9 ms·

Free Money: The Surprising Effects of a Basic Income Supplied by Government

56 points by stevekemp 9y ago

ytNumbers 9y ago
I can see how basic income could help some types of people, but it can also hurt other types of people. If only there was a way to determine who it would help/hurt, and then to only give it out when it would actually help. https://ifstudies.org/blog/what-can-we-learn-from-native-americans-about-a-universal-basic-income https://ifstudies.org/blog/what-can-we-learn-from-native-ame...
- mikeash 9y ago
  Extrapolating from the experience of people who were genocided, displaced, systematically oppressed, and excluded from productive economic activity strikes me as likely to be inaccurate.
Simulacra 9y ago
This is very interesting, but is it not also worth noting that the community allowed this money is very controlled? The idea of a basic income is that everyone gets it, regardless of where you live in the country, and other factors. My problem with basic income is that once you start, there will always be a demand to increase it, and enormous political pressure to increase it, along with people from all over the world wanting into the system. For a small population of native Americans, it seems to work very very well, but I don't think it's sustainable for an entire country.
- sputknick 9y ago
  Another problem that I see is that it will very quickly become "not basic" in that we might give everyone $2,000 a month, but then quickly politicians will advocate for certain constituents to get more. "People who work as teachers in poor neighborhoods should get an extra $500 a month" or "People who have been convicted of X Y or Z crime should get $500 less for the rest of their lives".
  - ravenstine 9y ago
    We might also see the same thing that's happened with minimum wage and student loans. (where basic income no longer covers even the basics)
    - zlynx 9y ago
      Yes, well, as long as it covers the basics somewhere. Someone living on only basic income won't be able to afford to live in Manhattan. They'll have to move to rural Alabama.
      - frgtpsswrdlame 9y ago
        Maybe you still can't live in Manhattan but I don't really see the point in a UBI so low that you can't afford to live in a city at all.
        indubitable 9y ago
        I think helping with the economic development of smaller areas would be a huge benefit in and of itself. But basic income opens up really revolutionary ideas beyond this. Imagine you get 10,000 people together and the income is set to something quite low - $1000 a month. That's $10 million a month that, if a moderate sized group of people were willing to coordinate and work together, could be used to build new cities and developments from the ground up. In a way a basic income can almost be seen as a decentralization of government as it enables citizens to direct government funded spending at their discretion.
        NinoScript 9y ago
        I had never thought about it like this. This makes so much sense.
      - SilasX 9y ago
        But that's the thing: you can do that today: live minimally for a year at big-city wages, then buy a trailer in rural Alabama. If people don't consider that a viable option now, neither will they with any feasible basic income level.
- ravenstine 9y ago
  It would probably require either isolationism or a true global government, and neither of those are feasible or desirable. That's undoubtedly why our economies tend to be mixed because basic income in a place like America would require too much sacrifice to sustain in the long term. This is going to become more of a challenging problem as humans become obsolete. Before an actual post-scarcity society, we will need government provided basic income, which is simultaneously a scary thought if we don't solve a bunch of other global problems first.
- rizzom5000 9y ago
  It's also worth noting that these payments are funded by casino revenue for that very small population. This article would look very different if some members of the tribe were taxed heavily to provide the payments to other members.
- frgtpsswrdlame 9y ago
  >My problem with basic income is that once you start, there will always be a demand to increase it, and enormous political pressure to increase it How is this a problem? If enough people support an increase in the UBI that politicians feel they have to raise it, isn't that a good thing?
  - xaqfox 9y ago
    Sometimes it would need to be raised and sometimes it would need to be lowered. It will, however, always be a politically unpopular position to lower it, even if it needs being done.
    - frgtpsswrdlame 9y ago
      I guess I don't see that as really a problem with UBI though. The same is true of the criminal justice system (and lots of other government functions), for example, tons of pressure to increase sentences and basically none to lower them. It seems more like a problem with representative government than anything else.
  - colemannugent 9y ago
    When do you stop raising it? If people could vote themselves more money the voter turnout would be insane. How would anyone control something like that? Anyone who ran against the increases would be easily defeated with something like this: "My opponent wants to take the money you deserve!". At some point you would be giving people more money than you produce as a country and then it's only a matter of time until the money runs out. Once the money runs out then your government will evaporate as the enraged populace tries to pin the blame on one group. This of course is on of the central issues with government run wealth redistribution programs, nobody wants less money and they will go to the polls to protect it. Whatever you think of the ACA/Obamacare in the US, once it got established and started paying out there is almost no way to repeal it as no one wants to lose their benefits. Even establishment Republicans learned their lesson and are now leaving it alone after seeing that they angered many Americans who enjoyed those benefits and threatened their chances of being re-elected.
- Retric 9y ago
  I suspect the reverse. Once basic income exists there will always be pressure from the top (who don't directly benefit) to reduce it. In the end it's the classic choice. People want more from the government and they also want to pay less taxes which ends up at a balance point.
- r00fus 9y ago
  > My problem with basic income is that once you start, there will always be a demand to increase it, and enormous political pressure to increase it This same logic applies to corporate welfare as well - and you can see the results (see latest tax bill). The differentiating factor is that, in one case you give to those without much political power vs. giving to those who have enough power to play havoc with your politics (or have already controlled/captured it). A bit of perspective helps to balance the slippery slope danger you presented.
- gumby 9y ago
  > My problem with basic income is that once you start, there will always be a demand to increase it, and enormous political pressure to increase it... Edmund Burke famously made this argument in the 18th century as an example of a problem with universal franchise (letting non-property owners vote). Supposedly the "masses" would vote for more and more handouts. Personally, I think the universal franchise has worked out pretty well overall, and this problem has, if anything, gone the wrong way even during the big bouts of progressivism in the late 19th and early 20th centuries. And even when they went overboard as they did in the UK, they recovered, perhaps over-recovered. But in the long run it seems to converge fine.
gooseus 9y ago
I can't help but think that UBI is the modern grain dole[0] and while it sounds like a great idea on the surface and would probably work out great for a number of individuals in the short run... it will also inevitably lead to the use of UBI as an easy political tool for populist leaders to use to come to power, leading to the a further degradation of the republic. [0] https://en.wikipedia.org/wiki/Cura_Annonae https://en.wikipedia.org/wiki/Cura_Annonae
- tareqak 9y ago
  Doesn't that mean that non-populist politicians should get together and actually implement some form of effective UBI to head off a dangerous and competent populist?
  - trendia 9y ago
    That sounds a lot like Otto von Bismarck [0] . Fearful of the socialists, he tried banning them, but that didn't work. So, instead, he introduced "Soclialism-lite" with improved worker conditions, social benefits, and semi-public medicine. [0] https://en.wikipedia.org/wiki/State_Socialism_(Germany) https://en.wikipedia.org/wiki/State_Socialism_(Germany)
    - RobertoG 9y ago
      So, socialism (the fear of) improved the live of those people. Sounds like a good deal.
  - creaghpatr 9y ago
    That's exactly what's happening right now. It's no coincidence Tech barons are pushing this concept before Congress cracks down.
  - gooseus 9y ago
    That doesn't really make sense to me... any public policy can be rendered ineffective by subsequent politicians. So a non-populist politician implements an "effective" UBI policy, but since it's only effective for a short amount of time because things change and people realize later that it's not as fair/effective as they thought... or else you can only pass a compromise bill and it's really not effective at all, but you're told it will be (assuming you keep voting for X!). I mean, why should everyone get the same amount? Or why should the percentage difference between my UBI this other groups be different by X amount? Suddenly the UBI is just a new way to target voting blocks with promises of adjustments in their favor... essentially like how the tax code is used politically. The only way to implement UBI effectively is to implement it a way where it can't be used as a populist political tool ever, which I think is impossible. The most messed up thing I find about UBI is that it's the solution put forth by companies which are actively avoiding paying taxes through loopholes and havens. Rather than someone like Zuckerberg thinking "Hmm... maybe I could help impoverished people by spreading my wealth to my employees more evenly and by paying my fair share in corporate/personal taxes to the local/state/federal govt?" Instead they say "I deserve billions of dollars in personal wealth and to stay competitive (despite my effective monopoly) I must utilize every tax loophole possible and it's up to the government to find some other way to find the revenue to keep my users/employees at a living wage."
dsfyu404ed 9y ago
This (and every other article I've read) fails to address how "universal" basic income would result in something other than a proportionate increase in the cost of living. I don't want my taxes pissed away into some slumlord's bank account any more than I want them pissed away on APCs for a small town police department.
- learc83 9y ago
  Assuming you believe free markets work (and assuming the UBI is paid for by tax increases instead of just printing more money), the answer to "how universal basic income would result in something other than a proportionate increase in the cost of living" is: that's not how markets work. Increased demand will result in increased supply except in markets/locations where the supply can't increase.
alacombe 9y ago
Basic income based on other's addictions ? I doubt people around here would welcome drug money being redistributed to a close community distinguishing itself from outsiders by blood, but somehow, this is acceptable. That being said, there is an easy counter argument to this article: Canada's "first nation". They receives millions in government funding which ends up to be redistributed arbitrarily by "band chief's", often in the pocket of their own direct family. It is not uncommon to have their income in the seven figures while other members of their band fall to real vice, drugs and drinking. (facts confirmed by many first nation members when I living on treaty land). Also, it is not uncommon to see natives who tried to integrate with Canadian society being ostracized by their own community and seen as "traitors" (once again, step family experience).
runeks 9y ago
The fundamental issue with a basic income, as I see it, is that it's impossible to guarantee, since the revenue, out of which basic income is paid, comes from taxes. This makes it impossible to know how much money the government will have to pay out a basic income next year. So a family that has gotten used to, say, $15,000 in basic income one year, may only get half of that the next year, because government can't predict its tax income for the next year. Add to this the fact that basic income takes away, at least some of, the reason to work in the first place, which means that the very foundation of governments paying out basic incomes -- income from taxation -- is affected by paying out basic income. The result is an unstable system with feedback loops, where paying out a lot of basic income one year results in fewer taxes the next year, which means the government has less money to pay out in basic income that year, causing people to need to a job, which increases taxes the next year, after which the government can pay out more in basic income. Predicting this oscillation is essential to making basic income work, and I'm not confident it's possible at all, at least not when we need to be as sure about it as we do when we're talking about money that people need to buy food.
- jknz 9y ago
  This criticism also applies to unemployment benefits in western European countries. If a large chunk of the population suddenly becomes unemployed, then the gov has less tax revenue but more employment benefits to cover. Unemployment benefits cannot be guaranteed without either expanding the national debt or printing money. A sane government behavior would be to spend in year n the known tax revenue of year (n-1), and nothing more.
  - ZeroGravitas 9y ago
    And this is in fact sometimes suggested as one of the key benefits. If an area suddently has a lot of people out of work with no safety net it causes a ripple effect as they curtail their spending massively at local businesses, and the next domino gets toppled. With unemployment benefit the goverment automatically injects cash into the area to forstall this outcome.
- aetherson 9y ago
evo_9 9y ago
Main take-away summarized in the closing paragraph: "...if anything is to be learned from the Cherokee experiment, it’s this: To imagine that a basic income, or something like it, would suddenly satisfy the disillusioned, out-of-work Rust Belt worker is as wrongheaded as imagining it would do no good at all, or drive people to stop working. There is a third possibility: that an infusion of cash into struggling households would lift up the youth in those households in all the subtle but still meaningful ways Costello has observed over the years, until finally, when they come of age, they are better prepared for the brave new world of work, whether the robots are coming or not."
Hasz 9y ago
I'd like to see a version of "basic employment". Can't find a job? The government will guarantee you some baseline pay and give you a job and healthcare benefits almost unilaterally. You've still gotta show up and do your work, but you are guaranteed something to do. It might be cleaning up roads and parks, building trails, washing streets, and planting trees, but it's a basic job that will provide you with enough money to get by. There would be career counseling, skills-based training, and opportunities to manage other workers. Essentially, an Army without the guns; a group focused on not only improving the public environment, but also the part of the public employed by the program.
- gregman1 9y ago
  One day we'll discover socialism.
  - Hasz 9y ago
    The USA had the WPA, which did something akin to my proposal. Its budget was 1.3bn in 1935 (23.5bn in 2017), and relative to the US military expenditure (521bn in 2016), it's just not that much money for an incredible amount of public good. Wikipedia has an excellent page about what the WPA administration accomplished over 8 years -- I think it's an idea worth reviving.
    - dragonwriter 9y ago
      The WPA was an reasonable countercyclical government response to a massive cyclical downturn in private-sector employment. That's not the problem UBI is intended to address, and the WPA would be an exceedingly poor fit TO UBI’s problem.
  - breckinloggins 9y ago
    You jest, but I think one day we'll discover something that looks a little like socialism, a little like "Star Trek-style" communism, and a little like free market capitalism. And it won't be ideologically driven, but based on all the little experiments that worked combined with all the things that technology and social changes have enabled. Ideologies are epistemic pathogens.
11thEarlOfMar 9y ago
Whether statistically significant or not, this provides a ray of hope that some of the benefits proponents foresee will be realized and many of the concerns that opponents foresee may not be, respectively, improved outcome for families, versus, reduced participation in the work force: "Before the casino opened, Costello found that poor children scored twice as high as those who were not poor for symptoms of psychiatric disorders. But after the casino opened, the children whose families’ income rose above the poverty rate showed a 40 percent decrease in behavioral problems. Just four years after the casino opened, they were, behaviorally at least, no different from the kids who had never been poor at all. By the time the youngest cohort of children was at least 21, she found something else: The younger the Cherokee children were when the casino opened, the better they fared compared to the older Cherokee children and to rural whites. This was true for emotional and behavioral problems as well as drug and alcohol addiction.... Other researchers have used Costello’s data to look at different effects of the casino payments. One fear about basic income is that people will be content living on their subsidies and stop working. But a 2010 analysis of the data, led by Randall Akee, who researches labor economics at the UCLA's Luskin School of Public Affairs, found no impact on overall labor participation."
- empath75 9y ago
  It's pretty remarkable that money apparently cures psychiatric disorders. Maybe we should be prescribing cash instead of ritalin to kids with ADD.
  - 11thEarlOfMar 9y ago
    It's about family dynamics. Parents who can focus on providing for and raising their kids will have a better outcome than those those that struggle to put food on the table. If the parents have hope and a means to deliver, the whole outlook of the kids changes from a life of coping with hopelessness to looking towards a future that they have influence over.
    - empath75 9y ago
      I was more making a statement about how those kinds of disorders are over treated with medication when a change in the home environment would make a bigger difference.
PatientTrades 9y ago
Universal basic income is already a thing in America. Free food stamps, free public housing, free k-12 education, free government provided cellphones, free wifi, etc. "Universal basic cash" is what this article is about. No, I don't think its a good idea to give people cold hard cash for basic income
gumby 9y ago
The bigger problem in my mind is people getting past the Industrial Age idea that you need a "job" to be a worthwhile human being, and that the nature of said "job" determines your value to society. I don't really mind if there's lots of crappy poetry and tremendous non-enumerative attention to child rearing and looking after the elderly. I don't mind in the slightest if someone decides they just want to watch TV all day à la "Fahrenheit 451". But in an abundance economy where the marginal cost of production is essentially nil and money is more useful as a signalling mechanism rather than a store of value, it's the mindset that will be most psychologically dangerous.
deleted 9y ago
[deleted]
RickJWag 9y ago
Facebook and Google should expand the experiment and provide a basic living wage to everyone in San Francisco. It'll be interesting to see what happens to the homeless population.

56 points by stevekemp 9y ago

I can see how basic income could help some types of people, but it can also hurt other types of people. If only there was a way to determine who it would help/hurt, and then to only give it out when it would actually help. https://ifstudies.org/blog/what-can-we-learn-from-native-americans-about-a-universal-basic-income https://ifstudies.org/blog/what-can-we-learn-from-native-ame...

mikeash 9y ago
Extrapolating from the experience of people who were genocided, displaced, systematically oppressed, and excluded from productive economic activity strikes me as likely to be inaccurate.

Simulacra 9y ago

This is very interesting, but is it not also worth noting that the community allowed this money is very controlled? The idea of a basic income is that everyone gets it, regardless of where you live in the country, and other factors. My problem with basic income is that once you start, there will always be a demand to increase it, and enormous political pressure to increase it, along with people from all over the world wanting into the system. For a small population of native Americans, it seems to work very very well, but I don't think it's sustainable for an entire country.

sputknick 9y ago
Another problem that I see is that it will very quickly become "not basic" in that we might give everyone $2,000 a month, but then quickly politicians will advocate for certain constituents to get more. "People who work as teachers in poor neighborhoods should get an extra $500 a month" or "People who have been convicted of X Y or Z crime should get $500 less for the rest of their lives".
- ravenstine 9y ago
  We might also see the same thing that's happened with minimum wage and student loans. (where basic income no longer covers even the basics)
  - zlynx 9y ago
    Yes, well, as long as it covers the basics somewhere. Someone living on only basic income won't be able to afford to live in Manhattan. They'll have to move to rural Alabama.
    - frgtpsswrdlame 9y ago
      Maybe you still can't live in Manhattan but I don't really see the point in a UBI so low that you can't afford to live in a city at all.
      - indubitable 9y ago
        I think helping with the economic development of smaller areas would be a huge benefit in and of itself. But basic income opens up really revolutionary ideas beyond this. Imagine you get 10,000 people together and the income is set to something quite low - $1000 a month. That's $10 million a month that, if a moderate sized group of people were willing to coordinate and work together, could be used to build new cities and developments from the ground up. In a way a basic income can almost be seen as a decentralization of government as it enables citizens to direct government funded spending at their discretion.
        NinoScript 9y ago
        I had never thought about it like this. This makes so much sense.
    - SilasX 9y ago
      But that's the thing: you can do that today: live minimally for a year at big-city wages, then buy a trailer in rural Alabama. If people don't consider that a viable option now, neither will they with any feasible basic income level.
ravenstine 9y ago
It would probably require either isolationism or a true global government, and neither of those are feasible or desirable. That's undoubtedly why our economies tend to be mixed because basic income in a place like America would require too much sacrifice to sustain in the long term. This is going to become more of a challenging problem as humans become obsolete. Before an actual post-scarcity society, we will need government provided basic income, which is simultaneously a scary thought if we don't solve a bunch of other global problems first.
rizzom5000 9y ago
It's also worth noting that these payments are funded by casino revenue for that very small population. This article would look very different if some members of the tribe were taxed heavily to provide the payments to other members.
frgtpsswrdlame 9y ago
>My problem with basic income is that once you start, there will always be a demand to increase it, and enormous political pressure to increase it How is this a problem? If enough people support an increase in the UBI that politicians feel they have to raise it, isn't that a good thing?
- xaqfox 9y ago
  Sometimes it would need to be raised and sometimes it would need to be lowered. It will, however, always be a politically unpopular position to lower it, even if it needs being done.
  - frgtpsswrdlame 9y ago
    I guess I don't see that as really a problem with UBI though. The same is true of the criminal justice system (and lots of other government functions), for example, tons of pressure to increase sentences and basically none to lower them. It seems more like a problem with representative government than anything else.
- colemannugent 9y ago
  When do you stop raising it? If people could vote themselves more money the voter turnout would be insane. How would anyone control something like that? Anyone who ran against the increases would be easily defeated with something like this: "My opponent wants to take the money you deserve!". At some point you would be giving people more money than you produce as a country and then it's only a matter of time until the money runs out. Once the money runs out then your government will evaporate as the enraged populace tries to pin the blame on one group. This of course is on of the central issues with government run wealth redistribution programs, nobody wants less money and they will go to the polls to protect it. Whatever you think of the ACA/Obamacare in the US, once it got established and started paying out there is almost no way to repeal it as no one wants to lose their benefits. Even establishment Republicans learned their lesson and are now leaving it alone after seeing that they angered many Americans who enjoyed those benefits and threatened their chances of being re-elected.
Retric 9y ago
I suspect the reverse. Once basic income exists there will always be pressure from the top (who don't directly benefit) to reduce it. In the end it's the classic choice. People want more from the government and they also want to pay less taxes which ends up at a balance point.
r00fus 9y ago
> My problem with basic income is that once you start, there will always be a demand to increase it, and enormous political pressure to increase it This same logic applies to corporate welfare as well - and you can see the results (see latest tax bill). The differentiating factor is that, in one case you give to those without much political power vs. giving to those who have enough power to play havoc with your politics (or have already controlled/captured it). A bit of perspective helps to balance the slippery slope danger you presented.
gumby 9y ago
> My problem with basic income is that once you start, there will always be a demand to increase it, and enormous political pressure to increase it... Edmund Burke famously made this argument in the 18th century as an example of a problem with universal franchise (letting non-property owners vote). Supposedly the "masses" would vote for more and more handouts. Personally, I think the universal franchise has worked out pretty well overall, and this problem has, if anything, gone the wrong way even during the big bouts of progressivism in the late 19th and early 20th centuries. And even when they went overboard as they did in the UK, they recovered, perhaps over-recovered. But in the long run it seems to converge fine.

gooseus 9y ago

I can't help but think that UBI is the modern grain dole[0] and while it sounds like a great idea on the surface and would probably work out great for a number of individuals in the short run... it will also inevitably lead to the use of UBI as an easy political tool for populist leaders to use to come to power, leading to the a further degradation of the republic. [0] https://en.wikipedia.org/wiki/Cura_Annonae https://en.wikipedia.org/wiki/Cura_Annonae

tareqak 9y ago
Doesn't that mean that non-populist politicians should get together and actually implement some form of effective UBI to head off a dangerous and competent populist?
- trendia 9y ago
  That sounds a lot like Otto von Bismarck [0] . Fearful of the socialists, he tried banning them, but that didn't work. So, instead, he introduced "Soclialism-lite" with improved worker conditions, social benefits, and semi-public medicine. [0] https://en.wikipedia.org/wiki/State_Socialism_(Germany) https://en.wikipedia.org/wiki/State_Socialism_(Germany)
  - RobertoG 9y ago
    So, socialism (the fear of) improved the live of those people. Sounds like a good deal.
- creaghpatr 9y ago
  That's exactly what's happening right now. It's no coincidence Tech barons are pushing this concept before Congress cracks down.
- gooseus 9y ago
  That doesn't really make sense to me... any public policy can be rendered ineffective by subsequent politicians. So a non-populist politician implements an "effective" UBI policy, but since it's only effective for a short amount of time because things change and people realize later that it's not as fair/effective as they thought... or else you can only pass a compromise bill and it's really not effective at all, but you're told it will be (assuming you keep voting for X!). I mean, why should everyone get the same amount? Or why should the percentage difference between my UBI this other groups be different by X amount? Suddenly the UBI is just a new way to target voting blocks with promises of adjustments in their favor... essentially like how the tax code is used politically. The only way to implement UBI effectively is to implement it a way where it can't be used as a populist political tool ever, which I think is impossible. The most messed up thing I find about UBI is that it's the solution put forth by companies which are actively avoiding paying taxes through loopholes and havens. Rather than someone like Zuckerberg thinking "Hmm... maybe I could help impoverished people by spreading my wealth to my employees more evenly and by paying my fair share in corporate/personal taxes to the local/state/federal govt?" Instead they say "I deserve billions of dollars in personal wealth and to stay competitive (despite my effective monopoly) I must utilize every tax loophole possible and it's up to the government to find some other way to find the revenue to keep my users/employees at a living wage."

dsfyu404ed 9y ago

This (and every other article I've read) fails to address how "universal" basic income would result in something other than a proportionate increase in the cost of living. I don't want my taxes pissed away into some slumlord's bank account any more than I want them pissed away on APCs for a small town police department.

learc83 9y ago
Assuming you believe free markets work (and assuming the UBI is paid for by tax increases instead of just printing more money), the answer to "how universal basic income would result in something other than a proportionate increase in the cost of living" is: that's not how markets work. Increased demand will result in increased supply except in markets/locations where the supply can't increase.

alacombe 9y ago

Basic income based on other's addictions ? I doubt people around here would welcome drug money being redistributed to a close community distinguishing itself from outsiders by blood, but somehow, this is acceptable. That being said, there is an easy counter argument to this article: Canada's "first nation". They receives millions in government funding which ends up to be redistributed arbitrarily by "band chief's", often in the pocket of their own direct family. It is not uncommon to have their income in the seven figures while other members of their band fall to real vice, drugs and drinking. (facts confirmed by many first nation members when I living on treaty land). Also, it is not uncommon to see natives who tried to integrate with Canadian society being ostracized by their own community and seen as "traitors" (once again, step family experience).

runeks 9y ago

The fundamental issue with a basic income, as I see it, is that it's impossible to guarantee, since the revenue, out of which basic income is paid, comes from taxes. This makes it impossible to know how much money the government will have to pay out a basic income next year. So a family that has gotten used to, say, $15,000 in basic income one year, may only get half of that the next year, because government can't predict its tax income for the next year. Add to this the fact that basic income takes away, at least some of, the reason to work in the first place, which means that the very foundation of governments paying out basic incomes -- income from taxation -- is affected by paying out basic income. The result is an unstable system with feedback loops, where paying out a lot of basic income one year results in fewer taxes the next year, which means the government has less money to pay out in basic income that year, causing people to need to a job, which increases taxes the next year, after which the government can pay out more in basic income. Predicting this oscillation is essential to making basic income work, and I'm not confident it's possible at all, at least not when we need to be as sure about it as we do when we're talking about money that people need to buy food.

jknz 9y ago
This criticism also applies to unemployment benefits in western European countries. If a large chunk of the population suddenly becomes unemployed, then the gov has less tax revenue but more employment benefits to cover. Unemployment benefits cannot be guaranteed without either expanding the national debt or printing money. A sane government behavior would be to spend in year n the known tax revenue of year (n-1), and nothing more.
- ZeroGravitas 9y ago
  And this is in fact sometimes suggested as one of the key benefits. If an area suddently has a lot of people out of work with no safety net it causes a ripple effect as they curtail their spending massively at local businesses, and the next domino gets toppled. With unemployment benefit the goverment automatically injects cash into the area to forstall this outcome.
aetherson 9y ago

evo_9 9y ago

Main take-away summarized in the closing paragraph: "...if anything is to be learned from the Cherokee experiment, it’s this: To imagine that a basic income, or something like it, would suddenly satisfy the disillusioned, out-of-work Rust Belt worker is as wrongheaded as imagining it would do no good at all, or drive people to stop working. There is a third possibility: that an infusion of cash into struggling households would lift up the youth in those households in all the subtle but still meaningful ways Costello has observed over the years, until finally, when they come of age, they are better prepared for the brave new world of work, whether the robots are coming or not."

Hasz 9y ago

I'd like to see a version of "basic employment". Can't find a job? The government will guarantee you some baseline pay and give you a job and healthcare benefits almost unilaterally. You've still gotta show up and do your work, but you are guaranteed something to do. It might be cleaning up roads and parks, building trails, washing streets, and planting trees, but it's a basic job that will provide you with enough money to get by. There would be career counseling, skills-based training, and opportunities to manage other workers. Essentially, an Army without the guns; a group focused on not only improving the public environment, but also the part of the public employed by the program.

gregman1 9y ago
One day we'll discover socialism.
- Hasz 9y ago
  The USA had the WPA, which did something akin to my proposal. Its budget was 1.3bn in 1935 (23.5bn in 2017), and relative to the US military expenditure (521bn in 2016), it's just not that much money for an incredible amount of public good. Wikipedia has an excellent page about what the WPA administration accomplished over 8 years -- I think it's an idea worth reviving.
  - dragonwriter 9y ago
    The WPA was an reasonable countercyclical government response to a massive cyclical downturn in private-sector employment. That's not the problem UBI is intended to address, and the WPA would be an exceedingly poor fit TO UBI’s problem.
- breckinloggins 9y ago
  You jest, but I think one day we'll discover something that looks a little like socialism, a little like "Star Trek-style" communism, and a little like free market capitalism. And it won't be ideologically driven, but based on all the little experiments that worked combined with all the things that technology and social changes have enabled. Ideologies are epistemic pathogens.

11thEarlOfMar 9y ago

Whether statistically significant or not, this provides a ray of hope that some of the benefits proponents foresee will be realized and many of the concerns that opponents foresee may not be, respectively, improved outcome for families, versus, reduced participation in the work force: "Before the casino opened, Costello found that poor children scored twice as high as those who were not poor for symptoms of psychiatric disorders. But after the casino opened, the children whose families’ income rose above the poverty rate showed a 40 percent decrease in behavioral problems. Just four years after the casino opened, they were, behaviorally at least, no different from the kids who had never been poor at all. By the time the youngest cohort of children was at least 21, she found something else: The younger the Cherokee children were when the casino opened, the better they fared compared to the older Cherokee children and to rural whites. This was true for emotional and behavioral problems as well as drug and alcohol addiction.... Other researchers have used Costello’s data to look at different effects of the casino payments. One fear about basic income is that people will be content living on their subsidies and stop working. But a 2010 analysis of the data, led by Randall Akee, who researches labor economics at the UCLA's Luskin School of Public Affairs, found no impact on overall labor participation."

empath75 9y ago
It's pretty remarkable that money apparently cures psychiatric disorders. Maybe we should be prescribing cash instead of ritalin to kids with ADD.
- 11thEarlOfMar 9y ago
  It's about family dynamics. Parents who can focus on providing for and raising their kids will have a better outcome than those those that struggle to put food on the table. If the parents have hope and a means to deliver, the whole outlook of the kids changes from a life of coping with hopelessness to looking towards a future that they have influence over.
  - empath75 9y ago
    I was more making a statement about how those kinds of disorders are over treated with medication when a change in the home environment would make a bigger difference.

PatientTrades 9y ago

Universal basic income is already a thing in America. Free food stamps, free public housing, free k-12 education, free government provided cellphones, free wifi, etc. "Universal basic cash" is what this article is about. No, I don't think its a good idea to give people cold hard cash for basic income

gumby 9y ago

The bigger problem in my mind is people getting past the Industrial Age idea that you need a "job" to be a worthwhile human being, and that the nature of said "job" determines your value to society. I don't really mind if there's lots of crappy poetry and tremendous non-enumerative attention to child rearing and looking after the elderly. I don't mind in the slightest if someone decides they just want to watch TV all day à la "Fahrenheit 451". But in an abundance economy where the marginal cost of production is essentially nil and money is more useful as a signalling mechanism rather than a store of value, it's the mindset that will be most psychologically dangerous.

deleted 9y ago

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RickJWag 9y ago

Facebook and Google should expand the experiment and provide a basic living wage to everyone in San Francisco. It'll be interesting to see what happens to the homeless population.