5 ms·

Because you are setting a floor. First, if you make a minimum income of 1,000, anyone making less or around that will demand a raise, after all why would I wor

by ry0ohki 13y ago

Because you are setting a floor. First, if you make a minimum income of 1,000, anyone making less or around that will demand a raise, after all why would I work if I could get the same amount loafing around the house. So the mid-lower tiers get a raise, and now the tier above that doesn't want to make the same as the lower tier and they get a raise, so there is inflation as everyone suddenly as a lot more money to spend. Which feels great for maybe a month or maybe a day, but with everyone making more money, goods in that area will rise in price, as landlords find they can make more money etc... and then we're back in the same situation. In theory goods outside of this economy with a floor would remain the same, but since the people that need to import it, store it, etc... would also be affected by the inflation in the end it doesn't net anything. TLDR; a basic income is an illusion, and inflation would quickly catch up.

phaemon 13y ago
>First, if you make a minimum income of 1,000, anyone making less or around that will demand a raise, after all why would I work if I could get the same amount loafing around the house. You've misunderstood the concept. Everybody gets this. If you're currently making 900 a month, then you now make 1900 a month. You go to work because you want more than the basic 1000.
efdee 13y ago
You are confusing "minimum income" and "basic income". "Basic income" is something everyone gets, employed or unemployed. Whatever you make in salary comes on top of that. So there is no "why would I work if I could get the same amount loafing around the house".
parasight 13y ago
Ok, then why not adjust the basic income by the percentage of inflation on a regular basis? I mean we can cope with inflation without basic income. Why not with basic income?
arobbins 13y ago
I don't think anyone can make less than 1,000 if that is the basic income. Everyone gets 1,000 plus whatever they earn from a job. If someone's job previously paid 500, then their new income is 1,500.
batiste 13y ago
Not sure it would happen as you describe it. I don't understand why peoples with small income will suddenly feel entitled for a raise. After all they just got a 1000 euros raise on top of their small income? For inflation I think the macro economic of Europe will not allow a drastic increase in prices. At least not in the prices of goods. Shops will still have to compete on prices and as there will probably be some people trying to live on the 1000 euro alone you might see very cheap shops flourish. If there is enough vacancy in real estate, people that have now more money will be able to afford a nicer/bigger apartments and might just drive the price of the least interesting ones down. Landlords will be forced to fix their apartment or lower the price. The situation at the end is that there a wealth redistribution that is guarantied and equal for everybody.
- VLM 13y ago
  "people that have now more money will be able to afford a nicer/bigger apartments" No not at all. The median dude will always live in the median house and nothing about this will change it. The primary real estate related effect is a dramatic change in macro societal debt to income ratios which in the long term has some interesting effects on bank assets and liabilities. Its very much like a stealth interest rate cut, with pretty much identical effects. The price of real estate will of course increase across the board, because the sellers know the buyers will have more money to pay mortgages with. The median guy will still sit in the median home, it'll just involve larger numbers in some bank account. "equal for everybody." LOL capgains are going to asset holders aka land and business owners and banks, not the joe 6 pack. The primary effect on J6P is getting kicked into a higher income tax bracket thus paying more taxes on a percentage basis. So .gov wins. Pretty much everyone wins but J6P as usual, as designed.
  - Daniel_Newby 13y ago
    > Its very much like a stealth interest rate cut, with pretty much identical effects. No, it's even better. The basic income can create an effective negative interest rate without giving the bankers an infinite Santa Claus, and most of the money will turn the crank of the consumption machine instead of being parked in safe havens.
wffurr 13y ago
>> Because you are setting a floor. First, if you make a minimum income of 1,000, anyone making less or around that will demand a raise, after all why would I work if I could get the same amount loafing around the house. I don't think you understand the proposal. Everyone gets the minimum income. There is no means-test. It is not a welfare benefit. It comes with citizenship. If you work and earn $1000 a month, that is in addition to the $1000 a month basic income you receive. However, you will also now pay tax on that $1000 additional income, even if prior to the basic income you did not earn enough to pay taxes. However, you still come out ahead overall. >> with everyone making more money, goods in that area will rise in price, as landlords find they can make more money etc... and then we're back in the same situation. >> inflation would quickly catch up. The basic income amount would be inflation-adjusted each year. This is no different from how SSI and welfare benefits work now. Or for that matter regular wages and costs, which rise with inflation each year, to allow relative adjustments without the disruption of falling prices.
VLM 13y ago
Another, perhaps more effective way to phrase it, is the median income dude is always going to live in the median house and eat median food and send his kids to median school. It is a controlled form of inflation however in that as a one time event, the median dude's fixed median debts are smaller as a fraction of his income and/or he can go deeper into debt in an absolute sense as a one time change. "a lot more money to spend." Well thats relative because its a low fixed amount and personal incomes vary quite a bit. At my current income an extra 1000 would be nice but wouldn't really change anything at all in the short term. For a rich dude that's not even a rounding error. For a starving student it would be a huge amount of money. So I would expect no inflation in things appealing to the upper classes, minimal effect for the middle classes, but huge effect on the lower classes. Even on supposedly interchangeable things like food, this is going to have a huge effect on the price of hot pockets and malt liquor but not much change in the price of lobster tails and beef tenderloin.
deleted 13y ago
[deleted]
glomph 13y ago
That only applies if the money is just created and not a result of taxation.

by ry0ohki 13y ago

phaemon 13y ago

>First, if you make a minimum income of 1,000, anyone making less or around that will demand a raise, after all why would I work if I could get the same amount loafing around the house. You've misunderstood the concept. Everybody gets this. If you're currently making 900 a month, then you now make 1900 a month. You go to work because you want more than the basic 1000.

efdee 13y ago

You are confusing "minimum income" and "basic income". "Basic income" is something everyone gets, employed or unemployed. Whatever you make in salary comes on top of that. So there is no "why would I work if I could get the same amount loafing around the house".

parasight 13y ago

Ok, then why not adjust the basic income by the percentage of inflation on a regular basis? I mean we can cope with inflation without basic income. Why not with basic income?

arobbins 13y ago

I don't think anyone can make less than 1,000 if that is the basic income. Everyone gets 1,000 plus whatever they earn from a job. If someone's job previously paid 500, then their new income is 1,500.

batiste 13y ago

Not sure it would happen as you describe it. I don't understand why peoples with small income will suddenly feel entitled for a raise. After all they just got a 1000 euros raise on top of their small income? For inflation I think the macro economic of Europe will not allow a drastic increase in prices. At least not in the prices of goods. Shops will still have to compete on prices and as there will probably be some people trying to live on the 1000 euro alone you might see very cheap shops flourish. If there is enough vacancy in real estate, people that have now more money will be able to afford a nicer/bigger apartments and might just drive the price of the least interesting ones down. Landlords will be forced to fix their apartment or lower the price. The situation at the end is that there a wealth redistribution that is guarantied and equal for everybody.

VLM 13y ago
"people that have now more money will be able to afford a nicer/bigger apartments" No not at all. The median dude will always live in the median house and nothing about this will change it. The primary real estate related effect is a dramatic change in macro societal debt to income ratios which in the long term has some interesting effects on bank assets and liabilities. Its very much like a stealth interest rate cut, with pretty much identical effects. The price of real estate will of course increase across the board, because the sellers know the buyers will have more money to pay mortgages with. The median guy will still sit in the median home, it'll just involve larger numbers in some bank account. "equal for everybody." LOL capgains are going to asset holders aka land and business owners and banks, not the joe 6 pack. The primary effect on J6P is getting kicked into a higher income tax bracket thus paying more taxes on a percentage basis. So .gov wins. Pretty much everyone wins but J6P as usual, as designed.
- Daniel_Newby 13y ago
  > Its very much like a stealth interest rate cut, with pretty much identical effects. No, it's even better. The basic income can create an effective negative interest rate without giving the bankers an infinite Santa Claus, and most of the money will turn the crank of the consumption machine instead of being parked in safe havens.

wffurr 13y ago

>> Because you are setting a floor. First, if you make a minimum income of 1,000, anyone making less or around that will demand a raise, after all why would I work if I could get the same amount loafing around the house. I don't think you understand the proposal. Everyone gets the minimum income. There is no means-test. It is not a welfare benefit. It comes with citizenship. If you work and earn $1000 a month, that is in addition to the $1000 a month basic income you receive. However, you will also now pay tax on that $1000 additional income, even if prior to the basic income you did not earn enough to pay taxes. However, you still come out ahead overall. >> with everyone making more money, goods in that area will rise in price, as landlords find they can make more money etc... and then we're back in the same situation. >> inflation would quickly catch up. The basic income amount would be inflation-adjusted each year. This is no different from how SSI and welfare benefits work now. Or for that matter regular wages and costs, which rise with inflation each year, to allow relative adjustments without the disruption of falling prices.

VLM 13y ago

Another, perhaps more effective way to phrase it, is the median income dude is always going to live in the median house and eat median food and send his kids to median school. It is a controlled form of inflation however in that as a one time event, the median dude's fixed median debts are smaller as a fraction of his income and/or he can go deeper into debt in an absolute sense as a one time change. "a lot more money to spend." Well thats relative because its a low fixed amount and personal incomes vary quite a bit. At my current income an extra 1000 would be nice but wouldn't really change anything at all in the short term. For a rich dude that's not even a rounding error. For a starving student it would be a huge amount of money. So I would expect no inflation in things appealing to the upper classes, minimal effect for the middle classes, but huge effect on the lower classes. Even on supposedly interchangeable things like food, this is going to have a huge effect on the price of hot pockets and malt liquor but not much change in the price of lobster tails and beef tenderloin.

deleted 13y ago

[deleted]

glomph 13y ago

That only applies if the money is just created and not a result of taxation.