Replacing welfare payments with “basic income” for all is alluring, but expensive(economist.com)
economist.com
Replacing welfare payments with “basic income” for all is alluring, but expensive
http://www.economist.com/news/finance-and-economics/21651897-replacing-welfare-payments-basic-income-all-alluring
31 comments
As a counterexample, what about people who need more than a basic income? In Spain, chronic patients with expensive treatments are still subsidized. The Social Security system is based in solidarity: a few need a lot of money, while many don't need much at all, and it balances out (well, it doesn't, but that's another matter).
I'm fine with this. Maybe I'm in the paying end of the deal, but since I believe health is a matter of luck, I'd like to be able to be in the receiving end (and not be left to die) in case I have bad luck.
Of course this could be an exception, but I'm sure there are a lot more exceptions not taken into consideration in the basic income discussion. IMHO, basic income doesn't solve the problem and introduces new ones.
I'm fine with this. Maybe I'm in the paying end of the deal, but since I believe health is a matter of luck, I'd like to be able to be in the receiving end (and not be left to die) in case I have bad luck.
Of course this could be an exception, but I'm sure there are a lot more exceptions not taken into consideration in the basic income discussion. IMHO, basic income doesn't solve the problem and introduces new ones.
Absolutely -- we'd still need a social safety net for people who "win" the Bad Luck Lottery, and that includes stellar health care programs.
'Need public housing? Not if you set a high enough basic income level.'
If everyone's income were increased, might not prices for things like housing go up as well, so some people could still be priced out?
If everyone's income were increased, might not prices for things like housing go up as well, so some people could still be priced out?
Yes. But the presence of a large group with a consistent fixed income would incentivize the building of large-scale low cost apartments - those don't exist currently outside of major cities (where 'low cost' is substantially higher), because the demand isn't there.
There is no shortage of incentive for that in most of western Europe - such property is significantly profitable. The reason why not much gets built is because (a) cheap housing blocks results in ghettoisation, which most governments try to prevent with mixed-dwelling planning requirements, and (b) local residents invariably object to any planning request for housing more low-income people near them.
I've seen enough uncompleted estates and empty unsellable new buildings over time to suspect that such property is significantly risky.
Maybe such property is significantly profitable today, but we can't be sure by the time the building is complete.
I suspect it's more likely a simple business decision: the profit doesn't outweigh the risk.
In London, construction companies work hard to avoid the commitment to affordable housing and pay councils bribes to overcome that. Why would they need to pay councils off if this was a profitable option for them?
Maybe such property is significantly profitable today, but we can't be sure by the time the building is complete.
I suspect it's more likely a simple business decision: the profit doesn't outweigh the risk.
In London, construction companies work hard to avoid the commitment to affordable housing and pay councils bribes to overcome that. Why would they need to pay councils off if this was a profitable option for them?
London's a special case: every single unit that can be converted from "affordable housing" to "luxury accommodation" is a massive profit realised by the developer. You can make a lot of money from building low-cost housing, but you can make an awful lot more from building really expensive housing, because there is essentially unlimited demand for both.
People getting priced out of an area could be good in the long term. Property taxes would have to increase a lot in that area to enable service workers to be paid enough to live there too. Over time this could act as a bit of a brake on housing costs in the expensive area.
My understanding is that people are happier with change if they feel that they have some choice in how to respond to it. If they were provided with a Basic Income then they could decide how to live within their means, maybe by extended families and friends picking where to live together.
My understanding is that people are happier with change if they feel that they have some choice in how to respond to it. If they were provided with a Basic Income then they could decide how to live within their means, maybe by extended families and friends picking where to live together.
I'd worry about the same thing. Government subsidy sure hasn't made education any less expensive.
(Education and public housing aren't quite the same thing, I know, but I'd still want to see some active work to prevent the same outcome.)
(Education and public housing aren't quite the same thing, I know, but I'd still want to see some active work to prevent the same outcome.)
There is a big difference between giving people money that can be used for anything, and giving them money they can only use for one thing.
Yes, but I think rent control and such could be better implemented without as strong an opposition from landlords that in the current system have to try and provide for their basic needs.
Eh?
Apartment-building (and home-building) isn't about the landlord making ends meet. It's about the landlord owning or borrowing a few million dollars to buy property and/or build upon it, then trying to make money over the next several decades, as he pays interest (or incurs opportunity cost), incurs maintenance expenses, pays insurance and property taxes, and watches as the investment depreciates due to the building getting old. A subsistence income is not a substitute for a real return on that investment.
Rent control substantially limits the upside potential of that sort of investment at best and usually goes further to act as a massive wealth transfer from landlord to tenant. As you can imagine, that deters investment, so housing shortages get worse and you end up either paying way too much or you just can't find an apartment to rent. (Moreover, even if rent control is eventually rolled back, the political risk that it will return is likely to haunt every future investment in the city for decades to come.)
You don't need to like landlords in general, or lionize them for their investment (the money is its own reward), or trust your landlord any further than you can throw him, but if you want people to live inside a decent piece of capital (instead of four-to-a-crappy-bedroom) then you'd do well to both study and respect the incentives that capitalism gives landlords (the money is its own reward) and how rent control distorts them.
... or you'll just screw over everyone, like New York City's War Emergency Tenant Protection Act, which continues to this day to protect certain lucky residents from World War II but resulted in something like 1/3 of the buildings in Harlem being abandoned, to say nothing of the Bronx. (and a little like today's San Francisco, though there are plenty of other barriers to new development there.)
Apartment-building (and home-building) isn't about the landlord making ends meet. It's about the landlord owning or borrowing a few million dollars to buy property and/or build upon it, then trying to make money over the next several decades, as he pays interest (or incurs opportunity cost), incurs maintenance expenses, pays insurance and property taxes, and watches as the investment depreciates due to the building getting old. A subsistence income is not a substitute for a real return on that investment.
Rent control substantially limits the upside potential of that sort of investment at best and usually goes further to act as a massive wealth transfer from landlord to tenant. As you can imagine, that deters investment, so housing shortages get worse and you end up either paying way too much or you just can't find an apartment to rent. (Moreover, even if rent control is eventually rolled back, the political risk that it will return is likely to haunt every future investment in the city for decades to come.)
You don't need to like landlords in general, or lionize them for their investment (the money is its own reward), or trust your landlord any further than you can throw him, but if you want people to live inside a decent piece of capital (instead of four-to-a-crappy-bedroom) then you'd do well to both study and respect the incentives that capitalism gives landlords (the money is its own reward) and how rent control distorts them.
... or you'll just screw over everyone, like New York City's War Emergency Tenant Protection Act, which continues to this day to protect certain lucky residents from World War II but resulted in something like 1/3 of the buildings in Harlem being abandoned, to say nothing of the Bronx. (and a little like today's San Francisco, though there are plenty of other barriers to new development there.)
Bingo. The problem with housing is that demand outstrip supply by a insane magnitude.
The only real way to fix housing is to flood the market with fixed price dwellings.
The only real way to fix housing is to flood the market with fixed price dwellings.
I agree and that is in part because you can "guess" what those effects will be but its not possible to say definitively they will or won't be produced.
Assuming 280M adults[1], $200 a month, per person, would be over 672 billion dollars a year if I did my math correctly. So you have to take that cost and figure out how much crime and welfare expense would be removed from the system.
I think most politicians assume that no entitlement program is ever successfully removed from the system so they would just add it on to the annual budget in full. So it makes it a hard pill to swallow. The Department of Health and Human Services is only $961B [2] and a big chunk of that is the institutes of health, the FDA, etc.
That said, I tend to agree that if you set the amount high enough that it can drive a services market at the BI level then you convert an inefficent fiat economy into a more efficient market economy for basic human services.
[1] http://quickfacts.census.gov/qfd/states/00000.html
[2] http://www.hhs.gov/about/budget/budget-in-brief/index.html
Assuming 280M adults[1], $200 a month, per person, would be over 672 billion dollars a year if I did my math correctly. So you have to take that cost and figure out how much crime and welfare expense would be removed from the system.
I think most politicians assume that no entitlement program is ever successfully removed from the system so they would just add it on to the annual budget in full. So it makes it a hard pill to swallow. The Department of Health and Human Services is only $961B [2] and a big chunk of that is the institutes of health, the FDA, etc.
That said, I tend to agree that if you set the amount high enough that it can drive a services market at the BI level then you convert an inefficent fiat economy into a more efficient market economy for basic human services.
[1] http://quickfacts.census.gov/qfd/states/00000.html
[2] http://www.hhs.gov/about/budget/budget-in-brief/index.html
Wouldn't those be compensated by inefficiencies introduced by the lack of negotiating power?
Prime example here is Medicare - it has an (albeit limited) ability to dictate the prices to participating providers due to its size. Remove the program, and everyone is left out to negotiate with their medical provider on a case-by-case basis, and we already know how well that worked out in practice (googlable via "runaway healthcare costs").
Prime example here is Medicare - it has an (albeit limited) ability to dictate the prices to participating providers due to its size. Remove the program, and everyone is left out to negotiate with their medical provider on a case-by-case basis, and we already know how well that worked out in practice (googlable via "runaway healthcare costs").
For the record, house renting prices in the UK have went up with what the Government has been willing to pay. It's probably folly to assume that house prices wouldn't just rise with basic income.
The article points out that making basic income available to those contributing to society (working, looking for work or volunteering). That's incredibly short-sighted for several reasons: 1) the idle are best being, well, idle - out of the way while everybody else gets on with making the world a better place. Sure they will reap the benefits but their number is likely to no higher than the currently idle. Indeed the numbers are likely to be fewer since everybody is free to do what they want; 2) means testing whether somebody is eligible is going to create bureaucracy and drive up the costs of the system and finally 3) if I wanted to spend a couple of weeks cleaning up my local beach of garbage I should be free to do so - the benefit to society is obviously large but the effort might just be me or a small group of similar minded folks. Justifying that to some authority so I could collect my payment would kill a lot of creativity because of the paperwork involved. As a result of lot of trivial but useful things, cleaning garbage from playgrounds or collecting household vegetable waste for a local compost heap would go undone.
>their number is likely to no higher than the currently idle
Why do you think giving some people free money that do not get it now would not result in some of them becoming idle?
There is evidence as payments increase the idle increase. For example, I think the OECD has data showing there are more people on disability by a wide margin across countries, and this correlates with the benefits the various countries offer. Do you really think there are naturally more disabled people in the UK than the US, or that because they offer better support more people are inclined to try and get it?
>if I wanted to spend a couple of weeks cleaning up my local beach of garbage I should be free to do so - the benefit to society is obviously large but the effort might just be me or a small group of similar minded folks
Obviously large to whom? Why does this group or person not already pay someone to clean the beach? Apparently the value is so low that people spend their money on things they want, instead of hiring you to clean the beach.
What you're arguing is that people will produce things of lesser value to society, but of some value to their own belief set, things of such low value overall that no one will pay for it. This results in a lower amount of goods and services, which ultimately results in society getting poorer, not richer.
Why do you think giving some people free money that do not get it now would not result in some of them becoming idle?
There is evidence as payments increase the idle increase. For example, I think the OECD has data showing there are more people on disability by a wide margin across countries, and this correlates with the benefits the various countries offer. Do you really think there are naturally more disabled people in the UK than the US, or that because they offer better support more people are inclined to try and get it?
>if I wanted to spend a couple of weeks cleaning up my local beach of garbage I should be free to do so - the benefit to society is obviously large but the effort might just be me or a small group of similar minded folks
Obviously large to whom? Why does this group or person not already pay someone to clean the beach? Apparently the value is so low that people spend their money on things they want, instead of hiring you to clean the beach.
What you're arguing is that people will produce things of lesser value to society, but of some value to their own belief set, things of such low value overall that no one will pay for it. This results in a lower amount of goods and services, which ultimately results in society getting poorer, not richer.
Some of them do become idle thats the whole point because some of them ARE idle. We are not talking about living like a king. We are talking about basic income i.e. getting by.
I am going to tell a story about the state I live in: Maine.
We have many programs: HUD (to help pay rent), Food Stamps, HEAP (fuel/electricity assistance), and others.
All of these have complex forms to fill out, and offices filled with staff that don't actually understand the complex rules, and the rules seem to change all the time.
Hiring these people costs money. Due to the complexity of the rules and forms, many families that qualify for these programs do not apply for them due to the frustration they cause, and when you're poor you only have a limited amount of frustration before you curl up and cry yourself to sleep every night.
Many consider just getting any aid from the state a full time job in of itself.
Not only that, programs like food stamps issue a card, the maintenance of these cards is probably not cheap as they outsource it to some company out of state. The minimum you can get on food stamps here is $15/mo (which helps absolutely no one, I'm sorry, but $15/mo could be a day's worth of food for a couple with a kid); what is the actual cost of doing that $15/mo? I read somewhere that a quarter of a million households qualify for food stamps in Maine, how much are money are we losing administering a program like this that has such little benefit? Could we be feeding another few thousand households with that waste?
I've been advocating a basic income program for years purely because of the efficiency of it. Once people no longer have to worry about where their next meal is, or their wife's next meal, or their kids's next meal, or if they will have a roof over their head tomorrow, or will their car be stolen, I mean, repoed by the bank tomorrow, they can actually focus on being gainfully employed, or go back to school, or just not be a fucking wreck.
I live in Maine. I suspect we are the poorest and most forgotten about state in the great experiment that is our nation. A program like this would create all the jobs we don't have, would end the constant bullshit people here have to deal with, and probably save lives as well.
Life here is so bleak that, as a non-alcoholic, people have assumed that I mean that I'm just in AA, and quit drinking. "No," I tell them, "I really don't drink. Never have." They look at me like I have two heads.
We have many programs: HUD (to help pay rent), Food Stamps, HEAP (fuel/electricity assistance), and others.
All of these have complex forms to fill out, and offices filled with staff that don't actually understand the complex rules, and the rules seem to change all the time.
Hiring these people costs money. Due to the complexity of the rules and forms, many families that qualify for these programs do not apply for them due to the frustration they cause, and when you're poor you only have a limited amount of frustration before you curl up and cry yourself to sleep every night.
Many consider just getting any aid from the state a full time job in of itself.
Not only that, programs like food stamps issue a card, the maintenance of these cards is probably not cheap as they outsource it to some company out of state. The minimum you can get on food stamps here is $15/mo (which helps absolutely no one, I'm sorry, but $15/mo could be a day's worth of food for a couple with a kid); what is the actual cost of doing that $15/mo? I read somewhere that a quarter of a million households qualify for food stamps in Maine, how much are money are we losing administering a program like this that has such little benefit? Could we be feeding another few thousand households with that waste?
I've been advocating a basic income program for years purely because of the efficiency of it. Once people no longer have to worry about where their next meal is, or their wife's next meal, or their kids's next meal, or if they will have a roof over their head tomorrow, or will their car be stolen, I mean, repoed by the bank tomorrow, they can actually focus on being gainfully employed, or go back to school, or just not be a fucking wreck.
I live in Maine. I suspect we are the poorest and most forgotten about state in the great experiment that is our nation. A program like this would create all the jobs we don't have, would end the constant bullshit people here have to deal with, and probably save lives as well.
Life here is so bleak that, as a non-alcoholic, people have assumed that I mean that I'm just in AA, and quit drinking. "No," I tell them, "I really don't drink. Never have." They look at me like I have two heads.
Yup (ex-pat Mainer that had to leave to find real work). The really perverse thing is where some of these benefits have income cliffs, where you lose the benefit if you make too much money working. For instance, let's say that you get to work some overtime and earn a little extra money. Then you realize that you've gone over the line to get your heat assistance, and you've got to come up with the $600/mo to fill the oil tank out of your own pocket. You'd be better off not working any harder, unless you can make the jump to get out of the band where losing benefits offsets the increased income.
I have never heard someone talk about Maine as bleak. Seems like most people who live there or are from there love it. Are you really saying poverty in Maine eclipses the Deep South?
Purely anecdotal, but I took a roadtrip through southern Appalachia a few years ago, and the parts of West Virginia, Tennessee and North Carolina that I went through reminded me so much of rural Maine that it wasn't funny.
Maine is really two different states. There is southern Maine, centered on York and Cumberland counties (basically the Portland metro area), and then there is the rest of the state. The other half of Maine has very little industry, almost no white-collar work, and extremely low population density. There are entire regions of the state that are propped up by one or two paper mills that are still operating, or subsist off of tourism dollars during the summer months or the ski season. And even tourism and skiing took a beating during the recent financial crisis.
Maine is really two different states. There is southern Maine, centered on York and Cumberland counties (basically the Portland metro area), and then there is the rest of the state. The other half of Maine has very little industry, almost no white-collar work, and extremely low population density. There are entire regions of the state that are propped up by one or two paper mills that are still operating, or subsist off of tourism dollars during the summer months or the ski season. And even tourism and skiing took a beating during the recent financial crisis.
I agree with this. When people say "Hey, what about Portland" I tell them, no, Portland and Kittery are actually part of New Hampshire since they seem to get all the actual benefit.
Like, you know how when you travel between states, theres the major highways, and theres tons forest, and no actual towns or anything for miles? It isn't like that from NH into Portland, it IS like that from Portland into Augusta or on the way up to Bangor.
Oh, and as for all the paper mills? We're killing those off. And our one large major employer that isn't in Portland/Kittery? Its rumored that since Jackson Lab couldn't open a big new location here in Maine and opened it in Flordia instead, they're moving their existing location here down to Florida too (and with that, probably thousands of jobs will go with it between the people that work there and the people that support those people in that community).
Its like, can we just leave the US and join Canada already?
Like, you know how when you travel between states, theres the major highways, and theres tons forest, and no actual towns or anything for miles? It isn't like that from NH into Portland, it IS like that from Portland into Augusta or on the way up to Bangor.
Oh, and as for all the paper mills? We're killing those off. And our one large major employer that isn't in Portland/Kittery? Its rumored that since Jackson Lab couldn't open a big new location here in Maine and opened it in Flordia instead, they're moving their existing location here down to Florida too (and with that, probably thousands of jobs will go with it between the people that work there and the people that support those people in that community).
Its like, can we just leave the US and join Canada already?
A generous basic income funded by very high taxes would be self-defeating, as it would reintroduce the sort of distortions that many of its advocates hope to banish from the welfare system. Loafers could live comfortably without lifting a finger.
Basically, if there is not enough jobs for everyone - the raison d'etre of the basic income - then at some point, some aren't going to do anything: that's the point.
In other terms, the basic income is all about how do deal with the people which does nothing since we have reasons to think they couldn't do anything anyway according to the situation.
Basically, if there is not enough jobs for everyone - the raison d'etre of the basic income - then at some point, some aren't going to do anything: that's the point.
In other terms, the basic income is all about how do deal with the people which does nothing since we have reasons to think they couldn't do anything anyway according to the situation.
> Loafers could live comfortably without lifting a finger.
I have zero problems with this (for some levels of "comfortably"), the alternative is filled with drugs and crime.
I have zero problems with this (for some levels of "comfortably"), the alternative is filled with drugs and crime.
Although automation of jobs is a popular reason for talking about basic income these days, I don't think it's the original or only reason for it being thought a good idea.
The problem with this, at least in somewhere like the UK, is you haven't convinced the public that there aren't enough jobs.
Sure, some people are saying so, but there's a barrage of benefits programs that shows there is a subset of the native population who just can't be arsed trying to get a job, and who won't work for a job that earns them similar or less money than they get on benefits.
While these people are sitting around with their massive entitlment complexes and a subset or them are willing to go on channel4 and openly discuss it, you're never going to convince the public there's no jobs.
It's sad because, these people are supposed to be statsticly insignificant, but alas, I work full time and had to pay £500,000 for a 2 bed terrace. I resent the fact we can't move the non-working out of London when it costs a fortune to live somewhere nearby.
Of course the bigger problem is that money has a gravitational pull and the rich are getting richer, but they're not being idiots on channel4, so the middle class aren't taking it out on them.
Sure, some people are saying so, but there's a barrage of benefits programs that shows there is a subset of the native population who just can't be arsed trying to get a job, and who won't work for a job that earns them similar or less money than they get on benefits.
While these people are sitting around with their massive entitlment complexes and a subset or them are willing to go on channel4 and openly discuss it, you're never going to convince the public there's no jobs.
It's sad because, these people are supposed to be statsticly insignificant, but alas, I work full time and had to pay £500,000 for a 2 bed terrace. I resent the fact we can't move the non-working out of London when it costs a fortune to live somewhere nearby.
Of course the bigger problem is that money has a gravitational pull and the rich are getting richer, but they're not being idiots on channel4, so the middle class aren't taking it out on them.
I really see UBI as the mechanism that allow capitalism to transition in to the post-work work.
I always argue that even if they'd want to cultivate their own food, all land is already taken so they are not only unable but forbidden to earn their income.
Unvoiced assumption #1: working is good.
Corollary: Not working is bad.
Unvoiced assumption #2: anyone who wants a job can get one.
We know that #2 is false. Coupling the assumptions together produces a group of people who are considered to be bad for reasons that are entirely beyond their control.
We know that #2 is false. Coupling the assumptions together produces a group of people who are considered to be bad for reasons that are entirely beyond their control.
Well, I think assumption #1 (especially the corollary) is voiced, for instance, as follows:
>Loafers could live comfortably without lifting a finger.
But, I do think that sentiment is a root part of the resistance against BI. People have bought pretty heavily into the current status quo that says, "you eat what you kill". So, if you don't work you are an undeserving freeloader or loafer.
Whereas, BI, for some, essentially acknowledges the common ownership of natural resources, etc., treating sustenance derived therefrom as more a natural right than something that must be earned.
>Loafers could live comfortably without lifting a finger.
But, I do think that sentiment is a root part of the resistance against BI. People have bought pretty heavily into the current status quo that says, "you eat what you kill". So, if you don't work you are an undeserving freeloader or loafer.
Whereas, BI, for some, essentially acknowledges the common ownership of natural resources, etc., treating sustenance derived therefrom as more a natural right than something that must be earned.
The capitalist status quo is all about "you eat what you kill," true. But in America, a huge majority is ostensibly Christian, especially in politics. And Jesus is all about grace, that you literally cannot earn the living truth, the light, the peace, the spirit, because they are given in grace. I wonder why it's such a radical suggestion to take that premise into material aspects of life.
I think there is a huge disconnect between professed Christian values and execution on many fronts, including this one.
I suppose that especially those who adhere to the Christian faith would anticipate this. In other words, the Christian teaching is that the very need for grace is brought about by humankind's utter inability to consistently adhere to Christian principles.
I suppose that especially those who adhere to the Christian faith would anticipate this. In other words, the Christian teaching is that the very need for grace is brought about by humankind's utter inability to consistently adhere to Christian principles.
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I think the ethical arguments and the practical arguments about how other policies could be changed once basic income is implemented are more than enough reason to vote yes. But all of that is ultimately moot: the most important reason why basic income will soon be necessary is that "jobs" as they exist now are already on their way out.
The idea that it is "too expensive" just begs the question "too expensive to whom?" Eventually, our practice of giving the richest people more and more money will hit a breaking point, and we will have to figure out a way to take care of all the people whose livelihoods have been automated. Basic income is the best and easiest way to obviate that problem, and the richest can easily afford to pay for it.
The idea that it is "too expensive" just begs the question "too expensive to whom?" Eventually, our practice of giving the richest people more and more money will hit a breaking point, and we will have to figure out a way to take care of all the people whose livelihoods have been automated. Basic income is the best and easiest way to obviate that problem, and the richest can easily afford to pay for it.
The article also doesn't seem to take into account that we already spend of hundreds of billions of dollars every year of welfare programs that could be saved. The article just piles BI on as an additional expense.
I also think most BI supporters tend to shoot too high. The equivalent income of just a 16hr per week job at min wag would do wonders for the economy without putting a great deal of pressure on people not to work.
I also think most BI supporters tend to shoot too high. The equivalent income of just a 16hr per week job at min wag would do wonders for the economy without putting a great deal of pressure on people not to work.
The US spends $454B on welfare programs[1], but has a population of 321M. If you scrapped the existing welfare program in favor of BI, you'd be able to give everyone only $117 per month. You can make adjustments for things like children not requiring as much, but we're still nowhere near a livable wage.
[1] http://www.usgovernmentspending.com/year_spending_2015USbn_1...
[1] http://www.usgovernmentspending.com/year_spending_2015USbn_1...
I think you'd need to expand beyond what's generally classified as welfare. You could probably also get reduce or eliminate social security benefits (another $745.3B)
You could also probably greatly simplify the tax code, which has become a form of welfare with the poor paying less and the richer paying more relative to the amount they earn.
Then there's other potential benefits or reductions in cost, that are harder to quantify and predict. Would there be a reduction in crime? (which could reduce police costs) A decrease in sickness and health costs? (due to increased nutrition and better shelter) An increase in productivity and a boost to the economy? (due to people being in better health, being able to get more education and a tax code and welfare system that doesn't incentivize making less) What about all the non-profit organizations that spend millions helping the unfortunate? (What could that be spent on instead?)
I'm not necessarily in favor of a basic income to the extent mentioned in the article. I do wonder, however, if some limited basic income could be more effective than our current programs designed to help the poor and needy and if it would provide some better stability in people's lives generally. Either way, it would have a broader impact on the economy than simply removing welfare programs from federal and state budgets.
You could also probably greatly simplify the tax code, which has become a form of welfare with the poor paying less and the richer paying more relative to the amount they earn.
Then there's other potential benefits or reductions in cost, that are harder to quantify and predict. Would there be a reduction in crime? (which could reduce police costs) A decrease in sickness and health costs? (due to increased nutrition and better shelter) An increase in productivity and a boost to the economy? (due to people being in better health, being able to get more education and a tax code and welfare system that doesn't incentivize making less) What about all the non-profit organizations that spend millions helping the unfortunate? (What could that be spent on instead?)
I'm not necessarily in favor of a basic income to the extent mentioned in the article. I do wonder, however, if some limited basic income could be more effective than our current programs designed to help the poor and needy and if it would provide some better stability in people's lives generally. Either way, it would have a broader impact on the economy than simply removing welfare programs from federal and state budgets.
"You could probably also get reduce or eliminate social security benefits"
"Eliminate" would never fly politically, and to be honest I don't think it's the right thing anyway. We probably could reduce/consolidate, if we did so in a way that meant (BI + SSI) was never lower than SSI before the change, which would certainly still mean savings.
"Eliminate" would never fly politically, and to be honest I don't think it's the right thing anyway. We probably could reduce/consolidate, if we did so in a way that meant (BI + SSI) was never lower than SSI before the change, which would certainly still mean savings.
That would hardly keep people without jobs out of poverty, which I read in another article is just over $20k.
A $20k poverty threshold is for a household of 3. For 1, it's a little under $12k.
http://aspe.hhs.gov/poverty/15poverty.cfm#thresholds
http://aspe.hhs.gov/poverty/15poverty.cfm#thresholds
I find it hard to believe that someone could live off $12k. Then again I live in Australia where cost of living on the whole is fairly expensive. But given rent is a big component of cost of living I'd hazard a guess that this will vary quite significantly in different parts of the USA. Furthermore I'm sure there are many different ways to define the poverty line. Even if the basic cost of living is met, there are additional costs that one may have to bear before gaining employment, including education, appropriate clothing, transport and the additional costs of accommodation close to employment.
The argument for a basic income is that one should be able to live comfortably and not just cover bare essentials. This means that people shouldn't be living at the poverty line but well over it. This shouldn't be a disincentive to work because most people need to live their lives around some kind of structured activity. Though it does mean that if there is a shortage of jobs then the unemployed won't be left to rot and the option exists to do some meaningful volunteer work.
The argument for a basic income is that one should be able to live comfortably and not just cover bare essentials. This means that people shouldn't be living at the poverty line but well over it. This shouldn't be a disincentive to work because most people need to live their lives around some kind of structured activity. Though it does mean that if there is a shortage of jobs then the unemployed won't be left to rot and the option exists to do some meaningful volunteer work.
Money doesn't disappear. If you give people a basic income, they'll spend it. On rent, beer, education, their kids, all the things people normally spend money on. And some of it is going to come back to all of us in one way or another. Maybe more people will have money to buy apps or pay for services offered by hn members' startups. Or they'll buy lottery tickets and the additional money that goes to education will be used to hire consultants or custodians for schools. Or they'll spend more money at Wal-mart, some of which will be used to purchase some kind of software from a tech startup. Money always trickles back up, especially when it's put into the hands of low income people who tend to spend more than they save.
This adds up to a discount on the cost of BI. Increase taxes by X% and you get back Y% in increased spending. Of course everyone won't benefit equally, but there will be plenty of good times to go around. Don't worry about moral judgements regarding who is working and who isn't. As long as they're spending it will mean more for you.
This adds up to a discount on the cost of BI. Increase taxes by X% and you get back Y% in increased spending. Of course everyone won't benefit equally, but there will be plenty of good times to go around. Don't worry about moral judgements regarding who is working and who isn't. As long as they're spending it will mean more for you.
>Money doesn't disappear
But it can be used efficiently or inefficiently. For example, if there are two bread bakers, and I can pay $10 to one and he makes two loaves, or $10 to the other and he makes one, then the money has not disappeared but one use produced more goods for society.
>Money always trickles back up, especially when it's put into the hands of low income people who tend to spend more than they save.
Where do you think savings goes? It is most certainly invested back into society, and is not generally spent on consumption. Giving money just so people can consume will mostly make more of the goods they consume. If you want future looking invention and innovation, you need savings that can be lent to startups, businesses, and other uses.
But it can be used efficiently or inefficiently. For example, if there are two bread bakers, and I can pay $10 to one and he makes two loaves, or $10 to the other and he makes one, then the money has not disappeared but one use produced more goods for society.
>Money always trickles back up, especially when it's put into the hands of low income people who tend to spend more than they save.
Where do you think savings goes? It is most certainly invested back into society, and is not generally spent on consumption. Giving money just so people can consume will mostly make more of the goods they consume. If you want future looking invention and innovation, you need savings that can be lent to startups, businesses, and other uses.
The thing to do is take a step back from money and consider production and consumption.
A basic income would hopefully create some increase in consumption.
The more interesting question is what it would do to production. The big fear is that it would cause a drop in production, a drop big enough that mean consumption would have to drop below where it is today.
A basic income would hopefully create some increase in consumption.
The more interesting question is what it would do to production. The big fear is that it would cause a drop in production, a drop big enough that mean consumption would have to drop below where it is today.
>A basic income would hopefully create some increase in consumption.
But you took the money to pay for basic income from someone else. They would have used it for consumption and possibly investment (or savings, which is also invested). So it is not at all clear this would result in a better economy.
But you took the money to pay for basic income from someone else. They would have used it for consumption and possibly investment (or savings, which is also invested). So it is not at all clear this would result in a better economy.
I more or less said that in the next paragraph there.
Re: state lotteries and education, I think John Oliver's segment is at least worth watching
https://www.youtube.com/watch?v=9PK-netuhHA
https://www.youtube.com/watch?v=9PK-netuhHA
Having negative income tax brackets for those that:
1. Work +
2. Declare their income (i.e., file tax returns) +
3. Make below X amount
... is more financially reasonable and has the benefit of keeping the person working/trying/moving.
In this system, as an example, someone making below 30K year would gets the difference between what they make and the 30K mark given to them.
Otherwise, the only other solution is to just have the FED print out the 5-10+ trillion/year this guaranteed minimum income program needs - and distribute it each month.
Most people are already paying a 40-60% effective tax rate (all use, property, local, state, federal taxes - and other related fees - added up) on what they earn, and you really can't tax them more for obvious reasons.
1. Work +
2. Declare their income (i.e., file tax returns) +
3. Make below X amount
... is more financially reasonable and has the benefit of keeping the person working/trying/moving.
In this system, as an example, someone making below 30K year would gets the difference between what they make and the 30K mark given to them.
Otherwise, the only other solution is to just have the FED print out the 5-10+ trillion/year this guaranteed minimum income program needs - and distribute it each month.
Most people are already paying a 40-60% effective tax rate (all use, property, local, state, federal taxes - and other related fees - added up) on what they earn, and you really can't tax them more for obvious reasons.
A solid BI system could be done for around $2-3 trillion, not $5-10+. BI supporter tend to over shoot, $2000 a month is too high and will disincentivize work too much. (Although, the market would correct itself via inflation given enough time.)
I worked out the figures, and roughly the equivalent of a 16hr/week job at min wage would be close to optimal and affordable.
Taxes should be lower too, btw, but that has to do with wasteful spending in many areas, and nothing to do with BI which can actually help get rid of some that waste.
I worked out the figures, and roughly the equivalent of a 16hr/week job at min wage would be close to optimal and affordable.
Taxes should be lower too, btw, but that has to do with wasteful spending in many areas, and nothing to do with BI which can actually help get rid of some that waste.
> disincentivize work too much
This assumes that work is good, and that not working is bad. How do you back up that assumption?
What happens when there is not enough work for everyone? If your value is intrinsically tied to your job, and there just aren't enough jobs to go around, are you supposed to just die and make way for someone who won the N lottery which let them get the job? Or should employers create unnecessary jobs just for the sake of giving everybody a job (and thus taxing us in another way, to support paying all of these unnecessary jobs)?
This assumes that work is good, and that not working is bad. How do you back up that assumption?
What happens when there is not enough work for everyone? If your value is intrinsically tied to your job, and there just aren't enough jobs to go around, are you supposed to just die and make way for someone who won the N lottery which let them get the job? Or should employers create unnecessary jobs just for the sake of giving everybody a job (and thus taxing us in another way, to support paying all of these unnecessary jobs)?
Speaking for people who make as much as, or more than, me: We could afford to pay a lot more in taxes.
Speak only for yourself, please.
I paid close to 50% of my income in income and payroll taxes last year. I live in the US and am not in the top marginal federal tax bracket. I feel I am taxed more than adequately when compared to other economies that provide a much greater service level for their citizens.
The problems in the US are not on the supply side, they are on the demand (government spending) side, and simply - they are on the military complex side.
I paid close to 50% of my income in income and payroll taxes last year. I live in the US and am not in the top marginal federal tax bracket. I feel I am taxed more than adequately when compared to other economies that provide a much greater service level for their citizens.
The problems in the US are not on the supply side, they are on the demand (government spending) side, and simply - they are on the military complex side.
Why isn't the statement that people on high incomes can afford to pay more tax generally true? Simply feeling that the tax you pay is adequate does not mean paying more would be unaffordable. Certainly you could more afford it than someone on an income of half or a quarter of yours.
The question of whether reducing funding of the military complex would be a better policy than tax increases is a valid one, but unrelated.
The question of whether reducing funding of the military complex would be a better policy than tax increases is a valid one, but unrelated.
The top marginal income tax bracket isn't the place where you pay the highest combined income + payroll tax, since the the larger part of tax is capped and it is otherwise flat, not progressive.
If your paying close to 50% combined, it probably means you'd pay less, as a percentage, if you made more. Getting close to 50% total rate is hard.
If your paying close to 50% combined, it probably means you'd pay less, as a percentage, if you made more. Getting close to 50% total rate is hard.
> Speaking for people who make as much as, or more than, me: We could afford to pay a lot more in taxes.
Here you go friend... http://fms.treas.gov/faq/moretopics_gifts.html
If what you just said is true, I'm sure you've already done this many times before. Lead by example, practiced what you preached, paid your real tax due.
And if not, no need to wait any more.
Here is also the public debt gift page (and stats) if you don't like the above one...
https://www.pay.gov/public/form/start/23779454
http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm
Here you go friend... http://fms.treas.gov/faq/moretopics_gifts.html
If what you just said is true, I'm sure you've already done this many times before. Lead by example, practiced what you preached, paid your real tax due.
And if not, no need to wait any more.
Here is also the public debt gift page (and stats) if you don't like the above one...
https://www.pay.gov/public/form/start/23779454
http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm
This argument doesn't have merit. Tragedy of commons/game theory provides us the basis to understand that individual/group efforts are insufficient. Voluntary donations to government from well-meaning individuals will put them at a disadvantaged position against those who are not concerned with the well-being of the others.
Advocating for across the board changes for everyone is a more efficient strategy.
Advocating for across the board changes for everyone is a more efficient strategy.
> Voluntary donations to government from well-meaning individuals will put them at a disadvantaged position against those who are not concerned with the well-being of the others.
The people that hold your position also say that the privileged can't be disadvantaged.
What I'm point out is hypocrisy.
The people that hold your position also say that the privileged can't be disadvantaged.
What I'm point out is hypocrisy.
>The people that hold your position also say that the privileged can't be disadvantaged.
Sorry, I don't get it. Can you elaborate please?
Sorry, I don't get it. Can you elaborate please?
I work for myself, and after I pay my taxes, I have about 2-5K left in my bank account. Then I live month-to-month from what I take in and what I chip away at.
If he can afford to pay more taxes, if he makes so much more than I, he can't be disadvantaged to me or the rest of us who can't afford to pay more taxes - by paying what he claims he wants to (but yet does not).
If he can afford to pay more taxes, if he makes so much more than I, he can't be disadvantaged to me or the rest of us who can't afford to pay more taxes - by paying what he claims he wants to (but yet does not).
>he can't be disadvantaged
The point is not that they are disadvantaged in absolute terms, but in comparison to those who value profit above all else. Voluntary gifts to gov diminishes relative power of those more compassionate and increases relative influence of those who are less inclined to help others.
Also, the increase in taxation in question could be applied only at the top of income ranges.
Moreover, if you have $2-5K left in your bank account you may be considered privileged by some standards.
The point is not that they are disadvantaged in absolute terms, but in comparison to those who value profit above all else. Voluntary gifts to gov diminishes relative power of those more compassionate and increases relative influence of those who are less inclined to help others.
Also, the increase in taxation in question could be applied only at the top of income ranges.
Moreover, if you have $2-5K left in your bank account you may be considered privileged by some standards.
Why not start with something smaller, like providing "basic food" for everyone, and see what the result is? You could reuse existing programs, like food stamps, where the infrastructure is already in place for most grocery stores to accept payment. (except without the application process)
That seems like a less risky change than trying to provide enough income to cover housing, utilities, clothing, etc. all at once.
That seems like a less risky change than trying to provide enough income to cover housing, utilities, clothing, etc. all at once.
Or just start with a small Basic Income to test out the system.
Also a good option.
Personally, I think I would favor providing something like food through a system like food stamps first. It provides less risk of the money being wasted on addictions (drugs, gambling and other bad financial decisions) and better ensures the money is used to help someone (especially in the case of children, where they are not spending the money, but their parents are).
Personally, I think I would favor providing something like food through a system like food stamps first. It provides less risk of the money being wasted on addictions (drugs, gambling and other bad financial decisions) and better ensures the money is used to help someone (especially in the case of children, where they are not spending the money, but their parents are).
But part of the theory behind Basic Income is that people will change their behaviour when given more Agency, restricting what they can spend it on doesn't let us test this.
Is "basic food" enough without "basic shelter"?
Its better than nothing, isn't it? Basic shelter is a more complex and expensive problem to solve (due to varying costs and lack of existing infrastructure).
I think helping eliminate hunger (especially for children), is a good place to start, without having to make a massive change in how government is run without knowing how it will effect the economy.
I think helping eliminate hunger (especially for children), is a good place to start, without having to make a massive change in how government is run without knowing how it will effect the economy.
I think what we need is "basic commodities" in terms of foodstuffs that a person could live off of, for example: a 40lb bag of rice, lentils, 3 different kinds of beans, corn meal, canned tomatoes, canned fruit, and a jar full of multi-vitamins. Absolutely no proof of income status should be required only a quick verification that that A. You are a human being, and B. you're not abusing the system by taking more than you could actually consume during a given time period.
This ensures that nobody ever needs to go hungry, it puts money in people's pockets because now they don't have to spend as much of their income on food, and it accomplishes this all without prying into the private details of anyone's life.
The goal in my opinion should not be to "give everyone an income" but rather to give everyone a safety net on top of which they can attempt to build a life for themselves. It trains people to be used to sharing and giving the things that we need to sustain ourselves, which is healthy and nurtures a cooperative spirit among men.
This ensures that nobody ever needs to go hungry, it puts money in people's pockets because now they don't have to spend as much of their income on food, and it accomplishes this all without prying into the private details of anyone's life.
The goal in my opinion should not be to "give everyone an income" but rather to give everyone a safety net on top of which they can attempt to build a life for themselves. It trains people to be used to sharing and giving the things that we need to sustain ourselves, which is healthy and nurtures a cooperative spirit among men.
The trick that governments all around the world pull is taxing those who are not wealthy.
Taxation should not be a 'membership cost' for society. It should be a fee levied on the very wealthy, not out of some sense of spite, but in order that the system continues to produce reasonable outcomes for everyone.
When you do that, then basic income can be argued for reasonably.
Right now, poor/working class people fall over themselves to come up with reasons why BI won't work because they don't want their tax burdens to rise.
Land and capital owners should pay tax. Those with zero net worth really shouldn't. Why?
Because taxation on labour is effectively stolen labour. Taxation on capital is simply an adjustment in living standards. The two are hugely different.
The idea that the rich would just go fugitive if wealth were taxed is a total fantasy. Knightsbridge exists as a real place. I can cycle down the road and pop a letter through a letterbox. It might become marginally less attractive with a 1% annual tax. It might be that the economic boom caused by redistribution results in it increasing in value anyway.
Taxation should not be a 'membership cost' for society. It should be a fee levied on the very wealthy, not out of some sense of spite, but in order that the system continues to produce reasonable outcomes for everyone.
When you do that, then basic income can be argued for reasonably.
Right now, poor/working class people fall over themselves to come up with reasons why BI won't work because they don't want their tax burdens to rise.
Land and capital owners should pay tax. Those with zero net worth really shouldn't. Why?
Because taxation on labour is effectively stolen labour. Taxation on capital is simply an adjustment in living standards. The two are hugely different.
The idea that the rich would just go fugitive if wealth were taxed is a total fantasy. Knightsbridge exists as a real place. I can cycle down the road and pop a letter through a letterbox. It might become marginally less attractive with a 1% annual tax. It might be that the economic boom caused by redistribution results in it increasing in value anyway.
How expensive is it to NOT provide a "basic income"?
This consideration is missing in most of discussions about basic income. What is the opportunity cost of NOT implementing a basic income scheme?
What if we make an effort to assess the opportunity cost in longevity changes, public health indicators, crime rate, education levels and, perhaps, most encompassing and important parameter: human happiness.
I am quite sure that the opportunity cost which humanity and individual nation-states incur for not implementing basic income is absurdly, humongously huge.
What if we make an effort to assess the opportunity cost in longevity changes, public health indicators, crime rate, education levels and, perhaps, most encompassing and important parameter: human happiness.
I am quite sure that the opportunity cost which humanity and individual nation-states incur for not implementing basic income is absurdly, humongously huge.
I don't see how this is affordable. With the Swiss amount of $2700 per month ($32,400 p.a) it's $32bn for 1m people per annum (8m people in Switzerland). This is 45% of the annual federal budget last year ($70b) & doesn't even cover 13% of the population. What about everything else that needs government expenditure: roads, defense, education & research, regulatory oversight, police?
But you don't need all the people you are paying to control all sorts of things in a conditional system. So you would basically get rid of a lot of expenses that are currently being used to control the system.
I don't see how you could get rid of spending on roads, police, foreign relations, defense, regulatory oversight? It's a jump to assume crime would disappear with basic income and police would no longer be needed.
Also expenditures where economies of scale can be achieved are better off as government expenditures as an individual would get nowhere near the cost effectiveness (healthcare, education) or the incentive to build as an individual (roads, parks, water networks, cleaning, etc).
There's also the prime issue of how it can be afforded in the first place, besides all the consequences of reallocating existing expenditure.
Also expenditures where economies of scale can be achieved are better off as government expenditures as an individual would get nowhere near the cost effectiveness (healthcare, education) or the incentive to build as an individual (roads, parks, water networks, cleaning, etc).
There's also the prime issue of how it can be afforded in the first place, besides all the consequences of reallocating existing expenditure.
Thats not what we are talking about. We are talking about the system to control that people are in fact getting what they are supposed to and not cheating.
Thats many many times bigger than you would think. Also no one is talking about not spending on road and the current system doesn't really do that either IMO.
Thats many many times bigger than you would think. Also no one is talking about not spending on road and the current system doesn't really do that either IMO.
Administrative costs aren't all that high:
http://www.cbpp.org/research/romneys-charge-that-most-federa...
http://www.ssa.gov/oact/STATS/admin.html
Making the spending a couple percent more effective doesn't really even start to pay for spending 10x.
So administrative savings aren't actually all that important a consideration when it comes to a basic income (Put it this way: the programs at the first link could have 100x their current administrative costs and still cost considerably less than a basic income).
Replacing contingent benefits with a basic income should be a positive, it's just that the expected change can't be all that large compared to the numbers required for even a small basic income.
http://www.cbpp.org/research/romneys-charge-that-most-federa...
http://www.ssa.gov/oact/STATS/admin.html
Making the spending a couple percent more effective doesn't really even start to pay for spending 10x.
So administrative savings aren't actually all that important a consideration when it comes to a basic income (Put it this way: the programs at the first link could have 100x their current administrative costs and still cost considerably less than a basic income).
Replacing contingent benefits with a basic income should be a positive, it's just that the expected change can't be all that large compared to the numbers required for even a small basic income.
Administration isn't all there is to controlling whether someone is getting the right benefits or not.
I think there is an opposing argument to the benefits you claim could be achieved. By having free income, there is less of an incentive to work, there is actually a large chance productivity would drop, not increase!
Also, keep in mind you need funds to run the tax collection system to collect taxes to fund the basic income scheme. On a theoretical basis you may have a point but I don't see its that easy or possible in reality. I for one would just use the basic income to live and roam the world without giving anything back (since this is what I'm incentivised to do).
Also, keep in mind you need funds to run the tax collection system to collect taxes to fund the basic income scheme. On a theoretical basis you may have a point but I don't see its that easy or possible in reality. I for one would just use the basic income to live and roam the world without giving anything back (since this is what I'm incentivised to do).
I doubt that. If basic income was implemented as a straight, tax-free cash payment, which didn't contribute to income tax, and replaced current means-tested welfare benefits, I think that it would actually be a net win for everyone. If you work, it means extra money in your pocket, and your benefits don't get pulled out from under you if you go over the income limits. On the government side, administration gets much simpler - just mail out the checks to everybody. You could also drastically simplify the tax code.
There is'nt less incentive to work I dont know how you would conclude such a thing.
With unconditional basic income there is always an incentive to work since it will always benefit you even just for a day. You aren't going to live like a king on basic income, not even close.
With unconditional basic income there is always an incentive to work since it will always benefit you even just for a day. You aren't going to live like a king on basic income, not even close.
Is basic income taxable or not? If it is taxable, the federal budget can be expanded. If not, tax rates would need to change. If a person makes $100,000, what should their net taxes be? They will recieve $34,400 in basic income, if they paid 45% tax, it would only be a net of $10,600 in taxes.
Probably as expensive as giving the homeless free housing... which has repeatedly shown to be cheaper than not
If you believe that deeply in that idea, then turn it into a startup. Put your own money into it and I'm sure you'll see truly interesting results!
The money saved is in police time, emergency health care, etc. so you'd need a way for a private enterprise to claim the savings that result from housing the homeless to make this market work.
In a large city these are all city services, which implies that a startup could work with the city as the customer.
It's already being demonstrated in Utah. Giving the homeless an apartment and a case worker is not only more humane and the right thing to do, it's also a lot cheaper than leaving them alone (and then treating them when they show up in the ER, etc).
The intersection of Good/Needed Ideas and Ideas That Turn a Profit is slim.
yes, this is the grim reality
I really like the general idea of basic income, but I don't think it's the right time for it now. The only reason I say that is that we need to address the destabilising effects of the banking sector before money is ready to use as a means of providing a safety net.
Control over the money supply ensures that prices can settle, which means that the income you earn (through UBI or otherwise) can give the basic quality of life we want to ensure all have access to. However, at the moment, the increase of money in circulation is largely driven by banks, who serve profit over people.
Solve the banking issue, and you'd have removed a road block for UBI as well as freeing up the capital to do it.
Alternatively, I like the idea of 'basic food' and 'basic shelter' that were mentioned elsewhere in these comments. They'd probably be easier to push through, as well as providing tangible benefits for those in need.
Control over the money supply ensures that prices can settle, which means that the income you earn (through UBI or otherwise) can give the basic quality of life we want to ensure all have access to. However, at the moment, the increase of money in circulation is largely driven by banks, who serve profit over people.
Solve the banking issue, and you'd have removed a road block for UBI as well as freeing up the capital to do it.
Alternatively, I like the idea of 'basic food' and 'basic shelter' that were mentioned elsewhere in these comments. They'd probably be easier to push through, as well as providing tangible benefits for those in need.
I haven't really made up my mind about Basic Income, but one thing I never heard advocates of Basic Income talk about is that incentives matter to human behavior. BI will tax people who work more and give handouts to those who don't. This disincentivizes working and incentivizes not working. For example, the increasing numbers of people on Social Security Disability Insurance seems like a similar phenomenon and is not a good omen. [1]
[1] - http://www.ssa.gov/policy/docs/chartbooks/disability_trends/...
[1] - http://www.ssa.gov/policy/docs/chartbooks/disability_trends/...
We don't know for sure how Basic Income will incentivise people, but I believe that it takes away a lot of negative incentives.
People at the moment are influenced by the need for enough income to support themselves securely. Poor people spend all of their mental energy on this problem, and middle class people spend some of their mental energy ensuring they don't drop into the poor category.
This has all sorts of negative implications - people rationalising work they do that is bad for society; people making sure they meet the criteria to receive SSDI.
If you give everyone Basic Income, there will presumably still be people who seek to play the system, but you remove a lot of those automatic negative incentives.
If people can see work as a way of earning luxuries, rather than as something they are dependent on for personal security, there may be some people who choose not to work. It may be that non-prestige jobs (such as cleaning) have to be paid higher.
But, I feel 100% comfortable with that. I think non-prestige jobs are woefully unfairly paid, as it is.
On the other side, people who want to work on something transformative will have more opportunity to do so, if they don't have to take the risk of not being able to provide for their basic needs.
People at the moment are influenced by the need for enough income to support themselves securely. Poor people spend all of their mental energy on this problem, and middle class people spend some of their mental energy ensuring they don't drop into the poor category.
This has all sorts of negative implications - people rationalising work they do that is bad for society; people making sure they meet the criteria to receive SSDI.
If you give everyone Basic Income, there will presumably still be people who seek to play the system, but you remove a lot of those automatic negative incentives.
If people can see work as a way of earning luxuries, rather than as something they are dependent on for personal security, there may be some people who choose not to work. It may be that non-prestige jobs (such as cleaning) have to be paid higher.
But, I feel 100% comfortable with that. I think non-prestige jobs are woefully unfairly paid, as it is.
On the other side, people who want to work on something transformative will have more opportunity to do so, if they don't have to take the risk of not being able to provide for their basic needs.
1. A basic income doesn't mean that you have enough to fulfil all dreams. There will still be reasons to earn more income, especially with those who are capable of delivering value.
2. There is a fundamental assumption that we are at a technological stage where work can be automated. If there are not enough jobs that someone a standard deviation below average intelligence can fulfil, we could be coming upon a societal disaster.
If instead, we incentivize automation by saying, "no job is a superior alternative to an easily automatable, low value job where people are treated as disposable," there is no significant conflict. If people with low skill do not choose to work, and their skills are automatable, it is only our moral qualms that get in the way.
As it is now, significant portions of the population cannot provide enough value to ensure their subsistence, minimum wage or otherwise. Is it only our morals that require some work from them?
3. Incentivizing not working also means incentivizing spending a year on an idea that could advance society, or works of art and literature. Harry Potter was written by someone who decided not to work. There might be major value to society that we're losing because we don't have a basic income.
2. There is a fundamental assumption that we are at a technological stage where work can be automated. If there are not enough jobs that someone a standard deviation below average intelligence can fulfil, we could be coming upon a societal disaster.
If instead, we incentivize automation by saying, "no job is a superior alternative to an easily automatable, low value job where people are treated as disposable," there is no significant conflict. If people with low skill do not choose to work, and their skills are automatable, it is only our moral qualms that get in the way.
As it is now, significant portions of the population cannot provide enough value to ensure their subsistence, minimum wage or otherwise. Is it only our morals that require some work from them?
3. Incentivizing not working also means incentivizing spending a year on an idea that could advance society, or works of art and literature. Harry Potter was written by someone who decided not to work. There might be major value to society that we're losing because we don't have a basic income.
What's interesting about your point 3. is that it speaks to these archetypes we have defined for people.
We have so ingrained in our minds that a person's value to society is defined by his/her economic contribution in the traditional sense (i.e. via a job or business ownership), that we assume that a person who does not work has no value by definition. In fact, they are even morally deficient. So, how can they possibly be of a quality/character as to contribute anything to society via arts, ideas, or otherwise?
It's a sneaky bit of circular logic that, for many, argues against a BI.
We have so ingrained in our minds that a person's value to society is defined by his/her economic contribution in the traditional sense (i.e. via a job or business ownership), that we assume that a person who does not work has no value by definition. In fact, they are even morally deficient. So, how can they possibly be of a quality/character as to contribute anything to society via arts, ideas, or otherwise?
It's a sneaky bit of circular logic that, for many, argues against a BI.
There's even more to it -- it's that the only thing of value to society is that which can be traded for money.
Indeed. When companies that otherwise have the wherewithal choose not to pursue cures or vaccines because there isn't enough profit in it, larger society barely pauses to register the true awfulness of such a calculus.
But, this is the type of stucture that we've engineered to allocate the world's resources--one where human value is malleable and always somewhere along the economic continuum. It's the same structure that precipitates the need for a BI and, sadly, also produces the minds that resist it.
But, this is the type of stucture that we've engineered to allocate the world's resources--one where human value is malleable and always somewhere along the economic continuum. It's the same structure that precipitates the need for a BI and, sadly, also produces the minds that resist it.
This disincentivizes working and incentivizes not working.
Some might see that as a good thing. Being forced to do something you hate for fear of not being able to feed your family is probably not healthy for anyone involved. Imagine if that person could quit their job and spend time with their kids instead.
Imagine the passionate painter or musician being able to paint or make music full time without worrying about having to pay rent next month.
Imagine the corporate programmer being able to quit his job and work 6 month on that open source project he always wanted to do.
As someone who actively enjoys his job and looks forwards to going to work most mornings, I think it would be kind of neat if more people could feel that.
Sure some people will just use their new freedom to drink beer and watch TV all day, but perhaps those people weren't contributing too much to begin with, making the net loss minor.
The main 'down' side would be that getting people to do 'shit' jobs will get harder and more expensive, but I think that might work out to be a reasonable price to pay.
Personally I'm not really convinced the numbers add up economically to make it actually viable, but I see it as an interesting utopia.
Some might see that as a good thing. Being forced to do something you hate for fear of not being able to feed your family is probably not healthy for anyone involved. Imagine if that person could quit their job and spend time with their kids instead.
Imagine the passionate painter or musician being able to paint or make music full time without worrying about having to pay rent next month.
Imagine the corporate programmer being able to quit his job and work 6 month on that open source project he always wanted to do.
As someone who actively enjoys his job and looks forwards to going to work most mornings, I think it would be kind of neat if more people could feel that.
Sure some people will just use their new freedom to drink beer and watch TV all day, but perhaps those people weren't contributing too much to begin with, making the net loss minor.
The main 'down' side would be that getting people to do 'shit' jobs will get harder and more expensive, but I think that might work out to be a reasonable price to pay.
Personally I'm not really convinced the numbers add up economically to make it actually viable, but I see it as an interesting utopia.
We're all "forced" to work because living requires resources. This is not an effect of civilization - wild animals work harder for their livings, and have nasty brutish lives to boot.
If the corporate programmer is willing to live a very frugal life (See Mr. Money Mustache, Jacob Lundfisker, etc.), then it won't take him or her very long at all to build up a 6-month cost-of-living fund. Perhaps it takes working three months to six months? (I know it's possible because I've done it.) And I'm not sure it's the job of society to support artists in their art independent of its value to society. At least I know I'm not interested in supporting it in my taxes. So I'm not so sure these examples are persuasive.
However, I do agree that it will become much harder to get people to do 'shit' jobs. One side effect is that it would give a serious additional kick towards automation, and so long as BI is implemented, that's good thing in terms of elevating the human condition.
If the corporate programmer is willing to live a very frugal life (See Mr. Money Mustache, Jacob Lundfisker, etc.), then it won't take him or her very long at all to build up a 6-month cost-of-living fund. Perhaps it takes working three months to six months? (I know it's possible because I've done it.) And I'm not sure it's the job of society to support artists in their art independent of its value to society. At least I know I'm not interested in supporting it in my taxes. So I'm not so sure these examples are persuasive.
However, I do agree that it will become much harder to get people to do 'shit' jobs. One side effect is that it would give a serious additional kick towards automation, and so long as BI is implemented, that's good thing in terms of elevating the human condition.
You are right, but only because most BI supporters advocate too high an income. Keep the equivalent down around a part-time min wage job, and it would do wonders for the economy with little disincentive.
That's more or less what the 'basic' is aimed at, part of the idea is to set the income at a level that has a limited impact on the incentive to work.
Chart 3 shows quite some growth since 1980, but the per year increase is not exactly astronomical (and the page mentions that there are trends not accounted for in the data, such as the aging of the baby boomers).
It's also reasonable to expect a contingent benefit to have more impact on the incentive than an uncontingent benefit.
Chart 3 shows quite some growth since 1980, but the per year increase is not exactly astronomical (and the page mentions that there are trends not accounted for in the data, such as the aging of the baby boomers).
It's also reasonable to expect a contingent benefit to have more impact on the incentive than an uncontingent benefit.
Basic income is not wealthy income you wont' be getting that much, just enough. Furthermore with unconditional basic income you will always be incentivized to work even if just for a month or a season (since you are not taxed on you basic income)
We do have some evidence:
http://m.huffpost.com/ca/entry/6335682
http://m.huffpost.com/ca/entry/6335682
One of the key planks of basic income (and the similar negative income tax) is to better align incentives so that working more always pays more (which it often doesn't today for the poorest due to poorly designed schemes that phase out benefit too quickly).
The whole discussion is ridiculous to me. All of the money filters back up to the capitalists anyway. Is that not mind-bendingly obvious?
If you are a recipient of the basic income, you spend it all. Every last dollar. You don't build net worth and take it out of the economy. (If more than a small hardcore crowd even can, it's been set too high).
In a country like the UK, that gets taxed at 50%+ (providing the tax authorities are actually doing their job and have not been deliberately underfunded). So half of it almost immediately goes back into the Government coffers.
I don't understand why people spend so much time doing arcane analyses whilst seemingly missing how the economy works at a very basic level.
Government spending can be a net drain in two broadly defined ways, as far as I can see. There may be others that I am missing.
1. Giving money to the rich directly who then hoard it. 2. Inefficient allocation of human talent or natural resources (e.g. if the government paid me 200k pa to chew pens, and I gave up my real job).
Spending on the poor really cannot cost money unless you have issues with collecting taxes.
If you are a recipient of the basic income, you spend it all. Every last dollar. You don't build net worth and take it out of the economy. (If more than a small hardcore crowd even can, it's been set too high).
In a country like the UK, that gets taxed at 50%+ (providing the tax authorities are actually doing their job and have not been deliberately underfunded). So half of it almost immediately goes back into the Government coffers.
I don't understand why people spend so much time doing arcane analyses whilst seemingly missing how the economy works at a very basic level.
Government spending can be a net drain in two broadly defined ways, as far as I can see. There may be others that I am missing.
1. Giving money to the rich directly who then hoard it. 2. Inefficient allocation of human talent or natural resources (e.g. if the government paid me 200k pa to chew pens, and I gave up my real job).
Spending on the poor really cannot cost money unless you have issues with collecting taxes.
2700 per month is 32.4k per year - that's awfully high for a basic income. I'm not surprised it's "too expensive".
Adjusting to GDP per capita gives a US equivalent of $20K/year. For the UK it adjusts to £10K/year, pretty much exactly the amount a single adult would get on job seeker's allowance plus housing benefit. (For pensioners and single parents with one child it goes up to about £15K/year.)
I agree, but we are talking about the Swiss here. Those people are pretty rich.
In the relatively near-term future it will be literally impossible to employ more than half of the population in nearly full-time positions that produce a net gain for their being filled. At that point there are essentially two choices - let some people not work, or let everybody work less. (There's actually a third choice that will probably be the default - make-work for all, so that we can be kept too busy to effect change).
The latter sounds more fair, but is inherently less efficient - specialization means that for every doctor to work half as much, we have to train twice as many doctors for the same amount of 'product' (the practicing of medicine).
The math in this article seems to also have inexplicably paired 'basic income' with 'flat tax' - while I'm sure there are plenty of people who would like both, those two systems are completely separate, and there's no good reason not to consider the effects in isolation rather than together.
The latter sounds more fair, but is inherently less efficient - specialization means that for every doctor to work half as much, we have to train twice as many doctors for the same amount of 'product' (the practicing of medicine).
The math in this article seems to also have inexplicably paired 'basic income' with 'flat tax' - while I'm sure there are plenty of people who would like both, those two systems are completely separate, and there's no good reason not to consider the effects in isolation rather than together.
As a big fan of the idea of a basic income I would love some numbers on this. Simplicity is sometimes worth the price.
No one on this thread seems to be aware that basic income has been tried in several trials both in the US and Canada. See, for instance, http://en.wikipedia.org/wiki/Mincome
One thing that I think doesn't come up very often when discussing BI is the fact that many other laws will have to dramatically change to make the experiment successful. Just imagine the enormous increase in things like contribution to open source, creation of art and culture, etc. I don't believe that the current environment of hyper-strict IP and patent laws can continue if BI were to be implemented, as many more people would use their increased leisure time to create. Today we can already see conflicts between big IP companies and individual creators, and if BI is introduced it will get much worse.
Inflation is currently controlled by adjusting the amount of new money printed to back up loans given to large banks.
Instead of printing new money in this way, we could just give the new money directly to the citizens.
Quick napkin math shows that every person in the US would have gotten a check every year all the way back to the 30's (some years smaller than others), without needing to raise taxes at all. In fact cancelling some of the welfare programs made unnecessary by this system would likely result in lower taxes.
Loans would be more expensive, but more expensive loans seems like a small price to pay for basically ending homelessness and hunger.
Instead of printing new money in this way, we could just give the new money directly to the citizens.
Quick napkin math shows that every person in the US would have gotten a check every year all the way back to the 30's (some years smaller than others), without needing to raise taxes at all. In fact cancelling some of the welfare programs made unnecessary by this system would likely result in lower taxes.
Loans would be more expensive, but more expensive loans seems like a small price to pay for basically ending homelessness and hunger.
n Britain, for example, workers can earn £10,600 ($16,500) before income tax is levied on subsequent earnings (starting at 20%).
Shortly to increase to £12,500 in George Osborne's next budget in July.
Shortly to increase to £12,500 in George Osborne's next budget in July.
1. The £12,500 promise is for this parliament, i.e. before 2020. It's probable that they will exceed the promise, but not in July.
2. Increasing the personal allowance no longer makes much difference to the poor and underemployed: the disadvantaged in society. Thanks to the last parliament, they are out of this category.
Increasing the benefit is now primarily a small tax benefit for the working middle classes that has the significant advantage of appearing to be progressive.
2. Increasing the personal allowance no longer makes much difference to the poor and underemployed: the disadvantaged in society. Thanks to the last parliament, they are out of this category.
Increasing the benefit is now primarily a small tax benefit for the working middle classes that has the significant advantage of appearing to be progressive.
Best solution I've come across is a small <1% fee on all financial transactions. Which would work well if all those transactions in the world occurred on a blockchain.
This guy is giving the method a shot: http://www.basicincome.co/
This guy is giving the method a shot: http://www.basicincome.co/
Many countries have tried it, and it usually ends like this [1] implementation by the Swedes from 1984-1991. Then they cancelled it after witnessing the devastation to their economic sector.
"During the first week of the tax, the volume of bond trading fell by 85%, even though the tax rate on five-year bonds was only 0.003%. The volume of futures trading fell by 98% and the options trading market disappeared. 60% of the trading volume of the eleven most actively traded Swedish share classes moved to the UK after the announcement in 1986 that the tax rate would double. 30% of all Swedish equity trading moved offshore. By 1990, more than 50% of all Swedish trading had moved to London. Foreign investors reacted to the tax by moving their trading offshore while domestic investors reacted by reducing the number of their equity trades.
As a result, revenues from these taxes were disappointing. For example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million. In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax that had grown to 4,000 million Swedish kronor by 1988."
[1] http://en.wikipedia.org/wiki/Swedish_financial_transaction_t...
"During the first week of the tax, the volume of bond trading fell by 85%, even though the tax rate on five-year bonds was only 0.003%. The volume of futures trading fell by 98% and the options trading market disappeared. 60% of the trading volume of the eleven most actively traded Swedish share classes moved to the UK after the announcement in 1986 that the tax rate would double. 30% of all Swedish equity trading moved offshore. By 1990, more than 50% of all Swedish trading had moved to London. Foreign investors reacted to the tax by moving their trading offshore while domestic investors reacted by reducing the number of their equity trades.
As a result, revenues from these taxes were disappointing. For example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million. In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax that had grown to 4,000 million Swedish kronor by 1988."
[1] http://en.wikipedia.org/wiki/Swedish_financial_transaction_t...
Economists believe that a financial transaction tax would primarily result in reducing low-income employment opportunities and ultimately be paid for by low-income consumers: http://en.wikipedia.org/wiki/Robin_Hood_tax#Evaluation_and_r...
The TL;DR is that a transaction tax would primarily serve to increase bid-offer spread, which slows down the markets and results in every industry selling slightly less at slightly higher prices - which naturally means slightly shifting to favour those with more purchasing power.
The TL;DR is that a transaction tax would primarily serve to increase bid-offer spread, which slows down the markets and results in every industry selling slightly less at slightly higher prices - which naturally means slightly shifting to favour those with more purchasing power.
Or the .5% tax on stock trades Bernie Sanders suggested. I like that better as it should have a smaller effect on consumer prices.
Raise tax on capital gains and stop corporate tax avoidance. You'll have enough to implement a minimum wage.
sure actually giving everyone 10k a year is going to cost too much. But I don't think anyone who is sane is actually proposing that.
At the moment, the poor get a mismash of benifits that all require administration.
replacing that with a single means tested universal income is far simpler.
for example:
every house hold is entitled to 10K, if you only earn 5k, you get a top up to 10k. This is no more costly that what already exisits in the UK (housing benefit, out of work, DLA, working tax credits) but is a magnitude more easy to administrate.
You get the added bonus of abolishing pensions that cost uber cash to maintain.
I think the economist is deliberately grasping at the wrong straws. Either that or the Swiss are batshit insane.
At the moment, the poor get a mismash of benifits that all require administration.
replacing that with a single means tested universal income is far simpler.
for example:
every house hold is entitled to 10K, if you only earn 5k, you get a top up to 10k. This is no more costly that what already exisits in the UK (housing benefit, out of work, DLA, working tax credits) but is a magnitude more easy to administrate.
You get the added bonus of abolishing pensions that cost uber cash to maintain.
I think the economist is deliberately grasping at the wrong straws. Either that or the Swiss are batshit insane.
That's a 100% tax rate on your first 10K in income?
You're correct in that it can replace a mish-mash of benefits, but incorrect to suggest topping up to a set limit. Rather they should get a set amount and then we can let wages fall to levels that would be unviable if the basic income wasn't in place.
How is basic income even feasible from an economic, realistic standpoint? It would have to be wealthy people taking the hit right? How else would it be possible?
Here is my high-level hypothesis, sans numbers: most workers produce far less real value than what they are paid. At one end you have many white-collar jobs that are glorified seat fillers, padding budgets for their departments. At the other end, you have blue-collar jobs whose value is artificially inflated by a minimum wage (or, wastefully shipping work overseas, and finished products back.)
In a UBI world (also assuming socialized medicine), neither minimum wage nor de facto salary+benefits would be necessary, and labor would be free to seek its true market value, as the competition becomes over status rather than survival. My hunch is that even if all work was taxed (flat or progressive) to pay for it, the actual purchasing power of the dollar would increase to offset it due a more efficient market. (It would also be offset by the elimination of means-testing and beauracracy in existing social programs, as well as enabling a great deal more education and entrepreneurship.)
Admittedly, the idea is abstract and hand-wavy. But it's worth considering.
In a UBI world (also assuming socialized medicine), neither minimum wage nor de facto salary+benefits would be necessary, and labor would be free to seek its true market value, as the competition becomes over status rather than survival. My hunch is that even if all work was taxed (flat or progressive) to pay for it, the actual purchasing power of the dollar would increase to offset it due a more efficient market. (It would also be offset by the elimination of means-testing and beauracracy in existing social programs, as well as enabling a great deal more education and entrepreneurship.)
Admittedly, the idea is abstract and hand-wavy. But it's worth considering.
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Here's some of my ideas:
1. CEO pay cap @ 20x(or some other similarly reasonable #) of the median salary of the employees. Median salary is 30k ? So I can only earn 600k ? Screw that, I'm going to get everyone closer to 75k, that'll put me at 1.5 mill, that's way better - and everyone profits.
2. Flat but fluid Nationwide Sales Tax (would mean anyone visiting, or staying illegally has to pay taxes -- way better than an income tax.) -- Adjust this yearly as needed to compensate for basic income and other needs. When there's a surplus lower it the next year, when there's a deficit raise it 1-2 cents per dollar.
3. Higher taxes on luxuries like: 4star+ hotels, First Class plane seats, fancy cars, boats, private jets.
4. All recipients must have a roof over their head, and an address to mail the check to.
5. Congress / Senate pay and benefits capped at the national average as well.
6. Allow individuals, ceo's, etc who have more money to "pay it forward" and actually donate money to the government earmarked for the basic income fund. Some of the .01% may actually want to help out the rest.
7. Tax on automation, and companies that use robots to displace workers. The age of the robot worker is coming, this may slow that down if we can make it less of an incentive.
2. Flat but fluid Nationwide Sales Tax (would mean anyone visiting, or staying illegally has to pay taxes -- way better than an income tax.) -- Adjust this yearly as needed to compensate for basic income and other needs. When there's a surplus lower it the next year, when there's a deficit raise it 1-2 cents per dollar.
3. Higher taxes on luxuries like: 4star+ hotels, First Class plane seats, fancy cars, boats, private jets.
4. All recipients must have a roof over their head, and an address to mail the check to.
5. Congress / Senate pay and benefits capped at the national average as well.
6. Allow individuals, ceo's, etc who have more money to "pay it forward" and actually donate money to the government earmarked for the basic income fund. Some of the .01% may actually want to help out the rest.
7. Tax on automation, and companies that use robots to displace workers. The age of the robot worker is coming, this may slow that down if we can make it less of an incentive.
If you took all the money paid to all Walmart employees above the manager position, every last cent, and redistributed it back to the workers, you'd increase their pay by less than $100.
You are assuming that companies are all in a high margin low competition markets, and a bunch of other stuff that is simply not true.
You are assuming that companies are all in a high margin low competition markets, and a bunch of other stuff that is simply not true.
CEO Pay Cap: This would be tough to regulate due to the creative ways that executives get paid.
Luxury Taxes: Not enough volume to make a difference.
Roof: Wouldn't you still need welfare, then? Doesn't this defeat the purpose of basic income (e.g. eliminating the administrative overhead of welfare payments)?
Congress/Senate: They don't make big money from paychecks.
Automation taxing: The overhead of levying that tax in a fair and effective way is dizzying.
Luxury Taxes: Not enough volume to make a difference.
Roof: Wouldn't you still need welfare, then? Doesn't this defeat the purpose of basic income (e.g. eliminating the administrative overhead of welfare payments)?
Congress/Senate: They don't make big money from paychecks.
Automation taxing: The overhead of levying that tax in a fair and effective way is dizzying.
What is really going to happen:
1) let me fire a bunch of low income workers, this causes the media and average to go up + stock options go up. Oh actually let me take the entire thing in stock options. Also now I work for 1 company that exclusively owns the other companies and only have one other employee who makes millions.
2) I rent everything or move to a different country
3) Same
4) Mother of 3 starved to death because government lost her address notification - read all about it in the news.
5) Only idiots want to run for the Senate.. Oh never mind
6) This will probably work, but I wonder if it will do enough to offset the cost?
7) You want to further incentivize companies to move out of the country?
1) let me fire a bunch of low income workers, this causes the media and average to go up + stock options go up. Oh actually let me take the entire thing in stock options. Also now I work for 1 company that exclusively owns the other companies and only have one other employee who makes millions.
2) I rent everything or move to a different country
3) Same
4) Mother of 3 starved to death because government lost her address notification - read all about it in the news.
5) Only idiots want to run for the Senate.. Oh never mind
6) This will probably work, but I wonder if it will do enough to offset the cost?
7) You want to further incentivize companies to move out of the country?
For example, water and parking spaces could be priced at their actual cost, rather than being subsidized. This would make the water market function properly and allocate it efficiently, and remove a bunch of car-related externalities.
Need public housing? Not if you set a high enough basic income level.
Street crime? Possibly quite reduced.
Massive corn subsidies? Who needs 'em?
And think of all the otherwise great ideas that we don't do because they'd effectively be regressive taxation. For example, congestion pricing. We could revisit all those ideas.
And what about when the children of would-have-been-poor households grow up with an actual ladder up? Think of the things they'll invent, the contributions they'll make to society.