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A couple of things right off the bat. This study assumes that: - There is zero effect on propensity to work - The national debt has no secondary effects on th

A couple of things right off the bat. This study assumes that: - There is zero effect on propensity to work - The national debt has no secondary effects on the economy - Changes in taxation do not affect consumption or investment behavior, at any tax level. Those first two right there are incredibly massive assumptions, and they amount to two of the biggest criticisms of these proposals in the first place. And the third is flat out wrong, with enormous amounts of data available to debunk it. Moreover, the third assumption ("Increasing government revenue by increasing taxes levied on households does not change household behavior") is actually at odds with their end conclusion! If there were truly no change in household behavior (whether at the margin or in the aggregate), then there could be no primary mechanism for this policy to have an impact in the first place. (And because this study explicitly ignores secondary impacts, without a primary impact, what are they actually claiming to measure?) So I'm not sure what the value is in a study that basically says, "If we ignore the biggest and most commonly criticized negative effects, the effect of this policy will be positive".

snarf21 9y ago
Exactly, and no mention if this would affect welfare and other social programs. So if someone still gets all the aid they do today and $1K per month, then there is more money to spend but are there more people who want to work where that money is spent? I think it likely that this would cause low end job wages to rise, not necessarily increase employment.
- lawless123 9y ago
  Certainly any job that only offers "do this and we give you enough money to barely live" will have to pay more.
  - rbanffy 9y ago
    Or no, since the person will already be receiving enough to live.
    - jerkstate 9y ago
      Well, the price of goods and services will go up because everybody suddenly has more money and the owners of the businesses that sell those goods and services have just had their taxes doubled, so we're back to square one anyways.
      - snarf21 9y ago
        I worry about this too. Who cares if you have more money if it has less buying power per dollar? This is also why I worry about drastically higher minimum wage. Poor people have more money but all the places they spend it have higher costs that lead to higher prices. Rich people don't spend the majority of their money at Wal-Mart so it affects them less. EITC and other tax reductions on the poor seems more effective and doesn't reduce buying power.
        jpindar 9y ago
        >Who cares if you have more money if it has less buying power per dollar? People who are broke care. Some money is always better than no money.
      - mmcconnell1618 9y ago
        Increased demand for some goods will create competition and prices will stay the same or fall. Commodity goods providers don't have pricing power so they can't raise prices without losing sales to competitors. There is also the "menu cost" which is the resistance of businesses to react in real time to economic events. A restaurant won't reprint menus everyday and the $1.99 cleaner won't change prices very often. In addition. The total money supply isn't growing, it is being redistributed to people more likely to consume. The velocity of money will increase but the total amount won't. This will keep prices relatively stable.
      - Vaskivo 9y ago
        But the wages they pay to workers have gone down.
- rbanffy 9y ago
  Most proposals do away with welfare programs, reducing enforcement costs with it. No need to ensure a person is unemployed and looking for a job or unable to work due to a medical condition.
  - notahacker 9y ago
    Sure, but the cost of enforcing who receives benefits is orders of magnitude less than the cost of paying $12k net of income taxes to the large number of working age people who for whatever reason (usually existing wealth or partner/parent income) aren't currently interested in working. This isn't just common sense; the data on working age economically inactive people, working age economically inactive people receiving benefits and admin costs is free and open for most countries.
    - rbanffy 9y ago
      There is good indication this reduces income disparity, create more opportunities for entrepreneurship (you can quit your job or go part-time while you do your thing) and, in general, more people consume more. The incentive to work more is there: with a sensible basic income you and your family won't starve and you won't need to work yourself to death, but you may want to have a nice vacation from time to time. With better economic security your freedom to move to better paying markets is increased. The only reason not to back an idea like this is how much the top earners will be able to evade paying their part, overburdening those who can't dodge taxes as efficiently.
- xienze 9y ago
  > and no mention if this would affect welfare and other social programs. Which is quite surprising because every, and I mean every, UBI proposal talks up how much money we'd _save_ because welfare would be eliminated. I just don't see how that's possible, because inevitably there are going to be a lot of people with real or self-imposed crises crying about how they don't have enough money to pay rent or buy food, and what is the government going to do, tell them "tough shit, you should've managed your UBI better"? Uh, I doubt it. We'll end up stuck with welfare programs as a UBI safety net and then people will inevitably game the system by crying broke every single month. This whole thing is such a ridiculous leftist fantasy, the biggest giveaway is that it completely ignores basic human behavior.
  - appearsonline 9y ago
    One wonders which humans you surround yourself with to consider that "basic human behavior".
    - xienze 9y ago
      Trying to maximize earnings is basic human behavior, sorry to break it to you. Welfare scams occur regularly, and that's before UBI. And you're dodging the bigger question: I'm on UBI and my money runs out, can't afford to feed the kids. Multiply that by at least several thousand people every month. Now what?
      - MarchHare 9y ago
        Food banks exist already, why would UBI change that.
      - jpindar 9y ago
        Same as now. You don't get more food stamps just because you ran out.
        xienze 9y ago
        The difference is it's earmarked money today. There's no potential to spend your food money on a phone and then claim you can't buy food at the end of the month.
lefstathiou 9y ago
And let's not forget the elephant in the room: inflation. The real value of that money will disappear over night.
- appearsonline 9y ago
  But it is detach from location. People can move if land becomes to expensive, unlike now, where land is tied to jobs.
  - rbanffy 9y ago
    > where land is tied to jobs. With additional pressure when both parents work and can't survive with one of them unemployed - they lack the freedom to seek better positions elsewhere because they are limited to both having jobs all the time.
tnzn 9y ago
You believe 12k a year basic income will make people work less ?
- garrettdc 9y ago
  We are constantly told that 7.25/hr isn't enough to live on, but people find a way to do so at the moment. 7.25 $/hr * 2000 hrs/year = 14500 which isn't far off from 12000. If the choice was between working for that and not working, I think the choice is easy. Unless this program were to completely eliminate welfare spending, then you'd likely end up with people choosing not to work because they don't need to. This of course assumes that purchasing power doesn't change with the massive influx of cash into the economy.
  - gaius 9y ago
    A small percentage of the workforce is actually paid minimum wage and most get a better job once they have had the entry level experience. The idea that minimum wage should sustain an entire working life is a fringe one.
    - garrettdc 9y ago
      Considering that much of the democratic presidential platform this previous election cycle, I would have to disagree with the assertion that this view is a "fringe one."
    - rbanffy 9y ago
      Basic survival cannot force a person to work more than full time.
  - ubernostrum 9y ago
    If you want to eliminate the possibility of people who don't need to work choosing not to work, you should be in favor of a 100% estate tax before you should be against UBI. Make it impossible for children to inherit enough wealth to live without working, and get those lazy parasites into the workforce where they belong! (or you could look at what happens when people are actually presented with realistic options for escaping the cycle of minimum-wage poverty, but that's a few steps of consciousness-raising away from where you currently are)
rbanffy 9y ago
> - There is zero effect on propensity to work OTOH, imagine parents that today can't be present to raise their kids may have the option of dropping one of their jobs to be with their family.
- jrs95 9y ago
  Or someone wasting their time working at one of 10 fast food places that are all right next to each other that no longer has to do that. How much is that job, or even that entire business, really contributing to the economy?
  - mseebach 9y ago
    Fast food? Actually, literally feeding people? It's contributing a lot to the economy.
    - jrs95 9y ago
      It's not like anyone is going to starve it a few of these places close. Once you factor in the negative health effects and the wasted potential of everyone staffing the place, I think the negative impact a basic income policy would have on the industry could actually be a good thing in the long run.
  - garrettdc 9y ago
    If you consider top-tier fast food chains have an average gross revenue > ~$2M and profits ~$100K, then that means The vast majority of that $2M is being dumped back into the economy in the form of purchasing supplies, equipment, and labor. The other benefit for those not employed by or involved in the restaurant's supply chain is cheap and convenient food.
norea-armozel 9y ago
The propensity to work is more of a social matter than an economic one. Also, most people today in the lower economic classes are over worked. I remember when I was working out of a temp agency with someone who had been working three jobs (two full time and one side job). I'm not sure the exact reason for this other than he had a child and his wife was also working part time herself. It's just scary to imagine that people think working is a virtue onto itself. I'd rather pay a marginally higher tax rate to make sure people don't work more than 40 hours a week and were able to get their basic needs (housing, food, healthcare). At least then there wouldn't be the chronic issues that poverty brings to drag down the economy as a whole.

snarf21 9y ago

Exactly, and no mention if this would affect welfare and other social programs. So if someone still gets all the aid they do today and $1K per month, then there is more money to spend but are there more people who want to work where that money is spent? I think it likely that this would cause low end job wages to rise, not necessarily increase employment.

lawless123 9y ago
Certainly any job that only offers "do this and we give you enough money to barely live" will have to pay more.
- rbanffy 9y ago
  Or no, since the person will already be receiving enough to live.
  - jerkstate 9y ago
    Well, the price of goods and services will go up because everybody suddenly has more money and the owners of the businesses that sell those goods and services have just had their taxes doubled, so we're back to square one anyways.
    - snarf21 9y ago
      I worry about this too. Who cares if you have more money if it has less buying power per dollar? This is also why I worry about drastically higher minimum wage. Poor people have more money but all the places they spend it have higher costs that lead to higher prices. Rich people don't spend the majority of their money at Wal-Mart so it affects them less. EITC and other tax reductions on the poor seems more effective and doesn't reduce buying power.
      - jpindar 9y ago
        >Who cares if you have more money if it has less buying power per dollar? People who are broke care. Some money is always better than no money.
    - mmcconnell1618 9y ago
      Increased demand for some goods will create competition and prices will stay the same or fall. Commodity goods providers don't have pricing power so they can't raise prices without losing sales to competitors. There is also the "menu cost" which is the resistance of businesses to react in real time to economic events. A restaurant won't reprint menus everyday and the $1.99 cleaner won't change prices very often. In addition. The total money supply isn't growing, it is being redistributed to people more likely to consume. The velocity of money will increase but the total amount won't. This will keep prices relatively stable.
    - Vaskivo 9y ago
      But the wages they pay to workers have gone down.
rbanffy 9y ago
Most proposals do away with welfare programs, reducing enforcement costs with it. No need to ensure a person is unemployed and looking for a job or unable to work due to a medical condition.
- notahacker 9y ago
  Sure, but the cost of enforcing who receives benefits is orders of magnitude less than the cost of paying $12k net of income taxes to the large number of working age people who for whatever reason (usually existing wealth or partner/parent income) aren't currently interested in working. This isn't just common sense; the data on working age economically inactive people, working age economically inactive people receiving benefits and admin costs is free and open for most countries.
  - rbanffy 9y ago
    There is good indication this reduces income disparity, create more opportunities for entrepreneurship (you can quit your job or go part-time while you do your thing) and, in general, more people consume more. The incentive to work more is there: with a sensible basic income you and your family won't starve and you won't need to work yourself to death, but you may want to have a nice vacation from time to time. With better economic security your freedom to move to better paying markets is increased. The only reason not to back an idea like this is how much the top earners will be able to evade paying their part, overburdening those who can't dodge taxes as efficiently.
xienze 9y ago
> and no mention if this would affect welfare and other social programs. Which is quite surprising because every, and I mean every, UBI proposal talks up how much money we'd _save_ because welfare would be eliminated. I just don't see how that's possible, because inevitably there are going to be a lot of people with real or self-imposed crises crying about how they don't have enough money to pay rent or buy food, and what is the government going to do, tell them "tough shit, you should've managed your UBI better"? Uh, I doubt it. We'll end up stuck with welfare programs as a UBI safety net and then people will inevitably game the system by crying broke every single month. This whole thing is such a ridiculous leftist fantasy, the biggest giveaway is that it completely ignores basic human behavior.
- appearsonline 9y ago
  One wonders which humans you surround yourself with to consider that "basic human behavior".
  - xienze 9y ago
    Trying to maximize earnings is basic human behavior, sorry to break it to you. Welfare scams occur regularly, and that's before UBI. And you're dodging the bigger question: I'm on UBI and my money runs out, can't afford to feed the kids. Multiply that by at least several thousand people every month. Now what?
    - MarchHare 9y ago
      Food banks exist already, why would UBI change that.
    - jpindar 9y ago
      Same as now. You don't get more food stamps just because you ran out.
      - xienze 9y ago
        The difference is it's earmarked money today. There's no potential to spend your food money on a phone and then claim you can't buy food at the end of the month.

lefstathiou 9y ago

And let's not forget the elephant in the room: inflation. The real value of that money will disappear over night.

appearsonline 9y ago
But it is detach from location. People can move if land becomes to expensive, unlike now, where land is tied to jobs.
- rbanffy 9y ago
  > where land is tied to jobs. With additional pressure when both parents work and can't survive with one of them unemployed - they lack the freedom to seek better positions elsewhere because they are limited to both having jobs all the time.

tnzn 9y ago

You believe 12k a year basic income will make people work less ?

garrettdc 9y ago
We are constantly told that 7.25/hr isn't enough to live on, but people find a way to do so at the moment. 7.25 $/hr * 2000 hrs/year = 14500 which isn't far off from 12000. If the choice was between working for that and not working, I think the choice is easy. Unless this program were to completely eliminate welfare spending, then you'd likely end up with people choosing not to work because they don't need to. This of course assumes that purchasing power doesn't change with the massive influx of cash into the economy.
- gaius 9y ago
  A small percentage of the workforce is actually paid minimum wage and most get a better job once they have had the entry level experience. The idea that minimum wage should sustain an entire working life is a fringe one.
  - garrettdc 9y ago
    Considering that much of the democratic presidential platform this previous election cycle, I would have to disagree with the assertion that this view is a "fringe one."
  - rbanffy 9y ago
    Basic survival cannot force a person to work more than full time.
- ubernostrum 9y ago
  If you want to eliminate the possibility of people who don't need to work choosing not to work, you should be in favor of a 100% estate tax before you should be against UBI. Make it impossible for children to inherit enough wealth to live without working, and get those lazy parasites into the workforce where they belong! (or you could look at what happens when people are actually presented with realistic options for escaping the cycle of minimum-wage poverty, but that's a few steps of consciousness-raising away from where you currently are)

rbanffy 9y ago

> - There is zero effect on propensity to work OTOH, imagine parents that today can't be present to raise their kids may have the option of dropping one of their jobs to be with their family.

jrs95 9y ago
Or someone wasting their time working at one of 10 fast food places that are all right next to each other that no longer has to do that. How much is that job, or even that entire business, really contributing to the economy?
- mseebach 9y ago
  Fast food? Actually, literally feeding people? It's contributing a lot to the economy.
  - jrs95 9y ago
    It's not like anyone is going to starve it a few of these places close. Once you factor in the negative health effects and the wasted potential of everyone staffing the place, I think the negative impact a basic income policy would have on the industry could actually be a good thing in the long run.
- garrettdc 9y ago
  If you consider top-tier fast food chains have an average gross revenue > ~$2M and profits ~$100K, then that means The vast majority of that $2M is being dumped back into the economy in the form of purchasing supplies, equipment, and labor. The other benefit for those not employed by or involved in the restaurant's supply chain is cheap and convenient food.

norea-armozel 9y ago

The propensity to work is more of a social matter than an economic one. Also, most people today in the lower economic classes are over worked. I remember when I was working out of a temp agency with someone who had been working three jobs (two full time and one side job). I'm not sure the exact reason for this other than he had a child and his wife was also working part time herself. It's just scary to imagine that people think working is a virtue onto itself. I'd rather pay a marginally higher tax rate to make sure people don't work more than 40 hours a week and were able to get their basic needs (housing, food, healthcare). At least then there wouldn't be the chronic issues that poverty brings to drag down the economy as a whole.