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Anything other than direct cash transfers to individual humans is likely to have this effect. Institutions are simply always going to be able to navigate and ta
by anonporridge 5y ago
Anything other than direct cash transfers to individual humans is likely to have this effect. Institutions are simply always going to be able to navigate and take advantage of complex government programs better than real human beings.
UBI or stfu.
Time to try some trickle up economics.
Also, for the love of god, let's stop prioritizing saving "jobs" that may or may not be necessary for civilization and start prioritizing real people's well being.
- ericmcer 5y agoDirect cash still has this effect. $1500 to subsidize rent that is $1500 to property owners.
- asdff 5y agoOnly if you have no rent control and allow property owners to take as much as they are able to off the table short of starving their tenants.
- lotsofpulp 5y agoOr only if you prevent supply from meeting demand.
- nsxwolf 5y agoWhen I was a landlord I found it very difficult to even cover the mortgage, let alone cover association dues and maintenance. I would try to raise the rent a little in between tenants, and it would greatly reduce interest in the listing.
- rvense 5y agoWhy should the rent cover your mortgage?
- germandiago 5y agoBecause people who buy a place would like to reasonably be able to pay something that takes 30 years or similar to pay with the rent itself. That is a reason why you invest in the first place.
- munk-a 5y agoThat's a pretty arbitrary measure though - you're making "free" money either way to pay towards that mortgage while retaining the whole value of the asset while it is gradually purchased. Whether you've got enough to cover mortgage or not doesn't necessarily flip a binary switch making it a good investment or not. Property ownership is a market barred from entry by a high buy in cost to account for some risk - but the risk is rather minimal and most properties are going to be value accruing over time. We can observe this by looking at how cheap general property insurance tends to be (unless you're in a really risky area - i.e. building a house in a flood plain).
- germandiago 5y ago> That's a pretty arbitrary measure though It is, but I think I would find reasonable getting a mortgage if it does not impose a load on my finance by having it rented.
- deleted 5y ago[deleted]
- ethangarofolo 5y agoWhy wouldn't it? We're talking about a mortgage on the rental property itself not on the landlord's personal residence.
- greenshackle2 5y ago> We're talking about a mortgage on the rental property itself not on the landlord's personal residence. Yes. Everyone in this conversation understands that. There's no relation between the amount and terms on your mortgage for your rental property and the market price to rent a given unit. If I take a 20 year mortgage does that mean I should charge more rent than if I took 30 years because my payment is higher? Should I drop rent by half when I'm done paying my mortgage since I no longer have a payment? It's nonsensical. There's especially no reason to expect that rent should cover 100% of the principal fraction of your mortgage payment. Taxes, maintenance, interest, etc. are pure costs which are understandably passed on to tenants. The principal fraction of a mortgage payment is not a cost, it is building your equity. If rent is covering all costs and "only" 50% of the principal fraction of your mortgage payment you're still making a profit. Because you're paying, let's say, $1000 of the mortgage payment with your own money, but you're getting a $2000 increase in equity.
- wizzwizz4 5y agoIt sounds like the bank was doing to you what people are complaining about landlords doing to tenants.
- nsxwolf 5y agoI think it was simply a function of renters in my area having other options at the price point.
- kingkawn 5y agoThe amount of rent people are paying is exorbitant if it covers the mortgage for owning the property.
- giaour 5y agoNormally, rent on a property is significantly less than the monthly payment on a 30-year mortgage on the same property. Where were you renting out spaces where people were willing to tolerate rent that high?
- MisterBastahrd 5y agoWhere does this "normally" occur? A house in my neighborhood would rent for over $3000 a month and cost about $1600 a month in mortgage / insurance / taxes, and that's been my experience when looking at any property anywhere in my entire city.
- giaour 5y agoManhattan, Seattle, the Bay Area. I haven't rented anywhere other than that, so I don't know how it works outside of those markets (which are admittedly unique as far as market fundamentals go). I paid $1400/month for rent on a place in Alameda, CA. The last recorded sale of the property was for ~$400,000 a couple years before I moved in. That mortgage would be ~$2400/month given average interest rates at the time.
- MisterBastahrd 5y agoThat's crazy comparative to most places I've lived. $1400 will get you a 2 bedroom apartment in a run down complex in the DFW area. Right now, $2350 gets you into a doublewide in Alameda.
- deleted 5y ago[deleted]
- pharmakom 5y agoUBI would likely cool the housing market since people would have the resources to try cheaper places.
- anonporridge 5y agoThis is an important point too. Traditionally, humans have to live where they can find a flow of capital via the jobs available. If every human has a baseline flow of capital attached to them specifically, regardless of where they live, it potentially opens up a ton of possibility in where people can live, because they can do less well paying jobs but still live a good life.
- qqqwerty 5y agoIt is also worth comparing this to the current status quo. About ~17% of working age adults in West Virginia are receiving disability benefits[1] vs about 8% for California and New York. The reasons for this are complex, but in short it is likely due to a mixture of cost of living (disability benefits go farther in LOC areas), economic opportunity (disability is "more attractive" when job opportunities are scare), and demographics (older, more blue collar, etc...). But regardless of how or why these discrepancies exist, we have essentially created a system which incentives our population to self-sort geographically based on their ability to contribute economically. That is of course problematic in and of itself, but this also means we have a real life pseudo "UBI experiment" that we can evaluate. And if you look at the data, nearly all of the states with high disability percentages are low cost of living states, particularly when it comes to housing prices. So anyone who complains about how UBI would increase housing costs needs to first account for the fact that large swaths of the working age population are already receiving benefits similar in level to a UBI (disability is about $1600/mo). And despite the higher concentration of beneficiaries in areas like WV, we haven't seen much of any impact in real estate or local inflation. If anything we have seen the opposite. [1] https://www.mathematica.org/dataviz/state-disability-maps https://www.mathematica.org/dataviz/state-disability-maps
- julienb_sea 5y agoAlternatively, UBI would provide a new income stream to literally everyone, increasing everyone's purchasing power. In a pure supply/demand scenario, the equilibrium price of essentially anything will increase accordingly, i.e. inflation. It's a fair point that UBI would result in some shift in market dynamic. But ultimately, most people will still want to get a job to supplement the UBI income, and high demand areas will remain high demand.
- anonporridge 5y agoLand lords still exist in a competitive market and can't arbitrarily raise rents without collusion. One way to alleviate this problem is to have a harsher tax on vacant properties to punish using housing as a store of value and creating artificial scarcity in the market, e.g. like how the DeBeers corporation made diamonds artificially scarce and scammed the world for the past century selling a shiny rock.
- davidw 5y ago> Land lords still exist in a competitive market and can't arbitrarily raise rents without collusion. Well...kind of. It's pretty bad in a lot of places. There aren't enough homes in the places people want to live.
- anonporridge 5y agoThere's a delicate balance of property owners using their power to prevent new construction and densification in an attempt to keep their property values high by preventing competition and going too far where you destroy your local economy because the people who actually do the work can't afford to live there.
- shinryuu 5y agoThat's the trickle-up economics in action! I'd prefer that.
- munk-a 5y agoI've always been a fan of picturing it as "rising tide economics".
- indymike 5y agoPay the landlord, and landlord gets the money and tenant gets evicted. Pay the tenant and the rent gets paid and no one gets evicted. We saw this with the 2009 mortgate crisis - banks got bailed out and evicted homeowners. Had we paid the homeowners, I suspect most would have just brought their mortage current.
- j_walter 5y agoNot if the tenant isn't being required to pay rent. 2 years of government money in the name of COVID assistance and rent help...but nothing that actually meant it went to paying rent. Some tenants simply bought more stuff or saved it while the landlords are still going without rent payments.
- Guest42 5y agoIs there a data source for this claim?
- geoduck14 5y agoEvery newspaper for the past 2 years. The government was THROWING money at people.
- BoiledCabbage 5y agoAnd most of those stories were business owners who used the money on themselves, let the business fold, and walked away. Not what's being argued here.
- Guest42 5y agoThe population received a significant sum of money but I haven’t seen a data set or statistic indicating people buying discretionary goods rather than paying rent.
- koolba 5y agoThere’s many examples of exactly this happening. Here’s one: https://www.npr.org/2021/10/22/1046154251/they-refused-to-pay-rent-and-stole-the-fridge-landlords-deal-with-pandemic-squat https://www.npr.org/2021/10/22/1046154251/they-refused-to-pa... The tenants no doubt received direct stimulus payments and never paid a dime of it in rent. There’s a reason why section 8 et al are paid directly to the landlords.
- SantalBlush 5y agoThis ignores competition between landlords though. If I get a UBI to supplement my income, maybe I can take that job in the smaller town instead of working in the big city. That spreads real estate demand over a much larger area. I'm still not sure whether or not UBI will be a success, but there are some reasonable arguments in its favor.
- gnat 5y agoThat's exactly what happened with student housing subsidies in NZ. Labour were elected and fulfilled a campaign promise by raising the housing allowance by $150 pw. Rents in Wellington rose $150 pw at the same time.
- tragictrash 5y agoDo you have a link to a more in depth article?
- gnat 5y agoHm, government commissioned research says this isn't happening. I may be forced to eat my words. https://www.motu.nz/assets/Documents/our-work/population-and-labour/individual-and-group-outcomes/Accommodation-Supplement-Exec-Summary.pdf https://www.motu.nz/assets/Documents/our-work/population-and... That said: "Larger rent increases were observed among those who received larger increases in accommodation payments."
- qqqwerty 5y agoThis is a bad example. Students are tied geographically to their respective campuses. With a UBI, individuals would be incentivized to relocate to lower cost of living areas to stretch their UBI farther. The fact that housing is in such tight demand in certain areas is not an argument against UBI. To solve that problem we need to build more houses.
- kingkawn 5y agoThose people get a house for the month. That’s what it subsidizes. Landlord gets theirs one way or another.
- the_optimist 5y agoUtterly and laughably wrong. Anything other than basic education and viable community-level institutions is going to have this effect. Play stupid wealth transfer games and win zero dreamy wealth transfer prizes.
- systemvoltage 5y agoWe will see how it fails as California will inevitably try it. It will be a spectacular failure on a monumental scale and a canary in the coal mine.
- the_optimist 5y agoI have no doubt this will be proclaimed to have “worked!” on a small scale. But this is not engineering, this is society, and society scales much differently.
- genousti 5y agoUbi would go into homeowners. Hell at some Point they will raise rent by the ammount of the ubi because they know people can afford at least that
- jlmorton 5y agoIt's far too simplistic to say UBI would go to homeowners. In a supply-constrained environment, it's true that a higher capacity to pay would lead to higher prices, but that's not some general truth. If it were, you could say the same thing about wage increases. Any policy goal seeking higher incomes would be useless: it will all just go to homeowners. Why bother with public education? Sure, it will increase incomes, but it's all just going to go to homeowners.
- wizzwizz4 5y agoSubstitute “homeowners” with “farmers”. It'll all go to food costs. (Yet I don't hear anyone making this argument; what's different about food?)
- mrkentutbabi 5y agoPublic education doesn’t directly increase earning. Learning takes effort. Also you can learn useless stuff that has no demand. UBI is a handout. It takes zero effort you might as well lie down and be a rock.
- jollybean 5y ago"UBI or stfu." "for the love of god, let's stop prioritizing saving "jobs" th" Printing money does not create value and we will generally suffer reduced standard living, some worse than others at least over time. In the long run, the real economy creates vast consumer surpluses which are generally not even really accounted for. We are actually quite a bit richer than we were a generation ago. 'Direct Stimulus' might be better in the very, very short term to stave of serious harm, but in the 'mid term' it can be destructive, and in the long term it will absolutely be destructive. Since the first wave of COVID in Canada, a lot of industries have been trying to open, but people have preferred to take their 'CERB' (direct payments) than work, which has accounted for reduced service and is one of the key drivers of inflation. UBI payments are worthless if there's nobody to stock the shelve and nothing to stock them with.
- anonporridge 5y agoWhen did I say anything about printing money? Don't conflate a policy debate about how we spend the commonwealth with the policy debate about how we collect the commonwealth.
- jollybean 5y ago"When did I say anything about printing money?" Because that's how UBI will have to come into fruition i.e. under the auspices 'MMT' or some other made up term. It's 100% politically impossible to raise taxes on the middle and upper 1/3 to to the extent necessary to pay off the bottom 1/4-1/3 of the population to (mostly) do nothing and that's not even starting to consider the instantaneous shock of inflation that will hit the moment it happens. 0% chance of this happening in any country, any nation, any situation - can't happen. Ergo, the policy has to be hidden into some kind of 'magic money' theory or policy, which will invariably involve a lot of money and credit creation. We're already seeing the effects of this today. That's not to say we can't improve a lot of issues with regards to equality including possibly raising taxes and many other things - but it's far more effective to have people work on doing things of value, like attendants in retirement homes, making meals, then it is to give them free surpluses and have them mostly stay at home. UBI is much like Crypto, an interesting idea that does not add up in any meaningful way in our current context.
- ravenstine 5y agoI'm sure the few elites who own the vast majority of the wealth will agree and implement UBI in a way that doesn't enrich them or hollow out the poor and middle class. /s To be fair, I at least agree in the sense that we need to reexamine this idea of creating/saving jobs as something virtuous in and of itself. I just don't see how there's a lick of chance in overriding human behavior that turns the powerful into opportunists.
- anonporridge 5y ago1) Everyone, even those with extreme wealth, can be helped to see the benefit of raising the floor for everyone. There is a non zero possibility that anyone can lose their wealth, or their children or grandchildren end up losing it. In a world increasing ravaged by automation, UBI is an insurance policy not only for those in need now, but possibly for you and your progeny. 2) Wealthy elites will end up just as poor and desperate if there's no one to buy the output of their companies, rent their properties, or do the real work that keeps civilization running because we fall into a social death spiral as more and more people get left behind and the rumblings of violent revolution grows.
- wyager 5y agoFree handouts don't "raise the floor" in a sustainable, long-term, or asymptotically effective way. Every dollar spent on UBI would yield better returns being invested in essentially any kind of R&D, unless your time preference is very high.
- deleted 5y ago[deleted]
- mlyle 5y agoRight now, there's welfare cliffs and other problems with benefits that make it difficult to climb out of benefit dependency. In turn, current programs incentivize people to not do things that increase their income. https://www.atlantafed.org/economic-mobility-and-resilience/advancing-careers-for-low-income-families/what-are-benefits-cliffs https://www.atlantafed.org/economic-mobility-and-resilience/... A UBI, instead, eliminates these problems and ensures there's always a reason to increase your income. This in turn removes deadweight costs, improves economic efficiency, and can be expected to produce gains that will compound over time. Yes, letting the poor starve to death might be more fiscally efficient, as long as they don't riot or anything. But most don't view this as a reasonable policy option.
- ed25519FUUU 5y agoDidn’t the government just write checks to people? Wasn’t a ton of that money also fraudulently stolen and sent overseas?
- qbasic_forever 5y agoThe fed has written far bigger checks to wallstreet. QE for the last 2 years has been something like 9 _trillion_ dollars injected into banks and companies balances. The ~$3000 in direct cash stimulus to Americans over the same time was only about $800 billion.
- deleted 5y ago[deleted]
- tryitnow 5y agoDespite being an avid supporter of UBI, I had to downvote your comment for the "stfu" part. I have noticed an unfortunate tendency towards fanaticism on the part of many UBI advocates. This fanaticism does not do the cause of UBI any favors - it just gives it the patina of a policy supported by mentally unstable crackpots, when in fact, a lot of excellent, well-balanced minds have advocated for UBI.
- BLKNSLVR 5y agoConsistent rejection / ignoring of: > a lot of excellent, well-balanced minds have advocated for UBI. results in: > tendency towards fanaticism on the part of many UBI advocates
- zjaffee 5y agoAllowing the large and hard to replicate systems of human organization that are American corporations to collapse would be far more damaging than anything else. Even if you give people money to spend, if you let big business collapse domestically all that money will flow to large companies overseas.
- eli_gottlieb 5y ago>Also, for the love of god, let's stop prioritizing saving "jobs" that may or may not be necessary for civilization and start prioritizing real people's well being. The people who've finally managed to increase their wages and take-home pay thanks to the full-employment conditions that started in ~2019 or so might have something to say about that.
- eric_b 5y agoUBI is a pipe-dream. Look what happened when we tried it on a small scale with stimulus to "everyone". Rents went up 20-40% across the board, and demand exceeded supply in most industries. This will happen in any UBI scenario - the cost of goods will rise to meet whatever money people have. The reason is simple - we are not in a post-scarcity society. I don't know why people think we are. Desirable apartments, land, products and myriad other things still follow supply and demand. If you increase demand, and supply stays the same, you will get higher prices. And no, UBI will not encourage companies to increase supply - with what workers will they do it?
- seventytwo 5y agoOk, so now tell us what you believe WILL work. Because we’ve been trying “trickle-down” for 50 years now, and all we have to show is runaway wealth inequality, corporate “personhood”, and international conglomerates that can influence our politics while avoiding our tax.
- postpawl 5y ago"Rents went up 20-40% across the board" I don't think you can blame that on the stimulus. There are tons of other forces driving up prices, including iBuyers and the lack of affordable new construction. The stimulus barely paid a month of rent for most people.
- eric_b 5y agoThe stimulus is absolutely a factor. I agree there are other things pushing on both the demand side of the equation as well as the supply side. But UBI will never increase supply - at best you'd craft it in such a way so as to be neutral (though I don't know how you'd pull this off - someone has to work the crappy jobs) But UBI absolutely will increase demand - and therefore prices until the same equilibrium is met but at a higher price. Basically, the poor will still be poor, but the rich will be poorer too. If a race to the lowest common quality of life is what you want, UBI is the answer. For any other scenario keep looking.
- 5y ago
- ChrisLomont 5y agoThe countries with the best outcomes, as noted in the article, did not give money to individuals, but to businesses. Direct payments to people let them squander it while businesses failed, leaving people unemployed. UBI feeds consumption, not production, and they are not the same thing. Lots of production is B2B and other aspects far removed from the consumption of the pipeline. Throwing a few trillion directly at people is popular but demonstrably not as well spent as other countries showed. "Many governments staved off damage by paying businesses to keep workers employed"
- sbelskie 5y agoWhat country has GDP on a better trend compared to pre-pandemic than the US?
- ChrisLomont 5y agoNot sure why this is relevant, but if by trend you mean higher growth, then over half of countries in the world had larger growth in 2018-2019 [1]. US (growth 2.2%) is 119th out of 202 countries, with Timor-Leste at 19.5% at the top. Lots of big countries also outgrew the US over this period: Vietnam 7%, China 5.9, Ireland 4.9%, Poland, Hungary, India, Israel, UAE, Luxembourg, Ukraine, Latvia, Peru..... It's not like the US was anything special for growth. Did you think the US was the country with the best growth? Or even near the top? [1] https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2019&name_desc=false&start=2018 https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2...
- deleted 5y ago[deleted]
- darkerside 5y agoHonestly, in capitalism, even direct transfers to the poor end up going to the rich when they buy goods and services. Not complaining, just observing.
- mrkentutbabi 5y agoNo UBI or stfu.
- enaaem 5y agoSaudi Arabia have the closest thing to an UBI and Saudi nationals notorious for having bad work ethics and low skills. The economy is pretty much run by foreign workers. The country will be completely doomed if it continues this path and the oil runs out. The government is trying all kind of policies to prevent this. https://en.m.wikipedia.org/wiki/Saudization https://en.m.wikipedia.org/wiki/Saudization
- seventytwo 5y agoAnd you’ve eliminated all the other possible variables?
- iancmceachern 5y agoThis is a bad example with many compounding factors, not just the one variable being UBI. There are many differences between Saudi culture and ours here in the US, many differences in the way in this proposed, etc. Also important to note that this essentially applies to men of Saudi decent only. It is not UBI, it's missing the U.
- dang 5y agoPlease don't post ideological flamewar comments to HN. They make threads predictable, tedious, and usually nasty. We're trying for something different here: thoughtful, curious conversation. To the extent possible on the public internet. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- trasz 5y agoHow is explaining that the problem is inherent to this particular way of doing business a flame war?
- dang 5y agoThe first paragraph was ok, although it was already a generic ideological tangent, which does not make for good HN discussion (https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sort=byDate&type=comment&query=generic%20ideolog%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...). But "UBI or stfu" was pure flamebait and obviously against the site guidelines, especially since UBI is one of the classic generic flamewar topics. (From https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html: "Eschew flamebait. Avoid unrelated controversies and generic tangents.") "Time to try some trickle up economics" is just ideological rhetoric, which is flame fuel. And "for the love of God" is more internet flamey tropiness. All in all, that makes for a bad HN comment.