really do hope that we, along the way, not only get data on the economics of it, but also a new ethical mainstream regarding entitlement. Capitalism will be a rather dangerous as framework of ethics in a world where economic value is derived entirely from capital. Only the elite can justify their existance on that framework. I'm currently aligned with the geo-libertarian view of things, as an example of a dissenting UBI-proponent. It seems the "mainstream" UBI thinking at the moment is rather socialistic in nature. Don't really see how that can fare much better than the capitalistic views when faced with the proposition that 10% is supposed to pay for the other 90%

jkelsey 10y ago

I'm sorry libertarians, but you can't just throw a equal amount of cash at everybody and say good luck. Society just isn't that simple. Different people have different needs, and that's where the complex overhead of a bureaucracy comes in. Stop trying to starve the beast already, and instead, help make it better. Or, admit at least, that you just don't give a damn about people who aren't like you.

DanBC 10y ago
UBI isn't about libertarianism, it's about reducing the fucking stupid disincentives built into current benefits systems. Instead of telling people that they can have this money only if they work less than 16 hours a week, or only if they stay disabled, just give them the money. That way you don't need to employ doctors to see if someone is still as disabled as they were last year, and people who get a part time job can increase their hours without penalty.
- Tycho 10y ago
  But it might create even bigger disincentives that have a much more universal effect, which could be disasterous.
  - leereeves 10y ago
    There are good reasons to think it won't. People continue to work after they have enough money not to; people making $40K per year go to night school to try to increase their income. Most people continue to want more after their basic needs are met. And beyond money, work can give a sense of purpose and a connection to other people.
    - Tycho 10y ago
      But we're not talking about 'most' people. We're talking about all people. What about the people who think to themselves, I don't want to work, I want to live off welfare. Now there will be more of those people (especially since technology satisfies more and more leisure needs for just the price of an internet connection). Also as people grow up in such a society, they don't have that driving motive in the back of their mind that if they have to eventually find employment to survive. How will such people turn out as adults? The promise of UBI is saving money and unlocking more human potential (by allowing more risk taking, or letting artists pursue their art, or whatever). But if you think of the need to be productive (for survival) as a force/pressure that has shaped the complex system we call society since the dawn of civilisation, then I can imagine that removing that force in a large nation could result in something extremely dysfunctional or even horrifying.

Tycho 10y ago

I'm surprised UBI is getting all the attention and negative income tax is not receiving equal consideration.

maxerickson 10y ago
A negative income tax would be one way to implement UBI. It sort of fits into the UBI umbrella.
- Tycho 10y ago
  Doesn't seem like the same thing to me. Negative income tax means you still need to find someone who will employ you, and also you don't get any benefit if you are above the threshold so it's not universal.
  - maxerickson 10y ago
    I don't think it is written in stone that you must have a job to receive a negative income tax. That would be one way to implement it, but you could also have an implementation that was based on some arbitrary level of income, where if you didn't reach that income, the government gave you the difference, even if it were the full amount (this would be a bad way to do it, but nonetheless). For sure, a negative income tax that required employment would not be a UBI. So they may overlap is a better statement than saying it falls under the umbrella. It's also the case that a UBI is only pretend universal. There are people that will see either an increase in their effective tax rate or a decrease in their buying power (the latter if you fund it by printing money).
  - redthrow 10y ago
    > you still need to find someone who will employ you Not necessarily. Negative income tax is one way to implement means-tested basic income. One way to implement a NIT is you have a cutoff point (e.g. $20,000/year) and a rebate rate (e.g. 50%). So, using the above rate, if your income is... (a) $0/year ... you get $10,000/year (b) $10k/year ... you get ($20k-$10k) x 0.5 = $5,000/year (your total income is $15k/year) (c) $15k/year ... you get ($20k-$15k) x 0.5 = $2,500/year (your total income is $17.5k/year) (d) $20k/year and up ... you get nothing --- > you don't get any benefit if you are above the threshold so it's not universal It's not universal in the sense that not everyone gets the government check, but it's universal in the sense that the same rule is applied to everyone.

Mz 10y ago

This was a bad trade, in my view. Government agencies are the worst of all mechanisms for dealing with human needs. They are necessarily bound by rules applied uniformly to people who have the same problems on paper but who will respond differently to different forms of help. Whether religious or secular, nongovernmental organization are inherently better able to tailor their services to local conditions and individual cases. Yet, ironically, he is for a UBI.

dpweb 10y ago

You can make the case for this as a simplification of social welfare, but btw hey - it's also a cure for the coming AI jobs apocalypse! Giving everyone 10k a year isn't going to help a worker replaced by robots. 10k doesn't get you far as an annual income. BI doesn't solve the jobs crisis. You could view it, as subsidizing corporations to decrease wages. Taxpayers paying what the corporations don't have to. So it won't be surprising to see Basic income touted not just by the liberal crowd, but by the Wall St Journal's and corporate interests.

mac01021 10y ago
Why won't 10k per year help a worker replaced by robots? 1> It's definitely enough for a single person to live comfortably on, though perhaps not in the house they lived in before getting lain-off. (I agree children can be a small problem and the proposal from the article does not consider them. But if you're not working and don't need to pay for professional childcare then the cost of a child per year is only a few thousand for food.) 2> It's 10k per year plus whatever you can earn. If you don't have that pesky minimum wage restricting job openings to only those tasks that the customer base values at >$12/hr, then you can rake in a good amount of money performing tasks that people don't value quite so much.

dclowd9901 10y ago

Not a fan of the decreasing benefits at $60k. That creates a huge donut hole for those making 59k and then get a 3% promotion. All of a sudden they've take a paycut. Make it a flat income. (Also, should be closer to $15 or $18k a year).

ido 10y ago
The cut is gradual (so that each extra $1 you earn, less than $1 is reduced from your benefit). So you will never end up with a paycut by making more money.
gizmo686 10y ago
This proposal decreases benefits between $30k and $60k. The total delta in benefits would be $6.5k. Assuming this decrease occurs linearly, this comes out to a marginal tax of 21%. The current marginal tax rate for someone (unmarried) making between 37k and 91k is 25% [0] This means that over this $30k interval, people would be facing about a 46% effective marginal tax [1]. The current top bracket is only 39.6% and does not kick in (for unmarried individuals) until $415k. While this proposal does create a silly marginal tax rate, it is still below 100%, which means that making more income still leads to more money in your pocket. Our current system, if you count the value of non-monotary aid, often exceeds a marginal rate of 100%, which is a far more serious problem. I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets. [0] https://www.irs.gov/pub/irs-drop/rp-15-53.pdf https://www.irs.gov/pub/irs-drop/rp-15-53.pdf [1] This number might be slightly different if the two taxes interact with each other.
- maxerickson 10y ago
  It would be really dumb to stack the taper on top of existing tax rates. Which I guess doesn't mean it wouldn't happen.
- shasta 10y ago
  > I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets. This was such a dumb sentence in an otherwise interesting post.

danbruc 10y ago

Several years ago I thought a universal basic income would be a good idea but the longer I thought about it the more that went away. Now I can't even tell which problem it tries to solve. There won't be enough work for everyone in the future? Well then cut down working hours instead of having half the population work full time and pay for the other half. Some jobs don't provide enough income to make a living? Then have sufficient minimum wages, there is no point in doing any work that does not pay well enough to make a living. Also universality, what is the point? Above some income you are essentially just paying yourself. There might be a technical point because it keeps the rules simple but besides that I don't see in which way absolute universality is a feature. Reduce the overhead from many different social programs, for state and citizen? Fair point, but then again an universal basic income seems quite a huge hammer.

blazespin 10y ago
"Well then cut down working hours instead of having half the population work full time and pay for the other half" That doesn't work. The reality is, and I'm sorry to say, but the required IQ to be economically relevant is increasing every year. Your plan doesn't work because you can't spread out the work that way. Increasing minimum wages will only just accelerate automation and exacerbate the problem. My concern about UBI is that it won't properly track inflation and will quickly become not enough and all the welfare programs are gone, so people are doubly screwed. Other than that, I like it. I'd like to see more "pay to go to school" programs, though. We'd end up with fewer Trumps...
- danbruc 10y ago
  The reality is, and I'm sorry to say, but the required IQ to be economically relevant is increasing every year. Your plan doesn't work because you can't spread out the work that way. That is only a real problem if the population does not keep up with this development. I can not tell whether requirements are (now) growing faster then capabilities but both certainly grew ever since. The other thing is that it seems to me that - at least to some extend - the capabilities are the controlling factor here. The economy can demand whatever it needs, if it is not available the economy will have to adopt. Increasing minimum wages will only just accelerate automation and exacerbate the problem. I did not mean to increase minimum wages more and more just to make any job viable, this of course only leads to inflation. I meant to let non-viable [EDIT: This read »no viable« before.] jobs die or automate. If people are not willing to pay enough for getting their lawn mowed - not sure if that is a good example - to make a living from it, then there never was a market for lawn mowing. Subsidizing it by the rest of the population with government benefits of any kind is not a solution.

blazespin 10y ago

This will track inflation?

arbre 10y ago

Wouldn't the price of everything raise accordingly, so that you basically can't afford anything with the basic income?

paul 10y ago
Only if the world were zero-sum, which it's not. Remember how only rich people used to have cell phones, and now billions of people have them? The price of most goods is close to the marginal cost of production, which means that giving more people money may actually lower the cost of many goods (by increasing volume). Artificially scarce goods, such as an apartment in SF, may get more expensive however since their price is set by the marginal ability to pay. The good news is, you don't have to live in SF.
- vilhelm_s 10y ago
  I guess apartments in San Fransisco already cost more than what someone living off basic income could afford, so the prices should not be driven up at all. Indeed, people living there would presumably get a net reduction in income (from tax increases to pay for the BI), so the prices should go down.
  - Mz 10y ago
    If you read the article, the BI being proposed would drop off after you began earning more than $30k and the drop would stop at $60k in earned income. I imagine a rather high percentage of people living in San Francisco already earn well above $60k annually.
    - gozur88 10y ago
      That's not a UBI scheme. That's just welfare.
      - Mz 10y ago
        The article proposes that we replace welfare programs, social security, etc, with this UBI. Then, at some point, it says this: Government agencies are the worst of all mechanisms for dealing with human needs. They are necessarily bound by rules applied uniformly to people who have the same problems on paper but who will respond differently to different forms of help. Whether religious or secular, nongovernmental organization are inherently better able to tailor their services to local conditions and individual cases. I find it ironic that this individual is for the so called UBI.

Cozumel 10y ago

Something I haven't seen anyone else mention, if UBI is introduced won't that cause prices to increase? For example, supermarket 'own brands' are usually cheaper than branded products, but if everyone is getting a minimum income then those prices won't need to be as cheap, just cheaper than alternatives.

mac01021 10y ago
Eggs and milk aren't getting more expensive to produce. So, if the currently-cheapest brand increases its price, it's opening a window for new competition to sell at the old low price. It's possible that anticompetitive forces would prevent that competition from emerging in many cases, but I would not say that it is obvious that prices will increase under UBI.
- derekp7 10y ago
  Except that it does become more expensive to produce those eggs. That is, assuming some of UBI gets paid for out of increased taxes that the farmer would have to pay.

dba7dba 10y ago

We shouldn't be talking about government paying basic income. We should talk about millionaires and billionaires paying living wage to everyone working in their home and every employee in their companies that they share ownership in. That would be a better conversation to have.

mac01021 10y ago
And when they stop hiring people because they no longer require the labor of people who do not have specialized skill sets?

dba7dba 10y ago

TrevorJ 10y ago

ten thousand dollars a year isn't going to really do anything but enable people to remain in minimum wage jobs though.

gregw134 10y ago
A lot of people only make 15-20k/year. It would do a lot for them.

Shivetya 10y ago

While it is an interesting idea it is going to have to be crafted in such a way that politicians don't just treat it like tax law and start carving out exceptions. another area people need to look into is changing the direction of though that has crept into society which that "you deserve this, that, and this, as its your right" and instead get back to the days where people were encouraged to strive to return more to society than society gave them.

hackaflocka 10y ago

Some clarifications needed: 1) So, someone who has 8 kids gets the same exact income as someone who has 0 kids? 2) What happens when health insurance costs escalate?

fzeroracer 10y ago

I am all for Basic Income but the way the author wants to implement it would be a disaster. My mother is fully disabled and unable to work as a result of her stroke and she relies on Medicaid, Food Stamps and SSI to live. $13000 per person would be lower than what she gets right now and that's without considering the insurance issues. These changes would quite literally kill or leave homeless a large amount of America's disabled, poor or elderly population. If Basic Income is to work then it needs to be actually liveable and adjusted based upon the CoL in each area.

marcoperaza 10y ago
>If Basic Income is to work then it needs to be actually liveable and adjusted based upon the CoL in each area. There's a good argument to be made for a larger sum for the disabled who cannot work. But I'd be extremely opposed to any regional adjustments. If individual cities and states want to supplement the UBI, then that's up to them, but people moving out of high-cost areas and into low-cost ones is part of the natural ebb and flow that keeps the cost of living reasonable. And can you imagine what a CoL adjusted UBI for San Francisco would look like? A massive ripoff of the rest of the country.
- newjersey 10y ago
  > There's a good argument to be made for a larger sum for the disabled who cannot work. But I'd be extremely opposed to any regional adjustments. If individual cities and states want to supplement the UBI, then that's up to them, but people moving out of high-cost areas and into low-cost ones is part of the natural ebb and flow that keeps the cost of living reasonable. And can you imagine what a CoL adjusted UBI for San Francisco would look like? A massive ripoff of the rest of the country. I don't know what the solution is here but if in this hypothetical reality, the garden state didn't supplement but California did then I'd move to California in a heartbeat. I am sure I'd be broke even with any supplement in San Diego but at least I'll be broke in San Diego. Edit: I cannot support any discrimination in basic income based on "ability to work". I'd rather the whole thing fail. I'd rather we never have basic income implemented at all than this bastardization go through. Personally, I'm all for death panels. We should not try to keep everyone alive at all costs. If I get in a freak accident and it'd cost me $10M+ to keep me alive with little to no chance of a full recovery, please let me die. Something we need to discuss separately from universal basic income is the need to reduce cost in healthcare. I'd gladly support expanding Medicare to everyone without having to qualify. We would need significantly greater penalties for Medicare fraud and add incentives for whistleblowers and make it easier to report fraud. I'm OK with "lite" Medicare that drops expensive procedures and lets patients suffering from rare cases fending for themselves in order to cut costs especially if there is little chance that the patient will ever recover fully.

Roboprog 10y ago

If only all of the things that needed doing for the common good were actually being done now, either by robots, or by a small number of people with machine assistance, this discussion might make more sense. Once the roads are fixed, and the parks are clean, the disabled are cared for, etc, etc, etc. THEN maybe we should have a discussion about "Basic Income". Our current technology is NOT "The Culture". There is still work to do, it is "simply" (not so simple) a matter of clawing back some cash from those who benefitted most from a stable society. The WSJ's "10K" plan just sounds like a scam to cut more government jobs while throwing out a small consolation prize to prevent outright rebellion.

avz 10y ago

The way I understand the motivation behind UBI is that it is inspired by the notion that we have (mostly) automated production of goods and therefore human work has been (mostly) delegated to machines. It is therefore perfectly reasonable for people to receive UBI so they can purchase all the robot-produced goods. The reason I am skeptical of such a view is that production of goods is a tiny fraction of the work humans actually do. A lot of people these days work on solving problems, not on producing goods. And we are far from being short on problems to solve... Alzheimer's, clean energy, climate change... Saying that humans should not need to work is like saying: This is it. We're done here. This is the world we want.

deleted 10y ago
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rexpop 10y ago
> Saying that humans should not need to work is like saying: This is it. We're done here. This is the world we want. That's not what's being said. We're not done. This is not the world we want. We should be able to work on Alzheimer's, clean energy and climate change without worrying about where our next meal is coming from. And, sure, many researches have salaries. But many potential researchers aren't employed, aren't trained, aren't educated. Think of the millions of folks whose passion for helping people, taking care of the planet or tinkering is getting sidelined while they work a cash register to save up for community college. Those people can use a basic income to find a better, more productive, more fulfilling and more useful position in life.

youngButEager 10y ago

In economics there is a saying: "There's no free lunch." Basic Income gives people a free lunch. What is the "opportunity cost" of that free lunch? For those of you unfamiliar with "opportunity cost", here's an example: - you have two passions at age 18: software and playing in rock bands. You want to become a professional in one of those fields. The rock band choice prevents you from being in a place long enough to be hired to write code. And vice versa. - You choose to write code. Ten years later you are at the top of your game, age 32. You own a condo and are married and on an 'executive track' at the company you work for. But had you chosen the 'rock band' career, who knows? Maybe you would have taken off and at age 32 have a string of hit records, millions of fans and million$ in wealth. That's the 'opportunity cost' -- you cannot do both. Okay back to Basic Income. A person receiving Basic Income could replace that income by working more. But they don't work more because, why should they? The opportunity cost of Basic Income is that lost productivity in the economy, the lost output from that person. Who knows how large that economic benefit to society is, when it's replaced by "Basic Income for everyone."

apo 10y ago

Maybe a silly question, but why $13,000? Why not $5,000? Why not $20,000? How does the risk/reward tradeoff of this proposal change as that magic number changes? Also: > The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare. What about education funding? What does corporate welfare entail? Defense spending, for example?

TACIXAT 10y ago

Kind of a meta comment, but it wouldn't surprise me at all if the basic income movement was (for the most part) started and promoted by an intelligence agency. After reading about the literary magazines and abstract art that the CIA funded I started thinking what a current program would look like. I think it would look like how basic income is developing.

Pyxl101 10y ago
Could you be more specific? What literary magazines and abstract art did the CIA fund? What about the way basic income is developing gives you the impression that it's a CIA program? Without detail this seems like an unsupported conspiracy theory. What would be their incentive in this instance?
- TACIXAT 10y ago
  https://en.wikipedia.org/wiki/Abstract_expressionism#Abstract_expressionism_and_the_Cold_War https://en.wikipedia.org/wiki/Abstract_expressionism#Abstrac... https://theawl.com/literary-magazines-for-socialists-funded-by-the-cia-ranked-93e65a5a710a#.a618zmt10 https://theawl.com/literary-magazines-for-socialists-funded-... Totally speculation at this point. Just the way that the movement arose. There were a few articles covering it. Then a few communities created around it. Then more and more research done on it. Its emergence was interesting.
mac01021 10y ago
> After reading about the literary magazines and abstract art that the CIA funded ... Any links?
- deleted 10y ago
  [deleted]
- Pamar 10y ago
  I suppose the op meant this: http://www.independent.co.uk/news/world/modern-art-was-cia-weapon-1578808.html http://www.independent.co.uk/news/world/modern-art-was-cia-w...

poppow 10y ago

Murray is known for his eugenics arguments. He's pushing for economic Darwinism. The use of 'DNA' in his article belies his propensities. He uses pseudoscience to sell his brand of politics. Firing salvos for a Trump advisor.

dragonwriter 10y ago

The choice for the surtax is perverse: a major point of having a UBI as opposed to means-tested social benefit program is to maintain the marginal benefit of additional income; having a "surtax" that reduces the benefit progressively with income that kicks in at a fairly low income level and proceeds to increase up to a level that's still not a high income is a fairly horrible idea that defeats key elements of the basic idea of a UBI. I'm not a fan of radical big-bang all-at-once UBI replacing other programs swap anyway (favoring a UBI tied to a dedicated revenue stream that displaces means-tested benefit programs as it ramps up, instead) but even among big-bang implementations this is particularly poorly designed. (1) The "surtax", as discussed above. (2) Because it relies on electronic deposit to a bank account, it relies on (but does not provide) a solution to the problem of the unbanked. (3) The decision to apply it only to adults is dubious, but if you are going to have an age-qualified UBI, it should apply at a minimum to all legal adults -- everyone over 18. (4) The benefit (after deducting the required health insurance purchase, which for those with no other income simply replaces Medicaid, which is eliminated [0]) is below poverty level. Which would make sense as an initial condition of a UBI which was built to grow over time, but this proposal doesn't appear to be -- its a proposal, therefore, to maintain, rather than alleviate, poverty. (5) Apparently, the author prefers to fund the UBI for everyone largely by continuing the existing regressive, labor-pays-only, payroll taxes (Medicare is flat, Social Security is flat up to a limit, and then capped, making it -- and overall payroll taxes -- regressive overall), whose current regressive structure (including the flat structure of Medicare) is justified based on the idea that they are buy-ins to benefit programs that provide consistent (Medicare) or capped, contribution-determined (Social Security) benefits. Aside from there being no sane rationale that would justify this, it entirely eliminates UBI's utility as a system to help adapt the economy to deal with progressive automation and the dynamics of the labor market moving toward a larger pool of jobs that have lower returns and a narrowing highly (and increasingly-highly) paid pool of elite workers. Moral issues aside, payroll tax structure can't support the author's proposed UBI going forward. Then again, I suspect that's the author's intent: kill Social Security, Medicare, Medicaid, etc., and replace them with something that cannot function in the long term. After all, this is a proposal for a social transfer program from an author who has written an entire book setting out supposedly universal laws that each individually (and, a fortiori, all combined) supposedly justify the conclusion that all social transfers are inherenty harmful and should be eliminated. [0] The author indicates the healthcare component is too complex to discuss in the article, but this is also a particularly worrying component. Looking at what $3,000 gets you on the health insurance market, this mandatory insurance purchase replacing Medicaid might make the poorest of the poor significantly worse off by itself.

dreamdu5t 10y ago

I feel surrounded by total idiots. None of the math adds up... Cost of living is not considered at all. I'm not against the basic idea but the proposals are beyond half-baked - they're idiotic. I get the feeling nobody writing this UBI stuff has any experience or understanding of the welfare systems they're aiming to replace.

discardorama 10y ago

> A UBI will do the good things I claim only if it replaces all other transfer payments and the bureaucracies that oversee them. Unfortunately, I have 2 problems with this: 1. Of the people that I see in SF who could use UBI, almost none of them seem the type who would clean up their acts with UBI. They have serious mental issues, and money means only 1 thing to them: a means to chemical substances. So what do you do when a guy blows his $2000 monthly stipend on hookers and blow and now is back on the streets? Arrest him? Send him to jail? Put him in a mental hospital? And who pays for that? And who provides him the services, if the bureaucrats who used to do it are gone? 2. What do you do about the millions who are employed in the service-providing sector (bureaucrats, non-profits, etc.) ? Right now they make decent money; you're now going to lay them off. Where will the jobs come from for them?

adventured 10y ago
> Where will the jobs come from for them? That's a pretty weak criticism. Where are the jobs going to come from to employ the millions of people that used to be farmers (in 1875)? Where are the jobs going to come from to employ former delivery milkmen? Or what about the jobs for people that used to handle telephone call switching? The same place they've always come from: economic dynamism. The solar industry, as one basic example, is adding 100,000 new jobs every four years at this point. In 20 years, that one industry will employ a million people - up from almost nothing in 2005. We've got five million job openings presently. The labor market is quite healthy, with the U6 unemployment rate down to where it was before the recession. Besides, unleashing all of that educated labor will result in increased innovation and economic growth, not less.
- fapjacks 10y ago
  This is so right on the money.
- discardorama 10y ago
  > is adding 100,000 new jobs every four years at this point. In 20 years, that one industry will employ a million people I think your math doesn't add up. But going along with your line of thought: will UBI be phased in over 20 years? No. It'll happen over a year or two. Several million people will suddenly be off the rolls. That's not a gradual decline; that's a bloody step function. You will most definitely not have jobs for them. Creating jobs is hard, really hard.

jondubois 10y ago

I like the idea of UBI, but the problem with schemes to improve wealth equality is that usually the middle class ends up footing almost all of the bill. If a rich person feels that their wealth is threatened, they can evade the negative consequences of the scheme (taxes) by relocating their head office to the Caymans. On the other hand, if a middle class family is negatively impacted by the scheme - They cannot evade it; they can't afford to move to another country because they rely on their jobs for income. If UBI is to be instated, we would also have to implement harsh laws to prevent the upper classes from evading taxes. Moving wealth to a tax haven should be made a criminal offence (with jail time). Also, income (passive income in particular) should always be taxed based on the country of origin (from which the payment originated) instead of the complex network of case-by-case tax treaties that currently exist. A single, origin-based tax system would not have all the loopholes that a complex case-by-case system has. Any country that refuses to enter into the origin-based tax treaty should be kicked out of the UN and trade sanctions should be imposed. In practice, a rich person is currently not bound by the laws of their own country; they are bound by the laws of the country whose laws are the most convenient for them - They can literally pick and choose how much tax they want to pay.

prawn 10y ago
Not even necessarily middle class. In Australia, many families who I'd consider middle class use family trusts, negative gearing and the like to minimise tax. The group just below that cops the worst of it, IMO.
arebop 10y ago
Does it really matter if a billionaire stacks up billions in some Cayman account? If so, it is straightforward to use inflation to redistribute those digits. What I care about is a billionaire who buys up all the land in my country. The land can't be hidden and is therefore easy to tax. I care about a billionaire who eats gold leaf ice cream sundaes while the children across town are malnourished, but it is easy to tax gold and food sales at restaurants and groceries. The big problem historically with sales tax has been that it is regressive, but with basic income that doesn't matter any more. There's no problem I know about with land taxes except misguided concern for the elderly and corrupt loopholes. Why not stop even trying to tax financial abstractions and just address hoarding?

jboggan 10y ago

. . . In the Carboniferous Epoch we were promised abundance for all, By robbing selected Peter to pay for collective Paul; But, though we had plenty of money, there was nothing our money could buy, And the Gods of the Copybook Headings said: "If you don't work you die." . . . [0] - http://www.kiplingsociety.co.uk/poems_copybook.htm http://www.kiplingsociety.co.uk/poems_copybook.htm

rayalez 10y ago

I'm surprised that so many people on HN support UBI, it sounds horrifying to me. Did you learn nothing from communism? By increasing taxes you decrease incentives for making wealth, and, more importantly, infringe on individual freedoms. Infringing on human rights of the rich people is one of the worst things you can do for the economy, because they are the people with means of production, and they are the people with options to go somewhere else. The premise that you are free to make as much money as you want and not be punished for it is one of the biggest things that made USA awesome in the first place. The idea behind UBI is that we can now afford it because we have abundance of resources to support it. If that were the case, these resources would be available without the need to coerce people out of their money. The only way to get those resources without taking away the freedom is to treat UBI as what it should be - a charity. Only when there's so much abundance that people are willingly giving away enough of their money to support everyone else, when it's a choice and not a coercion, will UBI have a chance at working without creepy and horrifying consequences.

papapra 10y ago
Did you at least read the article ? He writes about replacing the current welfare system with UBI. About the taxes, I think you are wrong because you think in black and white. It's not binary, it's a spectrum and you want to have a balance, in USA the current system is very favorable to the rich.
- rayalez 10y ago
  In the previous discussion a commenter pretty much explained why this wouldn't work: https://news.ycombinator.com/item?id=11807840 https://news.ycombinator.com/item?id=11807840 Also I think I can accept that a certain amount of taxes is a necessary evil. But let's treat it as such, and avoid taking more than absolutely necessary. In my opinion UBI is a step way too far in the wrong direction.
  - papapra 10y ago
    Why it is necessary evil ? You don't live alone in this world and I bet you profited enormously from the country, community that you live in.

aminok 10y ago

Basic income, like all compulsory income redistribution programs, is a disgusting authoritarian intrusion that should be rejected by all moral people.

ChrisLomont 10y ago

Some sanity checks that UBI fails in every method I've seen: it's some combination of (usually multiple): 1) costs a huge amount more in taxation, 2) screws those most needing help, 3) is not universal, but simply a tax on rich to give to poor, or 4) does not address the economic consequences that negate a significant part of the claims. Simple checks for this one: 1) 236,000,000 Americans aged 21+ [1] times 13,000 each is $3 trillion needing gathered in taxed to hand out. Entire Federal receipts for 2015 was $3.25 trillion [2]. 2) The author scraps all current transfer programs (common), including Social Security and Medicare. The plan requires 3K of the 10K to be for health insurance. Average Social Security payment is 14,784 [3]. So we screwed Social Security recipients, who more likely need the money than then average person getting the new free UBI. 3) Medicare currently spends around 900B, which I assume will still need covered, since people will still have medical needs. The 3K allocated above, times 236M people, is 708B, not enough to cover Medicare, and certainly not enough to replace all current health care insurance. 4) The transfer programs cut total at most 2T [2]. 5) An analysis of his tax scheme, using [4]. The first 30K is not taxed (23.5% of households). Those above 60K get no UBI (46% of households). As such, I wonder if they still need to pay an additional 3K for insurance since they didn't get the 13K? We'll assume so. The rest we can assume has linear benefits from 30K (13K free money) to 60K (no free money). This means for each $2.3 earned over 30K, one loses $1 in free money, which I think would create a huge disincentive to jump this weird benefit gap. Here's [5]effective federal tax rates by quintile. Coupled with the income breakdown above, those under the 60K range will get tax breaks, meaning those above 60K will shoulder a decent amount more in taxes. 6) It would be interesting to chase down who will have to pay what to meet these requirements - it's late; perhaps I'll do that later. 7) Removing targeted money (for housing, for food for kids, etc), and simply giving cash allows people to spend on bad items. The reason many programs are targeted is to help ensure people buy the necessities first. I would expect UBI as posed here would realize this, and then add back targeted programs to avoid the bad effects, negating the claimed simplicity of UBI. Also, many poor get money from multiple programs, and removing those programs and giving everyone a fixed 10K would mean a lot of them now get a lot less (as I claimed, these plans screw the most needy quite often). 8) UBI will most likely make the entire country poorer: the report on Mincome gives an example of a previous UBI experiment causing a 13% reduction in hours worked. OECD reports show as benefits increase across countries, more people live off benefits as opposed to working. Basic economic theory also would make the same claim. If so, less production means we have less goods and services. 9) Counter to 8, prices will likely rise for things the poor buy, especially rent, forcing people back to work. This is also basic economic theory; currently someone willing to put forth X effort to trade for a place to stay will still do so, and giving that person free money (and everyone) will allow landlords to raise rent to consume some of the free money. Think of the common complaint that govt making money easy for houses or college causes those prices to climb faster than without the easy money - except now this applies to a lot more goods. So, if we have limited resources, which we do, why not use them in targeted ways to alleviate problems instead of trying a ham-handed, one-size-tries-to-fit-all solution? This is my main complaint about UBI desires - it necessarily removes benefits from the most needy to give to the less needy by ignoring the level or situation (or even regional cost of living changes). And if your reply is we simply raise taxes, then why not apply targeted benefits with those increased taxes? It still would provide help where most needed, instead of blind (and suboptimal) allocation. [1] https://en.wikipedia.org/wiki/Demography_of_the_United_States https://en.wikipedia.org/wiki/Demography_of_the_United_State... [2] https://en.wikipedia.org/wiki/United_States_federal_budget https://en.wikipedia.org/wiki/United_States_federal_budget [3] https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/ https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/ [4] https://en.wikipedia.org/wiki/Household_income_in_the_United_States https://en.wikipedia.org/wiki/Household_income_in_the_United... [5] https://www.cbo.gov/sites/default/files/cbofiles/attachments/effective_rates_0.pdf https://www.cbo.gov/sites/default/files/cbofiles/attachments...

scotty79 10y ago

UBI will just cause rents to go up. Rents in attractive locations are always as high as most tenants living there can afford. If you give people 1000$, rents for the poorest will just go up by up to $1000. Property prices will follow swiftly. The only force working in opposite direction would be that some people will be able not to flock to attractive locations but I don't think it'll be enough to counter the obvious raise. You'd have to tax property progressively and accept the drop in property price associated with it being less attractive for people who buy to rent. Apparently property prices are sort of holly cow in US so no-one in their right mind can afford doing anything that would harm that, even it it meant actually ending the poverty.

cathartes 10y ago

What I find strangely absent in most discussion of the UBI is how these fixed payments will hold up against inflation. Even simple arithmetic based on the Consumer Price Index over the past forty years will suggest that an amount like $10,000 US in 2016 dollars will likely be trivial cash in twenty years time. (And, arguably, it's already trivial cash today for just getting by.) More than likely, the UBI will have no lasting impact, no matter how it is implemented, unless the buying power of the dollar is realistically accounted for in each year's handout. And I just don't see that happening.

todd8 10y ago

I see lots of comments that suggest that a UBI wouldn't work because the rich have their money offshore, etc. However, I'm not so pessimistic. The parent article is about a plan for the US, and in the US, the rich do pay their taxes. According to the IRS [1], the top 10% make 48% of the total adjusted gross income in the US and pay over 70% of the total income tax. Many aspects of the tax system don't make sense to me, but overall it just isn't true that in the US the rich don't pay their taxes. Some rich Americans choose to renounce their citizenship each year and leave for other countries. The numbers are relatively small, and it involves extremely high tax penalties. (Something like 10 years of taxes and the payment of all capital gains realized or not.) This wouldn't make any difference to a UBI plan. [1] https://www.irs.gov/pub/irs-soi/soi-a-ints-id1506.pdf https://www.irs.gov/pub/irs-soi/soi-a-ints-id1506.pdf

anovikov 10y ago

This idea seems to be so cynical. So capitalists want to, flatten the distribution of social welfare: give more or less same money, but evenly to everyone. What will be achieved? Now it is received by the people who are deeply in need. You are not going to make much profit on them: people who are deeply in need are very frugal at spending their money, they are price-conscious by definition. Now everyone will get an even amount, and most Americans aren't poor by any standard, so the money will be spent to increase consumption of the non-essentials (increasing your profits), or to invest in stock (increasing your valuation). And then it is shown as a move to a better and more fair society. They want 'good' consumers to consume more and multiply, and 'useless' poor people to die as quickly as possible (because $3000 is too little to pay for health insurance) and never have any children (because the UBI is not given to children, and so if you leave on UBI and have a child, you are instantly desperately poor, and no other means to support say, single moms, will exist). Social Darwinism, supply side! What a cynicism!

dragons 10y ago
people who are deeply in need are very frugal at spending their money This article gives some of the logic behind redistributing income this way: https://www.washingtonpost.com/news/wonk/wp/2015/04/14/where-the-poor-and-rich-spend-really-spend-their-money/ https://www.washingtonpost.com/news/wonk/wp/2015/04/14/where... The rich save more than the poor, and the more they have, they more they'll save. Money that's being saved isn't being spent, which means less business for everyone from the dry cleaner on the corner to the owner of a five-star hotel. In turn, that means less work for everybody and a lethargic economy. To be sure, banks can invest the money that the wealthy save, which can stimulate the economy as well. Yet many observers... are worried that as a global society, we've accumulated too much in the way of savings already.
- anovikov 10y ago
  What i totally don't get from this chart, how can housing expenses be so high? It means about 1/3 if all spending spent on housing, which is about 4-5 trillion a year. Where all that money goes? Construction for example, employs less than 3% of U.S. workforce. Banking (profits from mortgages) make a significant part, but it's easy to calculate that don't get a terribly big chunk. Also aren't many families living in paid out homes and don't spend anything on housing at all? 19.9% of all units in the USA are owner-occupied without a mortgage, and 12.4% are vacant. Meaning 22.71% of families are neither renting nor paying a mortgage (homeless aside). Which would imply that those who are spending anything on their housing, spend about 46%, if the average for all household is about 35% as the chart on your link suggests. Nearly half. Which is simply hard to believe. Was that the case, housing would have been the cornerstone of U.S. economy. Total outstanding mortgage debt is 13.7 trillion, which is less than 1x total household income in the USA. So spending 35% of income on housing, all debt could be paid in 3 years even interest included. Because about 60% of people own their homes vs rent, even not counting that they pay typically more then renters, it could mean paying out all mortgages in 5 years, which certainly isn't the case. Other way around, total value of all U.S. homes is 27.5 trillion, about 12.4% are unoccupied (if you are paying a mortgage on a second home you don't occupy, this isn't a housing expense, this is an investment). which leaves 24.1 trillion for occupied homes. If housing is 35% of all income of Americans, it means 5 years worth of all 'housing' expenses will pay for all homes in America - including those already paid out. And less than 4 years if you exclude those paid out. Something is wrong here. I think these estimates are about 3x wrong. http://www.fool.com/investing/general/2015/03/23/heres-the-average-americans-mortgage-payment-by-ag.aspx http://www.fool.com/investing/general/2015/03/23/heres-the-a... this chart suggests average share of income Americans pay in mortgage are ca. 14% of their income. renters probably pay less, but even if not, 22.7% pay nothing because they own their homes outright. Which leaves 10-11% of income spent on housing, not 35%. Even less if you remember that interest on mortgage is tax-deductible, so definitely under 10%.