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Guaranteed Minimum What?

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Re: Guaranteed Minimum What?

#131

Post by lux »

> My best guess is that we’re not going to resolve these challenges in any intentional comprehensive logical manner. At least not at first. Instead circumstances are going to overwhelm us until enough of the population is miserable enough to demand real change. That’s been the historical model and it tends to be messy.

This is why I think we need to accelerate the pace of automation as much as possible. That's the only way of creating enough governmental pressure fast enough to reduce the suffering time of the first waves hit by automation. Counter-intuitive, but the faster we get there the less suffering in the transition and the faster society wakes up to the fact that we have to take care of our own.

The right to subsistence has been conveniently tied to the ability to work because that's easy to understand, but it's always been an artificial link.

Re: Guaranteed Minimum What?

#132

Post by odonnellryan »

mamon wrote: post #94
bryanlarsen wrote: post #50

Earlier quoted context omitted.

Why would you expect inflation? All sane UBI proposals don't create money, they just move money from rich people to poor people. If you're a Friedman disciple, then "inflation is a monetary phenomenon" and we can stop there. If we're moving money from rich people to poor people, perhaps we'll see the prices of stuff rich people buy go down and the prices of stuff poor people buy go up. The vast majority of stuff poor…

The problem with taking money from the rich and giving it to the poor is that you undermine riches' motivation. If you limit the prize, then you also limit amount of effort that one is willing to make to get it. Therefore, after UBI is introduced on mass scale we might see a slow but steady decline in economic activity: fewer new companies started, fewer investments made, riches focusing on tax evasion and moving the…

> The problem with taking money from the rich and giving it to the poor is that you undermine riches' motivation.

Two problems:

1) Assuming the "riches' motivation" is something that would be bad to undermine

2) This probably isn't true

Re: Guaranteed Minimum What?

#133

Post by nateberkopec »

bryanlarsen wrote: post #50
chris_va wrote: post #33

I realize that UBI is a very popular position on HN, so I am hoping someone here has given this more thought and can comment. My problem with UBI is that all tests to date look great, but have only been done on a micro level. The fundamental issue I would like addressed is the macro scale inflation you would expect when redistributing trillions of dollars without commensurate economic value being created directly. Mo…

Why would you expect inflation? All sane UBI proposals don't create money, they just move money from rich people to poor people. If you're a Friedman disciple, then "inflation is a monetary phenomenon" and we can stop there. If we're moving money from rich people to poor people, perhaps we'll see the prices of stuff rich people buy go down and the prices of stuff poor people buy go up. The vast majority of stuff poor…

MV = PQ. Money * Velocity = Price level * Quantity of goods and services.

Friedman assumes the velocity of money is constant (good assumption), so really the only why you can cause inflation is to increase the supply of money, M. UBI increases the velocity of money by moving money from low-consumption, high-investment rich people to high-consumption, low-investment poor-to-middle-class people. Increase money velocity, and you'll see price inflation to compensate.

Re: Guaranteed Minimum What?

#134

Post by URSpider94 »

mamon wrote: post #94
bryanlarsen wrote: post #50

Earlier quoted context omitted.

Why would you expect inflation? All sane UBI proposals don't create money, they just move money from rich people to poor people. If you're a Friedman disciple, then "inflation is a monetary phenomenon" and we can stop there. If we're moving money from rich people to poor people, perhaps we'll see the prices of stuff rich people buy go down and the prices of stuff poor people buy go up. The vast majority of stuff poor…

The problem with taking money from the rich and giving it to the poor is that you undermine riches' motivation. If you limit the prize, then you also limit amount of effort that one is willing to make to get it. Therefore, after UBI is introduced on mass scale we might see a slow but steady decline in economic activity: fewer new companies started, fewer investments made, riches focusing on tax evasion and moving the…

Look, no matter how much you tax the wealthy, you always have a positive derivative -- the more money you make, the more you take home. I really can't see anyone making a rational decision to work less hard because the tax rate is too high, within reason.

The other thing that becomes blindingly clear when you live somewhere like Silicon Valley is that wealth is logarithmic. If you take home a million dollars a year here, you're still living in a 2000 sq foot home in a town with a half-decent school district. If you want a house walkable to downtown Palo Alto, you'd better be making $5 - $10 million (those homes go for $4 - 5 million). And if you want a real mansion, you'll need $20-30 mil. You want your own jet? $100 mil. There's always someone making MUCH more money than you, unless your name is Gates or Bezos. In that environment, a 3x increase in pay is still a meaningful difference in take-home.

Re: Guaranteed Minimum What?

#135

Post by aeorgnoieang »

jawns wrote: post #75

One thing that might cushion the displacement of workers by automation is if the workers themselves had an ownership interest in the automation technology. Yes, they would lose their jobs, but having an ownership interest would allow them to generate income. Maybe instead of UBI, we should consider a scheme where we grant an ownership interest in productive property. One naive way to implement that is to just grant s…

> Maybe instead of UBI, we should consider a scheme where we grant an ownership interest in productive property.

A sovereign wealth fund that automatically distributes 'shares' to its citizens, prohibits them from selling their shares, and distributes a dividend regularly? Seems pretty functionally equivalent to a UBI.

Re: Guaranteed Minimum What?

#136

Post by dllthomas »

atemerev wrote: post #130
goldbeck wrote: post #7

Earlier quoted context omitted.

[citation needed]

Some numbers: Current US population: 324 million people, 250 million adults. Poverty line income: $22,000 for the family of four (it is hard to estimate individual poverty line income, but it's more than $22,000 / 4. Let's say $12,000, which is $1000 / month). Total cost of universal basic income of $1,000/month for the US: $3 trillion per year. Total US income tax revenue: $1.8 trillion for personal income tax, $0.4…

You are making the case that it's currently impractical. That is very different from "as inevitable as [the] CAP theorem".

For instance, if the cost of "basic life necessities" was somehow $5/yr, but incomes (and tax revenues) similar to today (... presumably people are spending an awful lot on luxury goods?), it could certainly be all three of those things.

It may be the case that that is somehow impossible, but that's a case that you need to make in some way other than listing off what the current numbers happen to be.

Re: Guaranteed Minimum What?

#137

Post by marcosdumay »

sparkling wrote: post #39

From Henry Hazlitts 1946 classic "Economics in One Lesson": You cannot make a man worth a given amount by making it illegal for anyone to offer him anything less. You merely deprive him of the right to earn the amount that his abilities and situation would permit him to earn, while you deprive the community even of the moderate services that he is capable of rendering. In brief, for a low wage you substitute unemploy…

Competitive forces are a thing.

If your competitors can hire cheap people for working there, you will never be able to justify hiring more expensively. But if they can not hire that cheaply, you will be able to spend more too.

Re: Guaranteed Minimum What?

#138

Post by dllthomas »

danbruc wrote: post #18
atemerev wrote: post #5

Guaranteed minimum income is: sustainable, sufficient for basic life necessities, can be implemented for the current population levels. Choose two. It is as inevitable as CAP theorem.

Set the income tax rate to 100 %, give an equal share of that money to every citizen. That should check all three boxes, shouldn't it?

Given just how poor the incentives wind up being, I think with current technology that it would be unlikely to tick the second box.

Re: Guaranteed Minimum What?

#139

Post by AnimalMuppet »

danbruc wrote: post #78
BenjiWiebe wrote: post #45

Earlier quoted context omitted.

Personally I wouldn't bother working very hard if income tax was 100%.

The incentive structure in this example is certainly bad, but that is an issue whenever you are planning to give things away for free, with a universal basic income scheme or otherwise. That my example is exceptionally poor in this regard should not matter too much for the point addressed unless you want to hint at a problem with sustainability. That might or might not be the case depending on the behavior of the peo…

Hint at a problem with sustainability? I'll come right out and say it: Your proposal is not sustainable. The only people who will work in that environment are those who will work for free.

Even if that were enough people, you also remove economic feedback about the effectiveness of peoples' actions. That feedback is critical for an economy to efficiently allocate resources.

Re: Guaranteed Minimum What?

#140

Post by SirensOfTitan »

WalterBright wrote: post #90
SirensOfTitan wrote: post #44

I really don't understand why ideas like the Negative Income Tax aren't being considered before Universal Basic Income. In that scenario, the government just sets an income floor and pays the difference ( https://en.wikipedia.org/wiki/Negative_income_tax ). UBI makes little sense whenever someone making 500K a year still gets it unconditionally. The marginal utility of that is nil, but its tax implications are massiv…

> pays the difference Then there's no reason to work at the lower end of the wage scale, because you'd be working for free.

I think the idea is that automation makes many jobs obsolete at the lower end, at which point some form of guaranteed minimum income or basic income has some necessity.
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