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The main point of UBI isn't “more money solves problems”, it is “replacing means testing of benefits with unconditional benefits removes adverse effects of the

The main point of UBI isn't “more money solves problems”, it is “replacing means testing of benefits with unconditional benefits removes adverse effects of the rapid clawback of benefits with increasing-but-still-low income”. Giving individuals money without changing the policy context doesn't actually test the mechanism of action proposed for UBI. (It does, arguably, test the mechanism of action of some proposed private charity [or business-linked] alternatives which do involve cash transfers and don't involve changing the public policy context and incentives, but that's a whole different issue.)

rocqua 1y ago
UBI has many different defenses. One of them is that means tested benefits are harmful, and I think it's a really strong one. But another very common defense of UBI is that mass unemployment is inevitable, but because of technological developments that cause wide abundance, so UBI can be used to make that abundance available to the newly unemployed. The harms of means testing are many. They include: - Massive organizational overhead to do the means testing, have appeals process, have fraud detection, and fraud punishment. - Personal overhead on those who have to 'pass' the means-testing. This can be non-trivial procedurally, and appeals tend to be very complicated. Moreover, the consequences of making a mistake that gets marked as fraudulent are severe. This makes it quite time- and stress-costly to get these benefits, and makes some people skip them. - It creates weird economic incentives, if done exceptionally poorly, it creates situations where an increase in net income causes a decrease in gross income. In other situations you get an effective marginal tax rate of nearly 100%, which discourages work and prevents the building of wealth by advancing a career.

rocqua 1y ago

UBI has many different defenses. One of them is that means tested benefits are harmful, and I think it's a really strong one. But another very common defense of UBI is that mass unemployment is inevitable, but because of technological developments that cause wide abundance, so UBI can be used to make that abundance available to the newly unemployed. The harms of means testing are many. They include: - Massive organizational overhead to do the means testing, have appeals process, have fraud detection, and fraud punishment. - Personal overhead on those who have to 'pass' the means-testing. This can be non-trivial procedurally, and appeals tend to be very complicated. Moreover, the consequences of making a mistake that gets marked as fraudulent are severe. This makes it quite time- and stress-costly to get these benefits, and makes some people skip them. - It creates weird economic incentives, if done exceptionally poorly, it creates situations where an increase in net income causes a decrease in gross income. In other situations you get an effective marginal tax rate of nearly 100%, which discourages work and prevents the building of wealth by advancing a career.