8 ms·

If my brother tells me he's hungry and broke I might make him dinner and let him crash on my couch. If I just saw him spend $500 on weed I'll probably tell him

If my brother tells me he's hungry and broke I might make him dinner and let him crash on my couch. If I just saw him spend $500 on weed I'll probably tell him he's on his own. The demonstration is essential because if we don't require it, some people will exploit our kind nature to rob us. This is already a massive problem in programs where we do require demonstrations of need. See NPR's expose on rampant disability fraud: http://apps.npr.org/unfit-for-work/ http://apps.npr.org/unfit-for-work/ It's hard to see how eliminating safeguards will improve things.

heartsucker 10y ago
But at what level do we accept there's assholes and move on and not let them ruin it for all of us? If we have a program that helps 1 person and 1 person scams it, we might get rid of that program. What if it helps 10 for every 1 scammer? 1,000? 1,000,000? Certainly with the last we'd say it's ok.
- yummyfajitas 10y ago
  We stop when the marginal cost of additional oversight exceeds the marginal benefit of additional fraud prevented. I.e., we keep increasing oversight until diminishing returns causes $1 of additional fraud prevention spending to reduce fraud by $0.99. I don't know where that point lives, but as NPRs expose demonstrates, that amount is certainly larger than zero and probably a lot larger than where we are now.
  - heartsucker 10y ago
    I was taking the most simplistic approach. Your point is better than mine, but usually the argument I see is that "there are welfare queens, and that's not fair, therefore there shouldn't be welfare at all." I was more arguing against that.
    - yummyfajitas 10y ago
      I'm arguing for good government, not no government. Unfortunately good government requires carefully understanding and administering a bureaucracy, taking into account individual incentives, and building something non-simple. Basic income is just a cheap mental hack used to seduce the lazy. It's like looking at a webapp, realizing that 75% of your compute cycles are doing error handling and then saying "aha, the solution is to ignore all errors!" It's seductive, brilliant in it's simplicity, and complete idiocy. Among other things, this is why essentially no basic income proponents are willing to even do a back of the envelope calculation to show how it would work. (Similarly, "eliminate all error handling" guy will refuse to write a proof of concept.) [edit: I altered this comment to explain in better detail what I think is wrong with BI, but eliminated a sentence that SandBOx replied to. I believe the real goal of most BI proponents is to create a vote bank of government dependents.]
      - SandB0x 10y ago
        Out of interest, what do you think their real goals are? (I agree with the sentiment of your comments FWIW)
      - ebalit 10y ago
        This proposition by Marc de Basquiat seems to be a lot more than "back of the envelope calculation": http://www.allocationuniverselle.com/doc/BIEN_Munich_2012-09-15_MdeBasquiat.pdf http://www.allocationuniverselle.com/doc/BIEN_Munich_2012-09... It's a reform of the French tax system based around a basic income and flat taxes on income and wealth. The resulting redistribution is similar to the current system without the nasty border effects and bureaucracy.
  - pessimizer 10y ago
    That is mathematical, but the marginal benefit can't exclusively be considered in terms of the financial health of the program. The imposition of fraud prevention creates a lot of negative externalities (in relation to the finances of the program) on people who are recipients or potential recipients. False positive detections of fraud, or heavy burdens of evidence will cause a feedback effect by causing people who we would want to qualify as recipients to commit fraud in order to elude oversight, thereby (if focused on the solvency of the program) justifying even further oversight, and higher overheads. Also, since the purpose of the program is to reduce poverty, not to detect fraud, another effect is that the additional oversight will keep people away from the program, either by (as above) their inability to navigate the efforts to protect the program from fraud, but also by the effect of intrusive (and possibly personal and demeaning) questions and inspections has on people's self-image who choose to accept the aid (as per TFA), causing them to avoid taking it to avoid social stigma. I know these are the types of points that laissez-faire libertarians laugh at i.e. "imagine someone who is taking my money refuse any indignity; they can always choose to starve," but those sorts of libertarians don't think that poverty is a concern anyway. When those types get to design programs like this, they end up largely populated by people who are willing to navigate them as a job, hence largely fraudulent, creating a self-fulfilling prophecy. The vast bulk of overhead is ultimately fraud control in some form, and as that expands, so the program expands, while the number of people being helped stays steady or even shrinks. This massive administration is farmed out to contractors to reduce ballooning costs (cronies, friends of friends and/or benefactors - an externality that affects us all as a rise in corruption) who are rewarded for finding more fraud with a higher proportion of the budget of the program. Their primary motivation then becomes to find excuses to exclude people from the program. This is depressing to even type. The reason one would have basic income is to eliminate this. I believe that every millionaire should receive a check. Means-testing is a scam.
sanxiyn 10y ago
How can some people exploit basic income system to "rob us"? Maybe they can fabricate people which don't actually exist? (Or more realistically, delay reporting death to collect basic income of dead people.) These are concerns, but hopefully modern government can deal with fake identities. These still seem a lot better than current welfare system. If you consider giving basic income to people who spend $500 on weed "robbing", well you are entitled to your opinion, but that's not exploit of system, because system is working as intended.
- yummyfajitas 10y ago
  People exploit basic income to rob us when they consume it without needing it. Why do you think having zero oversight and giving benefits to everyone, including those who don't need it, is somehow better than the current system? If you consider giving basic income to people who spend $500 on weed "robbing", well you are entitled to your opinion, but that's not exploit of system, because system is working as intended. Yes, it's pretty clear that the goal is to create a vote bank of government dependents who exploit the rest of us.
  - akmiller 10y ago
    Many reasons to this and something has to change at some point. But just a couple of points is that if everyone receives it then nobody can be robbing the system as everyone is entitled to it. Another point that the HN crew should be well aware of is that we are going to see entire Industries worth of jobs disappear. Obviously other jobs will come but not at the rate they are going to decline and they will likely be more high skilled jobs than low one's. We are on the cusp of automated vehicles and when that comes to fruition all cab/taxi/bus/truck drivers will be without jobs. This will happen in many other areas as well and to not seriously prepare for this type of future is absolute lunacy. Not saying that BI is THE answer...but it, along with many other things, are definitely worth exploring further.
    - yummyfajitas 10y ago
      Yes, and if I do this: try: ... except Exception, e: return 200, "ok" then I've completely eliminated the problem of 500 Internal Server Error. Just because you redefine taking money you don't need from productive people as "entitled" doesn't make the problem go away.
DougWebb 10y ago
It's not that clear cut. Your options are more like: 1) Trust your brother, feed him and let him crash. Costs you $50. 2) Don't trust your brother. Hire an investigator to determine if he bought weed. Most of the time nothing is found so you wind up helping him, which now cost $70. Occaaionally you discover something and choose not to help. Still costs you $20. Is #2 worth it? That depends on how often the investigator finds a reason not to help.
- cloverich 10y ago
  Also time -- the $50 option costs no time. I think your argument is important. We spend a ton of time debating and considering how to prevent freeloaders. I'm more inclined to just ignore them and see how it goes, then start adding checks into the system when (if?) its apparent the free-loaders are a legitimate threat to the system.
- jackcosgrove 10y ago
  There's a third option which always costs $0.
  - CPLX 10y ago
    There's never an option costing zero as long as the brother in question has the ability to punch you in the face and take your food for leaving him to starve.
    - yummyfajitas 10y ago
      So we need a BI because the poor will spend all their money on drugs, and then engage in violence against peaceful citizens who don't feed them? That's an interesting view.
      - alanwatts 10y ago
        >the poor will spend all their money on drugs, If and when attempting to formulate coherent arguments, avoid using such absolute statements.
josho 10y ago
> This is already a massive problem in programs where we do require demonstrations of need. See NPR's expose on rampant disability fraud: http://apps.npr.org/unfit-for-work/ http://apps.npr.org/unfit-for-work/ But, the disability fraud is due in large part to the rampant unemployment, poverty, and gutted social safety net in that area. So, the option for those folks is disability or live on the streets. I wouldn't exactly say you are making the case for requiring proof of need. Also interestingly you see use of drugs as reason to refute need. I believe there is a correlation between desperate poverty and drug use, I think it's because for those people with no hope of escaping poverty they need some kind of escape. Unlike you and I if we ever loose a job or get hit with an unfortunate circumstance we can get out of it fairly easy because of our education and in-demand skills. Now imagine a factory closing and 5000 folks with barely an education now out of a job, some percent of that cohort is going to end up resorting to drug use as an escape from their hopeless position. Idealistically, I'm hoping a basic income gives people like this some hope back. But, even then if there truly are no jobs for them, then if some % of the population enjoys weed then maybe that's ok--it's better than a lot of other possibilities they could be doing.
- yummyfajitas 10y ago
  No, the disability fraud is caused by healthy people lying in order to take money from others that they didn't earn. Are you somehow claiming that wealthy Americans are unable to make choices for themselves, i.e. they are incompetent? If so, lets find them caretakers who can manage their lives for them. Lets not let them continue making bad choices that cost the rest of us. I have no problem with smoking weed and I do it myself sometimes. I have a problem with spending your own money on weed and then turning to me claiming you are hungry. Spend your own money before you spend mine.
  - pessimizer 10y ago
    I think that if you did a cost/benefit analysis on benefit fraud, you'd find that it's a lot of work and risk for a very tiny benefit. Unless you don't believe in economics, you'd assume that they would do another job which would require less work and risk and more pay if they had access to one. Disability fraud is caused by desperation. Either that or 2% (IIRC) of the U.S. working population suddenly became either very sick or lying dopesmokers right after the housing bubble burst.
beisner 10y ago
This kind of argument misses the forest for the trees. In any welfare system where we don't just say "screw 'em" to people who can't seem to support themselves enough to survive, there will be people who game the system. Now, I'd argue that those people almost always have the potential to be productive (and aren't productive because of motivational, situational, or basic economic reasons), but there is no benefits system we can introduce that will directly encourage these people to change. Yes, if we introduce basic income, by making things significantly better for everyone at the bottom we might slightly increase the number of people who don't contribute economically, and I agree that initially this feels like a moral problem that we might like to avoid. But in the grand scheme of things, I believe that a basic income will cause an increase in economic productivity (through increased access to education, less reliance on illicit activity, and removal of certain stressors that keep people locked in the cycle of poverty) to a MUCH larger demographic of people, vastly offsetting whatever inefficiencies are introduced by an increase in those who don't contribute to the economic system. Heck, even the reduction in bureaucratic expenditures might be enough to offset this cost. At the end of the day, any system will have a potential for introducing moral hazard, but I feel that any increase that might be introduced by basic income is vastly offset by the other economic benefits the system brings.
- yummyfajitas 10y ago
  Actually the increase is more than "slight". It's a 13% reduction in work effort, more than double the reduced work effort caused by the great recession. http://public.econ.duke.edu/~erw/197/forget-cea%20(2).pdf http://public.econ.duke.edu/~erw/197/forget-cea%20(2).pdf Heck, even the reduction in bureaucratic expenditures might be enough to offset this cost. Why don't you do a back of the envelope calculation to demonstrate how this could possibly work? I have yet to see a single successful attempt at this.
rorykoehler 10y ago
What do you have against your brother putting $500 back into the economy? That's good for everyone (except for him in the example you gave). If you were smart you would have sold him the weed and made yourself a few hundred bucks. Then you could easily feed him with the profit. The local grocer can then feed his family with the extra money he made because you bought more from him due to your sudden windfall and so on. The economy benefits from money circulation. Basic income is going to improve the health of the economy by giving spending power and financial security to everyone. In turn this will make people looser with their everyday spending which will be of phenomenal benefit for the overall health of the economy. You're thinking about it as if it's your personal account. Money doesn't work like that at scale.
- jimmyk 10y ago
  What do you have against your brother putting $500 back into the economy? That's good for everyone How is it good for everyone else? Everyone else now collectively has $500 less to spend on other goods and services. Instead of scarce resources being used to create those other goods and services, they will be used to grow weed. That sounds to me like it's decidedly bad for everyone else.
  - majewsky 10y ago
    Exactly. Because there's only so much money to spend every year, and when it's used up, the economy shuts down until New Year's Eve. /s
    - jimmyk 10y ago
      Do you not believe there are scarce resources? Or do you not believe money is used to direct how those scarce resources are used?
      - rorykoehler 10y ago
        Considering the amount we waste is enough to feed the rest of the planet, no we don't really have scarce resources and resources are becoming less and less scarce every year.
dragonwriter 10y ago
> See NPR's expose on rampant disability fraud There's no incentive for fraud in an unconditional benefit system. > It's hard to see how eliminating safeguards will improve things. Its actually easy to see, when the "safeguards" directly produce perverse incentives. Means-testing reduces the marginal benefit to finding additional income, encouraging a culture of dependence. And any type of conditional benefit scheme creates an incentive for fraud where the benefits of fraud outweigh the expected cost of committing it. The "safeguards" are the problem, not a mitigation.
- yummyfajitas 10y ago
  Yes, and if I redefine all errors as successes my program has no bugs. Back in reality, my application is not meeting business needs, and BI is still wasting a bunch of money on people who don't need it. Means-testing reduces the marginal benefit to finding additional income, encouraging a culture of dependence. And any type of conditional benefit scheme creates an incentive for fraud where the benefits of fraud outweigh the expected cost of committing it. A Basic Job Guarantee (if you need a job real bad, the government gives you a real bad job) does not create incentives for fraud. EITC also has minimal incentives for fraud.
  - dragonwriter 10y ago
    > A Basic Job Guarantee (if you need a job real bad, the government gives you a real bad job) does not create incentives for fraud. No one needs a job. People need good and services, which (in a system that is basically market structured) income is a means to provide. A job isn't a need, its multiple steps removed from needs. A "Basic Job" labor army programming is a reasonable means of providing stability in income, currency in marketable skills, and providing for infrastructure and other public needs during a short-term disruption in the private economy negatively effecting employment that does not involve a long-term transformation in the nature of the economy and the kinds of work likely to be in demand. Its a very bad way of dealing with long-term structural unemployment, providing a social safety net during a period of substantial transformation of the jobs in demand which either makes people permanently unemployable or requires substantial time devoted to retraining to regain employability for displaced workers, etc. Its a good component of a set of policies to address the Great Depression, but not for an economic revolution driven by automation and other developments. > EITC also has minimal incentives for fraud. Sure, because EITC has a fairly gradual falloff of benefits with increasing income at the top end (and because, though risk of getting caught may be fairly low, sanctions for tax fraud are very steep), it creates only a fairly mild incentive to fraud through concealed outside income. Certainly, rolling all primarily means-tested (but not mainly conditioned on other needs) social benefit programs into EITC, both raising the cap and broadening the range appropriately, and keeping the fairly mild fall-off at the top would substantially reduce overall complexity, and reduce incentives for fraud, at the cost of directing less funds to the neediest at the bottom (due to the phase-in part at the bottom end of the scale with EITC.) Of course, the only differences between an EITC and a UBI funded (insofar as funds are needed beyond those from replaced means-tested programs) increased high-end taxes in a progressive income tax system is: (1) EITC doesn't reach the bottom end of the distribution as effectively, due to the phase-in, (2) EITC is effectively (other than as mentioned in #1) equivalent to a UBI funded by an increased tax on a narrow range of income toward the low (but not absolute bottom) end of the scale (the range at which the UBI phases out.) rather than one funded by an increased tax at the top end of the scale, as in most UBI proposals. UBI is basically EITC with those two problems fixed.

heartsucker 10y ago

But at what level do we accept there's assholes and move on and not let them ruin it for all of us? If we have a program that helps 1 person and 1 person scams it, we might get rid of that program. What if it helps 10 for every 1 scammer? 1,000? 1,000,000? Certainly with the last we'd say it's ok.

yummyfajitas 10y ago
We stop when the marginal cost of additional oversight exceeds the marginal benefit of additional fraud prevented. I.e., we keep increasing oversight until diminishing returns causes $1 of additional fraud prevention spending to reduce fraud by $0.99. I don't know where that point lives, but as NPRs expose demonstrates, that amount is certainly larger than zero and probably a lot larger than where we are now.
- heartsucker 10y ago
  I was taking the most simplistic approach. Your point is better than mine, but usually the argument I see is that "there are welfare queens, and that's not fair, therefore there shouldn't be welfare at all." I was more arguing against that.
  - yummyfajitas 10y ago
    I'm arguing for good government, not no government. Unfortunately good government requires carefully understanding and administering a bureaucracy, taking into account individual incentives, and building something non-simple. Basic income is just a cheap mental hack used to seduce the lazy. It's like looking at a webapp, realizing that 75% of your compute cycles are doing error handling and then saying "aha, the solution is to ignore all errors!" It's seductive, brilliant in it's simplicity, and complete idiocy. Among other things, this is why essentially no basic income proponents are willing to even do a back of the envelope calculation to show how it would work. (Similarly, "eliminate all error handling" guy will refuse to write a proof of concept.) [edit: I altered this comment to explain in better detail what I think is wrong with BI, but eliminated a sentence that SandBOx replied to. I believe the real goal of most BI proponents is to create a vote bank of government dependents.]
    - SandB0x 10y ago
      Out of interest, what do you think their real goals are? (I agree with the sentiment of your comments FWIW)
    - ebalit 10y ago
      This proposition by Marc de Basquiat seems to be a lot more than "back of the envelope calculation": http://www.allocationuniverselle.com/doc/BIEN_Munich_2012-09-15_MdeBasquiat.pdf http://www.allocationuniverselle.com/doc/BIEN_Munich_2012-09... It's a reform of the French tax system based around a basic income and flat taxes on income and wealth. The resulting redistribution is similar to the current system without the nasty border effects and bureaucracy.
- pessimizer 10y ago
  That is mathematical, but the marginal benefit can't exclusively be considered in terms of the financial health of the program. The imposition of fraud prevention creates a lot of negative externalities (in relation to the finances of the program) on people who are recipients or potential recipients. False positive detections of fraud, or heavy burdens of evidence will cause a feedback effect by causing people who we would want to qualify as recipients to commit fraud in order to elude oversight, thereby (if focused on the solvency of the program) justifying even further oversight, and higher overheads. Also, since the purpose of the program is to reduce poverty, not to detect fraud, another effect is that the additional oversight will keep people away from the program, either by (as above) their inability to navigate the efforts to protect the program from fraud, but also by the effect of intrusive (and possibly personal and demeaning) questions and inspections has on people's self-image who choose to accept the aid (as per TFA), causing them to avoid taking it to avoid social stigma. I know these are the types of points that laissez-faire libertarians laugh at i.e. "imagine someone who is taking my money refuse any indignity; they can always choose to starve," but those sorts of libertarians don't think that poverty is a concern anyway. When those types get to design programs like this, they end up largely populated by people who are willing to navigate them as a job, hence largely fraudulent, creating a self-fulfilling prophecy. The vast bulk of overhead is ultimately fraud control in some form, and as that expands, so the program expands, while the number of people being helped stays steady or even shrinks. This massive administration is farmed out to contractors to reduce ballooning costs (cronies, friends of friends and/or benefactors - an externality that affects us all as a rise in corruption) who are rewarded for finding more fraud with a higher proportion of the budget of the program. Their primary motivation then becomes to find excuses to exclude people from the program. This is depressing to even type. The reason one would have basic income is to eliminate this. I believe that every millionaire should receive a check. Means-testing is a scam.

sanxiyn 10y ago

How can some people exploit basic income system to "rob us"? Maybe they can fabricate people which don't actually exist? (Or more realistically, delay reporting death to collect basic income of dead people.) These are concerns, but hopefully modern government can deal with fake identities. These still seem a lot better than current welfare system. If you consider giving basic income to people who spend $500 on weed "robbing", well you are entitled to your opinion, but that's not exploit of system, because system is working as intended.

yummyfajitas 10y ago
People exploit basic income to rob us when they consume it without needing it. Why do you think having zero oversight and giving benefits to everyone, including those who don't need it, is somehow better than the current system? If you consider giving basic income to people who spend $500 on weed "robbing", well you are entitled to your opinion, but that's not exploit of system, because system is working as intended. Yes, it's pretty clear that the goal is to create a vote bank of government dependents who exploit the rest of us.
- akmiller 10y ago
  Many reasons to this and something has to change at some point. But just a couple of points is that if everyone receives it then nobody can be robbing the system as everyone is entitled to it. Another point that the HN crew should be well aware of is that we are going to see entire Industries worth of jobs disappear. Obviously other jobs will come but not at the rate they are going to decline and they will likely be more high skilled jobs than low one's. We are on the cusp of automated vehicles and when that comes to fruition all cab/taxi/bus/truck drivers will be without jobs. This will happen in many other areas as well and to not seriously prepare for this type of future is absolute lunacy. Not saying that BI is THE answer...but it, along with many other things, are definitely worth exploring further.
  - yummyfajitas 10y ago
    Yes, and if I do this: try: ... except Exception, e: return 200, "ok" then I've completely eliminated the problem of 500 Internal Server Error. Just because you redefine taking money you don't need from productive people as "entitled" doesn't make the problem go away.

DougWebb 10y ago

It's not that clear cut. Your options are more like: 1) Trust your brother, feed him and let him crash. Costs you $50. 2) Don't trust your brother. Hire an investigator to determine if he bought weed. Most of the time nothing is found so you wind up helping him, which now cost $70. Occaaionally you discover something and choose not to help. Still costs you $20. Is #2 worth it? That depends on how often the investigator finds a reason not to help.

cloverich 10y ago
Also time -- the $50 option costs no time. I think your argument is important. We spend a ton of time debating and considering how to prevent freeloaders. I'm more inclined to just ignore them and see how it goes, then start adding checks into the system when (if?) its apparent the free-loaders are a legitimate threat to the system.
jackcosgrove 10y ago
There's a third option which always costs $0.
- CPLX 10y ago
  There's never an option costing zero as long as the brother in question has the ability to punch you in the face and take your food for leaving him to starve.
  - yummyfajitas 10y ago
    So we need a BI because the poor will spend all their money on drugs, and then engage in violence against peaceful citizens who don't feed them? That's an interesting view.
    - alanwatts 10y ago
      >the poor will spend all their money on drugs, If and when attempting to formulate coherent arguments, avoid using such absolute statements.

josho 10y ago

> This is already a massive problem in programs where we do require demonstrations of need. See NPR's expose on rampant disability fraud: http://apps.npr.org/unfit-for-work/ http://apps.npr.org/unfit-for-work/ But, the disability fraud is due in large part to the rampant unemployment, poverty, and gutted social safety net in that area. So, the option for those folks is disability or live on the streets. I wouldn't exactly say you are making the case for requiring proof of need. Also interestingly you see use of drugs as reason to refute need. I believe there is a correlation between desperate poverty and drug use, I think it's because for those people with no hope of escaping poverty they need some kind of escape. Unlike you and I if we ever loose a job or get hit with an unfortunate circumstance we can get out of it fairly easy because of our education and in-demand skills. Now imagine a factory closing and 5000 folks with barely an education now out of a job, some percent of that cohort is going to end up resorting to drug use as an escape from their hopeless position. Idealistically, I'm hoping a basic income gives people like this some hope back. But, even then if there truly are no jobs for them, then if some % of the population enjoys weed then maybe that's ok--it's better than a lot of other possibilities they could be doing.

yummyfajitas 10y ago
No, the disability fraud is caused by healthy people lying in order to take money from others that they didn't earn. Are you somehow claiming that wealthy Americans are unable to make choices for themselves, i.e. they are incompetent? If so, lets find them caretakers who can manage their lives for them. Lets not let them continue making bad choices that cost the rest of us. I have no problem with smoking weed and I do it myself sometimes. I have a problem with spending your own money on weed and then turning to me claiming you are hungry. Spend your own money before you spend mine.
- pessimizer 10y ago
  I think that if you did a cost/benefit analysis on benefit fraud, you'd find that it's a lot of work and risk for a very tiny benefit. Unless you don't believe in economics, you'd assume that they would do another job which would require less work and risk and more pay if they had access to one. Disability fraud is caused by desperation. Either that or 2% (IIRC) of the U.S. working population suddenly became either very sick or lying dopesmokers right after the housing bubble burst.

beisner 10y ago

This kind of argument misses the forest for the trees. In any welfare system where we don't just say "screw 'em" to people who can't seem to support themselves enough to survive, there will be people who game the system. Now, I'd argue that those people almost always have the potential to be productive (and aren't productive because of motivational, situational, or basic economic reasons), but there is no benefits system we can introduce that will directly encourage these people to change. Yes, if we introduce basic income, by making things significantly better for everyone at the bottom we might slightly increase the number of people who don't contribute economically, and I agree that initially this feels like a moral problem that we might like to avoid. But in the grand scheme of things, I believe that a basic income will cause an increase in economic productivity (through increased access to education, less reliance on illicit activity, and removal of certain stressors that keep people locked in the cycle of poverty) to a MUCH larger demographic of people, vastly offsetting whatever inefficiencies are introduced by an increase in those who don't contribute to the economic system. Heck, even the reduction in bureaucratic expenditures might be enough to offset this cost. At the end of the day, any system will have a potential for introducing moral hazard, but I feel that any increase that might be introduced by basic income is vastly offset by the other economic benefits the system brings.

yummyfajitas 10y ago
Actually the increase is more than "slight". It's a 13% reduction in work effort, more than double the reduced work effort caused by the great recession. http://public.econ.duke.edu/~erw/197/forget-cea%20(2).pdf http://public.econ.duke.edu/~erw/197/forget-cea%20(2).pdf Heck, even the reduction in bureaucratic expenditures might be enough to offset this cost. Why don't you do a back of the envelope calculation to demonstrate how this could possibly work? I have yet to see a single successful attempt at this.

rorykoehler 10y ago

What do you have against your brother putting $500 back into the economy? That's good for everyone (except for him in the example you gave). If you were smart you would have sold him the weed and made yourself a few hundred bucks. Then you could easily feed him with the profit. The local grocer can then feed his family with the extra money he made because you bought more from him due to your sudden windfall and so on. The economy benefits from money circulation. Basic income is going to improve the health of the economy by giving spending power and financial security to everyone. In turn this will make people looser with their everyday spending which will be of phenomenal benefit for the overall health of the economy. You're thinking about it as if it's your personal account. Money doesn't work like that at scale.

jimmyk 10y ago
What do you have against your brother putting $500 back into the economy? That's good for everyone How is it good for everyone else? Everyone else now collectively has $500 less to spend on other goods and services. Instead of scarce resources being used to create those other goods and services, they will be used to grow weed. That sounds to me like it's decidedly bad for everyone else.
- majewsky 10y ago
  Exactly. Because there's only so much money to spend every year, and when it's used up, the economy shuts down until New Year's Eve. /s
  - jimmyk 10y ago
    Do you not believe there are scarce resources? Or do you not believe money is used to direct how those scarce resources are used?
    - rorykoehler 10y ago
      Considering the amount we waste is enough to feed the rest of the planet, no we don't really have scarce resources and resources are becoming less and less scarce every year.

dragonwriter 10y ago

> See NPR's expose on rampant disability fraud There's no incentive for fraud in an unconditional benefit system. > It's hard to see how eliminating safeguards will improve things. Its actually easy to see, when the "safeguards" directly produce perverse incentives. Means-testing reduces the marginal benefit to finding additional income, encouraging a culture of dependence. And any type of conditional benefit scheme creates an incentive for fraud where the benefits of fraud outweigh the expected cost of committing it. The "safeguards" are the problem, not a mitigation.

yummyfajitas 10y ago
Yes, and if I redefine all errors as successes my program has no bugs. Back in reality, my application is not meeting business needs, and BI is still wasting a bunch of money on people who don't need it. Means-testing reduces the marginal benefit to finding additional income, encouraging a culture of dependence. And any type of conditional benefit scheme creates an incentive for fraud where the benefits of fraud outweigh the expected cost of committing it. A Basic Job Guarantee (if you need a job real bad, the government gives you a real bad job) does not create incentives for fraud. EITC also has minimal incentives for fraud.
- dragonwriter 10y ago
  > A Basic Job Guarantee (if you need a job real bad, the government gives you a real bad job) does not create incentives for fraud. No one needs a job. People need good and services, which (in a system that is basically market structured) income is a means to provide. A job isn't a need, its multiple steps removed from needs. A "Basic Job" labor army programming is a reasonable means of providing stability in income, currency in marketable skills, and providing for infrastructure and other public needs during a short-term disruption in the private economy negatively effecting employment that does not involve a long-term transformation in the nature of the economy and the kinds of work likely to be in demand. Its a very bad way of dealing with long-term structural unemployment, providing a social safety net during a period of substantial transformation of the jobs in demand which either makes people permanently unemployable or requires substantial time devoted to retraining to regain employability for displaced workers, etc. Its a good component of a set of policies to address the Great Depression, but not for an economic revolution driven by automation and other developments. > EITC also has minimal incentives for fraud. Sure, because EITC has a fairly gradual falloff of benefits with increasing income at the top end (and because, though risk of getting caught may be fairly low, sanctions for tax fraud are very steep), it creates only a fairly mild incentive to fraud through concealed outside income. Certainly, rolling all primarily means-tested (but not mainly conditioned on other needs) social benefit programs into EITC, both raising the cap and broadening the range appropriately, and keeping the fairly mild fall-off at the top would substantially reduce overall complexity, and reduce incentives for fraud, at the cost of directing less funds to the neediest at the bottom (due to the phase-in part at the bottom end of the scale with EITC.) Of course, the only differences between an EITC and a UBI funded (insofar as funds are needed beyond those from replaced means-tested programs) increased high-end taxes in a progressive income tax system is: (1) EITC doesn't reach the bottom end of the distribution as effectively, due to the phase-in, (2) EITC is effectively (other than as mentioned in #1) equivalent to a UBI funded by an increased tax on a narrow range of income toward the low (but not absolute bottom) end of the scale (the range at which the UBI phases out.) rather than one funded by an increased tax at the top end of the scale, as in most UBI proposals. UBI is basically EITC with those two problems fixed.