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While I think UBI is one of the better solutions to the poverty problem in the US, I think almost any solution to poverty will fall prey to inflation if we don'

While I think UBI is one of the better solutions to the poverty problem in the US, I think almost any solution to poverty will fall prey to inflation if we don't address income inequality. One way to do this is pay ratio caps at companies. It's pretty hard to argue against this: if you really believe that wealth trickles down, then you should have no problem trusting but verifying that.

burrows 6y ago
> While I think UBI is one of the better solutions to the poverty problem in the US, I think almost any solution to poverty will fall prey to inflation if we don't address income inequality. Please define the "poverty problem" in the US. How is an increase in the money supply related to income inequality?
- claudeganon 6y ago
  > How is an increase in the money supply related to income inequality? Go read about whose asses were saved with printed the money during the 2008 financial crisis. Or the 7 trillion bailout fund for corporations that just passed.
  - burrows 6y ago
    Corporate bailouts are bullshit, I agree. But even without bailouts there would still be massive inequality (which I think is fine). Cut spending and abolish the Fed.
- kerkeslager 6y ago
  > Please define the "poverty problem" in the US. Ugh. That's way too complex, and you know it. But I'll try to give you some bullet points: 1. Homelessness 2. Inability to afford healthcare 3. Home ownership being inaccessible to most people 4. Inability to afford childcare 5. Inability to afford education Note how 1, 4, and 5 aren't solvable by providing jobs--these are problems that prevent you from entering the workforce even when jobs are available. Frankly, I don't think you're asking this question in good faith. > How is an increase in the money supply related to income inequality? If you implement UBI, you're essentially also implementing a minimum wage, since companies will have to pay significantly more than UBI. Rather than accept a cut in their own pay to pay workers more, executives will raise the price of goods and services. This effect, across the economy causes inflation. So if you don't find a way to prevent executives raising their own pay to maintain inequality, you get inflation any time you give money to the poor. Economic conservatives tend to overstate this problem, in my opinion--there's nothing preventing you from just raising the UBI proportional to inflation. But historically, minimum wage hasn't tracked inflation, and I worry that UBI would suffer the same problem.
  - jpindar 6y ago
    >since companies will have to pay significantly more than UBI. They would only have to do that if people had to choose between taking the job and getting UBI.
    - kerkeslager 6y ago
      Ehh, not exactly. My personal situation is an example: if UBI were implemented I would quit working immediately to pursue a graduate degree. Granted, that graduate degree would lead me back into the workforce eventually, but at least in the short run, it would take significant incentives to keep me in the workforce if pursuing education instead were an option. I also know someone who works for $20/hour, and pays $12/hour for childcare. $8/hour isn't worth anyone's time in 2020, but they do it because government assistance doesn't pay their bills. If they were receiving a livable UBI, I have no doubt that they would choose to raise their children full time rather than work for an absurdly low wage.
      - burrows 6y ago
        > If they were receiving a livable UBI, I have no doubt that they would choose to raise their children full time rather than work for an absurdly low wage. Having a child isn’t some externality requiring government intervention. Your friend is an adult who choose to allocate their time into child-rearing rather than wage-increasing activities.
gnicholas 6y ago
> One way to do this is pay ratio caps at companies. It's pretty hard to argue against this: if you really believe that wealth trickles down, then you should have no problem trusting but verifying that. That's not what trickle-down economics was ever about, to my understanding. But more importantly, a plan like you suggest would surely increase the user of contractors, rendering these the proposed pay ratio impotent.
- kerkeslager 6y ago
  Yes, there are loopholes that need to be closed. The same as any short description of a complex economic policy. I'm not sure why you think this problem is insurmountable: states already have regulations around who may be considered contractors.
  - gnicholas 6y ago
    States do have rules around considering individuals to be contractors. I don't know of any laws that do the same with regard to contracted companies — for example, the company that employs the people who clean the bathrooms at FB. This seems much harder to overcome with regulations.
ahdeanz 6y ago
This is a classic pre-distribution versus redistribution debate. I’d just note that they are not mutually exclusive strategies and can both be undertaken simultaneously. You can see Sweden has been able to do so but countries like US, France, Germany, UK all have similar levels of inequality before redistribution. The US inequality compared to those countries is primarily due to lack of redistribution: Around ~29 minute mark: https://youtu.be/DCUq5_ERDp8 https://youtu.be/DCUq5_ERDp8
- kerkeslager 6y ago
  I'll just point out that I did not oppose undertaking both simultaneously.
Nasrudith 6y ago
I don't see the connection between inflation and inequality. Inflation is relative currency growth vs true economy size and productivity. Pay ratio caps don't seem that productive in several ways. For one humans are tricky in that they don't just lie down and accept the laws you want that go against what they want and instead undermine and loophole it in ingenius ways. Trivially that would encourage "nesting doll tiered" subsidary companies and contractors to bypass the limits. Second the high end of income wouldn't even be affected as they make their money largely from investments not salary or wages. Even if they got the seed for investments from their high salaries - like every retired athlete who managed to stay rich and even get richer after endorsements dried up.
- kerkeslager 6y ago
  > I don't see the connection between inflation and inequality. Inflation is relative currency growth vs true economy size and productivity. If you implement UBI, you're essentially also implementing a minimum wage, since companies will have to pay significantly more than UBI. Rather than accept a cut in their own pay to pay workers more, executives will raise the price of goods and services. This effect, across the economy causes inflation. So if you don't find a way to prevent executives raising their own pay to maintain inequality, you get inflation any time you give money to the poor. Economic conservatives tend to overstate this problem, in my opinion--there's nothing preventing you from just raising the UBI proportional to inflation. But historically, minimum wage hasn't tracked inflation, and I worry that UBI would suffer the same problem. > For one humans are tricky in that they don't just lie down and accept the laws you want that go against what they want and instead undermine and loophole it in ingenius ways. Trivially that would encourage "nesting doll tiered" subsidary companies and contractors to bypass the limits. This problem exists in any solution, including all the ones that already exist. It should be addressed, but I don't think that's a reasonable criticism of any solution if it applies to all of them. > Second the high end of income wouldn't even be affected as they make their money largely from investments not salary or wages. Even if they got the seed for investments from their high salaries - like every retired athlete who managed to stay rich and even get richer after endorsements dried up. Yes, we'd have to find a way to treat investment income as equivalent to pay in order for this to work.

burrows 6y ago

> While I think UBI is one of the better solutions to the poverty problem in the US, I think almost any solution to poverty will fall prey to inflation if we don't address income inequality. Please define the "poverty problem" in the US. How is an increase in the money supply related to income inequality?

claudeganon 6y ago
> How is an increase in the money supply related to income inequality? Go read about whose asses were saved with printed the money during the 2008 financial crisis. Or the 7 trillion bailout fund for corporations that just passed.
- burrows 6y ago
  Corporate bailouts are bullshit, I agree. But even without bailouts there would still be massive inequality (which I think is fine). Cut spending and abolish the Fed.
kerkeslager 6y ago
> Please define the "poverty problem" in the US. Ugh. That's way too complex, and you know it. But I'll try to give you some bullet points: 1. Homelessness 2. Inability to afford healthcare 3. Home ownership being inaccessible to most people 4. Inability to afford childcare 5. Inability to afford education Note how 1, 4, and 5 aren't solvable by providing jobs--these are problems that prevent you from entering the workforce even when jobs are available. Frankly, I don't think you're asking this question in good faith. > How is an increase in the money supply related to income inequality? If you implement UBI, you're essentially also implementing a minimum wage, since companies will have to pay significantly more than UBI. Rather than accept a cut in their own pay to pay workers more, executives will raise the price of goods and services. This effect, across the economy causes inflation. So if you don't find a way to prevent executives raising their own pay to maintain inequality, you get inflation any time you give money to the poor. Economic conservatives tend to overstate this problem, in my opinion--there's nothing preventing you from just raising the UBI proportional to inflation. But historically, minimum wage hasn't tracked inflation, and I worry that UBI would suffer the same problem.
- jpindar 6y ago
  >since companies will have to pay significantly more than UBI. They would only have to do that if people had to choose between taking the job and getting UBI.
  - kerkeslager 6y ago
    Ehh, not exactly. My personal situation is an example: if UBI were implemented I would quit working immediately to pursue a graduate degree. Granted, that graduate degree would lead me back into the workforce eventually, but at least in the short run, it would take significant incentives to keep me in the workforce if pursuing education instead were an option. I also know someone who works for $20/hour, and pays $12/hour for childcare. $8/hour isn't worth anyone's time in 2020, but they do it because government assistance doesn't pay their bills. If they were receiving a livable UBI, I have no doubt that they would choose to raise their children full time rather than work for an absurdly low wage.
    - burrows 6y ago
      > If they were receiving a livable UBI, I have no doubt that they would choose to raise their children full time rather than work for an absurdly low wage. Having a child isn’t some externality requiring government intervention. Your friend is an adult who choose to allocate their time into child-rearing rather than wage-increasing activities.

gnicholas 6y ago

> One way to do this is pay ratio caps at companies. It's pretty hard to argue against this: if you really believe that wealth trickles down, then you should have no problem trusting but verifying that. That's not what trickle-down economics was ever about, to my understanding. But more importantly, a plan like you suggest would surely increase the user of contractors, rendering these the proposed pay ratio impotent.

kerkeslager 6y ago
Yes, there are loopholes that need to be closed. The same as any short description of a complex economic policy. I'm not sure why you think this problem is insurmountable: states already have regulations around who may be considered contractors.
- gnicholas 6y ago
  States do have rules around considering individuals to be contractors. I don't know of any laws that do the same with regard to contracted companies — for example, the company that employs the people who clean the bathrooms at FB. This seems much harder to overcome with regulations.

ahdeanz 6y ago

This is a classic pre-distribution versus redistribution debate. I’d just note that they are not mutually exclusive strategies and can both be undertaken simultaneously. You can see Sweden has been able to do so but countries like US, France, Germany, UK all have similar levels of inequality before redistribution. The US inequality compared to those countries is primarily due to lack of redistribution: Around ~29 minute mark: https://youtu.be/DCUq5_ERDp8 https://youtu.be/DCUq5_ERDp8

kerkeslager 6y ago
I'll just point out that I did not oppose undertaking both simultaneously.

Nasrudith 6y ago

I don't see the connection between inflation and inequality. Inflation is relative currency growth vs true economy size and productivity. Pay ratio caps don't seem that productive in several ways. For one humans are tricky in that they don't just lie down and accept the laws you want that go against what they want and instead undermine and loophole it in ingenius ways. Trivially that would encourage "nesting doll tiered" subsidary companies and contractors to bypass the limits. Second the high end of income wouldn't even be affected as they make their money largely from investments not salary or wages. Even if they got the seed for investments from their high salaries - like every retired athlete who managed to stay rich and even get richer after endorsements dried up.

kerkeslager 6y ago
> I don't see the connection between inflation and inequality. Inflation is relative currency growth vs true economy size and productivity. If you implement UBI, you're essentially also implementing a minimum wage, since companies will have to pay significantly more than UBI. Rather than accept a cut in their own pay to pay workers more, executives will raise the price of goods and services. This effect, across the economy causes inflation. So if you don't find a way to prevent executives raising their own pay to maintain inequality, you get inflation any time you give money to the poor. Economic conservatives tend to overstate this problem, in my opinion--there's nothing preventing you from just raising the UBI proportional to inflation. But historically, minimum wage hasn't tracked inflation, and I worry that UBI would suffer the same problem. > For one humans are tricky in that they don't just lie down and accept the laws you want that go against what they want and instead undermine and loophole it in ingenius ways. Trivially that would encourage "nesting doll tiered" subsidary companies and contractors to bypass the limits. This problem exists in any solution, including all the ones that already exist. It should be addressed, but I don't think that's a reasonable criticism of any solution if it applies to all of them. > Second the high end of income wouldn't even be affected as they make their money largely from investments not salary or wages. Even if they got the seed for investments from their high salaries - like every retired athlete who managed to stay rich and even get richer after endorsements dried up. Yes, we'd have to find a way to treat investment income as equivalent to pay in order for this to work.