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Near zero. Few are really portraying how expensive this is. $1k a month for every American is just under 4 trillion dollars. For every adult American it would b

Near zero. Few are really portraying how expensive this is. $1k a month for every American is just under 4 trillion dollars. For every adult American it would be just under 2.5 trillion. Currently, the entire federal budget is 3.8 trillion dollars. The GDP is 19.5 trillion. We're looking to spend an amount equivalent to the entire federal budget or 10-20% of the whole country's GDP on UBI. Yang's attempt to portraying this as fiscally feasible is based on the assumption that UBI will automagically result in extreme economic growth.

bargl 8y ago
He actually does a really good job breaking down where he plans for each dollar to come from. For a candidate to have a dollar by dollar break down to account for his plan is something I don't remember seeing. While I can't say his plan is feasible, I can say at least he has one.
CompelTechnic 8y ago
Reminds me of Sanders' assumption that his economic policies would result in 5% GDP growth for 10 years straight... whew!
systematical 8y ago
He proposes a value-added tax to raise much of the money. Next, you can't receive both social security and the UBI. Other social welfare programs can't be utilized a long with the UBI either. If for instance you're receiving $400 in food stamps, you only get $600 in UBI. With that said, yes, he is relying on this boosting the economy (tax revenue) to pay for the rest.
- manfredo 8y ago
  The money comes from somewhere. No matter how you slice it, we're going from ~25% government revenue as a percentage of GDP to mid 30s or as high as 45% of GDP sent to the government. Only 3rd world countries and some small European States have that kind of tax/GDP ratio. For reference, Canada is 31%. So the plan is to pass one of the biggest tax hikes in US history (probably the biggest one during peace time) and then keeping our fingers crossed hoping for rapid, consistent economic growth following said massive tax increase. I think I'll pass.
  - rosser 8y ago
    The money goes somewhere, too, though. That "tax hike" would almost all get spent, and probably pretty quickly, because the overwhelming majority of it would be going to people who live close enough to hand-to-mouth that the differences are academic. So is that pulling $3T/year out of the economy or pumping most of $3T/year into it?
    - manfredo 8y ago
      It's both: we're taking 3trn a year out of the economy and putting 3 trillion a year into the hands of Americans. Maybe they'll turn around and spend it. Maybe they won't. Perhaps you're right and every cent of the UBI goes back into the economy - but in that case it's still only neutral in terms of economic impact (and even this scenario is fanciful, there's going to be overhead in terms of administration and not everyone is going to spend their UBI check). It's an even bigger leap to think that siphoning $3T out of the economy somehow puts more than 3T back in - and that's what Yang is counting on. Step 1. Pass 3T worth of taxes and spending cuts. Step 2. Give everyone $1k a month. Step 3. ??? Step 4. Poverty disappears, the economy grows by leaps and bounds. It's a utopian vision. Tantalizing, yes I can empathize with people who like it. But let's not forget that Utopia comes from the Greek words "not" and "place". A utopia is something we all desire but does not exist. The pursuit of which has led many societies to ruin.
      - rosser 8y ago
        I think the position is that whatever fraction of that $3T that gets spent at the bottom of the economy will contribute more to the economy overall than it would have sitting in the bank accounts of whoever "paid" the tax, simply on the basis that so much more of it will be spent that way. Yes, it's less than $3T. It's still circulating. A moving dollar is more economically useful than one at rest, isn't it? If we're going to premise the "health" of our economy in no small part on the movement of monkey status points, then move the things. It's "trickle-up", not "trickle-down"...
        manfredo 8y ago
SubiculumCode 8y ago
I have not seen claims by Yang that this will be paid for by growth. Please cite your reference. It would be paid for by a value added tax of 10%.
- systematical 8y ago
  Reference is from interviews, alluded to on his policy page "A Universal Basic Income at this level would permanently grow the economy by 12.56 to 13.10 percent—or about $2.5 trillion by 2025—and it would increase the labor force by 4.5 to 4.7 million people. Putting money into people’s hands and keeping it there would be a perpetual boost and support to job growth and the economy."
  - nailer 8y ago
    Saying UBI would grow the economy is not the same thing as saying that UBI growth would pay for UBI. My understanding is that Yang doesn't include it in the 3tn - most comes from replacing existing welfare programs and VAT.
    - manfredo 8y ago
      He definitely did say that UBI is going to pay for UBI. He factored projected economic growth into the budget.
Reedx 8y ago
That's not how he portrays it though: The means to pay for a Universal Basic Income will come from 4 sources: 1. Current spending. We currently spend between $500 and $600 billion a year on welfare programs, food stamps, disability and the like. This reduces the cost of Universal Basic Income because people already receiving benefits would have a choice but would be ineligible to receive the full $1,000 in addition to current benefits. 2. A VAT. Our economy is now incredibly vast at $19 trillion, up $4 trillion in the last 10 years alone. A VAT at half the European level would generate $800 billion in new revenue. A VAT will become more and more important as technology improves because you cannot collect income tax from robots or software. 3. New revenue. Putting money into the hands of American consumers would grow the economy. The Roosevelt Institute projected that the economy would grow by approximately $2.5 trillion and create 4.6 million new jobs. This would generate approximately $500 – 600 billion in new revenue from economic growth and activity. 4. We currently spend over one trillion dollars on health care, incarceration, homelessness services and the like. We would save $100 – 200 billion as people would take better care of themselves and avoid the emergency room, jail, and the street and would generally be more functional. Universal Basic Income would pay for itself by helping people avoid our institutions, which is when our costs shoot up. Some studies have shown that $1 to a poor parent will result in as much as $7 in cost-savings and economic growth. From https://www.yang2020.com/what-is-ubi/ https://www.yang2020.com/what-is-ubi/
- manfredo 8y ago
  I don't see how he's portraying it differently. He's still essentially banking on some utopian vision actually coming true. Replacing welfare? Sure we may be able to decrease it, but what are we gonna do with the minority of people that squander their UBI check? Let them starve? His VAT proposal isn't even on the same order of magnitude of what it would take to pay for the program. Heck, even if you add up the proposed VAT tax and all the purported savings it doesn't even add up to the cost of the UBI checks let alone the administrative overhead: (5-6bn in welfare cuts) + (8bn in vat) + (5-6bn in magic economic growth) + (1-2bn in cutting stuff he doesn't really elaborate on) = (1.8-2.1trn). So even if all his fantastic predictions come true we're still short of the 3.1 trillion to give 1k UBI checks to all ~260m adult Americans.
beat 8y ago
Median income is currently a bit over $30k. I can't see how you can make the assumption that increasing median income by 30% or so would not result in extreme economic growth. There's nothing automagical about it. It's plainly obvious, and unreasonable to assume the opposite.
- AnimalMuppet 8y ago
  Real growth? Or just inflation? Then there's the little matter that the money comes from somewhere. Moving $3T from one pocket to another may not result in any growth at all. (Ironically, if Yang were irresponsible, and weren't going to pay for this program, then this objection would not apply.)
  - beat 8y ago
    All economic growth comes from money moving somewhere. It just seems absurd to me to think "may not result in any growth at all". Money in the hands of the poor and middle class moves faster than money in the hands of the rich, and thus creates more actual business. This is a well-understood economic fact.
    - AnimalMuppet 8y ago
      But it wasn't going to be taken out of the hands of the rich to pay for this. It was going to come from a VAT, and from existing welfare. But existing welfare is taking it from the poor, and the VAT is taking it from businesses and people who buy stuff. It's largely not coming from the rich. So even by your second paragraph, it's unclear that this is going to cause actual growth.
      - beat 8y ago
        Think about the math. Is a VAT actually going to take a third of the income of the average wage earner? No, no it will not.
        8y ago

bargl 8y ago

He actually does a really good job breaking down where he plans for each dollar to come from. For a candidate to have a dollar by dollar break down to account for his plan is something I don't remember seeing. While I can't say his plan is feasible, I can say at least he has one.

CompelTechnic 8y ago

Reminds me of Sanders' assumption that his economic policies would result in 5% GDP growth for 10 years straight... whew!

systematical 8y ago

He proposes a value-added tax to raise much of the money. Next, you can't receive both social security and the UBI. Other social welfare programs can't be utilized a long with the UBI either. If for instance you're receiving $400 in food stamps, you only get $600 in UBI. With that said, yes, he is relying on this boosting the economy (tax revenue) to pay for the rest.

manfredo 8y ago
The money comes from somewhere. No matter how you slice it, we're going from ~25% government revenue as a percentage of GDP to mid 30s or as high as 45% of GDP sent to the government. Only 3rd world countries and some small European States have that kind of tax/GDP ratio. For reference, Canada is 31%. So the plan is to pass one of the biggest tax hikes in US history (probably the biggest one during peace time) and then keeping our fingers crossed hoping for rapid, consistent economic growth following said massive tax increase. I think I'll pass.
- rosser 8y ago
  The money goes somewhere, too, though. That "tax hike" would almost all get spent, and probably pretty quickly, because the overwhelming majority of it would be going to people who live close enough to hand-to-mouth that the differences are academic. So is that pulling $3T/year out of the economy or pumping most of $3T/year into it?
  - manfredo 8y ago
    It's both: we're taking 3trn a year out of the economy and putting 3 trillion a year into the hands of Americans. Maybe they'll turn around and spend it. Maybe they won't. Perhaps you're right and every cent of the UBI goes back into the economy - but in that case it's still only neutral in terms of economic impact (and even this scenario is fanciful, there's going to be overhead in terms of administration and not everyone is going to spend their UBI check). It's an even bigger leap to think that siphoning $3T out of the economy somehow puts more than 3T back in - and that's what Yang is counting on. Step 1. Pass 3T worth of taxes and spending cuts. Step 2. Give everyone $1k a month. Step 3. ??? Step 4. Poverty disappears, the economy grows by leaps and bounds. It's a utopian vision. Tantalizing, yes I can empathize with people who like it. But let's not forget that Utopia comes from the Greek words "not" and "place". A utopia is something we all desire but does not exist. The pursuit of which has led many societies to ruin.
    - rosser 8y ago
      I think the position is that whatever fraction of that $3T that gets spent at the bottom of the economy will contribute more to the economy overall than it would have sitting in the bank accounts of whoever "paid" the tax, simply on the basis that so much more of it will be spent that way. Yes, it's less than $3T. It's still circulating. A moving dollar is more economically useful than one at rest, isn't it? If we're going to premise the "health" of our economy in no small part on the movement of monkey status points, then move the things. It's "trickle-up", not "trickle-down"...
      - manfredo 8y ago

SubiculumCode 8y ago

I have not seen claims by Yang that this will be paid for by growth. Please cite your reference. It would be paid for by a value added tax of 10%.

systematical 8y ago
Reference is from interviews, alluded to on his policy page "A Universal Basic Income at this level would permanently grow the economy by 12.56 to 13.10 percent—or about $2.5 trillion by 2025—and it would increase the labor force by 4.5 to 4.7 million people. Putting money into people’s hands and keeping it there would be a perpetual boost and support to job growth and the economy."
- nailer 8y ago
  Saying UBI would grow the economy is not the same thing as saying that UBI growth would pay for UBI. My understanding is that Yang doesn't include it in the 3tn - most comes from replacing existing welfare programs and VAT.
  - manfredo 8y ago
    He definitely did say that UBI is going to pay for UBI. He factored projected economic growth into the budget.

Reedx 8y ago

That's not how he portrays it though: The means to pay for a Universal Basic Income will come from 4 sources: 1. Current spending. We currently spend between $500 and $600 billion a year on welfare programs, food stamps, disability and the like. This reduces the cost of Universal Basic Income because people already receiving benefits would have a choice but would be ineligible to receive the full $1,000 in addition to current benefits. 2. A VAT. Our economy is now incredibly vast at $19 trillion, up $4 trillion in the last 10 years alone. A VAT at half the European level would generate $800 billion in new revenue. A VAT will become more and more important as technology improves because you cannot collect income tax from robots or software. 3. New revenue. Putting money into the hands of American consumers would grow the economy. The Roosevelt Institute projected that the economy would grow by approximately $2.5 trillion and create 4.6 million new jobs. This would generate approximately $500 – 600 billion in new revenue from economic growth and activity. 4. We currently spend over one trillion dollars on health care, incarceration, homelessness services and the like. We would save $100 – 200 billion as people would take better care of themselves and avoid the emergency room, jail, and the street and would generally be more functional. Universal Basic Income would pay for itself by helping people avoid our institutions, which is when our costs shoot up. Some studies have shown that $1 to a poor parent will result in as much as $7 in cost-savings and economic growth. From https://www.yang2020.com/what-is-ubi/ https://www.yang2020.com/what-is-ubi/

manfredo 8y ago
I don't see how he's portraying it differently. He's still essentially banking on some utopian vision actually coming true. Replacing welfare? Sure we may be able to decrease it, but what are we gonna do with the minority of people that squander their UBI check? Let them starve? His VAT proposal isn't even on the same order of magnitude of what it would take to pay for the program. Heck, even if you add up the proposed VAT tax and all the purported savings it doesn't even add up to the cost of the UBI checks let alone the administrative overhead: (5-6bn in welfare cuts) + (8bn in vat) + (5-6bn in magic economic growth) + (1-2bn in cutting stuff he doesn't really elaborate on) = (1.8-2.1trn). So even if all his fantastic predictions come true we're still short of the 3.1 trillion to give 1k UBI checks to all ~260m adult Americans.

beat 8y ago

Median income is currently a bit over $30k. I can't see how you can make the assumption that increasing median income by 30% or so would not result in extreme economic growth. There's nothing automagical about it. It's plainly obvious, and unreasonable to assume the opposite.

AnimalMuppet 8y ago
Real growth? Or just inflation? Then there's the little matter that the money comes from somewhere. Moving $3T from one pocket to another may not result in any growth at all. (Ironically, if Yang were irresponsible, and weren't going to pay for this program, then this objection would not apply.)
- beat 8y ago
  All economic growth comes from money moving somewhere. It just seems absurd to me to think "may not result in any growth at all". Money in the hands of the poor and middle class moves faster than money in the hands of the rich, and thus creates more actual business. This is a well-understood economic fact.
  - AnimalMuppet 8y ago
    But it wasn't going to be taken out of the hands of the rich to pay for this. It was going to come from a VAT, and from existing welfare. But existing welfare is taking it from the poor, and the VAT is taking it from businesses and people who buy stuff. It's largely not coming from the rich. So even by your second paragraph, it's unclear that this is going to cause actual growth.
    - beat 8y ago
      Think about the math. Is a VAT actually going to take a third of the income of the average wage earner? No, no it will not.
      - 8y ago