7 ms·

> How is it possible to pull this much money out of the American economy without crashing it? UBI actually injects money into the economy. Accompanying UBI wou

> How is it possible to pull this much money out of the American economy without crashing it? UBI actually injects money into the economy. Accompanying UBI would be reducing minimum wage to zero, managing inflation by increasing income taxes in higher brackets, and removing deductibles so that more tax is collected. By reducing minimum wages you encourage people to start up new companies — with no salaries to pay, you reduce startup costs significantly (there are still costs such as insurance, legal filings). The whole point of UBI is to pay everyone the same guaranteed amount. If you start scaling back as income rises, what you are actually doing is a different scheme called Negative Income Tax. UBI basically pushes any wages into the taxable brackets immediately. A national government would institute a UBI to encourage a mobile workforce, since reducing the cost of switching towns reduces the friction of moving to find better work. A UBI also reduces the level of exploitation of workers, so there would be less workplace induced chronic injury which is a net drain on the country. There will also be improved mental health as people aren't forced to work in dead end jobs just to make ends meet. For the USA specifically, UBI would need to be accompanied by reformation of the health care system, basically completing the implementation of the Affordable Care Act so that health insurance is actually affordable, and not bound to employment. The USA will also need to implement similar systems of regulation of the cost of health care services and products.

dragonwriter 8y ago
> UBI actually injects money into the economy. Not if it is tax funded (EDIT: But, even then, it doesn't pull money out of the economy); it may, however, increase the domestic velocity of money, which has a similar effect to injecting money. > Accompanying UBI would be reducing minimum wage to zero Maybe, maybe not. I think it would be more sensible to reduce minimum wage to it's non-UBI target minus (annual UBI/2000hrs); with a $8000 UBI (about right for poverty support given median household size) and a $15 non-UBI minimum wage target, that would be an $11 minimum wage (with the current $7.25 minimum wage as target, it would be a $3.25 minimum wage.) > managing inflation by increasing income taxes in higher brackets, Using fiscal policy to manage inflation is probably not a great idea; let the Fed do that with monetary policy, and if you raise taxes (whether by raising rates in higher brackets or by taxing capital gains the same as labor income or both), do it for revenue not inflation control.
mises 8y ago
> UBI actually injects money into the economy. Not unless you're printing it; that's the only way to "inject" money. > Accompanying UBI would be reducing minimum wage to zero This is not a "standard part" of all UBI proposals. Some agree; some don't. > managing inflation by increasing income taxes in higher brackets Any specific numbers on who would pay what? I may not be rich now, but I don't really like the idea of having to pay a bunch of taxes if I do become wealthy some day. On the managing inflation part, giving more people more money to spend would make money move around more and quite possibly increase inflation. For an example, let's say I own an apartment building and currently rent a unit at $400/mo. If everyone starts getting $800+/mo, I know I can double my rates without anyone complaining too much. I might not do it all at once, but it seems almost inevitable that this will cause a significant amount of inflation by giving a large class of people more to spend. > reformation of the health care system That seems like a whole other kettle of fish. We do have one of the most innovative health care systems in the world, and I'd hate to see that stifled. I had some bad stuff I needed treatment for, which I'd rather not detail specifically. I talked to others in countries with government healthcare who had the same problem, and had to travel here to get treatment as it's a rare condition with most of the good treatments on the bleeding edge. A friend of a friend's mother was diagnosed with stage 2 breast cancer; told to come back later as it wasn't advanced enough to warrant operation. As someone who's had to rely on treatment not deemed standard by the government, I get twitchy when people mention single-payer etc. Had I been stuck with the treatment prescribed by the gov't, I'd likely be dead. Lastly, regulating health care prices removes incentives to develop really cool new treatments. They may cost more than your average kidney, but some of the knew cancer biologics are amazing. My parents have friends who have gotten amazing results, though they did have to use a significant chunk of their retirement for said results.

dragonwriter 8y ago

> UBI actually injects money into the economy. Not if it is tax funded (EDIT: But, even then, it doesn't pull money out of the economy); it may, however, increase the domestic velocity of money, which has a similar effect to injecting money. > Accompanying UBI would be reducing minimum wage to zero Maybe, maybe not. I think it would be more sensible to reduce minimum wage to it's non-UBI target minus (annual UBI/2000hrs); with a $8000 UBI (about right for poverty support given median household size) and a $15 non-UBI minimum wage target, that would be an $11 minimum wage (with the current $7.25 minimum wage as target, it would be a $3.25 minimum wage.) > managing inflation by increasing income taxes in higher brackets, Using fiscal policy to manage inflation is probably not a great idea; let the Fed do that with monetary policy, and if you raise taxes (whether by raising rates in higher brackets or by taxing capital gains the same as labor income or both), do it for revenue not inflation control.

mises 8y ago

> UBI actually injects money into the economy. Not unless you're printing it; that's the only way to "inject" money. > Accompanying UBI would be reducing minimum wage to zero This is not a "standard part" of all UBI proposals. Some agree; some don't. > managing inflation by increasing income taxes in higher brackets Any specific numbers on who would pay what? I may not be rich now, but I don't really like the idea of having to pay a bunch of taxes if I do become wealthy some day. On the managing inflation part, giving more people more money to spend would make money move around more and quite possibly increase inflation. For an example, let's say I own an apartment building and currently rent a unit at $400/mo. If everyone starts getting $800+/mo, I know I can double my rates without anyone complaining too much. I might not do it all at once, but it seems almost inevitable that this will cause a significant amount of inflation by giving a large class of people more to spend. > reformation of the health care system That seems like a whole other kettle of fish. We do have one of the most innovative health care systems in the world, and I'd hate to see that stifled. I had some bad stuff I needed treatment for, which I'd rather not detail specifically. I talked to others in countries with government healthcare who had the same problem, and had to travel here to get treatment as it's a rare condition with most of the good treatments on the bleeding edge. A friend of a friend's mother was diagnosed with stage 2 breast cancer; told to come back later as it wasn't advanced enough to warrant operation. As someone who's had to rely on treatment not deemed standard by the government, I get twitchy when people mention single-payer etc. Had I been stuck with the treatment prescribed by the gov't, I'd likely be dead. Lastly, regulating health care prices removes incentives to develop really cool new treatments. They may cost more than your average kidney, but some of the knew cancer biologics are amazing. My parents have friends who have gotten amazing results, though they did have to use a significant chunk of their retirement for said results.