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I fully admit, I didn't read through the details of your assumptions, just skimmed the post, but I didn't see anything addressing the changes in prices of basic

I fully admit, I didn't read through the details of your assumptions, just skimmed the post, but I didn't see anything addressing the changes in prices of basic goods if everyone can afford them. Do you model any increase/decrease in prices - e.g., a 10% increase in demand for housing cause a 10% increase in housing prices?

VLM 13y ago
Everyone can already afford basic goods. Its just at the lowest of incomes instead of a varied portfolio of extremely expensive to administrate benefits, all that would be wiped out and replaced with one simple check. A slumlord can TRY to raise his rent 10% anytime he wants, including today, but if the residents aren't making any more money, that plan is not going to work very well. At the highest levels multimillion dollar lakefront homes aren't going to be affected unless we unleash subprime loans again (which would be profitable, so we will, but thats another discussion). The primary effect would be on the shrinking middle class. Many of those extremely expensive welfare administrators are middle class and replacing those jobs with an extremely small shell script is going to result in massive middle class job loss. That should be modeled. One mistake in the model was assuming "basic job" would produce anything at all. I suspect the most likely outcome of putting one dude in charge of two dudes, one digging holes, and the other filling the holes in, is both guys are going to pay a small bribe to the boss to falsify the paperwork. Another severe attitude problem issue is you assign a guy to a "basic job" picking up trash in a park, well, if he goes fishing instead, you can't fire him from a guaranteed job. You're supposed to be a teachers aide at school; well, yes, but I'm checking facebook on my phone instead, what are you going to do about it? I suspect the value produced will approach zero. Another model error is assuming the only unusual payoff will be JKRowling style, but I suspect you'll have 100000 amateur theater geeks and wanna be musicians for every billion dollar author. So the cultural production should explode. Hard to say if it'll be worth anything, but they'll be a lot of it, that's for sure.
- bsbechtel 13y ago
  >Everyone can already afford basic goods. Its just at the lowest of incomes instead of a varied portfolio of extremely expensive to administrate benefits, all that would be wiped out and replaced with one simple check. I think you and I disagree on this assumption. For one, we still have homeless people, although for a handful it is a lifestyle choice. I'd say it's far more nuanced and complex than to just say everyone can already afford basic goods. If someone loses all their current gov't benefits, but starts receiving $1,000/mo which they are free to spend however they want, how do their buying habits change? No one really knows. As far as I know, food stamp programs and other current welfare programs have many restrictions on the types of goods you can purchase. In addition, we aren't considering the marginal costs of increased production of some goods, while others are negligible - e.g., software. I agree with your other criticisms of the model though.

VLM 13y ago

Everyone can already afford basic goods. Its just at the lowest of incomes instead of a varied portfolio of extremely expensive to administrate benefits, all that would be wiped out and replaced with one simple check. A slumlord can TRY to raise his rent 10% anytime he wants, including today, but if the residents aren't making any more money, that plan is not going to work very well. At the highest levels multimillion dollar lakefront homes aren't going to be affected unless we unleash subprime loans again (which would be profitable, so we will, but thats another discussion). The primary effect would be on the shrinking middle class. Many of those extremely expensive welfare administrators are middle class and replacing those jobs with an extremely small shell script is going to result in massive middle class job loss. That should be modeled. One mistake in the model was assuming "basic job" would produce anything at all. I suspect the most likely outcome of putting one dude in charge of two dudes, one digging holes, and the other filling the holes in, is both guys are going to pay a small bribe to the boss to falsify the paperwork. Another severe attitude problem issue is you assign a guy to a "basic job" picking up trash in a park, well, if he goes fishing instead, you can't fire him from a guaranteed job. You're supposed to be a teachers aide at school; well, yes, but I'm checking facebook on my phone instead, what are you going to do about it? I suspect the value produced will approach zero. Another model error is assuming the only unusual payoff will be JKRowling style, but I suspect you'll have 100000 amateur theater geeks and wanna be musicians for every billion dollar author. So the cultural production should explode. Hard to say if it'll be worth anything, but they'll be a lot of it, that's for sure.

bsbechtel 13y ago
>Everyone can already afford basic goods. Its just at the lowest of incomes instead of a varied portfolio of extremely expensive to administrate benefits, all that would be wiped out and replaced with one simple check. I think you and I disagree on this assumption. For one, we still have homeless people, although for a handful it is a lifestyle choice. I'd say it's far more nuanced and complex than to just say everyone can already afford basic goods. If someone loses all their current gov't benefits, but starts receiving $1,000/mo which they are free to spend however they want, how do their buying habits change? No one really knows. As far as I know, food stamp programs and other current welfare programs have many restrictions on the types of goods you can purchase. In addition, we aren't considering the marginal costs of increased production of some goods, while others are negligible - e.g., software. I agree with your other criticisms of the model though.