8 ms·

I realize UBI has been a popular topic on HN, answer me this... UBI, if implemented, would move O($10T/year) around the economy. We've seen a lot of small sca

I realize UBI has been a popular topic on HN, answer me this... UBI, if implemented, would move O($10T/year) around the economy. We've seen a lot of small scale studies, which basically boil down to giving people money == life improvements. However, I do not see how a small scale study could possibly answer the open macro questions, like inflationary collapse (e.g. increased velocity without direct economic output), even if the whole "will people work anymore" question is moot. Without answering those questions, it would be a USSR scale experiment, which is incredibly dangerous. Improving peoples lives would be great, but I cannot see how one could be an advocate for UBI without having solid answers to those questions.

micromacrofoot 1y ago
why not do it gradually by expanding regional pilot programs, you can't answer these questions without doing it
- burnt-resistor 1y ago
  Another possibility is a negative tax issued every month that becomes effectively UBI. Also, if the IRS were to cut some of their absurd tax breaks for billionaires like the carried interest loophole, simplify things, calculate it for people, and withhold the most likely correct amount ahead of time, it would ease the unnecessary burden placed on people who aren't rich enough to have tax accountants. Corporations need to be taxed at around 75% too while we're at it to pay their fair share. The ratcheting of tax brackets should also be 90% of personal income for the 3 millionth dollar and over. Every billionaire is a policy failure and CEO:worker pay exceeding 1000x is crazy.
theteapot 1y ago
"inflationary collapse" seems contradictory. I think hyperinflation is a more correct term.
strken 1y ago
I see being an advocate for UBI as advocating for solid answers to those questions. I would also point out that there's a difference between a full UBI, a modest partial UBI, and the kind of "basic income" that's not universal and goes away at a rate of 50c on the dollar when you earn more, like in this study. You can't slowly roll out a full UBI, but that's definitely possible for a partial UBI or a means-tested cash payment. You can dial the amount down as far as you want and still study the impact.
mbesto 1y ago
Two points: (1) You are correct that you cannot test UBI in a petri dish. It has to be all or nothing to see the REAL effects. (2) If you rework UBI to be a negative income tax and remove all of government subsidies and handouts then it would have much less potential for disastrous economic impact (see Milton Friedman[0]) [0] - https://en.wikipedia.org/wiki/Negative_income_tax https://en.wikipedia.org/wiki/Negative_income_tax
rhelz 1y ago
We already have UBI....as long as you are over 65 :-) In addition, I suppose you would agree that children should be guaranteed to have a home and 3 square meals. So already something like half of our lives are covered by some kind of UBI. 20 years to mature, 20 years of retirement, sandwiching a 30-40 year career. Don't forget, UBI would replace everything else. Food stamps, unemployment benefits, social security, etc etc. And literally SQUARE MILES of office building staffing bureaucrats who do means testing, fraud prevention, etc etc for government benefits would also not be required. If you put together all of the money we spend for all of that, I wouldn't be surprised if 90%, or even 100% of the cost of a UBI could be covered.
- verteu 1y ago
  > If you put together all of the money we spend for all of that, I wouldn't be surprised if 90%, or even 100% of the cost of a UBI could be covered. Administrative overhead is nowhere near as high as you estimate. SNAP covers ~12% of the population with 5% overhead costs. Medicaid covers ~20% of the population with 5-10% overhead. Social security covers ~20% of the population with <1% overhead. The extra spending to make benefits universal is an order of magnitude higher than any savings from eliminating bureaucracy.
  - AnthonyMouse 1y ago
    You're measuring the cost to the government, not the cost to the public. How much time do people waste filling out eligibility forms? What's the economic cost of wastefully converting fungible money into non-fungible requirements to buy specific goods and services? Meanwhile the "extra spending" isn't real because the benefits, being universal, are going to many of the same people paying for them, and therefore simply cancel out. The purpose of making them universal is the simplification: It's simpler -- and therefore harder to cheat -- to have a UBI and a uniform tax rate than to have a benefits phase out that effectively cancels out the lower rates on lower income people in the existing tax code. Or worse, creates marginal rate cliffs and highly irregular rates because overlapping benefits phase outs interact with each other in random and perverse ways.
JKCalhoun 1y ago
I have a hard time seeing how UBI would be fundamentally different than what exists on American Indian reservations. Is that the model that people are envisioning?
- rozap 1y ago
  There was quite a bit of displacement, subjugation and genocide of entire peoples that precipitated any handouts they did receive. It is possible that that influenced outcomes.
  - JKCalhoun 1y ago
    I know my example is flawed, what then are some examples where UBI has worked?
- chneu 1y ago
  Are you serious? Reservations are employment deserts with little to no opportunity to do much. That, paired with generations of societal genocide, means reservations are not a good test for what can be done elsewhere. That comparison is absolutely wild.
  - rozap 1y ago
    I heavily edited my comment (a sibling to your comment) to tone down the snark. But I agree - this may land in my top 10 most insane hacker news comments that I've ever read.
  - JKCalhoun 1y ago
    Maybe you can suggest examples then where UBI have worked?
j_timberlake 1y ago
It's a proposed solution to mass unemployment scenarios. If the government wanted to give people money right now, it would just lower income taxes. If you have a better solution to mass unemployment, feel free to share it with the rest of us.
- km144 1y ago
  How about... greater benefits to people who are unemployed? I mean, UBI is inherently a poor policy for "mass unemployment scenarios", because there is no feasible scenario in which the majority of people are unemployed. To give UBI to people making around the median wage or higher because there is mass unemployment due to automation that doesn't affect them doesn't seem like a good use of money at all.
  - j_timberlake 1y ago
    "there is no feasible scenario in which the majority of people are unemployed" Try not to ever forget you said this, you'll find it hilarious in the future. The value of typical human labor never stops falling, while the costs of employment never stop rising. Something's going to give, and it's not going to be the profits.
AnthonyMouse 1y ago
> (e.g. increased velocity without direct economic output) Transfer payments don't really increase the velocity of money because they're not associated with any direct economic output. If Alice has $100,000 to spend and Carol has $25,000 to spend, there is $125,000 in actual spending, i.e. demand for something that has to be produced. If you then do a transfer payment of $10,000 from Alice to Carol then Alice is spending $90,000 and Carol is spending $35,000, it's still the same $125,000. Maybe they'll buy different stuff, maybe one would be more likely to buy business investments and the other would be more likely to buy college tuition, but that has no more likelihood to cause problems than if Carol got a raise and Alice had to pay for it.
- Doxin 1y ago
  If Alice has $100,000 to spend and Carol has $25,000 to spend it's much more likely that Alice will save a bunch of money instead of spending it. Giving poor people money is much more likely to be spent at all than when you let overly rich people keep it.
  - AnthonyMouse 1y ago
    What do you expect to happen to money which is "saved"? They're not stuffing it in a mattress. Some business gets it and then spends it to buy inventory or do construction or whatever it is their business does. If it was actually stuffed in a mattress forever at scale then the government would have to contemporaneously print that amount of new money to prevent deflation from the contraction of the circulating money supply, and then somebody would be spending that.
    - Doxin 1y ago
      > They're not stuffing it in a mattress How do people get (and stay, and get ever more) rich if not by accumulating wealth? They aren't stuffing it under a mattress, no, but they also aren't spending it significantly. What do you expect a millionaire to do if you hand him $10? how about giving a homeless person $10? My intuition is that money is going to get spent a lot quicker by the latter. We've tried trickle-down economics and it clearly doesn't work. Let's try trickle-up economics for a while, see what that does.
burnt-resistor 1y ago
1. You're fear-mongering and red baiting with strawman FUD. 2. Doesn't have to be that much. 3. Alaska issues a yearly dividend from their permanent fund.

micromacrofoot 1y ago

why not do it gradually by expanding regional pilot programs, you can't answer these questions without doing it

burnt-resistor 1y ago
Another possibility is a negative tax issued every month that becomes effectively UBI. Also, if the IRS were to cut some of their absurd tax breaks for billionaires like the carried interest loophole, simplify things, calculate it for people, and withhold the most likely correct amount ahead of time, it would ease the unnecessary burden placed on people who aren't rich enough to have tax accountants. Corporations need to be taxed at around 75% too while we're at it to pay their fair share. The ratcheting of tax brackets should also be 90% of personal income for the 3 millionth dollar and over. Every billionaire is a policy failure and CEO:worker pay exceeding 1000x is crazy.

theteapot 1y ago

"inflationary collapse" seems contradictory. I think hyperinflation is a more correct term.

strken 1y ago

I see being an advocate for UBI as advocating for solid answers to those questions. I would also point out that there's a difference between a full UBI, a modest partial UBI, and the kind of "basic income" that's not universal and goes away at a rate of 50c on the dollar when you earn more, like in this study. You can't slowly roll out a full UBI, but that's definitely possible for a partial UBI or a means-tested cash payment. You can dial the amount down as far as you want and still study the impact.

mbesto 1y ago

Two points: (1) You are correct that you cannot test UBI in a petri dish. It has to be all or nothing to see the REAL effects. (2) If you rework UBI to be a negative income tax and remove all of government subsidies and handouts then it would have much less potential for disastrous economic impact (see Milton Friedman[0]) [0] - https://en.wikipedia.org/wiki/Negative_income_tax https://en.wikipedia.org/wiki/Negative_income_tax

rhelz 1y ago

We already have UBI....as long as you are over 65 :-) In addition, I suppose you would agree that children should be guaranteed to have a home and 3 square meals. So already something like half of our lives are covered by some kind of UBI. 20 years to mature, 20 years of retirement, sandwiching a 30-40 year career. Don't forget, UBI would replace everything else. Food stamps, unemployment benefits, social security, etc etc. And literally SQUARE MILES of office building staffing bureaucrats who do means testing, fraud prevention, etc etc for government benefits would also not be required. If you put together all of the money we spend for all of that, I wouldn't be surprised if 90%, or even 100% of the cost of a UBI could be covered.

verteu 1y ago
> If you put together all of the money we spend for all of that, I wouldn't be surprised if 90%, or even 100% of the cost of a UBI could be covered. Administrative overhead is nowhere near as high as you estimate. SNAP covers ~12% of the population with 5% overhead costs. Medicaid covers ~20% of the population with 5-10% overhead. Social security covers ~20% of the population with <1% overhead. The extra spending to make benefits universal is an order of magnitude higher than any savings from eliminating bureaucracy.
- AnthonyMouse 1y ago
  You're measuring the cost to the government, not the cost to the public. How much time do people waste filling out eligibility forms? What's the economic cost of wastefully converting fungible money into non-fungible requirements to buy specific goods and services? Meanwhile the "extra spending" isn't real because the benefits, being universal, are going to many of the same people paying for them, and therefore simply cancel out. The purpose of making them universal is the simplification: It's simpler -- and therefore harder to cheat -- to have a UBI and a uniform tax rate than to have a benefits phase out that effectively cancels out the lower rates on lower income people in the existing tax code. Or worse, creates marginal rate cliffs and highly irregular rates because overlapping benefits phase outs interact with each other in random and perverse ways.

JKCalhoun 1y ago

I have a hard time seeing how UBI would be fundamentally different than what exists on American Indian reservations. Is that the model that people are envisioning?

rozap 1y ago
There was quite a bit of displacement, subjugation and genocide of entire peoples that precipitated any handouts they did receive. It is possible that that influenced outcomes.
- JKCalhoun 1y ago
  I know my example is flawed, what then are some examples where UBI has worked?
chneu 1y ago
Are you serious? Reservations are employment deserts with little to no opportunity to do much. That, paired with generations of societal genocide, means reservations are not a good test for what can be done elsewhere. That comparison is absolutely wild.
- rozap 1y ago
  I heavily edited my comment (a sibling to your comment) to tone down the snark. But I agree - this may land in my top 10 most insane hacker news comments that I've ever read.
- JKCalhoun 1y ago
  Maybe you can suggest examples then where UBI have worked?

j_timberlake 1y ago

It's a proposed solution to mass unemployment scenarios. If the government wanted to give people money right now, it would just lower income taxes. If you have a better solution to mass unemployment, feel free to share it with the rest of us.

km144 1y ago
How about... greater benefits to people who are unemployed? I mean, UBI is inherently a poor policy for "mass unemployment scenarios", because there is no feasible scenario in which the majority of people are unemployed. To give UBI to people making around the median wage or higher because there is mass unemployment due to automation that doesn't affect them doesn't seem like a good use of money at all.
- j_timberlake 1y ago
  "there is no feasible scenario in which the majority of people are unemployed" Try not to ever forget you said this, you'll find it hilarious in the future. The value of typical human labor never stops falling, while the costs of employment never stop rising. Something's going to give, and it's not going to be the profits.

AnthonyMouse 1y ago

> (e.g. increased velocity without direct economic output) Transfer payments don't really increase the velocity of money because they're not associated with any direct economic output. If Alice has $100,000 to spend and Carol has $25,000 to spend, there is $125,000 in actual spending, i.e. demand for something that has to be produced. If you then do a transfer payment of $10,000 from Alice to Carol then Alice is spending $90,000 and Carol is spending $35,000, it's still the same $125,000. Maybe they'll buy different stuff, maybe one would be more likely to buy business investments and the other would be more likely to buy college tuition, but that has no more likelihood to cause problems than if Carol got a raise and Alice had to pay for it.

Doxin 1y ago
If Alice has $100,000 to spend and Carol has $25,000 to spend it's much more likely that Alice will save a bunch of money instead of spending it. Giving poor people money is much more likely to be spent at all than when you let overly rich people keep it.
- AnthonyMouse 1y ago
  What do you expect to happen to money which is "saved"? They're not stuffing it in a mattress. Some business gets it and then spends it to buy inventory or do construction or whatever it is their business does. If it was actually stuffed in a mattress forever at scale then the government would have to contemporaneously print that amount of new money to prevent deflation from the contraction of the circulating money supply, and then somebody would be spending that.
  - Doxin 1y ago
    > They're not stuffing it in a mattress How do people get (and stay, and get ever more) rich if not by accumulating wealth? They aren't stuffing it under a mattress, no, but they also aren't spending it significantly. What do you expect a millionaire to do if you hand him $10? how about giving a homeless person $10? My intuition is that money is going to get spent a lot quicker by the latter. We've tried trickle-down economics and it clearly doesn't work. Let's try trickle-up economics for a while, see what that does.

burnt-resistor 1y ago

1. You're fear-mongering and red baiting with strawman FUD. 2. Doesn't have to be that much. 3. Alaska issues a yearly dividend from their permanent fund.