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Guaranteed Minimum What?

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Re: Guaranteed Minimum What?

#151

Post by BeetleB »

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. If you limit the prize, then you also limit amount of effort that one is willing to make to get it.

Commonly stated, but any real data to support it?

I think what kills the economy more is when the barrier to entry is high. This impacts mostly non-wealthy folks. In the US, it is ridiculously trivial to set up a "company". I've heard in some countries, you need to apply for a license, which could be expensive (say $2000). And along with that a lot of regulation that is quite affordable to big companies, but not to the average Jane.

The rich easily absorb all these costs, and it barely hurts their motivation. Poorer people trying to make a living and grow their wealth somewhat are most impacted.

Re: Guaranteed Minimum What?

#152

Post by Kenji »

We already have guaranteed minimum income. Look at the people employed by the state. Doing mundane tasks, day by day, that could be automated cheaply and effortlessly. Literally sorting and storing documents, something the computer is proficient at. It is invented and completely senseless and stupid work. Depending on the country, we are talking about 20-50% of the population being state employees right now, in the first world. And the trend is that it's increasing, fast. There's your UBI, and as a bonus point, it keeps people off the streets and they think they are doing something.

Re: Guaranteed Minimum What?

#153

Post by rhino369 »

URSpider94 wrote: post #134
mamon wrote: post #94

Earlier quoted context omitted.

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 h…

>I really can't see anyone making a rational decision to work less hard because the tax rate is too high, within reason.

I really think people do. Two years ago I had to work 250 hours in December to get a 25k bonus. At ~40% taxation, I felt it was worth it. I probably wouldn't at 65%. That is a pretty extreme case, but well off people turn down work if it isn't lucrative enough.

Plus, if you are taxing investments, then it all matters because of risk. Tax factors into the expected value of an investment. It's not worth investing money if 70% of the proceeds get taken away. This is why world wide, capital is taxed fairly lightly.

Re: Guaranteed Minimum What?

#154

Post by ThatGeoGuy »

rhino369 wrote: post #145
zimzam wrote: post #116

Earlier quoted context omitted.

This assumes that the primary reason to start a company is to become fantastically wealthy, which I would contest. Sure, most founders want to get rich, but I'd assert most would be just as happy to end up in the 8 figure range ($10's of millions) as they would in the 9-10 figure range. (And such a reduction would require taxes on a scale far beyond what UBI would require) Few people are going to consider starting a…

Founders might looking for a good living and glory, but VC's for example are looking to really capitalize on 100X growth.

To play devil's advocate: you may not need VC's as much in a UBI world. You don't have to worry about income if your startup fails, so you're less likely to play the VC lottery in hopes that you can ride the funding into a successful exit.

Re: Guaranteed Minimum What?

#155

Post by sokoloff »

lovich wrote: post #150
FussyZeus wrote: post #115

Earlier quoted context omitted.

> If you don't see a dime I wouldn't call it an UBI. "Unconditional" is supposed to mean that everyone gets the same amount of dime. I wouldn't see a dime because I make far, far more than the people who need it. I don't need help.

Part of the benefit of UBI is removing a large amount of overhead that comes with current welfare systems. This is done by writing a check to every citizen in the system with overhead only to confirm that one citizen gets one check. When you add in other checks you increase how much money needs to be spent on just running the system

If I literally see a dime from the UBI check and pay $2 in taxes to support the UBI program for every dime in UBI I receive, it's reasonable to say that I'm not really receiving UBI on a net basis.

(I still support it, and your arguments for why it must be universal are congruent with my own thinking.)

Re: Guaranteed Minimum What?

#156

Post by milesvp »

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…

There's inflation that the CPI tracks. And then there's inflation in a given sector, or product group. Basically inflation happens any time you shift the money supply around, be it with government regulation, or with economic booms or "gold rushes" (just look at what happened in the shale boom town economies).

I can guarantee that there will be inflation in areas of the market that cater to poorer people. There is a pretty basic economics law that says when demand for goods go up (aka more money chasing a good) it's price will tend to go up relative to to the "price elasticity" for the good.

Things like basic food stuffs will get more expensive, because there will be more money chasing it. Rents will go up, since disproportionately more poor people rent. Hopefully much of this will be offset by people being free to move to cheaper cities, since they no longer need to worry about work income as much. Alcohol and tobacco will likely get more expensive as well.

You're right, in that eventually production will ramp up to meet increased demand, but it's usually not 1 to 1 increase, which means you'll still have higher prices in the long term (though it does happen occasionally where increased demand leads to lower prices because the volume allows for economies of scale in production).

UBI isn't likely to be the silver bullet that many think it will be. All the experiments have been short term, and inflationary pressures can be small and can take time to take effect. Also the UBI experiments have been in smaller countries, where social aspects may be coming into play.

I'd really like UBI to work, since I dream of having enough basic money to sustain me so I can work on some of the science and engineering that interest me but might not have short term value, but my economics background give me an intuition that it can't be as successful as people think it will be. It'll likely be a beast that will require constantly increasing benefits as price levels rise to adjust to the new equilibriums, with ever fewer reasons to do the work necessary to fuel the costs. Maybe we're approaching a post scarcity world, but economics says no such thing is possible, that there is always something that is scarce that people will compete for.

Re: Guaranteed Minimum What?

#157

Post by vivekd »

People have it tough. To compound to this the cost of things like food, housing and energy are sky rocketing, at least the have been in Toronto where I live.

I don't know if UBI is the answer, or even if the problems are tied to mechanization. But certainly I think we hit the nail on the head when we realize that things are glib and something needs to be done. If not UBI, than something big to ensure that everyone can share in the wealth our society produces and that people are not scrounging, fighting and drowning in debt just to barely get by.

Re: Guaranteed Minimum What?

#158

Post by rhino369 »

massysett wrote: post #84

I have no idea why this is getting upvoted. A blog post that simply observes a bunch of self-serve kiosk machines, has a bait title, and is used on HN for an uninformative rehash of a UBI discussion that has taken place here over and over. I was hoping at least for a piece that made an argument or said something informative, not for some photos of a movie theater lobby and a restaurant.

It would be funny to read this bloggers response to Lotus 123 in 1984.

Re: Guaranteed Minimum What?

#159

Post by pyoung »

nateberkopec wrote: post #133
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…

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…

But if we are demand constrained as opposed to supply constrained for most consumer goods, than you will see an increase in 'Q', not 'P'.

Re: Guaranteed Minimum What?

#160

Post by bitJericho »

haltingthoughts wrote: post #119
bitJericho wrote: post #99

Earlier quoted context omitted.

Ubi does fix that. If ubi isn't enough to cover those then it's not high enough.

It's basically not possible to do that without making those things cheaper somehow. Convert the entire US federal budget to UBI and it is around 10k per person. Healthcare alone per person is already 9k. Housing is maybe another 5k. And this is before those things get more expensive as people consume more of them.

Ubi goes hand in hand with taxing the rich
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