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How can they be cost neutral? That would only happen if by luck the same number of people applied to basic income as previously applied for means-tested benefit

by Tycho 10y ago

How can they be cost neutral? That would only happen if by luck the same number of people applied to basic income as previously applied for means-tested benefits. I find this scenario unlikely! Also, even if you have some new funding source, the system would have potentially huge liabilities if lots of people decide to sign up for it. Given that we can barely manage pensions, which I suspect have more stable characteristics than the hypothetical distribution of basic income requests, I'm skeptical that we could successfully manage a basic income program.

dragonwriter 10y ago
> How can they be cost neutral? That's literally exactly what the GP post explains. If the funds distributed as UBI are the funds redirected from replaced programs, the costs are, by definition, the same. > That would only happen if by luck the same number of people applied to basic income as previously applied for means-tested benefits. No, it wouldn't. You are assuming equal per beneficiary per time period total benefit + administrative costs. > Also, even if you have some new funding source, the system would have potentially huge liabilities if lots of people decide to sign up for it. No, its not dependent on people who "decide to sign up for" since, by definition, an unconditional income is given unconditionally to every member of the target population; that's part of the basic calculation of the benefit that can be given at any funding level.
- Tycho 10y ago
  Isn't becoming part of the target population essentially the same thing as signing up? If the cost remained exactly the same, then either you spread similar benefits across a similar group size, or you spread greatly reduced benefits over a much larger group of people, to the point where it's no longer a living "wage".
  - dragonwriter 10y ago
    > Isn't becoming part of the target population essentially the same thing as signing up? Its a lot more predictable than "requests", especially if the target population is something like adult citizens and legal permanent residents. > If the cost remained exactly the same, then either you spread similar benefits across a similar group size, or you spread greatly reduced benefits over a much larger group of people, to the point where it's no longer a living "wage". Yes, the cost neutral version would be reduced maximum benefit in the short term (though, again, you make the mistake of assuming that the full cost is just benefits, and ignore changes in administrative overhead), while the budget-neutral-by-increased-revenue versions might retain similar maximum benefits.
    - Tycho 10y ago
      > Its a lot more predictable than "requests", especially if the target population is something like adult citizens and legal permanent residents. In that case it would basically just be removing all welfare and giving everyone a tax-cut.
morgante 10y ago
> How can they be cost neutral? That would only happen if by luck the same number of people applied to basic income as previously applied for means-tested benefits. In addition to the other points being made (about new funding sources), you're assuming the payout for basic income would exactly match previous means-tested benefits. Realistically spending, any basic income program will likely provide less than the upper end of many existing entitlement programs.

by Tycho 10y ago

dragonwriter 10y ago

> How can they be cost neutral? That's literally exactly what the GP post explains. If the funds distributed as UBI are the funds redirected from replaced programs, the costs are, by definition, the same. > That would only happen if by luck the same number of people applied to basic income as previously applied for means-tested benefits. No, it wouldn't. You are assuming equal per beneficiary per time period total benefit + administrative costs. > Also, even if you have some new funding source, the system would have potentially huge liabilities if lots of people decide to sign up for it. No, its not dependent on people who "decide to sign up for" since, by definition, an unconditional income is given unconditionally to every member of the target population; that's part of the basic calculation of the benefit that can be given at any funding level.

Tycho 10y ago
Isn't becoming part of the target population essentially the same thing as signing up? If the cost remained exactly the same, then either you spread similar benefits across a similar group size, or you spread greatly reduced benefits over a much larger group of people, to the point where it's no longer a living "wage".
- dragonwriter 10y ago
  > Isn't becoming part of the target population essentially the same thing as signing up? Its a lot more predictable than "requests", especially if the target population is something like adult citizens and legal permanent residents. > If the cost remained exactly the same, then either you spread similar benefits across a similar group size, or you spread greatly reduced benefits over a much larger group of people, to the point where it's no longer a living "wage". Yes, the cost neutral version would be reduced maximum benefit in the short term (though, again, you make the mistake of assuming that the full cost is just benefits, and ignore changes in administrative overhead), while the budget-neutral-by-increased-revenue versions might retain similar maximum benefits.
  - Tycho 10y ago
    > Its a lot more predictable than "requests", especially if the target population is something like adult citizens and legal permanent residents. In that case it would basically just be removing all welfare and giving everyone a tax-cut.

morgante 10y ago

> How can they be cost neutral? That would only happen if by luck the same number of people applied to basic income as previously applied for means-tested benefits. In addition to the other points being made (about new funding sources), you're assuming the payout for basic income would exactly match previous means-tested benefits. Realistically spending, any basic income program will likely provide less than the upper end of many existing entitlement programs.