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Basic income doesn't emphasize divisions between poor and working people

basicincomecanada.org

161–170 of 259 posts

Re: Basic income doesn't emphasize divisions between poor and working people

#161
post #59

Earlier quoted context omitted.

I have seen it in every discussion. Some of the forms of evasion include: * focusing on the wealth/profit generated by a surge in entrepreneurship from the millions suddenly motivated to start successful businesses * focusing on the unlimited wealth created by robots/asteroids/solar in space which will fund any program we wish * focusing on how we can't afford not to try BI, i.e., the default system is a financial fa…

Don't forget lots of incorrect assumptions about human nature, namely that there won't be a large, permanent underclass created by BI and that the people actually paying for BI will be more than happy to do so.

> Don't forget lots of incorrect assumptions about human nature, namely that there won't be a large, permanent underclass created by BI and that the people actually paying for BI will be more than happy to do so.

I think almost everyone would want to work on $13-$15k a year. However, they'd work part time.

And tbh, for our current welfare system, that is essentially what happens already. They work minimum wage jobs, part time, on call.

Re: Basic income doesn't emphasize divisions between poor and working people

#162
post #107

Earlier quoted context omitted.

You must be joking, I know an awful lot of americans with laptops. Its not like mortgaging a house! And Im not talking about 'above living expenses'. When I bought mine I had no money for the electric bill. I leveraged the laptop purchase into paying that bill and many more after it!

You weren't as poor as some people I know then. Many of the people I'm talking about already can't pay their utility bills. Some of them don't have electricity because it was shut off. Just because it works for you doesn't mean it will work for others.

You don't know me or my situation so don't speak like you do. I bargained with collections to give me the time. I paid the electric bill with promises of “If you shut it off right now, I cannot earn the money to pay the bill, but if you keep the lights on I can work hard and pay in full (soon)”.

For months I had negative money in my bank account and a court order against me (collections for a credit card I had been buying groceries on and no longer had). So that means whenever I did make any money, the instant I put the cheque into my account to cash it - it was gone. I still couldn't buy groceries even if you put a cheque for $5000 in my hand at some points.

I got by and survived. Dropped 70 pounds from not eating right, but you're right, perhaps I wasn't poor as some folks you know, so therefore my experience hasn't been my experience.

Re: Basic income doesn't emphasize divisions between poor and working people

#163

Earlier quoted context omitted.

If my brother tells me he's hungry and broke I might make him dinner and let him crash on my couch. If I just saw him spend $500 on weed I'll probably tell him he's on his own. The demonstration is essential because if we don't require it, some people will exploit our kind nature to rob us. This is already a massive problem in programs where we do require demonstrations of need. See NPR's expose on rampant disability…

It's not that clear cut. Your options are more like: 1) Trust your brother, feed him and let him crash. Costs you $50. 2) Don't trust your brother. Hire an investigator to determine if he bought weed. Most of the time nothing is found so you wind up helping him, which now cost $70. Occaaionally you discover something and choose not to help. Still costs you $20. Is #2 worth it? That depends on how often the investigat…

What if your brother has hungry kids? Moral superiority doesn't feed kids.

Re: Basic income doesn't emphasize divisions between poor and working people

#164
post #9

"If we’re interested in social policies that are resilient I think the dignity problem, or the moral aspects of these policies are worth considering more closely." I certainly agree the moral aspects are worth considering. No matter how you arrange your basic income scheme (and the tax system to support it), it's going to split the population into two groups: those who are net recipients of government money, and thos…

Don't let basic income advocates evade the question of who pays for their utopian scheme.

We absolutely shouldn't let them evade that question. So I'll go ahead and not evade it for you.

No matter how you arrange your basic income scheme (and the tax system to support it), it's going to split the population into two groups: those who are net recipients of government money, and those who are net contributors.

This is incorrect. Other commenters rightly point out that the benefits of basic income extend far beyond what can be measured in terms of money. But even if we only take into account the money, your assumption that you need taxes to support basic income is wrong. Money is not zero-sum. The money supply (including deposits, credit, etc.) expands and contracts depending on the needs of the economy.

Without making a rigorous argument, I will boldly assert that we can pay for a basic income without taxing anyone. We can pay for it through deficit spending or helicopter money (money-financed fiscal policy), which are both essentially the equivalent of printing money. You might worry that such a practice would cause inflation or devaluation of the dollar thereby resulting an implicit tax on those who have a lot of money. Here's two reasons why basic income through printing money wouldn't cause inflation:

1. Prices are determined by the amount of spending in the economy relative to the amount of real wealth* being traded. For some (inelastic) spending, people will spend whether they have the money or not. They'll borrow in order to spend. If you give them free money, they'll borrow less. The Fed can raise interest rates to make sure this happens. You're just swapping an unstable form of credit money for stable base money that never has to be paid back.

2. More spending isn't necessarily inflationary either. Most of what we produce is subject to an economy of scale. That means that the more of it we make, the cheaper it gets to make each individual unit. If you give poor people money to buy things they otherwise would not have bought, we make more of that stuff to meet the new demand, and prices can remain stable or even come down. Rich people benefit too because they have more customers to sell to. The money we hand to the poor doesn't just stay with the poor. It ends up in the hands of the rich as usual.

EDIT: 3. Money gradually leaves circulation over time. People hoard it and save it. If we're not continually injecting new money into the economy, we run into trouble. A basic income is as good of a way to do this as any. It's certainly better than incentivizing a bubble in private credit.

EDIT: 4. As technology advances, we produce more and more real wealth. If we want prices to remain stable, we need more and more money circulating. So we need to inject more new money than just what's necessary to replace the money that we lose through saving/hoarding.

A fun thought experiment is to ask yourself what would happen if the taxing arm of the treasury had no direct access to information about how much spending the government was doing and vice versa. Instead, they had to make decisions about how much to tax (and spend) based on macroeconomic indicators such as inflation. Would the budget naturally balance itself? Unlikely. We would run a deficit because that's what's most stable. We just wouldn't know we were running a deficit.

I would argue that for a government that can issue its own currency, we shouldn't think of taxation as a way to fund government spending. Instead we can think of it as an economic policy tool to remove excess money from the economy. But we have other tools to do that too (e.g. raising interest rates or fractional reserve requirements).

Paying for a basic income is cheaper than withholding a basic income. Instead of asking how we pay for a basic income, we should be asking how we expect to be able to pay for all the job creation/job protection we seem to think we need.

I know you probably disagree, but that's okay. I'm happy to discuss all of this further if you'd like to know more.

* - I'm defining the real wealth of a product or service to be the mean marginal utility across all people. For example, the real wealth of a luxury car isn't much higher than the real wealth of a normal car. This is because most people in the world would get a similar boost in marginal utility out of owning either one. A rich person will spend their money on less real wealth compared to a poor person because, for example, they'd get more personal utility from buying a luxury car than they would would by spending the same amount of money on two normal cars, even though the two normal cars represent nearly twice as much real wealth.

Re: Basic income doesn't emphasize divisions between poor and working people

#165
post #53
post #3

As a Canadian entrepreneur I worry that mincome/basic income will serve to knock the wind out of the sails of many innovators and entrepreneurs who, like me, are currently DRIVEN to work hard, research, push the industry along and crank up competition. I would much, much rather work hard, earn more money, and feed my neighbour - than have no hope of digging myself out of my situation no matter hos hard I worked, bein…

I'm not sure you're worries are about the right things. As an entreprenuer I highly value safety nets. The odds of failing are so high that without things like publicly supported bankruptcy I don't think I'd ever risk going into the kind of debt necessary to succeed. So I imagine minimum income to be a huge boon entreprenuership. As an economist however, I may be in agreement. I have some concerns about the inflation…

So ... one problem is a long term tanking in the velocity of money. Can't make commissions or skim off money that's not spent. No matter how fast or slow the revenue comes in, the fixed debt, is fixed.

Its very hard to argue that even if every penny goes into the pocket of a couple New York Bankers, that there won't be more activity along the way than if nothing gets spent.

Something interesting to consider is there are goods and economic fields where the population has been trained to say they'll pay anything for X, Y, or Z. Medical care, Education, Real Estate, whatever. Given that we have generations of explosive inflation in those fields way beyond normal inflation rate, I don't think changing the base income would change much in the long run. If health care costs always in the past and forever in the future until rapidly approaching system collapse will increase by 25% annually, then giving a poor person $10K/yr will have basically no impact in the long run. Like arguments I had with my wife about Peapod grocery delivery vs shopping myself... the difference is (was) approximately six months of food inflation price, and I don't enjoy shopping, and I intend to continue eating six months in the future, so I don't care if it costs a little more today, its not really changing anything in my life financially.

Another interesting thing to think about is the old Dr Phil line about money problems being unable to be fixed with money. So giving 10K to poor people means in practice its all going to disappear with no improvement in standard of living, just like every other handout in the history of humanity. Such that there's almost no point in talking about that economic segment of the population WRT mincome. And its not much money for rich people, so ignore them too. mincome is a purely middle class play, its the only group that can experience any change.

Re: Basic income doesn't emphasize divisions between poor and working people

#166

Earlier quoted context omitted.

Yes, and if I redefine all errors as successes my program has no bugs. Back in reality, my application is not meeting business needs, and BI is still wasting a bunch of money on people who don't need it. Means-testing reduces the marginal benefit to finding additional income, encouraging a culture of dependence. And any type of conditional benefit scheme creates an incentive for fraud where the benefits of fraud outw…

> A Basic Job Guarantee (if you need a job real bad, the government gives you a real bad job) does not create incentives for fraud. No one needs a job. People need good and services, which (in a system that is basically market structured) income is a means to provide. A job isn't a need, its multiple steps removed from needs. A "Basic Job" labor army programming is a reasonable means of providing stability in income,…

But we don't have long term structural unemployment. Robots didn't take our jobs.

https://www.chrisstucchio.com/blog/2016/robots_didnt_take_ou...

We actually currently have a scarcity of labor and BI makes this problem worse (about twice as bad as the great recession did).

http://public.econ.duke.edu/~erw/197/forget-cea%20(2).pdf

EITC increases incentives to work as does a basic job guarantee. Welfare and BI have the opposite effect.

Re: Basic income doesn't emphasize divisions between poor and working people

#167
post #102

Earlier quoted context omitted.

There's never an option costing zero as long as the brother in question has the ability to punch you in the face and take your food for leaving him to starve.

So we need a BI because the poor will spend all their money on drugs, and then engage in violence against peaceful citizens who don't feed them? That's an interesting view.

It's actually not a particularly interesting or unique view, it's obvious, and essentially the basis of civilization.

Organisms that hoard resources have been targets of violence since we were all protozoa.

A widely used basic definition of government is simply the group that has cornered the market on the recognized use of violence.

Rich people have to do something to grapple with poverty or the poor people will kill them and eat their food. Same as it ever was, and its reality doesn't change in response to your moral judgement.

Re: Basic income doesn't emphasize divisions between poor and working people

#168
post #54

Earlier quoted context omitted.

How can some people exploit basic income system to "rob us"? Maybe they can fabricate people which don't actually exist? (Or more realistically, delay reporting death to collect basic income of dead people.) These are concerns, but hopefully modern government can deal with fake identities. These still seem a lot better than current welfare system. If you consider giving basic income to people who spend $500 on weed "…

People exploit basic income to rob us when they consume it without needing it. Why do you think having zero oversight and giving benefits to everyone, including those who don't need it, is somehow better than the current system? If you consider giving basic income to people who spend $500 on weed "robbing", well you are entitled to your opinion, but that's not exploit of system, because system is working as intended.…

Many reasons to this and something has to change at some point.

But just a couple of points is that if everyone receives it then nobody can be robbing the system as everyone is entitled to it. Another point that the HN crew should be well aware of is that we are going to see entire Industries worth of jobs disappear. Obviously other jobs will come but not at the rate they are going to decline and they will likely be more high skilled jobs than low one's. We are on the cusp of automated vehicles and when that comes to fruition all cab/taxi/bus/truck drivers will be without jobs. This will happen in many other areas as well and to not seriously prepare for this type of future is absolute lunacy. Not saying that BI is THE answer...but it, along with many other things, are definitely worth exploring further.

Re: Basic income doesn't emphasize divisions between poor and working people

#169

Earlier quoted context omitted.

Leave your brother to die on the street, cold and hungry and ignored. Of course.

After sleeping on the street for one night, the brother might also choose to spend his money on rent rather than weed the next time around.

Do you have any evidence for that? I would wager it leans in the other direction: sleeping on the street leads to other negative behaviors, in aggregate.

Re: Basic income doesn't emphasize divisions between poor and working people

#170
post #71

Earlier quoted context omitted.

> This is already a massive problem in programs where we do require demonstrations of need. See NPR's expose on rampant disability fraud: http://apps.npr.org/unfit-for-work/ But, the disability fraud is due in large part to the rampant unemployment, poverty, and gutted social safety net in that area. So, the option for those folks is disability or live on the streets. I wouldn't exactly say you are making the case fo…

No, the disability fraud is caused by healthy people lying in order to take money from others that they didn't earn. Are you somehow claiming that wealthy Americans are unable to make choices for themselves, i.e. they are incompetent? If so, lets find them caretakers who can manage their lives for them. Lets not let them continue making bad choices that cost the rest of us. I have no problem with smoking weed and I d…

I think that if you did a cost/benefit analysis on benefit fraud, you'd find that it's a lot of work and risk for a very tiny benefit. Unless you don't believe in economics, you'd assume that they would do another job which would require less work and risk and more pay if they had access to one. Disability fraud is caused by desperation. Either that or 2% (IIRC) of the U.S. working population suddenly became either very sick or lying dopesmokers right after the housing bubble burst.
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