4 ms·

It may be better to index it to the percentage of total income tax paid by everybody to prevent feedback loops, when higher ubi increases cost of living, increa

by chr1 7y ago

It may be better to index it to the percentage of total income tax paid by everybody to prevent feedback loops, when higher ubi increases cost of living, increasing ubi and eventually driving the whole economy off the cliff. Something like a tax return but calculated not as a percentage of the persons tax but of mean tax. It can start as a very small percentage at the start (1% ~ 1K/year) and then grow as other social payments are folded into it.

gizmo686 7y ago
That still produces a feedback loop. When the economy goes down, people recieve less UBI and therefore spend less, slowing down the economy more. Over the short/medium term, ww want UBI inversly correlated to total income tax (which I would expect is correlated with total economic health), so it can serve a dual purpose as an economic stimulus. Setting the UBI should be a matter of monetery policy set by the Fed, within parameters set by Congress.
- chr1 7y ago
  If economy goes down and you keep printing money not backed by anything, the value of the money goes down and you end up with hyperinflation like in Venezuela or Zimbabwe. So that's a very useful feedback loop: if too many people decide that they want to do art instead of driving trucks, the total income tax will go down, decreasing ubi and making more people to work. If someone invents self driving trucks and starts to get huge profits, ubi goes up, helping the drivers to live while they learn new useful skill.
  - gizmo686 7y ago
    Over the long term, maybe. Over the short term, recessions are still not going to be caused by changes in aggregate behavior; they will continue to be caused by business cycles, so we want to have counter-cyclic forces.
    - chr1 7y ago
      I believe with fixed 20k UBI, that is increasing when income tax decreases, the hyperinflation would happen very quickly (1-2 year) much quicker than the business cycles. But even if i am wrong it is better to start with small and conservative UBI scheme to be safe.

by chr1 7y ago

gizmo686 7y ago

That still produces a feedback loop. When the economy goes down, people recieve less UBI and therefore spend less, slowing down the economy more. Over the short/medium term, ww want UBI inversly correlated to total income tax (which I would expect is correlated with total economic health), so it can serve a dual purpose as an economic stimulus. Setting the UBI should be a matter of monetery policy set by the Fed, within parameters set by Congress.

chr1 7y ago
If economy goes down and you keep printing money not backed by anything, the value of the money goes down and you end up with hyperinflation like in Venezuela or Zimbabwe. So that's a very useful feedback loop: if too many people decide that they want to do art instead of driving trucks, the total income tax will go down, decreasing ubi and making more people to work. If someone invents self driving trucks and starts to get huge profits, ubi goes up, helping the drivers to live while they learn new useful skill.
- gizmo686 7y ago
  Over the long term, maybe. Over the short term, recessions are still not going to be caused by changes in aggregate behavior; they will continue to be caused by business cycles, so we want to have counter-cyclic forces.
  - chr1 7y ago
    I believe with fixed 20k UBI, that is increasing when income tax decreases, the hyperinflation would happen very quickly (1-2 year) much quicker than the business cycles. But even if i am wrong it is better to start with small and conservative UBI scheme to be safe.