Basic Income Research Proposal

impressive, but i feel like this is why we invented computer models and have technology (maybe) to start returning immediate results.

We're basically saying here that $60M (plus the other group) is better spent to see what weights to give to models to see how UBI scales-up rather than spending it to run a full gamut of Test Cases through the models and figuring out which outputs to motivate people to do with the money.

I mean, why are we spending money to figure out what people will spend the money on when we can already envision all the possibilities. Or am i wrong, and no one has modeled this yet??

UBI isn't expensive. Its wealth redistribution, not consumption. Military spending is a black hole of money - you get very little R&D or productive GDP growth yields out of it but it stucks hundreds of billions out of the country every year. Social security is better than military spending but usually worse than UBI - recipients of social security are some of the richest people right now as an age class, so transferring wealth to them often doesn't see it stimulating economic growth - it just gets reinvested. Additionally, social security taxes are not progressive - they cap out, and anyone making any money over 10k is paying into them. Its a regressive tax scheme that takes money from disproportionately the working poor and moves it into a richer age group.

It still isn't a black hole, though. A ton of social security money is then spent on essentials. Its much less wasteful than defense spending.

On the other end of the spectrum is a lot of infrastructure spending, especially big projects like Eisenhowers national highway system that built the interstates - money goes in, but the productive gains and economic stimulant from the spending is greater than the money going in so it is a net positive for the economy. I'm hesitant to even call that government spending or debt or the cost of the state since it doesn't really cost anything - you are using money to make money. It is state investment.

Now, of course, state investments have variable success rates. You can look back at successful projects and say they were obviously worth doing in hindsight because they have produced substantial prosperity. The highway system, the national railroads, the panama canal, national electrification, the Hoover dam, etc have all proven valuable. But often a bridge built or rails laid go unused and were wasteful. And then there is the matter of how bad the government is at keeping these projects within sane budets - Boston's Big Dig took significantly longer and cost multiple times more than initially projected, and that brings the value into question after its done whereas beforehand it looked obviously beneficial.

UBI I think is in a very optimal spot on that spectrum. It is immediate wealth redistribution, going almost exclusively to the poorest who per dollar earned spend the most of directly stimulating economic demand that grows the economy most optimally. But unlike infrastructure investment the return is immediate - as checks go out money is spent often same day, and as long as money is moving from slow growth (investment) to fast growth (consumption) its a net benefit to the economy, as long as said benefit is greater than the overhead of administrating the taxes to fund it and the distribution of the money. Which comes back to the infrastructure is great scenario - its great until you are being wasteful and corrupt in spending on it. If money is actually going to building infrastructure or money is actually going to the poor it is a colossal boon. When money goes into private pockets as it does in spades with the DoD it is wasteful. It isn't the amounts you take, it is how you spend that, and how predictable your spending and taxing will be going forward - markets can handle very high taxes as long as they are predictable.

> My proof is by example through thought experiment: I'm a grad student who has a bicycle accident. Without free gov healthcare I now must go into debt to either the hospital or a lender (medical purchases are just one example of an essentially non-negotiable expense). Perhaps I already had other debts, but somehow now my interest payment + living expenses payments are more than my basic income, otherwise known as the normal life of a grad student in todays society anyway - in my case BI didn't work. This is just one example of how easy it is to slide back into poverty with such a system, it could occur slower and over a few generations but sooner or later poverty is back. We just pushed the goal posts back a little bit.

Two arguments against this. The first is that you are comparing a steady income with an insurance. You can always spend your BI on insurance. Wether insurance would be more expensive if you had BI or not, has not been proven in this model, but it could go either way.

The second is that BI in that tought experiment, even if you eliminated insurance-type nets, would still yield lower poverty. Its just not the exact same people. That is one of the hardest problems on any social welfare program: if you need to improve everyones position absolutely and relatively, you basically cant do anything. You have to let some lose for others to gain.

I think you're confusing the GOP's motivations and their rhetoric. See also: their failure to repeal the ACA despite having the presidency and a majority in both houses.

This is a misunderstanding of how both macro inflation occurs (money supply growing faster than true value of wealth it abstracts), and how price is set (supply and demand).

UBI does not "create" new money and just give it to everyone (which would cause inflation). It's a wealth redistribution. That is, many people will see their income go down under UBI (probably most HN readers for example). The money supply will represent the same amount of wealth, what changes is who owns that wealth and as a result who decides how to use that wealth to consume.

Regarding price changes, price is set by the amount of a good/service demanded by consumers, and the supply of the good/service created by suppliers. High discretionary income does cause the demand for certain goods/services to go up (especially luxuries), but UBI is so basic at $1k per month it won't make much of a change in the demand curve because the type of goods/services that will be consumed by someone living on UBI are so fundamental they are already consuming these goods at the same rate under the current system.

So far as housing is concerned, UBI will pretty much "explode" the supply of acceptable housing for people living solely on UBI since they get access to housing in the entire US instead of having it constrained to locations where they could conceivably "make a living." I'm sure you realize what happens when supply increases drastically but demand stays somewhat constant (everyone has to live somewhere and you can only live in one place at once) -- the price of housing on avg will plummet considerably for UBI'ers.