5 ms·

I'd genuinely like to see your numbers because I've not seen a single napkin math calculation that makes is even remotely feasible. (for the United States)

eru 12y ago
In Europe it's entirely feasible, if your whole goal is to more or less keep the same post-tax, post-welfare distribution of income. You just do away with the traditional combination of means tested welfare and means tested taxes, and replace it with means testing for the taxes only. In the US that would also be possible, but the level of basic income you arrive at might be bloody low. I don't know the data. At least, you'd save on bureaucracy.
- learc83 12y ago
  >In the US that would also be possible, but the level of basic income you arrive at might be bloody low. Why would that be? The US has a significantly higher GDP per capita than every European country except Norway, Luxemburg, and maybe Switzerland (depending on who you ask). If you're talking about limiting it to current social welfare expenditures, the US spends about 20% of GDP on social welfare [1], and many European countries spend close to 30%. But since our GDP per capita is so much higher it should come out fairly close per person. [1] http://www.oecd-ilibrary.org/social-issues-migration-health/government-social-spending_20743904-table1 http://www.oecd-ilibrary.org/social-issues-migration-health/...
  - eru 12y ago
    Thanks for the numbers.
- forrestthewoods 12y ago
  This may sound rude, but I literally do not care about any response that does include napkin math. The concept of basic income has been quite popular on HN and elsewhere for the past 6-12 months. I have asked for napkin math probably two dozen times. No one has ever been able to provide it. I love the concept of basic income. I've played with the numbers quite a bit myself. I've tried to make it work. I can't do it. Not even close for the US. I'm desperate for someone to post some basic of basic back of the napkin level math. So far no one has done it. I do not consider that a good sign.
  - learc83 12y ago
    US GDP ~16 trillion. Government social spending 20% of GDP[1] or about 3.2 trillion dollars. US population about 320 million. That's right at about $10k per year to every American if we capped it at current government social spending. So a family of 4 would get $40k a year. You could make that 3.2 trillion go a lot further by raising taxes gradually so that when you reach say $75k you're paying as much extra taxes are you receive in Basic Income. I'm pretty sure [1] includes state and local spending as well so this would be tricky. [1] http://www.oecd-ilibrary.org/social-issues-migration-health/government-social-spending_20743904-table1 http://www.oecd-ilibrary.org/social-issues-migration-health/...
    - TTPrograms 12y ago
      That's a good point that if you're giving everyone say $20,000 a year you could still set taxes such that for a majority of employed adults you're net zero. So for simplicity you could assume just paying welfare recipients. The point of doing it this way vs current welfare would be increased transparency / reduced bureaucracy and providing more of a sliding scale of income classes rather than welfare / non-welfare buckets. In principle the costs could be made to be nearly equivalent.
    - forrestthewoods 12y ago
      Here's a good resource with more data. Including federal vs state. http://www.usgovernmentspending.com/current_spending http://www.usgovernmentspending.com/current_spending I'm curious what that 20% of social spending covers. It certainly includes health so we can't say "eliminate medicare/medicaid, but you get a yearly check for $10,000!". That's not gonna cut it. Federal+State+Local welfare spending is only 8% of total gov. spend and only ~3.1% of GDP. A long, long, long ways from being able to cut a $10k check per person. Edit: Why on earth would anyone downvote that? It boggles the mind.
      - learc83 12y ago
        >I'm curious what that 20% of social spending covers. I'm sure there are plenty of things in that 20% that can't be replaced with $10k per person--things like extra equipment for poor schools. However this was just napkin math to show that it's within an order of magnitude of doable. > "eliminate medicare/medicaid, but you get a yearly check for $10,000!". For the vast majority of people that would be a huge net gain. The UK only spends about $3k per year on each person for health care, so I think the vast majority could get by on the insurance they could afford with $10k per person. You'd still have to account for the edge cases. This would probably work better in a country with a single payer system. For the sake of argument, remove medicare/medicaid from the equation. That still leaves about 2.2 Trillion on other social spending. Let's subtract some other unknowns and leave it at just 1 trillion. You can stretch that 1 trillion pretty far if you adjust it so that children don't get the full amount, and add extra graduated taxes so that households making over $45k (the national median) have a zero net benefit with only people making below the poverty line receiving the entire benefit. I think it's very doable especially if you're willing to consider tax increases at the top. It's definitely not something outside the realm of possibility, and with demographic and labor changes in the United States over the next 50 years, I think something like a Basic Income is probable.
ppereira 12y ago
I don't see your email address in your profile. I did the calculation about 3 years ago for Canada, so it may or may not be useful. It is not so far fetched when you consider that we already provide some welfare support and a progressive income tax schedule with a complete exemption for low incomes. Most basic incomes proposals would do away with regular social assistance (while retaining special programs for the disabled, etc.) and would do away with the exemption for low incomes, since that is compensated for by the basic income. Some have calculated that the progressive income tax could be entirely replaced with a flat tax with basic income and be close to optimal. I am not so optimistic, but the great thing about a basic income is that it can be tested at a low level and then slowly increased to determine its actual cost.
- forrestthewoods 12y ago
  username + gmail
pjc50 12y ago
You don't actually have to run the numbers, because you can look through the dollar values to the underlying consumption distribution. And running the numbers is complicated by the likely discontinuity in wage and price inflation. Is there enough food in the US to feed everyone? Undoubtably yes. Is there enough space for housing? Yes, although the spatial distribution is a problem. But if it's no longer so essential to live where the jobs are .. So, if the scheme is targeted to that everyone can afford a minimum standard of living, and taxes are increased so that income above that sees less of an increase in standard of living, the feasibility is obvious. The real problems are the desire to exclude "undesirables" and "non-contributors", which results in an expensive, bureaucratic, and vindictive system. (The UK is heading in the other direction with the "bedroom tax" and other changes leading to a big rise in demand from foodbanks)
adventured 12y ago
It's very feasible for the US. Not everyone would get a basic income however, it would have to erode as you earn more income. And note, this is just the Federal Government's portion. http://www.budget.senate.gov/republican/public/index.cfm/2012/12/total-welfare-spending-equates-to-168-per-day-for-every-household-in-poverty http://www.budget.senate.gov/republican/public/index.cfm/201... "Based on data from the Congressional Research Service, cumulative spending on means-tested federal welfare programs, if converted into cash, would equal $167.65 per day per household living below the poverty level. By comparison, the median household income in 2011 of $50,054 equals $137.13 per day. Additionally, spending on federal welfare benefits, if converted into cash payments, equals enough to provide $30.60 per hour, 40 hours per week, to each household living below poverty."
- dragonwriter 12y ago
  > Not everyone would get a basic income however, it would have to erode as you earn more income. Then its not a basic income. If it is a basic income, everyone would get it. You could, of course, have a similar net effect to tapering off with income simply by adjusting the progressivity of the income tax system, which is what UBI proponents usually propose. Since you changing the rates of the tax system, but not the behavior of the system, doesn't add complexity or administrative overhead, but eliminating the means-testing on the benefit side does reduce complexity and administrative overhead, this is seen as a net win even though (overhead aside) the net effect to recipients is the same.

eru 12y ago

In Europe it's entirely feasible, if your whole goal is to more or less keep the same post-tax, post-welfare distribution of income. You just do away with the traditional combination of means tested welfare and means tested taxes, and replace it with means testing for the taxes only. In the US that would also be possible, but the level of basic income you arrive at might be bloody low. I don't know the data. At least, you'd save on bureaucracy.

learc83 12y ago
>In the US that would also be possible, but the level of basic income you arrive at might be bloody low. Why would that be? The US has a significantly higher GDP per capita than every European country except Norway, Luxemburg, and maybe Switzerland (depending on who you ask). If you're talking about limiting it to current social welfare expenditures, the US spends about 20% of GDP on social welfare [1], and many European countries spend close to 30%. But since our GDP per capita is so much higher it should come out fairly close per person. [1] http://www.oecd-ilibrary.org/social-issues-migration-health/government-social-spending_20743904-table1 http://www.oecd-ilibrary.org/social-issues-migration-health/...
- eru 12y ago
  Thanks for the numbers.
forrestthewoods 12y ago
This may sound rude, but I literally do not care about any response that does include napkin math. The concept of basic income has been quite popular on HN and elsewhere for the past 6-12 months. I have asked for napkin math probably two dozen times. No one has ever been able to provide it. I love the concept of basic income. I've played with the numbers quite a bit myself. I've tried to make it work. I can't do it. Not even close for the US. I'm desperate for someone to post some basic of basic back of the napkin level math. So far no one has done it. I do not consider that a good sign.
- learc83 12y ago
  US GDP ~16 trillion. Government social spending 20% of GDP[1] or about 3.2 trillion dollars. US population about 320 million. That's right at about $10k per year to every American if we capped it at current government social spending. So a family of 4 would get $40k a year. You could make that 3.2 trillion go a lot further by raising taxes gradually so that when you reach say $75k you're paying as much extra taxes are you receive in Basic Income. I'm pretty sure [1] includes state and local spending as well so this would be tricky. [1] http://www.oecd-ilibrary.org/social-issues-migration-health/government-social-spending_20743904-table1 http://www.oecd-ilibrary.org/social-issues-migration-health/...
  - TTPrograms 12y ago
    That's a good point that if you're giving everyone say $20,000 a year you could still set taxes such that for a majority of employed adults you're net zero. So for simplicity you could assume just paying welfare recipients. The point of doing it this way vs current welfare would be increased transparency / reduced bureaucracy and providing more of a sliding scale of income classes rather than welfare / non-welfare buckets. In principle the costs could be made to be nearly equivalent.
  - forrestthewoods 12y ago
    Here's a good resource with more data. Including federal vs state. http://www.usgovernmentspending.com/current_spending http://www.usgovernmentspending.com/current_spending I'm curious what that 20% of social spending covers. It certainly includes health so we can't say "eliminate medicare/medicaid, but you get a yearly check for $10,000!". That's not gonna cut it. Federal+State+Local welfare spending is only 8% of total gov. spend and only ~3.1% of GDP. A long, long, long ways from being able to cut a $10k check per person. Edit: Why on earth would anyone downvote that? It boggles the mind.
    - learc83 12y ago
      >I'm curious what that 20% of social spending covers. I'm sure there are plenty of things in that 20% that can't be replaced with $10k per person--things like extra equipment for poor schools. However this was just napkin math to show that it's within an order of magnitude of doable. > "eliminate medicare/medicaid, but you get a yearly check for $10,000!". For the vast majority of people that would be a huge net gain. The UK only spends about $3k per year on each person for health care, so I think the vast majority could get by on the insurance they could afford with $10k per person. You'd still have to account for the edge cases. This would probably work better in a country with a single payer system. For the sake of argument, remove medicare/medicaid from the equation. That still leaves about 2.2 Trillion on other social spending. Let's subtract some other unknowns and leave it at just 1 trillion. You can stretch that 1 trillion pretty far if you adjust it so that children don't get the full amount, and add extra graduated taxes so that households making over $45k (the national median) have a zero net benefit with only people making below the poverty line receiving the entire benefit. I think it's very doable especially if you're willing to consider tax increases at the top. It's definitely not something outside the realm of possibility, and with demographic and labor changes in the United States over the next 50 years, I think something like a Basic Income is probable.

ppereira 12y ago

I don't see your email address in your profile. I did the calculation about 3 years ago for Canada, so it may or may not be useful. It is not so far fetched when you consider that we already provide some welfare support and a progressive income tax schedule with a complete exemption for low incomes. Most basic incomes proposals would do away with regular social assistance (while retaining special programs for the disabled, etc.) and would do away with the exemption for low incomes, since that is compensated for by the basic income. Some have calculated that the progressive income tax could be entirely replaced with a flat tax with basic income and be close to optimal. I am not so optimistic, but the great thing about a basic income is that it can be tested at a low level and then slowly increased to determine its actual cost.

forrestthewoods 12y ago
username + gmail

pjc50 12y ago

You don't actually have to run the numbers, because you can look through the dollar values to the underlying consumption distribution. And running the numbers is complicated by the likely discontinuity in wage and price inflation. Is there enough food in the US to feed everyone? Undoubtably yes. Is there enough space for housing? Yes, although the spatial distribution is a problem. But if it's no longer so essential to live where the jobs are .. So, if the scheme is targeted to that everyone can afford a minimum standard of living, and taxes are increased so that income above that sees less of an increase in standard of living, the feasibility is obvious. The real problems are the desire to exclude "undesirables" and "non-contributors", which results in an expensive, bureaucratic, and vindictive system. (The UK is heading in the other direction with the "bedroom tax" and other changes leading to a big rise in demand from foodbanks)

adventured 12y ago

It's very feasible for the US. Not everyone would get a basic income however, it would have to erode as you earn more income. And note, this is just the Federal Government's portion. http://www.budget.senate.gov/republican/public/index.cfm/2012/12/total-welfare-spending-equates-to-168-per-day-for-every-household-in-poverty http://www.budget.senate.gov/republican/public/index.cfm/201... "Based on data from the Congressional Research Service, cumulative spending on means-tested federal welfare programs, if converted into cash, would equal $167.65 per day per household living below the poverty level. By comparison, the median household income in 2011 of $50,054 equals $137.13 per day. Additionally, spending on federal welfare benefits, if converted into cash payments, equals enough to provide $30.60 per hour, 40 hours per week, to each household living below poverty."

dragonwriter 12y ago
> Not everyone would get a basic income however, it would have to erode as you earn more income. Then its not a basic income. If it is a basic income, everyone would get it. You could, of course, have a similar net effect to tapering off with income simply by adjusting the progressivity of the income tax system, which is what UBI proponents usually propose. Since you changing the rates of the tax system, but not the behavior of the system, doesn't add complexity or administrative overhead, but eliminating the means-testing on the benefit side does reduce complexity and administrative overhead, this is seen as a net win even though (overhead aside) the net effect to recipients is the same.