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Yes, of course giving people money makes their lives better. It especially works when a very small subset of the population receives such treatment, such that t

Yes, of course giving people money makes their lives better. It especially works when a very small subset of the population receives such treatment, such that their relative income is higher than those outside the experiment. The issue with UBI is that enacting it at scale has two huge problems: 1. Financing it. These programs are monumentally expensive. You need to get the money from somewhere. The easiest place to take it is via the money printer and the second is from the rich. If you do it via the money printer, it's a self-own in terms of inflationary impact. If you do it by taxing the rich, you wind up hobbling and punishing your most productive citizens. Look at China's economic situation right now to see how ultimately unproductive that can be. 2. Diminishing effects. A bit more money is great when everybody else in your local economy didn't get it. But when everybody gets it, things just become more expensive. The USA did this during the COVID era. We basically implemented UBI. We expanded the M1 money supply from $4T to $18T and largely handed it out in a diffuse way. For the first 6 months it was awesome. And then shortages started spiking and inflation started creeping in. We ultimately had to roll it back. I don't think these problems are fundamentally solvable. Instead, we should foster competition, incentivize innovation, and let markets do their thing. This will create lower prices for basic goods and create employment opportunities so people can have what they need for cheap, under the financing of their own effort.

tnel77 3y ago
While I agree with many of your points, I feel like blaming item shortages on COVID payments is ignoring the massive impacts that panic buying and shutting down ports and factories had on the situation. Yes there was more money floating around, but people were purchasing items like it was the end of days and we had factories worldwide shuttering randomly due to COVID outbreaks and various government mandates which threw supply chains out of wack.
- CityOfThrowaway 3y ago
  You're right, the problem in the US was multi-causal. I mention that case because it is probably the best large-scale deployment of a UBI-like program any country has ever done. While we can't completely untangle the exact contribution magnitude, I think we can deduce that at least some meaningful % of the shortage/inflation situation was caused by the UBI-like program.
  - tnel77 3y ago
    I would agree with that. I wish there was a way to know how much though. There was an undeniable impact of giving people “free money,” but it doesn’t seem like most Americans received very much. Most of the people I know of received their 2-3 checks and that’s it. You’d see news articles two years into the pandemic saying things like “Americans finally running out of stimulus money.” It made me laugh because it seemed like most people spent that money crazy fast on their bills and very few people were able to actually pocket that cash.
    - Izkata 3y ago
      It was the people working close to minimum wage that were most affected - it was common to see small business owners unable to get workers to return because these payments were higher than they were making on the job. I think this would be the most likely outcome: basic income means no longer needing to work, and even if it just covers the essentials I think a lot more people are going to go that route than most expect.
  - andrepd 3y ago
    How do short lived and small stimulus checks even remotely resemble UBI?
criddell 3y ago
> The USA did this during the COVID era. Japan has being doing this for decades now and, AFAIK, there hasn't been any terrible consequences. What are they doing differently? imf.org says Japan's dept to GDP ratio is 214% and the US' is 110%.
- phmqk76 3y ago
  Japan’s story is different - Japan has been battling deflation for decades at least partially as a result of a rapidly aging population with zero desire to import workers. Which is not a judgment of Japan, which instead chose to provide a much higher per capita stimulus to its people with a focus on the quality of life of the average citizen.
- jimbokun 3y ago
  Japan's GDP today is roughly the same as it was in 1995: https://www.statista.com/statistics/263578/gross-domestic-product-gdp-of-japan/ https://www.statista.com/statistics/263578/gross-domestic-pr...
  - criddell 3y ago
    That's pretty remarkable considering their aging population.
- rspoerri 3y ago
  japan is mostly in depth to its own residents, while the us is owned by china. update: first thing remains true. but china owns less parts of the us depth by now, its more distributed among other countries.
  - deleted 3y ago
    [deleted]
- dilyevsky 3y ago
  Perhaps not the best example to pick - https://en.m.wikipedia.org/wiki/Lost_Decades https://en.m.wikipedia.org/wiki/Lost_Decades
zooq_ai 3y ago
Bravo!
lazyasciiart 3y ago
I don’t think any of that is correct.
phmqk76 3y ago
Your comment beats me to it! I used to be in favor of UBI, but every point you make is valid. And the so-called Modern Monetary Theory of printing unlimited sums of money without triggering inflation either doesn’t work conceptually, or requires too many ancillary policy changes to ever be an option. I think a good solution looks more like good old-fashioned workers rights laws that we see in Europe, which includes sector-level wage bargaining. And I would also like to see a federal jobs guarantee that would cause upwards wage pressure in the private sector, while providing a livable minimum wage for all who are able to work.
b450 3y ago
This strikes me (a total ignoramus) as the generally balanced and correct take. One question I have is, how much of that inflationary period has been due to supply issues that would have occurred regardless of stimulus checks? I share your skepticism about the "lol just tax the rich" approach. I'm not sure how true it is that taxes "hobble our most productive citizens" (what are you alluding to about china?), I generally just think rich people inevitably outmaneuver the government trying to tax them, and that rich people really shouldn't be "earning" that much to begin with (because I think their earnings in most cases has fuck-all to do with their actual "productivity"). I imagine there are plenty of smart people who have thought up other ways of socializing the fruits of economic growth in, idk, better ways.
AnthonyMouse 3y ago
> Financing it. These programs are monumentally expensive. You need to get the money from somewhere. The easiest place to take it is via the money printer and the second is from the rich. This is not actually that hard because they're only expensive on paper. Right now you have a slew of means tested programs with phase outs that amount to high marginal tax rates on the poor. Meanwhile we try to do the opposite with the tax system and have higher marginal rates on the rich. These largely cancel out, if not impose higher marginal rates on the poor than the rich. With a UBI you can use a flat tax system because the UBI rather than the tax system is what makes it progressive, which has the added benefit of simplifying the tax system. Then everyone is paying the same tax rate, which puts a higher "tax rate" on low and middle income people but only on paper, because you've eliminated the benefits phase outs and they get to keep the UBI, which more than offsets it. The result is that you have a small tax increase on the rich and a small increase in transfer payments to the poor/middle class, but the main benefit is the dramatic increase in simplicity and the reduction in bureaucracy and administrative overhead for administering all of the separate programs it would replace. > Diminishing effects. A bit more money is great when everybody else in your local economy didn't get it. But when everybody gets it, things just become more expensive. Except that the average person doesn't actually have any more money, since it's all transfer payments. Someone making $30,000 got some additional money but someone making $70,000, even though they do receive the UBI, has still received less money than they paid in tax to fund it. And this is what already happens, but much less efficiently, through various existing means-tested programs that would no longer be needed.
- CityOfThrowaway 3y ago
  What you're saying might be true. My sense is that the political project of doing a full-on tax-and-entitlement reform that results in a more sane system is impossible in the US. At the ideological/theoretical level, I absolutely believe that there exists a radically more optimal way distribute the existing tax burden and funds. But at the practical level, I think we have to do the equivalent of a long-term refactor. Any changes we make must be within the existing system and make sense on their own. Our only real option is to steer our way, digestible diff-by-digestible diff, to a better future.
logicfiction 3y ago
> If you do it by taxing the rich, you wind up hobbling and punishing your most productive citizens We may have different definitions of "rich" here. I don't think you can call them the most productive citizens. I think most extractive would be the more accurate label. And the stimulus checks were short lived, not universally distributed, and came in under $1T. The majority of the money spent was on other sources, even if you want to include the boosts to unemployment in the "UBI" category. As others mentioned it's also conflated with other factors like supply chain failures and massive business loan fraud.
BitwiseFool 3y ago
>"Yes, of course giving people money makes their lives better. It especially works when a very small subset of the population receives such treatment, such that their relative income is higher than those outside the experiment." I've never seen a UBI experiment which demands that the participants pay more in taxes and forfeit all other welfare benefits in exchange for the payment. Every "experiment" so far has been measuring the happiness impact of the upsides without any of the downsides that would be necessary to make the program work.
- AnthonyMouse 3y ago
  The payment would already disqualify you from a significant proportion of existing benefits, because they're means tested and now you have more money. Meanwhile the net tax increase would only be on people at higher income levels, but that would be offset by not having to fund those means tested programs anymore, and further offset by receiving the UBI themselves. And maybe we could measure some negative impact if someone making $100,000/year had to pay $5000 more in net taxes than they do now, but maybe we're not that concerned about a small impact on someone who already makes a lot of money.
- Izkata 3y ago
  They also have an explicit end date so people know they need to keep working and can't just rely on it.
mrbgty 3y ago
Yeah. The easier money is to get, the more willing people are to pay higher prices. There might be a 0 to 1 issue (people stuck at 0 need some kind of traction) that is at least improved in a practical sense with a small UBI although we still need productivity to continue increasing in order to drive prices down
5350-uiop-1130 3y ago
> You need to get the money from somewhere. The easiest place to take it is via the money printer and the second is from the rich. universal basic dividends. a % of shares in all companies should go into a public equity fund. dividends from this fund are then distributed to everyone equally. we already contribute to the wealth of these companies, if we search on Google or post on Twitter, why should we not get a share in the success of those companies?
ajross 3y ago
> The easiest place to take it is via the money printer FWIW: the easiest way to get people to throw you into a "junk economics" bin is to use terms like this. "Printing money" is, at best, an inside-the-echo-chamber shorthand for macroeconomic finance policy that is only going to confuse real economists trying to understand what you're talking about. Most of the time, though, it's just a signal that you don't know what you're talking about.
- Turing_Machine 3y ago
  This argument seems rather disingenuous. Are they literally printing money? No, not to any significant degree. They're not running the presses 24/7/365 or anything like that. Perhaps, though, you'd care to explain how, if you grow M1 from $4T to $18T, it matters whether you do it with physical printing presses or pushing buttons on a keyboard. The overall effect is the same. In fact, the printing press method would be less impactful. There's a physical limit on how fast a mechanical press can run. With the keyboard method, you just have to type in a few more zeros at the end.
  - ajross 3y ago
    > Are they literally printing money? No, not to any significant degree. Right. So talk about what they are actually doing, be it routine deficit financing (not "printing" under any reasonable definition) or QE (arguably I guess, depending on how you want to spin the repurchase scheduling). Under no circumstances does the government actually create money "out of thin air". Which under some circumstances is fine. If you're discussing a political topic with a bunch of like-minded gold standard fans (or whatever), then you can use this as a shorthand for "the fiat currency policy we all hate". And no one is confused. But THIS subthread is actually talking about financing public policy. So trying to shorthand the issue away is just a rhetorical trick. If you want to argue against public financing of a UBI, you have to do more than just shout "Money Printing!". Edit, because I missed this bit: > if you grow M1 from $4T to $18T I shouldn't have replied. That's a 100% bad faith argument, owing to a redefinition of the M1 money supply in May 2020 (to include "savings" accounts, which were previously ignored) that created a big discontinuity in the graph. You can argue that the new measurement is better or worse than the old, you can't use a delta between them as "growth". That's just a lie, and you should know better.
exe34 3y ago
How much of the 14T was in stimulus checks and how much was corporate welfare?
tsbinz 3y ago
> We expanded the M1 money supply from $4T to $18T and largely handed it out in a diffuse way. This is often quoted and either comes out of ignorance or is intentionally misleading. Assuming it's the former, M1 in the US is not a good measure over the time span you are quoting, because there has been an accounting change that significantly expands of what kind of accounts are considered to be in M1. See the description below the graph of https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL and the notification in https://www.federalreserve.gov/feeds/h6.html#2746 https://www.federalreserve.gov/feeds/h6.html#2746 (the item from December 17, 2020 in case the anchor doesn't work properly). If you want to make arguments about monetary supply in that time period, it's better to use M2.
- inyourtenement 3y ago
  Agreed, but this is such a red flag that a commenter is not thinking critically. Do they really think we quadrupled the money supply in a short time? And the only effect was 10% inflation? Usually that would disprove all of their other assumptions about the relationship between the money printer and inflation.
  - Detrytus 3y ago
    Yes, M1 money supply did quadruple in a short time, you can see it on one of the FED banks site: https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL Fortunately, the result was "asset inflation", i.e. most of that money went to stock market raising stock prices. That's why consumer goods inflation was so low.
    - inyourtenement 3y ago
      This is false, and is explained by the block of text below that chart. The definition of M1 was changed. Notice the addition of savings and money market accounts. Thank you for demonstrating the lack of critical thinking I was describing. > Before May 2020, M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other checkable deposits (OCDs), consisting of negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, share draft accounts at credit unions, and demand deposits at thrift institutions. > Beginning May 2020, M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other liquid deposits, consisting of OCDs and savings deposits (including money market deposit accounts). Seasonally adjusted M1 is constructed by summing currency, demand deposits, and OCDs (before May 2020) or other liquid deposits (beginning May 2020), each seasonally adjusted separately.
DonaldFisk 3y ago
> 1. Financing it. These programs are monumentally expensive. You need to get the money from somewhere. Depends on the level it's set at, but as it's "Basic" it would just cover basic needs. It would replace unemployment benefit, the non-contributory portion of old age pensions, child benefit, and maybe a few other things. It would also simplify bureaucracy - no need to assess people's circumstances. There have been pilot programmes which showed other benefits, e.g. the Dauphin experiment resulted in improvements in people's health, and a recent experiment in Kenya resulted in people setting up businesses, boosting the local economy. Yes, rich people would get it too, but that would be paid for through increases in higher rates of income tax.
- giantg2 3y ago
  Basic needs are costly, and the programs you mention do not completely cover basic needs. For things like social security, people spend something like half a lifetime paying into it inorder to recieve relatively small payments for a short portion of their life. Child benefits and unemployment are also short duration. I have no doubt that eliminating programs and bureaucracy will lead to better efficiency. However, I'm not convinced it will be cheaper. I also question the efficacy if the money is less targeted towards those who need it most. It seems the tests are not addressing the aspect of removing other services.
  - DonaldFisk 3y ago
    > Basic needs are costly, and the programs you mention do not completely cover basic needs. If they don't cover basic needs they aren't fit for their intended purpose and should be increased so that they do cover them, if they aren't replaced by UBI.
    - giantg2 3y ago
      There are other programs that in combination do cover basic needs for those that qualify by need. You're not going to be able to replacement CHIP and Medicaid with UBI. At least not without extensive bureaucracy on the tax side.
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analognoise 3y ago
>If you do it by taxing the rich, you wind up hobbling and punishing your most productive citizens. Here's where I call BS. >Look at China's economic situation right now to see how ultimately unproductive that can be. Isn't it a wee bit apples/oranges to say this about a totalitarian communist country with a converging set of issues (population pyramid, needs to import food, stressed water reserved, pollution)... nah it's definitely the rich people, we need to protect them! /s
EA-3167 3y ago
There's a third problem that people perennially ignore: once you institute it, even if circumstances change dramatically, it's politically untenable to stop the program. Even putting aside inflation, even putting aside financing it, this is a tiger you can't dismount. I feel like that reality and its implications are missing from most discussions of UBI, not to mention the inverse: it becomes politically beneficial to give away more money, even if it isn't sustainable.
ryandvm 3y ago
> The USA did this during the COVID era. We basically implemented UBI. We expanded the M1 money supply from $4T to $18T and largely handed it out in a diffuse way. For the first 6 months it was awesome. And then shortages started spiking and inflation started creeping in. We ultimately had to roll it back. Yup. And don't forget where most of that money finally ended up - as absolutely massive corporate windfalls. That COVID money went through the economy like shit through a goose and ended up where it always does, in the hands of those that are good at making money.
- andrepd 3y ago
  >And don't forget where most of that money finally ended up - as absolutely massive corporate windfalls So... it wasn't UBI at all? :) > and ended up where it always does, in the hands of those that are good at making money I think you mean "in the hands of our most productive citizens" ahaha
tr_user 3y ago
> If you do it by taxing the rich, you wind up hobbling and punishing your most productive citizens. Look at China's economic situation right now to see how ultimately unproductive that can be. What hogwash, if there's anything that's apparent today it's that the rich do not get there either by working hard or by being more smart. They just happen to have rich parents. Why are we ok with billionaires like elon musk who spend most of their day tweeting to control society changing amounts of wealth?
EasyMark 3y ago
One huge hole in your plan: the shortages weren't because people suddenly had more money, they happened because a huge percentage of production and international shipping came to a halt. Demand helped but it was not a majority of the problem.
breadbreadbread 3y ago
1. It's important to remember that having struggling poor people is expensive for the system. Emergency shelters, health issues that go untreated until they need emergency intervention, desperation crimes like theft (affecting policing and prisons), foster care, drug use intervention. These are all expenses that are reduced by a system like UBI. If you keep people healthy and fed, you can keep them peaceful and working and the program pays for itself. 2. I don't see the inflation effect as purely linear. Having $10 when things cost $10 is better than having $0 when things cost $5. There are thresholds that affect peoples ability to even engage with the market that you put your trust into. Also the market wants people to buy things, so it should welcome more people participating in it. And lets not forget that most of the price gouging over the past few years went straight to shareholder profits instead of increased supply costs, we can try to decentivize systems like that that profit off of economic crises. > we should foster competition, incentivize innovation, and let markets do their thing "letting markets do their thing" is contradictory to "fostering competition". Markets fundamentally drift towards consolidation. Source: the past sixty years. Markets do not fundamentally organically move towards progress. Often times the profitable thing is to pay workers shit wages and raise prices, and if you try to wait it out for a magical class of well financed competitors to come along and disrupt that status quo, millions of people will have been put into poverty in the interim.
- Turing_Machine 3y ago
  > Markets fundamentally drift towards consolidation. Source: the past sixty years. While I'm in favor of UBI (under certain conditions), the "past sixty years" don't back that up at all. Fortune's top 10 corporations in 1960 (roughly 60 years ago) 1 General Motors 2 Exxon Mobil 3 Ford Motor 4 General Electric 5 U.S. Steel 6 Mobil 7 Gulf Oil 8 Texaco 9 Chrysler 10 Esmark Top 10 corporations in 2020: 1 Walmart 2 Amazon 3 ExxonMobil 4 Apple 5 CVS Health 6 Berkshire Hathaway 7 United Health Group 8 McKesson 9 AT&T 10 AmeriSourceBergen Only one company (Exxon/Mobil) is on both lists. Many of the companies on the 2020 list didn't even exist in 1960.
  - piva00 3y ago
    Sixty years is perhaps too long, neoliberalism really kicked off in the 80s/90s with an increase in globalisation, and corporate consolidation through M&As ramped up quickly in the 2000s after financialisation of the economy went in high gear. If we backtrack to the last thirty to forty years and check which top 20 companies got to that spot through M&As it might paint a different picture.
andrepd 3y ago
>If you do it by taxing the rich, you wind up hobbling and punishing your most productive citizens It's a double stretch to say that (1) the "rich" are the "most productive" members of society, and (2) that imposing progressive taxation on them somehow harms the economy.
7e 3y ago
Not only to you get inflation with UBI, you also get labor shortages, as we've seen.
schwartzworld 3y ago
> If you do it by taxing the rich, you wind up hobbling and punishing your most productive citizens. Won't someone think of the poor billionaires. https://www.whitehouse.gov/cea/written-materials/2021/09/23/what-is-the-average-federal-individual-income-tax-rate-on-the-wealthiest-americans/ https://www.whitehouse.gov/cea/written-materials/2021/09/23/... The richest families in the world pay 8% income tax. To pick a random rich guy, Bill gates makes $98M/year. You could literally tax him 90% and he'd still be making more per year than most Americans make in their lives. > Instead, we should foster competition, incentivize innovation, and let markets do their thing Tell me Atlas Shrugged is your favorite book without telling me Atlas Shrugged is your favorite book.
smegger001 3y ago
there is a third option state owned enterprises, look at the Alaska Permanent Fund for example.
seanmcdirmid 3y ago
> Look at China's economic situation right now to see how ultimately unproductive that can be. I’m confused why you think China taxes the rich to take over the poor? Their taxation system is less redistributive than most western developed countries.
Log_out_ 3y ago
> you do it by taxing the rich, you wind up hobbling and punishing your most productive citizens. Look at China's economic situation right now to see how ultimately unproductive that can be. It speaks volume that we assume that China's rich, who largely earned their wealth through nepotism and party connections are a unfairly taxed meritocratic elite. the golden years of Western society happened during a period of intense competition with a socialist system , that resulted in large scale copying of socialist redistribution policies(unions, state controlled monopolies etc) without any decay of complexity always assigned to those policies. And many democrcies have now majorities of "rebellious" retro movements that try to reenact that past without grasping the core. Liberal free market always decays to gilded ages, decays to retro rebellions or a retry of socialism, resulting in a redistributing period. The liberal part of the policy loop has run its disastrous course. And It has produced very little, for the titanic scale it's been scaled too. A crispy planet for a electronic opiate system for everyone.
smitty1e 3y ago
> at scale Therein lies the rub. Above Dunbar's Number[1], we require vast bureaucratic scaffolding. The purest example is the military. Ranks; uniforms; courts martial. People at scale tend toward tyranny. Every. Single. Time. Our purported globalist saviors are not our friends, and ideas like UBI end in tears. Decentralize. Empower individuals. Minimize the number of people whose job it is to boss everyone else around. And then ensure those bosses are traded out at a regular frequency. Aristocracy in its explicit and implicit forms is an idea that is really no longer needed, so let's break the habit. [1] https://en.wikipedia.org/wiki/Dunbar's_number https://en.wikipedia.org/wiki/Dunbar's_number

tnel77 3y ago

While I agree with many of your points, I feel like blaming item shortages on COVID payments is ignoring the massive impacts that panic buying and shutting down ports and factories had on the situation. Yes there was more money floating around, but people were purchasing items like it was the end of days and we had factories worldwide shuttering randomly due to COVID outbreaks and various government mandates which threw supply chains out of wack.

CityOfThrowaway 3y ago
You're right, the problem in the US was multi-causal. I mention that case because it is probably the best large-scale deployment of a UBI-like program any country has ever done. While we can't completely untangle the exact contribution magnitude, I think we can deduce that at least some meaningful % of the shortage/inflation situation was caused by the UBI-like program.
- tnel77 3y ago
  I would agree with that. I wish there was a way to know how much though. There was an undeniable impact of giving people “free money,” but it doesn’t seem like most Americans received very much. Most of the people I know of received their 2-3 checks and that’s it. You’d see news articles two years into the pandemic saying things like “Americans finally running out of stimulus money.” It made me laugh because it seemed like most people spent that money crazy fast on their bills and very few people were able to actually pocket that cash.
  - Izkata 3y ago
    It was the people working close to minimum wage that were most affected - it was common to see small business owners unable to get workers to return because these payments were higher than they were making on the job. I think this would be the most likely outcome: basic income means no longer needing to work, and even if it just covers the essentials I think a lot more people are going to go that route than most expect.
- andrepd 3y ago
  How do short lived and small stimulus checks even remotely resemble UBI?

criddell 3y ago

> The USA did this during the COVID era. Japan has being doing this for decades now and, AFAIK, there hasn't been any terrible consequences. What are they doing differently? imf.org says Japan's dept to GDP ratio is 214% and the US' is 110%.

phmqk76 3y ago
Japan’s story is different - Japan has been battling deflation for decades at least partially as a result of a rapidly aging population with zero desire to import workers. Which is not a judgment of Japan, which instead chose to provide a much higher per capita stimulus to its people with a focus on the quality of life of the average citizen.
jimbokun 3y ago
Japan's GDP today is roughly the same as it was in 1995: https://www.statista.com/statistics/263578/gross-domestic-product-gdp-of-japan/ https://www.statista.com/statistics/263578/gross-domestic-pr...
- criddell 3y ago
  That's pretty remarkable considering their aging population.
rspoerri 3y ago
japan is mostly in depth to its own residents, while the us is owned by china. update: first thing remains true. but china owns less parts of the us depth by now, its more distributed among other countries.
- deleted 3y ago
  [deleted]
dilyevsky 3y ago
Perhaps not the best example to pick - https://en.m.wikipedia.org/wiki/Lost_Decades https://en.m.wikipedia.org/wiki/Lost_Decades

zooq_ai 3y ago

Bravo!

lazyasciiart 3y ago

I don’t think any of that is correct.

phmqk76 3y ago

Your comment beats me to it! I used to be in favor of UBI, but every point you make is valid. And the so-called Modern Monetary Theory of printing unlimited sums of money without triggering inflation either doesn’t work conceptually, or requires too many ancillary policy changes to ever be an option. I think a good solution looks more like good old-fashioned workers rights laws that we see in Europe, which includes sector-level wage bargaining. And I would also like to see a federal jobs guarantee that would cause upwards wage pressure in the private sector, while providing a livable minimum wage for all who are able to work.

b450 3y ago

This strikes me (a total ignoramus) as the generally balanced and correct take. One question I have is, how much of that inflationary period has been due to supply issues that would have occurred regardless of stimulus checks? I share your skepticism about the "lol just tax the rich" approach. I'm not sure how true it is that taxes "hobble our most productive citizens" (what are you alluding to about china?), I generally just think rich people inevitably outmaneuver the government trying to tax them, and that rich people really shouldn't be "earning" that much to begin with (because I think their earnings in most cases has fuck-all to do with their actual "productivity"). I imagine there are plenty of smart people who have thought up other ways of socializing the fruits of economic growth in, idk, better ways.

AnthonyMouse 3y ago

> Financing it. These programs are monumentally expensive. You need to get the money from somewhere. The easiest place to take it is via the money printer and the second is from the rich. This is not actually that hard because they're only expensive on paper. Right now you have a slew of means tested programs with phase outs that amount to high marginal tax rates on the poor. Meanwhile we try to do the opposite with the tax system and have higher marginal rates on the rich. These largely cancel out, if not impose higher marginal rates on the poor than the rich. With a UBI you can use a flat tax system because the UBI rather than the tax system is what makes it progressive, which has the added benefit of simplifying the tax system. Then everyone is paying the same tax rate, which puts a higher "tax rate" on low and middle income people but only on paper, because you've eliminated the benefits phase outs and they get to keep the UBI, which more than offsets it. The result is that you have a small tax increase on the rich and a small increase in transfer payments to the poor/middle class, but the main benefit is the dramatic increase in simplicity and the reduction in bureaucracy and administrative overhead for administering all of the separate programs it would replace. > Diminishing effects. A bit more money is great when everybody else in your local economy didn't get it. But when everybody gets it, things just become more expensive. Except that the average person doesn't actually have any more money, since it's all transfer payments. Someone making $30,000 got some additional money but someone making $70,000, even though they do receive the UBI, has still received less money than they paid in tax to fund it. And this is what already happens, but much less efficiently, through various existing means-tested programs that would no longer be needed.

CityOfThrowaway 3y ago
What you're saying might be true. My sense is that the political project of doing a full-on tax-and-entitlement reform that results in a more sane system is impossible in the US. At the ideological/theoretical level, I absolutely believe that there exists a radically more optimal way distribute the existing tax burden and funds. But at the practical level, I think we have to do the equivalent of a long-term refactor. Any changes we make must be within the existing system and make sense on their own. Our only real option is to steer our way, digestible diff-by-digestible diff, to a better future.

logicfiction 3y ago

> If you do it by taxing the rich, you wind up hobbling and punishing your most productive citizens We may have different definitions of "rich" here. I don't think you can call them the most productive citizens. I think most extractive would be the more accurate label. And the stimulus checks were short lived, not universally distributed, and came in under $1T. The majority of the money spent was on other sources, even if you want to include the boosts to unemployment in the "UBI" category. As others mentioned it's also conflated with other factors like supply chain failures and massive business loan fraud.

BitwiseFool 3y ago

>"Yes, of course giving people money makes their lives better. It especially works when a very small subset of the population receives such treatment, such that their relative income is higher than those outside the experiment." I've never seen a UBI experiment which demands that the participants pay more in taxes and forfeit all other welfare benefits in exchange for the payment. Every "experiment" so far has been measuring the happiness impact of the upsides without any of the downsides that would be necessary to make the program work.

AnthonyMouse 3y ago
The payment would already disqualify you from a significant proportion of existing benefits, because they're means tested and now you have more money. Meanwhile the net tax increase would only be on people at higher income levels, but that would be offset by not having to fund those means tested programs anymore, and further offset by receiving the UBI themselves. And maybe we could measure some negative impact if someone making $100,000/year had to pay $5000 more in net taxes than they do now, but maybe we're not that concerned about a small impact on someone who already makes a lot of money.
Izkata 3y ago
They also have an explicit end date so people know they need to keep working and can't just rely on it.

mrbgty 3y ago

Yeah. The easier money is to get, the more willing people are to pay higher prices. There might be a 0 to 1 issue (people stuck at 0 need some kind of traction) that is at least improved in a practical sense with a small UBI although we still need productivity to continue increasing in order to drive prices down

5350-uiop-1130 3y ago

> You need to get the money from somewhere. The easiest place to take it is via the money printer and the second is from the rich. universal basic dividends. a % of shares in all companies should go into a public equity fund. dividends from this fund are then distributed to everyone equally. we already contribute to the wealth of these companies, if we search on Google or post on Twitter, why should we not get a share in the success of those companies?

ajross 3y ago

> The easiest place to take it is via the money printer FWIW: the easiest way to get people to throw you into a "junk economics" bin is to use terms like this. "Printing money" is, at best, an inside-the-echo-chamber shorthand for macroeconomic finance policy that is only going to confuse real economists trying to understand what you're talking about. Most of the time, though, it's just a signal that you don't know what you're talking about.

Turing_Machine 3y ago
This argument seems rather disingenuous. Are they literally printing money? No, not to any significant degree. They're not running the presses 24/7/365 or anything like that. Perhaps, though, you'd care to explain how, if you grow M1 from $4T to $18T, it matters whether you do it with physical printing presses or pushing buttons on a keyboard. The overall effect is the same. In fact, the printing press method would be less impactful. There's a physical limit on how fast a mechanical press can run. With the keyboard method, you just have to type in a few more zeros at the end.
- ajross 3y ago
  > Are they literally printing money? No, not to any significant degree. Right. So talk about what they are actually doing, be it routine deficit financing (not "printing" under any reasonable definition) or QE (arguably I guess, depending on how you want to spin the repurchase scheduling). Under no circumstances does the government actually create money "out of thin air". Which under some circumstances is fine. If you're discussing a political topic with a bunch of like-minded gold standard fans (or whatever), then you can use this as a shorthand for "the fiat currency policy we all hate". And no one is confused. But THIS subthread is actually talking about financing public policy. So trying to shorthand the issue away is just a rhetorical trick. If you want to argue against public financing of a UBI, you have to do more than just shout "Money Printing!". Edit, because I missed this bit: > if you grow M1 from $4T to $18T I shouldn't have replied. That's a 100% bad faith argument, owing to a redefinition of the M1 money supply in May 2020 (to include "savings" accounts, which were previously ignored) that created a big discontinuity in the graph. You can argue that the new measurement is better or worse than the old, you can't use a delta between them as "growth". That's just a lie, and you should know better.

exe34 3y ago

How much of the 14T was in stimulus checks and how much was corporate welfare?

tsbinz 3y ago

> We expanded the M1 money supply from $4T to $18T and largely handed it out in a diffuse way. This is often quoted and either comes out of ignorance or is intentionally misleading. Assuming it's the former, M1 in the US is not a good measure over the time span you are quoting, because there has been an accounting change that significantly expands of what kind of accounts are considered to be in M1. See the description below the graph of https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL and the notification in https://www.federalreserve.gov/feeds/h6.html#2746 https://www.federalreserve.gov/feeds/h6.html#2746 (the item from December 17, 2020 in case the anchor doesn't work properly). If you want to make arguments about monetary supply in that time period, it's better to use M2.

inyourtenement 3y ago
Agreed, but this is such a red flag that a commenter is not thinking critically. Do they really think we quadrupled the money supply in a short time? And the only effect was 10% inflation? Usually that would disprove all of their other assumptions about the relationship between the money printer and inflation.
- Detrytus 3y ago
  Yes, M1 money supply did quadruple in a short time, you can see it on one of the FED banks site: https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL Fortunately, the result was "asset inflation", i.e. most of that money went to stock market raising stock prices. That's why consumer goods inflation was so low.
  - inyourtenement 3y ago
    This is false, and is explained by the block of text below that chart. The definition of M1 was changed. Notice the addition of savings and money market accounts. Thank you for demonstrating the lack of critical thinking I was describing. > Before May 2020, M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other checkable deposits (OCDs), consisting of negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, share draft accounts at credit unions, and demand deposits at thrift institutions. > Beginning May 2020, M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other liquid deposits, consisting of OCDs and savings deposits (including money market deposit accounts). Seasonally adjusted M1 is constructed by summing currency, demand deposits, and OCDs (before May 2020) or other liquid deposits (beginning May 2020), each seasonally adjusted separately.

DonaldFisk 3y ago

> 1. Financing it. These programs are monumentally expensive. You need to get the money from somewhere. Depends on the level it's set at, but as it's "Basic" it would just cover basic needs. It would replace unemployment benefit, the non-contributory portion of old age pensions, child benefit, and maybe a few other things. It would also simplify bureaucracy - no need to assess people's circumstances. There have been pilot programmes which showed other benefits, e.g. the Dauphin experiment resulted in improvements in people's health, and a recent experiment in Kenya resulted in people setting up businesses, boosting the local economy. Yes, rich people would get it too, but that would be paid for through increases in higher rates of income tax.

giantg2 3y ago
Basic needs are costly, and the programs you mention do not completely cover basic needs. For things like social security, people spend something like half a lifetime paying into it inorder to recieve relatively small payments for a short portion of their life. Child benefits and unemployment are also short duration. I have no doubt that eliminating programs and bureaucracy will lead to better efficiency. However, I'm not convinced it will be cheaper. I also question the efficacy if the money is less targeted towards those who need it most. It seems the tests are not addressing the aspect of removing other services.
- DonaldFisk 3y ago
  > Basic needs are costly, and the programs you mention do not completely cover basic needs. If they don't cover basic needs they aren't fit for their intended purpose and should be increased so that they do cover them, if they aren't replaced by UBI.
  - giantg2 3y ago
    There are other programs that in combination do cover basic needs for those that qualify by need. You're not going to be able to replacement CHIP and Medicaid with UBI. At least not without extensive bureaucracy on the tax side.

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analognoise 3y ago

>If you do it by taxing the rich, you wind up hobbling and punishing your most productive citizens. Here's where I call BS. >Look at China's economic situation right now to see how ultimately unproductive that can be. Isn't it a wee bit apples/oranges to say this about a totalitarian communist country with a converging set of issues (population pyramid, needs to import food, stressed water reserved, pollution)... nah it's definitely the rich people, we need to protect them! /s

EA-3167 3y ago

There's a third problem that people perennially ignore: once you institute it, even if circumstances change dramatically, it's politically untenable to stop the program. Even putting aside inflation, even putting aside financing it, this is a tiger you can't dismount. I feel like that reality and its implications are missing from most discussions of UBI, not to mention the inverse: it becomes politically beneficial to give away more money, even if it isn't sustainable.

ryandvm 3y ago

> The USA did this during the COVID era. We basically implemented UBI. We expanded the M1 money supply from $4T to $18T and largely handed it out in a diffuse way. For the first 6 months it was awesome. And then shortages started spiking and inflation started creeping in. We ultimately had to roll it back. Yup. And don't forget where most of that money finally ended up - as absolutely massive corporate windfalls. That COVID money went through the economy like shit through a goose and ended up where it always does, in the hands of those that are good at making money.

andrepd 3y ago
>And don't forget where most of that money finally ended up - as absolutely massive corporate windfalls So... it wasn't UBI at all? :) > and ended up where it always does, in the hands of those that are good at making money I think you mean "in the hands of our most productive citizens" ahaha

tr_user 3y ago

> If you do it by taxing the rich, you wind up hobbling and punishing your most productive citizens. Look at China's economic situation right now to see how ultimately unproductive that can be. What hogwash, if there's anything that's apparent today it's that the rich do not get there either by working hard or by being more smart. They just happen to have rich parents. Why are we ok with billionaires like elon musk who spend most of their day tweeting to control society changing amounts of wealth?

EasyMark 3y ago

One huge hole in your plan: the shortages weren't because people suddenly had more money, they happened because a huge percentage of production and international shipping came to a halt. Demand helped but it was not a majority of the problem.

breadbreadbread 3y ago

1. It's important to remember that having struggling poor people is expensive for the system. Emergency shelters, health issues that go untreated until they need emergency intervention, desperation crimes like theft (affecting policing and prisons), foster care, drug use intervention. These are all expenses that are reduced by a system like UBI. If you keep people healthy and fed, you can keep them peaceful and working and the program pays for itself. 2. I don't see the inflation effect as purely linear. Having $10 when things cost $10 is better than having $0 when things cost $5. There are thresholds that affect peoples ability to even engage with the market that you put your trust into. Also the market wants people to buy things, so it should welcome more people participating in it. And lets not forget that most of the price gouging over the past few years went straight to shareholder profits instead of increased supply costs, we can try to decentivize systems like that that profit off of economic crises. > we should foster competition, incentivize innovation, and let markets do their thing "letting markets do their thing" is contradictory to "fostering competition". Markets fundamentally drift towards consolidation. Source: the past sixty years. Markets do not fundamentally organically move towards progress. Often times the profitable thing is to pay workers shit wages and raise prices, and if you try to wait it out for a magical class of well financed competitors to come along and disrupt that status quo, millions of people will have been put into poverty in the interim.

Turing_Machine 3y ago
> Markets fundamentally drift towards consolidation. Source: the past sixty years. While I'm in favor of UBI (under certain conditions), the "past sixty years" don't back that up at all. Fortune's top 10 corporations in 1960 (roughly 60 years ago) 1 General Motors 2 Exxon Mobil 3 Ford Motor 4 General Electric 5 U.S. Steel 6 Mobil 7 Gulf Oil 8 Texaco 9 Chrysler 10 Esmark Top 10 corporations in 2020: 1 Walmart 2 Amazon 3 ExxonMobil 4 Apple 5 CVS Health 6 Berkshire Hathaway 7 United Health Group 8 McKesson 9 AT&T 10 AmeriSourceBergen Only one company (Exxon/Mobil) is on both lists. Many of the companies on the 2020 list didn't even exist in 1960.
- piva00 3y ago
  Sixty years is perhaps too long, neoliberalism really kicked off in the 80s/90s with an increase in globalisation, and corporate consolidation through M&As ramped up quickly in the 2000s after financialisation of the economy went in high gear. If we backtrack to the last thirty to forty years and check which top 20 companies got to that spot through M&As it might paint a different picture.

andrepd 3y ago

>If you do it by taxing the rich, you wind up hobbling and punishing your most productive citizens It's a double stretch to say that (1) the "rich" are the "most productive" members of society, and (2) that imposing progressive taxation on them somehow harms the economy.

7e 3y ago

Not only to you get inflation with UBI, you also get labor shortages, as we've seen.

schwartzworld 3y ago

> If you do it by taxing the rich, you wind up hobbling and punishing your most productive citizens. Won't someone think of the poor billionaires. https://www.whitehouse.gov/cea/written-materials/2021/09/23/what-is-the-average-federal-individual-income-tax-rate-on-the-wealthiest-americans/ https://www.whitehouse.gov/cea/written-materials/2021/09/23/... The richest families in the world pay 8% income tax. To pick a random rich guy, Bill gates makes $98M/year. You could literally tax him 90% and he'd still be making more per year than most Americans make in their lives. > Instead, we should foster competition, incentivize innovation, and let markets do their thing Tell me Atlas Shrugged is your favorite book without telling me Atlas Shrugged is your favorite book.

smegger001 3y ago

there is a third option state owned enterprises, look at the Alaska Permanent Fund for example.

seanmcdirmid 3y ago

> Look at China's economic situation right now to see how ultimately unproductive that can be. I’m confused why you think China taxes the rich to take over the poor? Their taxation system is less redistributive than most western developed countries.

Log_out_ 3y ago

> you do it by taxing the rich, you wind up hobbling and punishing your most productive citizens. Look at China's economic situation right now to see how ultimately unproductive that can be. It speaks volume that we assume that China's rich, who largely earned their wealth through nepotism and party connections are a unfairly taxed meritocratic elite. the golden years of Western society happened during a period of intense competition with a socialist system , that resulted in large scale copying of socialist redistribution policies(unions, state controlled monopolies etc) without any decay of complexity always assigned to those policies. And many democrcies have now majorities of "rebellious" retro movements that try to reenact that past without grasping the core. Liberal free market always decays to gilded ages, decays to retro rebellions or a retry of socialism, resulting in a redistributing period. The liberal part of the policy loop has run its disastrous course. And It has produced very little, for the titanic scale it's been scaled too. A crispy planet for a electronic opiate system for everyone.

smitty1e 3y ago

> at scale Therein lies the rub. Above Dunbar's Number[1], we require vast bureaucratic scaffolding. The purest example is the military. Ranks; uniforms; courts martial. People at scale tend toward tyranny. Every. Single. Time. Our purported globalist saviors are not our friends, and ideas like UBI end in tears. Decentralize. Empower individuals. Minimize the number of people whose job it is to boss everyone else around. And then ensure those bosses are traded out at a regular frequency. Aristocracy in its explicit and implicit forms is an idea that is really no longer needed, so let's break the habit. [1] https://en.wikipedia.org/wiki/Dunbar's_number https://en.wikipedia.org/wiki/Dunbar's_number