5 ms·

Isn't basic income a bit weird? I am a total noob, but to get money, truck drivers do something. Getting money for not doing anything is like increasing the low

Isn't basic income a bit weird? I am a total noob, but to get money, truck drivers do something. Getting money for not doing anything is like increasing the lower limit on minimum money you can have. The way to do it is probably paying only to the unemployed. Sounds socialism, because it is. But hating socialism just because USSR did it the wrong way is, in my opinion, stupid.

pjc50 11y ago
increasing the lower limit on minimum money you can have .. yes? That's the point. Along with increasing the lower limit on the amount of food you can have and the amount of housing you can have, up from "starvation" and "cardboard box".
- jotm 11y ago
  What I'm afraid of is that setting a basic income will increase food and housing prices, because "people can now afford it". And then we're back to square one...
  - geon 11y ago
    What you describe is inflation. But that would require more money in circulation, wouldn't it? Basic income would just be redistribution. Obviously, economy is vastly more complicated, and there are correlation effects between everything, so I don't know...
    - URSpider94 11y ago
      Inflation does not have to be even across all categories of goods. It is entirely feasible that the cost of food and housing would rise, while the cost of luxury yachts would fall. Wealth redistribution also does have the effect of increasing the money supply, without minting more money. The poor tend to spend 100% of what they take in, while the wealthy put a large portion of their money in the bank, where its not circulating in the economy.
      - evanpw 11y ago
        I think your second paragraph has the effect backwards. If you spend $10, then you have $10 less, and someone else has $10 more, no change in money supply. If you put $10 in the bank, the bank loans out $9 of it, so you "have" $10, someone else has $9, and the money supply has grown.
        nhaehnle 11y ago
        The grandparent comment (i.e. by URspider94) is correct. What you write about banks is a common, but incorrect misconception about what banks do. The truth of the matter is: Banks do not need deposits to make loans. Quite the contrary: Banks make loaning decisions independent of the level of their deposits - and it is the loan that causes the deposit, rather than the other way around, because the money loaned by the bank eventually lands in somebody's deposit. Think about it this way: A bank cannot force anybody to take out a loan. Instead, there is a demand for loans which banks satisfy (subject to checks of creditworthiness and available collateral). Whether person A spends $10 or puts it in a deposit does not change person B's demand for credit,[1] and therefore the amount lent by banks does not change either. [1] Of course, this is not entirely true. There can be causal links, but their direction is totally uncertain. For example, person A deciding not to spend money could mean that person B's business begins to struggle and person B needs to take out a loan that they otherwise would not have had to take. In that case, saving does increase the level of loans, but in a way that most people would judge to be detrimental to the economy. Conversely, person A deciding to spend the money could lead to person B's business projecting growth, which encourages person B to invest by taking out a loan. In this case, the loan level increases as well, and in a way that most people would judge to be beneficial. The economy is complicated.
        evanpw 11y ago
        Where do banks get the money that they loan out if not from deposits? Reserve requirements dictate what percentage of deposits banks have to keep on hand rather than loan out, and its inverse, the money multiplier, determines how much the money supply is expanded by repeated application of the deposit->loan process. This seems to be the standard treatment: I checked Abel-Bernanke's and Mankiw's Macroeconomics textbooks and they both tell basically the same story. The supply and demand for loanable funds are balanced through a price mechanism: the interest rate. If banks have lots of deposits and can't loan them all out, then they'll lower the interest rate that they charge until they can. If there's more demand for loans than can be covered by deposits, then banks will increase the interest rate that they charge until the two are balanced.
  - drabiega 11y ago
    There would probably be a little inflation from introducing a basic income, but we shouldn't expect it to put us back to square one, exactly. The re-distributive nature of a basic income will prevent some inflation, as will economies of scale. You would expect we would end up in a situation where production of expensive luxury goods decreases somewhat while lower end staples goes up.
  - guard-of-terra 11y ago
    Food is a buyer's market. If existing vendors try to increase prices, new ones will arise and push prices down. Unless US$ suffers inflation, food price likely stay the same. Housing is more complicated. With basic income you're free to choose less expensive areas because you aren't required to find work. There might be some ups and downs but it will settle.
  - chongli 11y ago
    Basic income isn't going to increase the demand for food. Do you think billionaires eat enough food to feed a small country?
  - rorykoehler 11y ago
    Competitive capitalism will take care of that.
FeepingCreature 11y ago
> Getting money for not doing anything Getting money for being a member of society*. After all, we already don't let people starve. > The way to do it is probably paying only to the unemployed. A lot of people think so, but this is actually a subtly terrible idea because it strongly incentivizes being unemployed.
- zo1 11y ago
  >"Getting money for being a member of society. After all, we already don't let people starve.*" Are you sure about that? http://en.wikipedia.org/wiki/Hunger_in_the_United_States http://en.wikipedia.org/wiki/Hunger_in_the_United_States
  - FeepingCreature 11y ago
    Yep. http://en.wikipedia.org/wiki/Hunger_in_Germany http://en.wikipedia.org/wiki/Hunger_in_Germany :-)
guard-of-terra 11y ago
"Getting money for not doing anything" and then "The way to do it is probably paying only to the unemployed" Foe some weird reason you seem to think "unemployed" are exempt from "people not doing anything". Anyway, the problem here is not socialism (socialism actually had mandatory labour). It is that you subsidy unemployed. You will get more unemployed. People who are forced to do nothing. With Basic Income people are encouraged to work at least part time.
dllthomas 11y ago
It actually doesn't put much of a hard floor on anything. The minimum amount of money you can have is still zero (temporarily). It does put a minimum on income, but not necessarily income after prior obligations.

pjc50 11y ago

increasing the lower limit on minimum money you can have .. yes? That's the point. Along with increasing the lower limit on the amount of food you can have and the amount of housing you can have, up from "starvation" and "cardboard box".

jotm 11y ago
What I'm afraid of is that setting a basic income will increase food and housing prices, because "people can now afford it". And then we're back to square one...
- geon 11y ago
  What you describe is inflation. But that would require more money in circulation, wouldn't it? Basic income would just be redistribution. Obviously, economy is vastly more complicated, and there are correlation effects between everything, so I don't know...
  - URSpider94 11y ago
    Inflation does not have to be even across all categories of goods. It is entirely feasible that the cost of food and housing would rise, while the cost of luxury yachts would fall. Wealth redistribution also does have the effect of increasing the money supply, without minting more money. The poor tend to spend 100% of what they take in, while the wealthy put a large portion of their money in the bank, where its not circulating in the economy.
    - evanpw 11y ago
      I think your second paragraph has the effect backwards. If you spend $10, then you have $10 less, and someone else has $10 more, no change in money supply. If you put $10 in the bank, the bank loans out $9 of it, so you "have" $10, someone else has $9, and the money supply has grown.
      - nhaehnle 11y ago
        The grandparent comment (i.e. by URspider94) is correct. What you write about banks is a common, but incorrect misconception about what banks do. The truth of the matter is: Banks do not need deposits to make loans. Quite the contrary: Banks make loaning decisions independent of the level of their deposits - and it is the loan that causes the deposit, rather than the other way around, because the money loaned by the bank eventually lands in somebody's deposit. Think about it this way: A bank cannot force anybody to take out a loan. Instead, there is a demand for loans which banks satisfy (subject to checks of creditworthiness and available collateral). Whether person A spends $10 or puts it in a deposit does not change person B's demand for credit,[1] and therefore the amount lent by banks does not change either. [1] Of course, this is not entirely true. There can be causal links, but their direction is totally uncertain. For example, person A deciding not to spend money could mean that person B's business begins to struggle and person B needs to take out a loan that they otherwise would not have had to take. In that case, saving does increase the level of loans, but in a way that most people would judge to be detrimental to the economy. Conversely, person A deciding to spend the money could lead to person B's business projecting growth, which encourages person B to invest by taking out a loan. In this case, the loan level increases as well, and in a way that most people would judge to be beneficial. The economy is complicated.
        evanpw 11y ago
        Where do banks get the money that they loan out if not from deposits? Reserve requirements dictate what percentage of deposits banks have to keep on hand rather than loan out, and its inverse, the money multiplier, determines how much the money supply is expanded by repeated application of the deposit->loan process. This seems to be the standard treatment: I checked Abel-Bernanke's and Mankiw's Macroeconomics textbooks and they both tell basically the same story. The supply and demand for loanable funds are balanced through a price mechanism: the interest rate. If banks have lots of deposits and can't loan them all out, then they'll lower the interest rate that they charge until they can. If there's more demand for loans than can be covered by deposits, then banks will increase the interest rate that they charge until the two are balanced.
- drabiega 11y ago
  There would probably be a little inflation from introducing a basic income, but we shouldn't expect it to put us back to square one, exactly. The re-distributive nature of a basic income will prevent some inflation, as will economies of scale. You would expect we would end up in a situation where production of expensive luxury goods decreases somewhat while lower end staples goes up.
- guard-of-terra 11y ago
  Food is a buyer's market. If existing vendors try to increase prices, new ones will arise and push prices down. Unless US$ suffers inflation, food price likely stay the same. Housing is more complicated. With basic income you're free to choose less expensive areas because you aren't required to find work. There might be some ups and downs but it will settle.
- chongli 11y ago
  Basic income isn't going to increase the demand for food. Do you think billionaires eat enough food to feed a small country?
- rorykoehler 11y ago
  Competitive capitalism will take care of that.

FeepingCreature 11y ago

> Getting money for not doing anything Getting money for being a member of society*. After all, we already don't let people starve. > The way to do it is probably paying only to the unemployed. A lot of people think so, but this is actually a subtly terrible idea because it strongly incentivizes being unemployed.

zo1 11y ago
>"Getting money for being a member of society. After all, we already don't let people starve.*" Are you sure about that? http://en.wikipedia.org/wiki/Hunger_in_the_United_States http://en.wikipedia.org/wiki/Hunger_in_the_United_States
- FeepingCreature 11y ago
  Yep. http://en.wikipedia.org/wiki/Hunger_in_Germany http://en.wikipedia.org/wiki/Hunger_in_Germany :-)

guard-of-terra 11y ago

"Getting money for not doing anything" and then "The way to do it is probably paying only to the unemployed" Foe some weird reason you seem to think "unemployed" are exempt from "people not doing anything". Anyway, the problem here is not socialism (socialism actually had mandatory labour). It is that you subsidy unemployed. You will get more unemployed. People who are forced to do nothing. With Basic Income people are encouraged to work at least part time.

dllthomas 11y ago

It actually doesn't put much of a hard floor on anything. The minimum amount of money you can have is still zero (temporarily). It does put a minimum on income, but not necessarily income after prior obligations.