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Study: A universal basic income would grow the economy

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

#71

Post by mseebach »

logicchains wrote: post #58
mseebach wrote: post #20

> 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, i…

I did my bachelors in economics, and one of our textbooks taught that all other things being equal (ceteris paribus), more wealth equalisation (taking from the richer and giving to the poorer) means less wealth creation in the long term. Why? Wealth will naturally concentrate in the hands of those more capable of creating it: if Jo is making 2% per annum return and Jane is making 4% per annum return, and they both st…

Indeed. The counter argument, however, is the suggestion that Jane's higher returns are at least partially due to her ability to extract favours from the government. Perhaps her mis-managed bank was shored up in a crash, while Jo's better managed construction business went bankrupt.

Now, some heretics might suggest that it's better to stop the government doing people favours, instead of semi-blindly taxing Jane's gains for Jo's benefit and hoping most of it came from government favours (never mind that Jo is now extracting a kind of favour from the government herself), but such ideas don't get a lot purchase.

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

#72

Post by ubernostrum »

garrettdc wrote: post #51
ubernostrum wrote: post #28

Earlier quoted context omitted.

If you want to eliminate the possibility of people who don't need to work choosing not to work, you should be in favor of a 100% estate tax before you should be against UBI. Make it impossible for children to inherit enough wealth to live without working, and get those lazy parasites into the workforce where they belong! (or you could look at what happens when people are actually presented with realistic options for…

People can choose to work or not. I just don't want to be stuck with the consequences of it. The word parasite means that they are increasing their well-being by reducing another individual's well-being. The number of children who are able to live off of their parents / grandparents money and don't work at all is so finite that it isn't really worth mentioning. Alongside that, they are a net gain for the economy. Thi…

So you've just advocated literal trickle-down economics here.

You are aware of the historical/empirical problems with it, yes?

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

#73

Post by specialist »

phkahler wrote: post #59
specialist wrote: post #54

Earlier quoted context omitted.

The moment I get my monthly cheddar, I'm moving to a nicer place with lower cost of living. The USA has more housing than people. Alas, that excess supply isn't near the jobs.

So you'd move to one of those places with cheap housing and no jobs? Does that mean you'd not be working? Of course the influx of people to low cost areas with no jobs would create some jobs in those places and raise prices on everything from housing to pizza.

Given broadband and strong coffee, I'll make the jobs.

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

#74

Post by rbanffy »

notahacker wrote: post #27
rbanffy wrote: post #17

Earlier quoted context omitted.

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.

Sure, but the cost of enforcing who receives benefits is orders of magnitude less than the cost of paying $12k net of income taxes to the large number of working age people who for whatever reason (usually existing wealth or partner/parent income) aren't currently interested in working. This isn't just common sense; the data on working age economically inactive people, working age economically inactive people receivi…

There is good indication this reduces income disparity, create more opportunities for entrepreneurship (you can quit your job or go part-time while you do your thing) and, in general, more people consume more. The incentive to work more is there: with a sensible basic income you and your family won't starve and you won't need to work yourself to death, but you may want to have a nice vacation from time to time. With better economic security your freedom to move to better paying markets is increased.

The only reason not to back an idea like this is how much the top earners will be able to evade paying their part, overburdening those who can't dodge taxes as efficiently.

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

#75

Post by rbanffy »

gaius wrote: post #25
garrettdc wrote: post #21

Earlier quoted context omitted.

We are constantly told that 7.25/hr isn't enough to live on, but people find a way to do so at the moment. 7.25 $/hr * 2000 hrs/year = 14500 which isn't far off from 12000. If the choice was between working for that and not working, I think the choice is easy. Unless this program were to completely eliminate welfare spending, then you'd likely end up with people choosing not to work because they don't need to. This o…

A small percentage of the workforce is actually paid minimum wage and most get a better job once they have had the entry level experience. The idea that minimum wage should sustain an entire working life is a fringe one.

Basic survival cannot force a person to work more than full time.

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

#76

Post by xienze »

jpindar wrote: post #41
xienze wrote: post #31

Earlier quoted context omitted.

Trying to maximize earnings is basic human behavior, sorry to break it to you. Welfare scams occur regularly, and that's before UBI. And you're dodging the bigger question: I'm on UBI and my money runs out, can't afford to feed the kids. Multiply that by at least several thousand people every month. Now what?

Same as now. You don't get more food stamps just because you ran out.

The difference is it's earmarked money today. There's no potential to spend your food money on a phone and then claim you can't buy food at the end of the month.

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

#77

Post by garrettdc »

ubernostrum wrote: post #72
garrettdc wrote: post #51

Earlier quoted context omitted.

People can choose to work or not. I just don't want to be stuck with the consequences of it. The word parasite means that they are increasing their well-being by reducing another individual's well-being. The number of children who are able to live off of their parents / grandparents money and don't work at all is so finite that it isn't really worth mentioning. Alongside that, they are a net gain for the economy. Thi…

So you've just advocated literal trickle-down economics here. You are aware of the historical/empirical problems with it, yes?

Not trickle down, just that 1) there is a difference in economic impact between those who choose not to work and live off of inheritance vs. those who choose not to work and live off of government assistance, and 2) 100% estate tax has no relation to UBI.

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

#78

Post by rbanffy »

garrettdc wrote: post #51
ubernostrum wrote: post #28

Earlier quoted context omitted.

If you want to eliminate the possibility of people who don't need to work choosing not to work, you should be in favor of a 100% estate tax before you should be against UBI. Make it impossible for children to inherit enough wealth to live without working, and get those lazy parasites into the workforce where they belong! (or you could look at what happens when people are actually presented with realistic options for…

People can choose to work or not. I just don't want to be stuck with the consequences of it. The word parasite means that they are increasing their well-being by reducing another individual's well-being. The number of children who are able to live off of their parents / grandparents money and don't work at all is so finite that it isn't really worth mentioning. Alongside that, they are a net gain for the economy. Thi…

> vast sums of wealth being dumped back into the economy through luxury purchases

Which feed people in remote countries minimum wage at best and keeps what looks like slavery at worst while it generates handsome profits for others who brought in very little value.

> create a disincentive for wealth accumulation

Which is actually a great thing: all that money will hit the economy much sooner.

> force those people into different investment vehicles

Like giving their offspring an education that'll allow them to pursue well paid positions. Gifts are also taxed and an exponential tax on their market value would be a smart thing. Also, they can be sure their children, no matter how deplorable, won't starve.

> That is really only import for those who are amassing large sums of wealth though

So these people who make insane amounts of money while pressuring down compensation for the rest of society will bear most of the burden. Seems only fair.

Also, keep in mind these people are far too powerful now to freely give up their advantages. These ideas have the potential of getting very, very ugly.

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

#79

Post by ubernostrum »

garrettdc wrote: post #77
ubernostrum wrote: post #72

Earlier quoted context omitted.

So you've just advocated literal trickle-down economics here. You are aware of the historical/empirical problems with it, yes?

Not trickle down, just that 1) there is a difference in economic impact between those who choose not to work and live off of inheritance vs. those who choose not to work and live off of government assistance, and 2) 100% estate tax has no relation to UBI.

The stated objection was that if people don't have to work, they'll choose not to.

If that's perceived as a problem, we already have that happening right now and aren't doing anything about it -- a complete confiscatory estate tax would solve it, though!

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

#80

Post by antisthenes »

logicchains wrote: post #58
mseebach wrote: post #20

> 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, i…

I did my bachelors in economics, and one of our textbooks taught that all other things being equal (ceteris paribus), more wealth equalisation (taking from the richer and giving to the poorer) means less wealth creation in the long term. Why? Wealth will naturally concentrate in the hands of those more capable of creating it: if Jo is making 2% per annum return and Jane is making 4% per annum return, and they both st…

Good thing our society doesn't optimize for maximum absolute wealth growth in a vacuum, else we'd have 1 person with all of the country's wealth.

> If we equalise wealth, however, such that both have $4,899.13, then in 50 years Jane will have $34,816.57 and Jo will have $13,186.44, for a total wealth pool of $48,003.01

Have you considered second order effects here? What if additional wealth allows "Jo" to increase their per annum return because they invest it in a business or education?

> In this sense there is hence a direct tradeoff between economic growth and wealth transfers from richer to poorer in the long term (all other things being equal).

I have a BA in Economics as well, and ceteris paribus models stop being useful past the 2nd year of study. I don't think they're ever useful except to illustrate the most basic concepts to freshmen and laymen. When you apply such models to the real world, you end up with a situation I described in the 1st paragraph.

In this case, the condition assumes that the rate of wealth creation is fixed and unalterable on a scale of 50 years. It also falsely assumes (just world fallacy) that wealth is already allocated in such a way as to belong to people with high (unalterable) wealth creation potential.

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