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IMHO basic income runs up against two problems: 0. People are primarily self serving and will likely not use the money as proponents intent, and 1. If you give

IMHO basic income runs up against two problems: 0. People are primarily self serving and will likely not use the money as proponents intent, and 1. If you give everyone a basic monthly income, what’s stopping everyone else who provides services (i.e. housing) from just increasing prices by however much the income is, thus negating the free money in the first place. What would make more sense are price controls to bring down costs, like housing and utilities.

jstarfish 8y ago
BMI just hits the tare button on what it means to be broke. You need no further evidence of what happens when you dump funny money into the market beyond looking at the rocketing cost of housing and education. The current result is what you get when everyone has access to a fixed amount of money. It doesn't level the playing field, it just elevates it.
- someone7x 8y ago
  > BMI just hits the tare button on what it means to be broke > It doesn't level the playing field, it just elevates it. Raising the lower bounds of poverty sounds like a good outcome!
firic 8y ago
Price control for a scarce resource (eg. land) will lower the price for people who are better connected (friends of the seller, same religion as the seller, etc) but will make the cost impossible for others. The solution to the housing problem is to build more houses.
- Retric 8y ago
  Land is available in the US under 10,000$ an acre. It’s the stuff like ocean views and public services that make land valuable not the limited total supply. Basic incomes would cause people to migrate to less expensive areas, but that’s unlikely to change prices much as we have vast amounts of land that’s barely used for anything.
  - firic 8y ago
    "Good" land is scarce. If you were to propose price control only in unwanted land then that law wouldn't do anything because the price there is already low. I was referring to wanted land, ie. land where price control would do something
    - dllthomas 8y ago
      I would note that a basic income directly increases the amount of land "sufficiently close to sufficient income".
    - Retric 8y ago
      I suspect people that are on basic income for longer periods might have a different view of what “good” land is. But, more to the point we already do what your talking about via affordable housing. It’s a large waste of resources, but hardly casusing the kind of inflation spiral your talking about due to how it’s implemented.
- sbilstein 8y ago
  In my handful of years in the bay area I've seen rent controlled 4 bedroom apartments pass through chains of friends (usually alumni of the same university) several years in a row. Most of these tenants have been well compensated tech workers. I think price control without regulating who can access lower controls can increase inequality. Something I have observed anecdotally to work is fixing a percentage of units to be reserved for low income people. It's a nice way to let us tech workers subsidize the less fortunate and still allow landlords to make money.
- Maybestring 8y ago
  >The solution to the housing problem is to build more houses. There's way too much latent demand for housing in booming cities to just build your way out. Without rent control, there will be people not benefiting from the boom that are just bled dry by rising costs.
  - travisoneill1 8y ago
    What is "latent demand"? There are empty apartments in SF right now and if you have the money you can rent them.
    - s73v3r_ 8y ago
      But that amount of money is astronomical. People are buying the apartments and leaving them vacant as an investment, rather than using them as intended, as a residence for a person living in the city.
    - Maybestring 8y ago
      The difference between current demand, and the increased demand that would exist at a lower price. I just mean, there are lots of people that would move to SF if they could afford it. This mass of potential immigrants will counter an attempt to just build your way out. Unless you mean a real substantive change to the city e.g. building 30,000 apartments/year.
nkoren 8y ago
> 0. People are primarily self serving and will likely not use the money as proponents intent This is an assumption, rooted in the belief that people are poor because they are lazy, and it is wrong. There are numerous studies which disprove this assumption and I have yet to see a study which supports it. > 1. If you give everyone a basic monthly income, what’s stopping everyone else who provides services (i.e. housing) from just increasing prices by however much the income is, thus negating the free money in the first place. While a UBI would raise the median income within an economy, if it was funded out of income tax then it would be neutral with respect to the mean available income, which is more what prices respond to. > What would make more sense are price controls to bring down costs, like housing and utilities. That's a really terrible idea. Free-market competition is better. Public ownership and provision of services is also better. Price controls on private markets, however, is genuinely the the worst of all worlds. It also does nothing whatsoever to help people at the bottom of the economic ladder, who don't have access to money at all.
- deleted 8y ago
  [deleted]
- joe_the_user 8y ago
  While a UBI would raise the median income within an economy, if it was funded out of income tax then it would be neutral with respect to the mean available income, which is more what prices respond to. This seems like an argument that breaks when one looks at the details of the markets involved. A landlord who owns low-income units doesn't care about average income. The landlord knows the income of their tenants and knows that they suddenly are able to afford more rent and so that landlord raises the rent to be able to take part in the windfall. IE, your argument would only work is housing units has efficient, elastic supply and demand like candy or something, where rising income taxes for the wealthy would reduce their demand for low-income units in the central cites. But we know the wealthy's demand for such units already near zero and the demand of the poor for such units is going to be constant.
  - dx87 8y ago
    A prime example of what you're talking about is apartments around military bases; landlords know that everyone on the base has to stay in the area for at least a few years, so they did sketchy stuff with what they'd charge for rent because they knew that the person couldn't leave. The pay rate of different ranks is public information, so if landlords found out you got promoted, they would raise your rent by difference between your old pay rate and new pay rate. Eventually the govt had to step in and make it illegal to charge different rent amounts based on what the service members rank was.
pattyboo 8y ago
What will prevent businesses from increasing the price? Competition Price control? Is this some sort of a joke?
- _rpd 8y ago
  > Price control? Is this some sort of a joke? No, UBI only works if you institute price controls, or if there is a mass migration to rural areas, Otherwise, it just sparks an inflationary spiral. The spiral is even quicker if UBI is 'adjusted' for regional cost of living.
  - dragonwriter 8y ago
    > No, UBI only works if you institute price controls, or if there is a mass migration to rural areas, Otherwise, it just sparks an inflationary spiral. There is good reason to think that a tax-supported UBI at any level would, in fact, lead to price inflation for goods disproportionately in demand at the low end of the income scale, such that the net benefit of a UBI to the lowest-income recipients would be less than would be expected by consideration of the nominal benefit and pre-policy price levels, sure. The idea that it would just spark an inflationary spiral, OTOH, something that needs some support.
    - _rpd 8y ago
      > The idea that it would just spark an inflationary spiral, OTOH, something that needs some support. Fair point. My assumption is that any political movement that institutes UBI in the first place would add automatic indexing to CPI either in the initial bill or soon after the first inflationary surge. Even if (miraculously) resisted at the federal level, the pressure to automatically index in urban areas would be overwhelming and even a few major cities with local indexing laws would still spark the inflationary spiral.
      - dllthomas 8y ago
        Yeah, the BI level should be pegged to targeted inflation, not observed or expected inflation.
dragonwriter 8y ago
> 0. People are primarily self serving and will likely not use the money as proponents intent That's...actually what many proponents specifically intend, though. > If you give everyone a basic monthly income, what’s stopping everyone else who provides services (i.e. housing) from just increasing prices by however much the income is, thus negating the free money in the first place. Competition for market goods, the lack of incentive to do so (or for regulators to allow it) for public services including regulated public utilities.
briandear 8y ago
Price controls just create shortages. See Venezuela.
xvedejas 8y ago
To address housing prices, UBI would ideally be paired with a Land Value Tax (LVT), to capture the producer surplus. More detailed discussion of the economics can be found here: https://en.wikipedia.org/wiki/Land_value_tax#Economic_properties https://en.wikipedia.org/wiki/Land_value_tax#Economic_proper...
saudioger 8y ago
With UBI I'm not necessarily tied to living in an urban population center, and I might be able to make a lower-paying job in a rural area work better for me. Urbanization came along with industrialization.

jstarfish 8y ago

BMI just hits the tare button on what it means to be broke. You need no further evidence of what happens when you dump funny money into the market beyond looking at the rocketing cost of housing and education. The current result is what you get when everyone has access to a fixed amount of money. It doesn't level the playing field, it just elevates it.

someone7x 8y ago
> BMI just hits the tare button on what it means to be broke > It doesn't level the playing field, it just elevates it. Raising the lower bounds of poverty sounds like a good outcome!

firic 8y ago

Price control for a scarce resource (eg. land) will lower the price for people who are better connected (friends of the seller, same religion as the seller, etc) but will make the cost impossible for others. The solution to the housing problem is to build more houses.

Retric 8y ago
Land is available in the US under 10,000$ an acre. It’s the stuff like ocean views and public services that make land valuable not the limited total supply. Basic incomes would cause people to migrate to less expensive areas, but that’s unlikely to change prices much as we have vast amounts of land that’s barely used for anything.
- firic 8y ago
  "Good" land is scarce. If you were to propose price control only in unwanted land then that law wouldn't do anything because the price there is already low. I was referring to wanted land, ie. land where price control would do something
  - dllthomas 8y ago
    I would note that a basic income directly increases the amount of land "sufficiently close to sufficient income".
  - Retric 8y ago
    I suspect people that are on basic income for longer periods might have a different view of what “good” land is. But, more to the point we already do what your talking about via affordable housing. It’s a large waste of resources, but hardly casusing the kind of inflation spiral your talking about due to how it’s implemented.
sbilstein 8y ago
In my handful of years in the bay area I've seen rent controlled 4 bedroom apartments pass through chains of friends (usually alumni of the same university) several years in a row. Most of these tenants have been well compensated tech workers. I think price control without regulating who can access lower controls can increase inequality. Something I have observed anecdotally to work is fixing a percentage of units to be reserved for low income people. It's a nice way to let us tech workers subsidize the less fortunate and still allow landlords to make money.
Maybestring 8y ago
>The solution to the housing problem is to build more houses. There's way too much latent demand for housing in booming cities to just build your way out. Without rent control, there will be people not benefiting from the boom that are just bled dry by rising costs.
- travisoneill1 8y ago
  What is "latent demand"? There are empty apartments in SF right now and if you have the money you can rent them.
  - s73v3r_ 8y ago
    But that amount of money is astronomical. People are buying the apartments and leaving them vacant as an investment, rather than using them as intended, as a residence for a person living in the city.
  - Maybestring 8y ago
    The difference between current demand, and the increased demand that would exist at a lower price. I just mean, there are lots of people that would move to SF if they could afford it. This mass of potential immigrants will counter an attempt to just build your way out. Unless you mean a real substantive change to the city e.g. building 30,000 apartments/year.

nkoren 8y ago

> 0. People are primarily self serving and will likely not use the money as proponents intent This is an assumption, rooted in the belief that people are poor because they are lazy, and it is wrong. There are numerous studies which disprove this assumption and I have yet to see a study which supports it. > 1. If you give everyone a basic monthly income, what’s stopping everyone else who provides services (i.e. housing) from just increasing prices by however much the income is, thus negating the free money in the first place. While a UBI would raise the median income within an economy, if it was funded out of income tax then it would be neutral with respect to the mean available income, which is more what prices respond to. > What would make more sense are price controls to bring down costs, like housing and utilities. That's a really terrible idea. Free-market competition is better. Public ownership and provision of services is also better. Price controls on private markets, however, is genuinely the the worst of all worlds. It also does nothing whatsoever to help people at the bottom of the economic ladder, who don't have access to money at all.

deleted 8y ago
[deleted]
joe_the_user 8y ago
While a UBI would raise the median income within an economy, if it was funded out of income tax then it would be neutral with respect to the mean available income, which is more what prices respond to. This seems like an argument that breaks when one looks at the details of the markets involved. A landlord who owns low-income units doesn't care about average income. The landlord knows the income of their tenants and knows that they suddenly are able to afford more rent and so that landlord raises the rent to be able to take part in the windfall. IE, your argument would only work is housing units has efficient, elastic supply and demand like candy or something, where rising income taxes for the wealthy would reduce their demand for low-income units in the central cites. But we know the wealthy's demand for such units already near zero and the demand of the poor for such units is going to be constant.
- dx87 8y ago
  A prime example of what you're talking about is apartments around military bases; landlords know that everyone on the base has to stay in the area for at least a few years, so they did sketchy stuff with what they'd charge for rent because they knew that the person couldn't leave. The pay rate of different ranks is public information, so if landlords found out you got promoted, they would raise your rent by difference between your old pay rate and new pay rate. Eventually the govt had to step in and make it illegal to charge different rent amounts based on what the service members rank was.

pattyboo 8y ago

What will prevent businesses from increasing the price? Competition Price control? Is this some sort of a joke?

_rpd 8y ago
> Price control? Is this some sort of a joke? No, UBI only works if you institute price controls, or if there is a mass migration to rural areas, Otherwise, it just sparks an inflationary spiral. The spiral is even quicker if UBI is 'adjusted' for regional cost of living.
- dragonwriter 8y ago
  > No, UBI only works if you institute price controls, or if there is a mass migration to rural areas, Otherwise, it just sparks an inflationary spiral. There is good reason to think that a tax-supported UBI at any level would, in fact, lead to price inflation for goods disproportionately in demand at the low end of the income scale, such that the net benefit of a UBI to the lowest-income recipients would be less than would be expected by consideration of the nominal benefit and pre-policy price levels, sure. The idea that it would just spark an inflationary spiral, OTOH, something that needs some support.
  - _rpd 8y ago
    > The idea that it would just spark an inflationary spiral, OTOH, something that needs some support. Fair point. My assumption is that any political movement that institutes UBI in the first place would add automatic indexing to CPI either in the initial bill or soon after the first inflationary surge. Even if (miraculously) resisted at the federal level, the pressure to automatically index in urban areas would be overwhelming and even a few major cities with local indexing laws would still spark the inflationary spiral.
    - dllthomas 8y ago
      Yeah, the BI level should be pegged to targeted inflation, not observed or expected inflation.

dragonwriter 8y ago

> 0. People are primarily self serving and will likely not use the money as proponents intent That's...actually what many proponents specifically intend, though. > If you give everyone a basic monthly income, what’s stopping everyone else who provides services (i.e. housing) from just increasing prices by however much the income is, thus negating the free money in the first place. Competition for market goods, the lack of incentive to do so (or for regulators to allow it) for public services including regulated public utilities.

briandear 8y ago

Price controls just create shortages. See Venezuela.

xvedejas 8y ago

To address housing prices, UBI would ideally be paired with a Land Value Tax (LVT), to capture the producer surplus. More detailed discussion of the economics can be found here: https://en.wikipedia.org/wiki/Land_value_tax#Economic_properties https://en.wikipedia.org/wiki/Land_value_tax#Economic_proper...

saudioger 8y ago

With UBI I'm not necessarily tied to living in an urban population center, and I might be able to make a lower-paying job in a rural area work better for me. Urbanization came along with industrialization.