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To me that only highlights how prohibatively expensive it would be to give BI to people in any amount that would really move the needle

by Jedi72 9y ago

zanny 9y ago
UBI isn't expensive. Its wealth redistribution, not consumption. Military spending is a black hole of money - you get very little R&D or productive GDP growth yields out of it but it stucks hundreds of billions out of the country every year. Social security is better than military spending but usually worse than UBI - recipients of social security are some of the richest people right now as an age class, so transferring wealth to them often doesn't see it stimulating economic growth - it just gets reinvested. Additionally, social security taxes are not progressive - they cap out, and anyone making any money over 10k is paying into them. Its a regressive tax scheme that takes money from disproportionately the working poor and moves it into a richer age group. It still isn't a black hole, though. A ton of social security money is then spent on essentials. Its much less wasteful than defense spending. On the other end of the spectrum is a lot of infrastructure spending, especially big projects like Eisenhowers national highway system that built the interstates - money goes in, but the productive gains and economic stimulant from the spending is greater than the money going in so it is a net positive for the economy. I'm hesitant to even call that government spending or debt or the cost of the state since it doesn't really cost anything - you are using money to make money. It is state investment. Now, of course, state investments have variable success rates. You can look back at successful projects and say they were obviously worth doing in hindsight because they have produced substantial prosperity. The highway system, the national railroads, the panama canal, national electrification, the Hoover dam, etc have all proven valuable. But often a bridge built or rails laid go unused and were wasteful. And then there is the matter of how bad the government is at keeping these projects within sane budets - Boston's Big Dig took significantly longer and cost multiple times more than initially projected, and that brings the value into question after its done whereas beforehand it looked obviously beneficial. UBI I think is in a very optimal spot on that spectrum. It is immediate wealth redistribution, going almost exclusively to the poorest who per dollar earned spend the most of directly stimulating economic demand that grows the economy most optimally. But unlike infrastructure investment the return is immediate - as checks go out money is spent often same day, and as long as money is moving from slow growth (investment) to fast growth (consumption) its a net benefit to the economy, as long as said benefit is greater than the overhead of administrating the taxes to fund it and the distribution of the money. Which comes back to the infrastructure is great scenario - its great until you are being wasteful and corrupt in spending on it. If money is actually going to building infrastructure or money is actually going to the poor it is a colossal boon. When money goes into private pockets as it does in spades with the DoD it is wasteful. It isn't the amounts you take, it is how you spend that, and how predictable your spending and taxing will be going forward - markets can handle very high taxes as long as they are predictable.
- icelancer 9y ago
  >>Military spending is a black hole of money - you get very little R&D or productive GDP growth yields out of it but it stucks hundreds of billions out of the country every year. I am no fan of the military and I agree with your premise, but I would strongly, strongly disagree with the "little R&D" portion of this comment. A great deal of technology we take for granted today was first made available due to the military taking on the huge reverse asymptotic cost curves of early adoption and invention of new tech. The military is an inefficient and potentially immoral R&D department, but it is not one that generates very little. A quick historical look at what has come out of the machinations of war and preparing for it will illustrate the point, and fast.
  - zanny 9y ago
    In terms of R&D for dollar spent, the military is awful compared to fairly parallel state institutions like public universities and NASA. If you want R&D, you shouldn't do it indirectly through researching ways to blow people up and murder - you should just do R&D spending. A lot of the problems when discussing the military budget are intentions. Nobody is proposing to grow or keep the current scale of the military on the idea its a valuable source of research. It is in the same vein as how you would not fund a basic income for research purposes - surely a lot of valuable R&D would actually come from a UBI by letting more people experiment as a hobby, but you wouldn't use it as an argument for making a UBI because the research per dollar spent ratio would be awful compared to dedicated research institutions. Funding CERN et al is on the order of magnitudes more bang for your buck if you are spending money to advance science than spending it on a military. Which relates back to my original point. All government spending needs to be interpreted through one of two lenses - either the government is absorbing an absolutely unavoidable expense and using its scale to lessen the burden (infrastructure maintenance, healthcare, retirement) or it is investing money with the intent for it to improve the country. There is absolutely a lot of overlap, but we are back at intents - when healthcare makes your citizenry healthier more often so they can be more productive that is a nice perk but does not come close to justifying public healthcare spending. Infrastructure can fall into both camps - building last-mile roads is absolutely not in all likelihood going to grow the economy - people would live more densely if not for state subsidies on public housing developments hooking into the public road network. But when they build highways to increase traffic throughput that is almost always with intent to grow the economy. A UBI falls in both camps, but conservatives should focus on the later benefits. The economic growth potential. On the topic of the military budget, anyone arguing for the current scale of the US military is arguing for a "necessary expense" perspective, not an investment one. Because its investment value is atrocious. And in general people are very skeptical of anything suggested to qualify for the first camp - and we should always be skeptical of those expenses, because they are the legitimate expenses where government spending actually contracts the economy.
Guvante 9y ago
UBI doesn't need to cover the median cost of living in the US. In fact with just income tax that is an impossible line to hit as it would certainly trigger inflation. But that doesn't mean that X dollars won't matter. In fact that is the entire purpose of this study "If we give people $1000/month, what happens?". Sure it isn't representative of what would actually happen with BI but if the study is done well and its findings are sound through review, then it would be a great way of answering "would that amount of money matter".

To me that only highlights how prohibatively expensive it would be to give BI to people in any amount that would really move the needle

by Jedi72 9y ago

To me that only highlights how prohibatively expensive it would be to give BI to people in any amount that would really move the needle

zanny 9y ago

UBI isn't expensive. Its wealth redistribution, not consumption. Military spending is a black hole of money - you get very little R&D or productive GDP growth yields out of it but it stucks hundreds of billions out of the country every year. Social security is better than military spending but usually worse than UBI - recipients of social security are some of the richest people right now as an age class, so transferring wealth to them often doesn't see it stimulating economic growth - it just gets reinvested. Additionally, social security taxes are not progressive - they cap out, and anyone making any money over 10k is paying into them. Its a regressive tax scheme that takes money from disproportionately the working poor and moves it into a richer age group. It still isn't a black hole, though. A ton of social security money is then spent on essentials. Its much less wasteful than defense spending. On the other end of the spectrum is a lot of infrastructure spending, especially big projects like Eisenhowers national highway system that built the interstates - money goes in, but the productive gains and economic stimulant from the spending is greater than the money going in so it is a net positive for the economy. I'm hesitant to even call that government spending or debt or the cost of the state since it doesn't really cost anything - you are using money to make money. It is state investment. Now, of course, state investments have variable success rates. You can look back at successful projects and say they were obviously worth doing in hindsight because they have produced substantial prosperity. The highway system, the national railroads, the panama canal, national electrification, the Hoover dam, etc have all proven valuable. But often a bridge built or rails laid go unused and were wasteful. And then there is the matter of how bad the government is at keeping these projects within sane budets - Boston's Big Dig took significantly longer and cost multiple times more than initially projected, and that brings the value into question after its done whereas beforehand it looked obviously beneficial. UBI I think is in a very optimal spot on that spectrum. It is immediate wealth redistribution, going almost exclusively to the poorest who per dollar earned spend the most of directly stimulating economic demand that grows the economy most optimally. But unlike infrastructure investment the return is immediate - as checks go out money is spent often same day, and as long as money is moving from slow growth (investment) to fast growth (consumption) its a net benefit to the economy, as long as said benefit is greater than the overhead of administrating the taxes to fund it and the distribution of the money. Which comes back to the infrastructure is great scenario - its great until you are being wasteful and corrupt in spending on it. If money is actually going to building infrastructure or money is actually going to the poor it is a colossal boon. When money goes into private pockets as it does in spades with the DoD it is wasteful. It isn't the amounts you take, it is how you spend that, and how predictable your spending and taxing will be going forward - markets can handle very high taxes as long as they are predictable.

icelancer 9y ago
>>Military spending is a black hole of money - you get very little R&D or productive GDP growth yields out of it but it stucks hundreds of billions out of the country every year. I am no fan of the military and I agree with your premise, but I would strongly, strongly disagree with the "little R&D" portion of this comment. A great deal of technology we take for granted today was first made available due to the military taking on the huge reverse asymptotic cost curves of early adoption and invention of new tech. The military is an inefficient and potentially immoral R&D department, but it is not one that generates very little. A quick historical look at what has come out of the machinations of war and preparing for it will illustrate the point, and fast.
- zanny 9y ago
  In terms of R&D for dollar spent, the military is awful compared to fairly parallel state institutions like public universities and NASA. If you want R&D, you shouldn't do it indirectly through researching ways to blow people up and murder - you should just do R&D spending. A lot of the problems when discussing the military budget are intentions. Nobody is proposing to grow or keep the current scale of the military on the idea its a valuable source of research. It is in the same vein as how you would not fund a basic income for research purposes - surely a lot of valuable R&D would actually come from a UBI by letting more people experiment as a hobby, but you wouldn't use it as an argument for making a UBI because the research per dollar spent ratio would be awful compared to dedicated research institutions. Funding CERN et al is on the order of magnitudes more bang for your buck if you are spending money to advance science than spending it on a military. Which relates back to my original point. All government spending needs to be interpreted through one of two lenses - either the government is absorbing an absolutely unavoidable expense and using its scale to lessen the burden (infrastructure maintenance, healthcare, retirement) or it is investing money with the intent for it to improve the country. There is absolutely a lot of overlap, but we are back at intents - when healthcare makes your citizenry healthier more often so they can be more productive that is a nice perk but does not come close to justifying public healthcare spending. Infrastructure can fall into both camps - building last-mile roads is absolutely not in all likelihood going to grow the economy - people would live more densely if not for state subsidies on public housing developments hooking into the public road network. But when they build highways to increase traffic throughput that is almost always with intent to grow the economy. A UBI falls in both camps, but conservatives should focus on the later benefits. The economic growth potential. On the topic of the military budget, anyone arguing for the current scale of the US military is arguing for a "necessary expense" perspective, not an investment one. Because its investment value is atrocious. And in general people are very skeptical of anything suggested to qualify for the first camp - and we should always be skeptical of those expenses, because they are the legitimate expenses where government spending actually contracts the economy.

Guvante 9y ago

UBI doesn't need to cover the median cost of living in the US. In fact with just income tax that is an impossible line to hit as it would certainly trigger inflation. But that doesn't mean that X dollars won't matter. In fact that is the entire purpose of this study "If we give people $1000/month, what happens?". Sure it isn't representative of what would actually happen with BI but if the study is done well and its findings are sound through review, then it would be a great way of answering "would that amount of money matter".