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My biggest fear with basic income on a national scale is that it might get soaked up in bidding wars for limited rental housing and just end up being inflation

My biggest fear with basic income on a national scale is that it might get soaked up in bidding wars for limited rental housing and just end up being inflation soaked up by landlords.

gumby 9y ago
Shouldn't that bring more housing stock into the market, reducing prices? Also: there are more participants than landlords: food, utilities, etc.
- Glyptodon 9y ago
  Agree there are more participants, I just think housing has supply issues in ways most other things don't. Land is limited, for example. And replacing buildings with higher density ones is... Frequently not easy.
toomanybeersies 9y ago
Student allowance recently went up $50 per week in New Zealand. A lot of students also found their rent went up $50 per week at the same time.
nradov 9y ago
That's pretty similar to what's been happening in Silicon Valley lately. According to investor Peter Thiel, the majority of capital invested in startups just flows to local landlords rather than funding real innovation. https://www.sfgate.com/expensive-san-francisco/article/peter-thiel-silicon-valley-capital-landlords-12759450.php https://www.sfgate.com/expensive-san-francisco/article/peter...
- conanbatt 9y ago
  Henry george explained it in san francisco in the late 1800's: any productivity gains will be captured by the landlords as long as the people are taxed for their work and the land is not taxed for the productivity gains. California is the most anti-georgist place ever: if you work in SF, you pay sales taxes that go to fund Bart that makes your own rent more expensive. State income tax has the same effect, the very own official economists of the state say it. And then you have property taxes benefits and mortgage benefits for landlords!
conanbatt 9y ago
Quite the opposite: universal basic income of a fixed amount would be much better spent outside of SF. Figure a 1k monthly stipend would be enough for rent and food in the mid west or some other small town. Currently the city of SF spends 2k a month per homeless person...
- nextlevelwizard 9y ago
  If I currently rent my apartment for ~400€/mo, why wouldn't I increase the rent to 600 or 800€/mo if the people were getting extra 1000€/mo from the government? Obviously the people might move out to somewhere more remote where the prices where lower, but now they would have to pay for the journey to work place and get whole new social circle and all other things that are involved with moving - expect you are moving to a smaller city/town or at least to worse neighborhood.
  - conanbatt 9y ago
    >If I currently rent my apartment for ~400€/mo, why wouldn't I increase the rent to 600 or 800€/mo if the people were getting extra 1000€/mo from the government? Because you don't get to put the prices on it, its a market. > Obviously the people might move out to somewhere more remote where the prices where lower, but now they would have to pay for the journey to work place and get whole new social circle and all other things that are involved with moving - expect you are moving to a smaller city/town or at least to worse neighborhood. Think of which kind of recipient is willing to leave a city because of a monthly stiped of 1k. Its not people with median wages. To be able to make a judgement on how it would affect rent prices you wuold have to model how many people leave the cities and how many people go to them. If basic income is fixed, its probably going to punish being in the city (higher taxes) and prize living outside (the money gotten with a lower tax rate will be worth more). I never quite got why people think basic income would produce an inflation that would erode it: what kind of model or idea explains that? Its not taxation, its not inflation, its not supply-demand. Im honestly asking.
    - nextlevelwizard 9y ago
chime 9y ago
I know livelihood after automation needs to be solved but I'm worried about how a guaranteed fixed income for a large section of young population might be exploited. If you are 70 and get $1500/mo social security, nobody is going to sell you a $200k Ferrari. But if you are young, there is tremendous incentive for businesses to carve out that $1500/mo into life long revenue streams. Student loans cannot be easily discharged in bankruptcy. Pass a few laws and suddenly, contracts you signed as an 18yr old cannot be discharged through any means. This means an 18yr old could buy a $200k car if they agree to $750/mo for 600 months (50 years) at 4% fixed rate. A little bit of collusion in the insurance industry and suddenly anyone could be liable for $200k damages from healthcare to auto claims. No problem, just pay it off over the next 50-60 years of your life while you live in destitution. In a Star-Trek post-scarcity world, cars don't cost $200k so this problem doesn't exist. But as long as we live in a world where money exists, I think giving everyone a fixed minimum income will absolutely result in unexpected exploitation on a mass scale. Right now, nobody is going to give an 18yr old with no credit a 200k car because there is no guarantee they can pay it off. They give them 30yr fixed mortgages today because property historically appreciates in value and can be repossessed. But in a post-credit rating world, instead of repossessing a 15yr old car, it is better to just put a lien on 50 yrs of somebody's income, bundle it up, and sell a million of these liens to a bank.
- TangoTrotFox 9y ago
  It's interesting to consider Star Trek. I mean in our society today you can easily blame capitalism for our woes. But I think more aptly, you should blame us. Consumerism is something you personally have to choose to become involved in. People buy overpriced phones offering marginal benefits over vastly more affordable alternatives, fancy cars that in the end do nothing but get from point A to point B, pay a massive markup on a Unix based PC so they can have a fruity label and a slightly thinner screen, etc, etc. And they do this all of their own will. In Star Trek people always look to us as the humans, because we are humans. But the biggest gag in Star Trek is that we're not the humans - we're the the Ferengi. Seriously, that was the intent. [1] The first paragraph there is irrelevant, the second is from the actual screenwriters and producers for the show. Society is a product of its people. The Ferengi live as they do because of the Ferengi. And the humans too live as they do because of the humans. If you thrust the Ferengi into the society of the humans it's not like they'd suddenly become as the humans. In short order it'd revert to Ferengi standards. And so too for us. Our society is a reflection of us. You need not change society - you need to change the people that makeup society. So long as there is somebody willing to buy something far outside their means for whatever reason, there will be people lining up to sell it to them. Something that is actually also still reflected in the show, even among humanity. Society is not something in isolation. Society is little more than the product of the people that comprise it. [1] - https://en.wikipedia.org/wiki/Ferengi#Interpretation_as_a_parody_of_Judaism https://en.wikipedia.org/wiki/Ferengi#Interpretation_as_a_pa...
TangoTrotFox 9y ago
I used to be much more positive on basic income. A big point here is that basic income could help develop the entire nation. In other words you don't need to live in downtown mega-city to make a living with a basic income. You could live in Bodunk, Utah where $300 gets you a great place. In the big picture you could even have a number of people band together and actually create new towns from the ground up. Imagine you just get 10,000 people working together to build up a new city. If we assume $1000/month income, that's a baseline of $10million a month for development. For low level development that is an enormous amount of money. People could literally build their own new cities from the ground up. And you could certainly entice plenty of engineers, construction workers, and the sort with such plans. Building your own future is enticing for anybody! But I've become jaded here. There was a recent article about somebody on social security living in their SUV because they couldn't afford the rent in the area they wanted to live in, on their $1400/month social security. And people were empathetic and defended her. If society has become so inertial and entitled that they are unable to move to areas of greater opportunity even when they have every incentive in the world, as well as the means, to do so then a basic income would likely explode in a giant ball of flame. The idea is not to let you have live as you see fit without ever working, but to enable people to have an extremely modest baseline of means and allow them to live as they see fit within their means. Instead we'd likely just see nonstop articles about $x/month in a basic income doesn't provide enough in [insert absurdly high cost of living area], people protesting for more (protests now subsidized by the funds they're complaining about), and other such nonsense. It could work phenomenally if people were willing to make it work, but it could also just implode society if people saw it not as a stipend but as an entitlement to their desires. In our current state, I expect we're far closer to the latter than the former.

My biggest fear with basic income on a national scale is that it might get soaked up in bidding wars for limited rental housing and just end up being inflation soaked up by landlords.

gumby 9y ago

Shouldn't that bring more housing stock into the market, reducing prices? Also: there are more participants than landlords: food, utilities, etc.

Glyptodon 9y ago
Agree there are more participants, I just think housing has supply issues in ways most other things don't. Land is limited, for example. And replacing buildings with higher density ones is... Frequently not easy.

toomanybeersies 9y ago

Student allowance recently went up $50 per week in New Zealand. A lot of students also found their rent went up $50 per week at the same time.

nradov 9y ago

That's pretty similar to what's been happening in Silicon Valley lately. According to investor Peter Thiel, the majority of capital invested in startups just flows to local landlords rather than funding real innovation. https://www.sfgate.com/expensive-san-francisco/article/peter-thiel-silicon-valley-capital-landlords-12759450.php https://www.sfgate.com/expensive-san-francisco/article/peter...

conanbatt 9y ago
Henry george explained it in san francisco in the late 1800's: any productivity gains will be captured by the landlords as long as the people are taxed for their work and the land is not taxed for the productivity gains. California is the most anti-georgist place ever: if you work in SF, you pay sales taxes that go to fund Bart that makes your own rent more expensive. State income tax has the same effect, the very own official economists of the state say it. And then you have property taxes benefits and mortgage benefits for landlords!

conanbatt 9y ago

Quite the opposite: universal basic income of a fixed amount would be much better spent outside of SF. Figure a 1k monthly stipend would be enough for rent and food in the mid west or some other small town. Currently the city of SF spends 2k a month per homeless person...

nextlevelwizard 9y ago
If I currently rent my apartment for ~400€/mo, why wouldn't I increase the rent to 600 or 800€/mo if the people were getting extra 1000€/mo from the government? Obviously the people might move out to somewhere more remote where the prices where lower, but now they would have to pay for the journey to work place and get whole new social circle and all other things that are involved with moving - expect you are moving to a smaller city/town or at least to worse neighborhood.
- conanbatt 9y ago
  >If I currently rent my apartment for ~400€/mo, why wouldn't I increase the rent to 600 or 800€/mo if the people were getting extra 1000€/mo from the government? Because you don't get to put the prices on it, its a market. > Obviously the people might move out to somewhere more remote where the prices where lower, but now they would have to pay for the journey to work place and get whole new social circle and all other things that are involved with moving - expect you are moving to a smaller city/town or at least to worse neighborhood. Think of which kind of recipient is willing to leave a city because of a monthly stiped of 1k. Its not people with median wages. To be able to make a judgement on how it would affect rent prices you wuold have to model how many people leave the cities and how many people go to them. If basic income is fixed, its probably going to punish being in the city (higher taxes) and prize living outside (the money gotten with a lower tax rate will be worth more). I never quite got why people think basic income would produce an inflation that would erode it: what kind of model or idea explains that? Its not taxation, its not inflation, its not supply-demand. Im honestly asking.
  - nextlevelwizard 9y ago

chime 9y ago

I know livelihood after automation needs to be solved but I'm worried about how a guaranteed fixed income for a large section of young population might be exploited. If you are 70 and get $1500/mo social security, nobody is going to sell you a $200k Ferrari. But if you are young, there is tremendous incentive for businesses to carve out that $1500/mo into life long revenue streams. Student loans cannot be easily discharged in bankruptcy. Pass a few laws and suddenly, contracts you signed as an 18yr old cannot be discharged through any means. This means an 18yr old could buy a $200k car if they agree to $750/mo for 600 months (50 years) at 4% fixed rate. A little bit of collusion in the insurance industry and suddenly anyone could be liable for $200k damages from healthcare to auto claims. No problem, just pay it off over the next 50-60 years of your life while you live in destitution. In a Star-Trek post-scarcity world, cars don't cost $200k so this problem doesn't exist. But as long as we live in a world where money exists, I think giving everyone a fixed minimum income will absolutely result in unexpected exploitation on a mass scale. Right now, nobody is going to give an 18yr old with no credit a 200k car because there is no guarantee they can pay it off. They give them 30yr fixed mortgages today because property historically appreciates in value and can be repossessed. But in a post-credit rating world, instead of repossessing a 15yr old car, it is better to just put a lien on 50 yrs of somebody's income, bundle it up, and sell a million of these liens to a bank.

TangoTrotFox 9y ago
It's interesting to consider Star Trek. I mean in our society today you can easily blame capitalism for our woes. But I think more aptly, you should blame us. Consumerism is something you personally have to choose to become involved in. People buy overpriced phones offering marginal benefits over vastly more affordable alternatives, fancy cars that in the end do nothing but get from point A to point B, pay a massive markup on a Unix based PC so they can have a fruity label and a slightly thinner screen, etc, etc. And they do this all of their own will. In Star Trek people always look to us as the humans, because we are humans. But the biggest gag in Star Trek is that we're not the humans - we're the the Ferengi. Seriously, that was the intent. [1] The first paragraph there is irrelevant, the second is from the actual screenwriters and producers for the show. Society is a product of its people. The Ferengi live as they do because of the Ferengi. And the humans too live as they do because of the humans. If you thrust the Ferengi into the society of the humans it's not like they'd suddenly become as the humans. In short order it'd revert to Ferengi standards. And so too for us. Our society is a reflection of us. You need not change society - you need to change the people that makeup society. So long as there is somebody willing to buy something far outside their means for whatever reason, there will be people lining up to sell it to them. Something that is actually also still reflected in the show, even among humanity. Society is not something in isolation. Society is little more than the product of the people that comprise it. [1] - https://en.wikipedia.org/wiki/Ferengi#Interpretation_as_a_parody_of_Judaism https://en.wikipedia.org/wiki/Ferengi#Interpretation_as_a_pa...

TangoTrotFox 9y ago

I used to be much more positive on basic income. A big point here is that basic income could help develop the entire nation. In other words you don't need to live in downtown mega-city to make a living with a basic income. You could live in Bodunk, Utah where $300 gets you a great place. In the big picture you could even have a number of people band together and actually create new towns from the ground up. Imagine you just get 10,000 people working together to build up a new city. If we assume $1000/month income, that's a baseline of $10million a month for development. For low level development that is an enormous amount of money. People could literally build their own new cities from the ground up. And you could certainly entice plenty of engineers, construction workers, and the sort with such plans. Building your own future is enticing for anybody! But I've become jaded here. There was a recent article about somebody on social security living in their SUV because they couldn't afford the rent in the area they wanted to live in, on their $1400/month social security. And people were empathetic and defended her. If society has become so inertial and entitled that they are unable to move to areas of greater opportunity even when they have every incentive in the world, as well as the means, to do so then a basic income would likely explode in a giant ball of flame. The idea is not to let you have live as you see fit without ever working, but to enable people to have an extremely modest baseline of means and allow them to live as they see fit within their means. Instead we'd likely just see nonstop articles about $x/month in a basic income doesn't provide enough in [insert absurdly high cost of living area], people protesting for more (protests now subsidized by the funds they're complaining about), and other such nonsense. It could work phenomenally if people were willing to make it work, but it could also just implode society if people saw it not as a stipend but as an entitlement to their desires. In our current state, I expect we're far closer to the latter than the former.