Study: A universal basic income would grow the economy • Hacker News Board

Re: Study: A universal basic income would grow the economy

#11

Post by lefstathiou » Thu, Aug 31, 2017, 1:33 PM UTC

chimeracoder wrote: post #5

A couple of things right off the bat. This study assumes that: - There is zero effect on propensity to work - The national debt has no secondary effects on the economy - Changes in taxation do not affect consumption or investment behavior, at any tax level. Those first two right there are incredibly massive assumptions, and they amount to two of the biggest criticisms of these proposals in the first place. And the th…

And let's not forget the elephant in the room: inflation. The real value of that money will disappear over night.

Re: Study: A universal basic income would grow the economy

#12

Post by tnzn » Thu, Aug 31, 2017, 1:36 PM UTC

chimeracoder wrote: post #5

A couple of things right off the bat. This study assumes that: - There is zero effect on propensity to work - The national debt has no secondary effects on the economy - Changes in taxation do not affect consumption or investment behavior, at any tax level. Those first two right there are incredibly massive assumptions, and they amount to two of the biggest criticisms of these proposals in the first place. And the th…

You believe 12k a year basic income will make people work less ?

Re: Study: A universal basic income would grow the economy

#13

Post by rbanffy » Thu, Aug 31, 2017, 1:37 PM UTC

lawless123 wrote: post #10

snarf21 wrote: post #8

Earlier quoted context omitted.

Exactly, and no mention if this would affect welfare and other social programs. So if someone still gets all the aid they do today and $1K per month, then there is more money to spend but are there more people who want to work where that money is spent? I think it likely that this would cause low end job wages to rise, not necessarily increase employment.

Certainly any job that only offers "do this and we give you enough money to barely live" will have to pay more.

Or no, since the person will already be receiving enough to live.

Re: Study: A universal basic income would grow the economy

#14

Post by appearsonline » Thu, Aug 31, 2017, 1:37 PM UTC

lefstathiou wrote: post #11

chimeracoder wrote: post #5

A couple of things right off the bat. This study assumes that: - There is zero effect on propensity to work - The national debt has no secondary effects on the economy - Changes in taxation do not affect consumption or investment behavior, at any tax level. Those first two right there are incredibly massive assumptions, and they amount to two of the biggest criticisms of these proposals in the first place. And the th…

And let's not forget the elephant in the room: inflation. The real value of that money will disappear over night.

But it is detach from location. People can move if land becomes to expensive, unlike now, where land is tied to jobs.

Re: Study: A universal basic income would grow the economy

#15

Post by rbanffy » Thu, Aug 31, 2017, 1:38 PM UTC

chimeracoder wrote: post #5

A couple of things right off the bat. This study assumes that: - There is zero effect on propensity to work - The national debt has no secondary effects on the economy - Changes in taxation do not affect consumption or investment behavior, at any tax level. Those first two right there are incredibly massive assumptions, and they amount to two of the biggest criticisms of these proposals in the first place. And the th…

> - There is zero effect on propensity to work

OTOH, imagine parents that today can't be present to raise their kids may have the option of dropping one of their jobs to be with their family.

Re: Study: A universal basic income would grow the economy

#16

Post by rbanffy » Thu, Aug 31, 2017, 1:40 PM UTC

appearsonline wrote: post #14

lefstathiou wrote: post #11

Earlier quoted context omitted.

And let's not forget the elephant in the room: inflation. The real value of that money will disappear over night.

But it is detach from location. People can move if land becomes to expensive, unlike now, where land is tied to jobs.

> where land is tied to jobs.

With additional pressure when both parents work and can't survive with one of them unemployed - they lack the freedom to seek better positions elsewhere because they are limited to both having jobs all the time.

Re: Study: A universal basic income would grow the economy

#17

Post by rbanffy » Thu, Aug 31, 2017, 1:41 PM UTC

snarf21 wrote: post #8

chimeracoder wrote: post #5

A couple of things right off the bat. This study assumes that: - There is zero effect on propensity to work - The national debt has no secondary effects on the economy - Changes in taxation do not affect consumption or investment behavior, at any tax level. Those first two right there are incredibly massive assumptions, and they amount to two of the biggest criticisms of these proposals in the first place. And the th…

Exactly, and no mention if this would affect welfare and other social programs. So if someone still gets all the aid they do today and $1K per month, then there is more money to spend but are there more people who want to work where that money is spent? I think it likely that this would cause low end job wages to rise, not necessarily increase employment.

Most proposals do away with welfare programs, reducing enforcement costs with it. No need to ensure a person is unemployed and looking for a job or unable to work due to a medical condition.

Re: Study: A universal basic income would grow the economy

#18

Post by xienze » Thu, Aug 31, 2017, 1:41 PM UTC

snarf21 wrote: post #8

chimeracoder wrote: post #5

A couple of things right off the bat. This study assumes that: - There is zero effect on propensity to work - The national debt has no secondary effects on the economy - Changes in taxation do not affect consumption or investment behavior, at any tax level. Those first two right there are incredibly massive assumptions, and they amount to two of the biggest criticisms of these proposals in the first place. And the th…

Exactly, and no mention if this would affect welfare and other social programs. So if someone still gets all the aid they do today and $1K per month, then there is more money to spend but are there more people who want to work where that money is spent? I think it likely that this would cause low end job wages to rise, not necessarily increase employment.

> and no mention if this would affect welfare and other social programs.

Which is quite surprising because every, and I mean every, UBI proposal talks up how much money we'd _save_ because welfare would be eliminated. I just don't see how that's possible, because inevitably there are going to be a lot of people with real or self-imposed crises crying about how they don't have enough money to pay rent or buy food, and what is the government going to do, tell them "tough shit, you should've managed your UBI better"? Uh, I doubt it. We'll end up stuck with welfare programs as a UBI safety net and then people will inevitably game the system by crying broke every single month.

This whole thing is such a ridiculous leftist fantasy, the biggest giveaway is that it completely ignores basic human behavior.

Re: Study: A universal basic income would grow the economy

#19

Post by jerkstate » Thu, Aug 31, 2017, 1:42 PM UTC

rbanffy wrote: post #13

lawless123 wrote: post #10

Earlier quoted context omitted.

Certainly any job that only offers "do this and we give you enough money to barely live" will have to pay more.

Or no, since the person will already be receiving enough to live.

Well, the price of goods and services will go up because everybody suddenly has more money and the owners of the businesses that sell those goods and services have just had their taxes doubled, so we're back to square one anyways.

Re: Study: A universal basic income would grow the economy

#20

Post by mseebach » Thu, Aug 31, 2017, 1:42 PM UTC

> They find that enacting any of these policies by growing the federal debt — that is, without raising taxes to pay for it — would substantially grow the economy. The effect fades away within eight years, but GDP is left permanently higher. The big, $12,000 per year per adult policy, they find, would permanently grow the economy by 12.56 to 13.10 percent — or about $2.5 trillion come 2025. It would also, they find, increase the percentage of Americans with jobs by about 2 percent, and expand the labor force to the tune of 4.5 to 4.7 million people.

> They also model the impact of the plan if it's paid for with taxes. That amounts to large-scale income redistribution, which, the authors argue, would stimulate the economy, because lower-income people are likelier to spend their money in the near-term than rich people are. Thus, they find that a full $12,000 a year per adult basic income, paid for with progressive income taxes, would grow the economy by about 2.62 percent ($515 billion) and expand the labor force by about 1.1 million people.

So, borrowing and spending 300 million adults * $12,000/adult/year = $3.6 trillion/year would grow the economy by $2.5 trillion? And raising it in taxes would grow the economy by just half a trillion?

Or what am I missing?

Also this:

> because lower-income people are likelier to spend their money in the near-term than rich people are

But what about the long term? We can debate the finer points about when and how much etc, but it remains uncontroversial that rich people invest nontrivial amounts in long term stuff. With near-70% top average (not marginal!) tax rates, this will go down by a lot. How will this redistribution from long-term investments to near-term spending affect the economy over the long term? Yes, fewer yachts and private jets (there are also people employed supporting those, and the net employment benefit suggested is already quite modest), but would an Elon Musk or Jeff Bezos subject to a 70% tax rate invest in the next SpaceX/Blue Origin (not to mention thousands of other startups backed by angels and personal/friends&family savings)?