18 ms·

One of the things about UBI is that these pilot programs aren't UBI, because they aren't universal. Giving a segment of the population free money is going to b

• mcbruiser3 9y ago
  net result being an increase in taxes on many (or at least mid-to-high earners) with zero benefits to society, only a built-in voting block for those who enable this edit: if I wanted upvotes I'd jump on the socialism/communism bandwagon. I feel sorry for the future if this is the prevailing thought :(
  • uoaei 9y ago
    Being able to eschew shitty soul-sucking jobs in favor of real personal development is "zero benefit"?
    • maxerickson 9y ago
      They are arguing that access to the economy without the exchange of productivity will not create the opportunity for personal development, that the cost of basic goods and housing will rise to absorb any universal payment.
    • imron 9y ago
      How many people will engage in real personal development, and how many people will just spend more time on Netflix and Facebook?
      • mistercow 9y ago
        There will be some of each, but either one results in more jobs for everybody else.
    • mcbruiser3 9y ago
      who lives on $500 a month? and the economy will simply adjust to absorb this increase anyway, so hence my comment about zero benefits. also, for young people at least, "shitty" jobs build character, which seems ever more critical these days. after working a "shitty" job for a little while, a person may be motivated to better themselves, or at least get a better job.
      • freeone3000 9y ago
        9.8% of the USA lives on $6,000 a year or less, according to the IRS. So, about 10% of the population lives on $500 a month. This isn't targeted to young people, though it will benefit them. This is also targeted at displaced workers, low-skill workers, and the upcoming tens of thousands marginalized out of the workforce by increasing automation. There's not really a PATH for people to move from shitty job to non-shitty job anymore. There simply aren't enough good jobs for every adult.
        • greedo 9y ago
          B.S. They may "earn" $6k or less per year, but they're not living on that. There's EITC, welfare, disability, etc etc. When I was a student, I "lived" on $500/month, but that was because I was a damn student working part time waiting tables. Had I been fully employed, my annual income would have been much higher.
• ThrustVectoring 9y ago
  >you can't subsidize the many at their own expense and have it result in a positive effect. You can if it changes local incentives to cause a better overall outcome. For example, a tragedy-of-the-commons situation can be improved by having each over-user give up their share of use to a monopolist whose subsidies replace the lost income. This is explicitly one of the goals of replacing the current social safety nets with UBI. The social safety net as it stands has some extraordinarily shitty incentives. The effective marginal rate on income can exceed 100% in some situations, where income-based phase-outs of benefits are higher than the extra money you make. When I worked pizza delivery, my boss at one time had to scramble to figure out how to decline a pay raise that made her ineligible for childcare subsidies that cost more than the increase in take-home pay. >But when you make it universal, my economics intuition says that the effect will be washed out by a commensurate rise in prices. This is why a university degree isn't what it used to be, IMO, and why I oppose the college subsidies people are talking about. The net effect is that an undergraduate degree basically becomes what a high school degree is right now.
  • aaron-lebo 9y ago
    Sorry to be annoying on this topic, but: This is explicitly one of the goals of replacing the current social safety nets with UBI. UBI can't replace social safety nets. It's impossible. 12k for every adult is 3 trillion dollars, which almost always assumes cutting other programs. What about healthcare? I bet most would rather have comprehensive health coverage instead of 12k every year, but you can't have both. In the US we have neither. You'd have to lose safety nets to make UBI work, financially. If you can show otherwise, do you mind explaining it?
    • lovich 9y ago
      part of our high healthcare costs are from not using a universal system. Other Western countries are achieving same or better outcomes with far less costs. I do agree that UBI will not work if we leave some of the things we consider basics now, such as food, housing, or(in my opinion) basic healthcare to be provided by competitive corporations, then we are essentially just going to be putting the money in their pockets
• fenwick67 9y ago
  I agree that these studies need to use the area's whole population to be complete. They should give these a try in a more insular area, like a big town the middle of nowhere in Wyoming, for these studies. They would have a more isolated economy.
• yellowstuff 9y ago
  Sure, if you simply gave everyone $1 for every dollar they already have, all you do is double prices and change nothing of substance. But I think the pro-UBI argument would be that you don't need to increase the money supply to do it. About 60% of Federal spending is on Social Security, Medicare and Medicaid. Reducing the spending on these programs, and other inefficient transfers such as welfare and disability will pay for much of UBI, and the rest is paid for by raising taxes. The net outcome is that rich people will pay a bit more to the government than they do now, poor people get a bit more than they do now, but the major effects are 1) inefficient bureaucracy is eliminated, 2) bad incentives are eliminated (such as disability payments forbidding any gainful employment, and 3) the stigma of welfare payments is removed when everyone gets them. I don't think this will work in the US because 1) there's no political will to reduce existing entitlement programs and 2) there's a lot of resentment in the working class against recipients of entitlements, and 3) racism. However, the argument that UBI will fail because it requires printing money is probably wrong.
  • bigtunacan 9y ago
    How is UBI any different from welfare if it is what you describe? From your description, it actually sounds worse. As I read it, it sounds sort of like this. 1) Reduce Social Security (so steal people's retirement money that they paid in...) 2) Reduce Medicare / Medicaid (The group of people that receive these are often the one's least likely to be able to afford medical care (the poor & the eldery) while simultaneously being the one's most likely to need such care (at least the elderly)).
  • mechagodzilla 9y ago
    I disagree with your premise that doubling the number of dollars everyone has would simply double prices. If you take someone that has $1 million in the bank, and magically make that $2 million, they almost certainly won't double all of their expenditures (they probably wouldn't change what they spend at all on a wide variety of categories - food or clothing, for instance). Rising inequality means that lack of demand is actually a big issue, since we're transferring income from people that would readily increase consumption, given more income, to people that will largely sit on that money. Globally speaking, our factories could easily produce more goods without raising prices much, if any. I believe a UBI would effectively be a transfer of wealth from people that have lots of money (but don't spend it) to people that don't have lots of money (but would readily spend more if they had it), but it wouldn't be the zero-sum game that people often assume it would, just by virtue of our productive capacity not being nearly maxed out.
• nicholas73 9y ago
  Are you going to eat more food with UBI? Probably not. Are food prices going to rise if others eat more food? No, we have spare capacity for food production. Also, a bigger topic, but supply and demand is not linear like they teach in school. Food prices are fairly cheap and stable in America because of excess capacity plus the fact that producers face thin margins plus spoilage. It will take a lot before prices move "commensurately". This is just one example.
• andrewla 9y ago
  The "commensurate rise in prices" is the tricky part. I think what you would see would be a percentage increase in prices corresponding to the average percentage increase in income. Since UBI is a flat amount, not tied to income, that average percentage is going to be so close to 0 as to be completely irrelevant. Even if it's not close to 0, for low-income (or UBI-only income) households especially, the marginal increase in income should be significantly higher than the marginal increase in prices.
• dragonwriter 9y ago
  UBI is giving a segment an increase in income (unless you are just printing money for it, which no one has proposed), since money comes from increased taxes or decreased existing spending somewhere else; there are, compared to the status quo ante, a segment of net gainers and one of net losers (with, most likely, a smooth continuum between.) So it's not actually different from the limited implementations in the way you paint it (it's different in other important ways, but not that one.)
• eru 9y ago
  https://medium.com/basic-income/why-land-value-tax-and-universal-basic-income-need-each-other-42ba999f7322 https://medium.com/basic-income/why-land-value-tax-and-unive... is a great article on how to do basic income. The problem is not so much general price rises, as rises in rent.
  • sokoloff 9y ago
    Exactly. If I had an idea that countrywide UBI was coming at a meaningful level, I'd buy as much cheap housing stock as I could get my hands on as I believe UBI would result in net household formation and net demand for low-end rental housing.
• stult 9y ago
  Well, you're not giving UBI to everyone. Just the people who don't earn more than UBI level. For everyone else, UBI becomes like the standard deduction under the current US system.
  • erentz 9y ago
    No. You give UBI to everyone. And you also tax everyone’s income, usually with a flat tax.
    • dredmorbius 9y ago
      s/flat/progressive/
    • stult 9y ago
      Ok. So think about what that actually means. You get a payment from the government for $1000 once a month. Then they take $2000 in taxes from your paycheck once a month. Net, you paid $1000 in taxes. For you, it is indistinghuisable from a system where you paid $1000 less in taxes because of lower rates. UBI functions like the standard deduction for your purposes, except insofar as it is refundable if your income and thus taxes owed drops below the UBI level, whereas a traditional refundable tax credit is refundable only after the return is filed, once per year. You can relabel the account balances however you want, but the underlying economic reality is the same for people earning income taxable above the UBI amount. You are paying more to the government than you are receiving. For people near or right on that level, they simply have an accelerated refund schedule.
• ChuckMcM 9y ago
  If I am understanding your argument, it is a sort of 'thermodynamics' argument against UBI. It argues that there exists a fixed supply of capital and that transfer payments funded by taxes are always counter balanced by an increases in prices to keep capital supplies in balance. If that isn't a correct interpretation of your argument, then the rest of this won't make a lot of sense. The reason this sort of thermodynamics arguments fails for me is that the economy isn't really the amount of cash flowing through it, rather cash is a proxy for GDP not the economy itself. GDP is a function of productivity and effort. In simpler terms we can have our fictional worker 'Bob' who is anxious and fearful so he scrapes along with a minimum wage job that he hates, versus 'Alt-Bob' who is engaged and excited about his career and is building a future retirement nest egg. With the same 'worker population' of '1' we get two very different GDPs. One theory is that UBI will make the anxious Bob less anxious and fearful and able to make better choices about their future. If you look at some of the work on how people who are anxious about the amount of money they have a hard time making good choices I refer you to the book 'Scarcity: Why having so little means so much.' it is a good read in general because it applies to anything, even 'free time' as a resource.
  • wtvanhest 9y ago
    I think an easier way to think about the OP's point is that if you offer every person $1,000 a month (UBI), prices to live their exact same life style will increase by $1,000/month. The net change will be zero. There is an argument that while costs go up $1,000, if a true life changing event occurs, let's say sickness or entrepurship happen, maybe the person can scale down their life style from ramen to unflavored ramen and not be as bad off as with no UBI.
  • gigs 9y ago
    If the justification for this is rising housing costs, then giving people free money to pay the high rents is just going to cause housing to be even more expensive. We've already tried this experiment. It's called financial aid for college. Tuition prices just keep tracking federal aid increases. http://college.usatoday.com/2015/08/20/report-federal-aid-rising-tuition/ http://college.usatoday.com/2015/08/20/report-federal-aid-ri... If they gave the money as credits to developers to build more housing, then they might have a chance at accomplishing their goal.
• stale2002 9y ago
  You actually can subsidize the many at the expense of the few. This is because wealth is becoming more and more centralized. So those "few" people are becoming bigger and bigger pots of gold that can be taken from.
• panarky 9y ago
  If you think it through with a simple model, you might challenge your intuition. Let's say the entire economy consists of three people: #1, #10 and #100. #1 earns $1,000 per month, #10 earns $10,000 a month, and #100 earns $100,000 a month. Raising #1's salary to $1,500 a month might have a small effect on prices in the economy at large, but prices certainly wouldn't go up 50%. That's because #1's share of the entire economy is very small. In the US, 14.5% of the population are #1s, and 85.5% are #2s and #3s. And that 14.5% of people represents a minuscule portion of the economy, maybe something like 5% or less, since their incomes are so low.
• strken 9y ago
  I thought the idea was that, firstly, current welfare already does this and UBI just gets rid of most of the harmful distortionary effects, and secondly, that UBI inherently must change the distribution of spending, and therefore while it will result in a long term increase in demand for the items poor people buy, that demand will eventually be followed by some increase in supply as the economy retools to take advantage of the new flow of money. Would anyone be able to explain why this just-so story is wrong? My econ isn't great.
• navigator01 9y ago
  I'm glad this is the top comment, because I don't often see common sense critiques of UBI that acknowledge price adjustment. We can't just print money, that is obviously going to fail as it always does. So... Will we try to implement UBI with wealth transfers? Taxing the rich and giving to the poor? That seems to be the only alternative to printing money, meaning that UBI is not an innovative idea whatsoever. It's just wealth redistribution.
  • erentz 9y ago
    Of course you don’t print money. You tax everyone more. And you give everyone a share of that tax. > UBI is not an innovative idea whatsoever. It’s not claimed to be. The idea is literally hundreds of years old and is pretty well understood. There seem to be a lot who are just coming across it and applying lazy thinking and biases to it and mostly getting it wrong.
    • greedo 9y ago
      Again, the math simply doesn't work out. The tax increases will be huge, and since most of the real tax revenue is in the middle class, you'll have to bump their tax rates up dramatically. Giving UBI of $10K/year to every citizen of the US is $3.25T. That's more than all the Federal revenues in 2017 (0). And $10K isn't enough. So you'll end up needing confiscatory tax rates on everyone, and possible a wealth tax (not just income). The distorting effect of this level of taxation would be incredible, just from an economic viewpoint. From a political view, it would lead to revolution. [0] - http://federal-budget.insidegov.com/l/120/2017-Estimate http://federal-budget.insidegov.com/l/120/2017-Estimate
• omarforgotpwd 9y ago
  Money is transferred from taxed earners to nontaxed people (unemployed, entrepreneur, retired, etc)