If everyone is getting $500 why wouldn't the landlords raise rents by $500?
The latest experiment in basic income will be coming to Stockton, California
51–60 of 120 posts
Re: The latest experiment in basic income will be coming to Stockton, California
#52If everyone is getting $500 why wouldn't the landlords raise rents by $500?
Maybe it will encourage building new apartments?
Re: The latest experiment in basic income will be coming to Stockton, California
#53One of the things about UBI is that these pilot programs aren't UBI, because they aren't universal. Giving a segment of the population free money is going to benefit that segment, no question. Welfare and Quantitative Easing are both examples of that. But when you make it universal, my economics intuition says that the effect will be washed out by a commensurate rise in prices. Or put another way, you can subsidize t…
If I am understanding your argument, it is a sort of 'thermodynamics' argument against UBI. It argues that there exists a fixed supply of capital and that transfer payments funded by taxes are always counter balanced by an increases in prices to keep capital supplies in balance. If that isn't a correct interpretation of your argument, then the rest of this won't make a lot of sense. The reason this sort of thermodyna…
I think an easier way to think about the OP's point is that if you offer every person $1,000 a month (UBI), prices to live their exact same life style will increase by $1,000/month.
The net change will be zero.
There is an argument that while costs go up $1,000, if a true life changing event occurs, let's say sickness or entrepurship happen, maybe the person can scale down their life style from ramen to unflavored ramen and not be as bad off as with no UBI.
Re: The latest experiment in basic income will be coming to Stockton, California
#54One of the things about UBI is that these pilot programs aren't UBI, because they aren't universal. Giving a segment of the population free money is going to benefit that segment, no question. Welfare and Quantitative Easing are both examples of that. But when you make it universal, my economics intuition says that the effect will be washed out by a commensurate rise in prices. Or put another way, you can subsidize t…
If I am understanding your argument, it is a sort of 'thermodynamics' argument against UBI. It argues that there exists a fixed supply of capital and that transfer payments funded by taxes are always counter balanced by an increases in prices to keep capital supplies in balance. If that isn't a correct interpretation of your argument, then the rest of this won't make a lot of sense. The reason this sort of thermodyna…
If the justification for this is rising housing costs, then giving people free money to pay the high rents is just going to cause housing to be even more expensive.
We've already tried this experiment. It's called financial aid for college. Tuition prices just keep tracking federal aid increases.
http://college.usatoday.com/2015/08/20/report-federal-aid-ri...
If they gave the money as credits to developers to build more housing, then they might have a chance at accomplishing their goal.
Re: The latest experiment in basic income will be coming to Stockton, California
#55One of the things about UBI is that these pilot programs aren't UBI, because they aren't universal. Giving a segment of the population free money is going to benefit that segment, no question. Welfare and Quantitative Easing are both examples of that. But when you make it universal, my economics intuition says that the effect will be washed out by a commensurate rise in prices. Or put another way, you can subsidize t…
I'm glad this is the top comment, because I don't often see common sense critiques of UBI that acknowledge price adjustment.
We can't just print money, that is obviously going to fail as it always does. So... Will we try to implement UBI with wealth transfers? Taxing the rich and giving to the poor?
That seems to be the only alternative to printing money, meaning that UBI is not an innovative idea whatsoever. It's just wealth redistribution.
Re: The latest experiment in basic income will be coming to Stockton, California
#56I wish there was less focus on distributing money and more focus on free water, food and shelter for everyone It's crazy to me in the UK that we have free healthcare, where you can get free water food and shelter if you're ill but if you're healthy you can go back on the street with potentially no food water shelter
Economic research has shown that in aggregate, cold hard cash is the most impactful aid you can give someone as well as the least impactful intervention you can impose on the market.
The freedom to make your money work for what you personally deem best is the creative, and personally empowering, juice that promotes the most productive behaviour.
Providing water, food, and shelter affects each of these markets in often deleterious ways. For example, consider the oft-cited criticism against foreign aid.
Re: The latest experiment in basic income will be coming to Stockton, California
#57If everyone is getting $500 why wouldn't the landlords raise rents by $500?
For most people, $500 would be taxed and $500 is then returned. So what would be the change?
Re: The latest experiment in basic income will be coming to Stockton, California
#58One of the things about UBI is that these pilot programs aren't UBI, because they aren't universal. Giving a segment of the population free money is going to benefit that segment, no question. Welfare and Quantitative Easing are both examples of that. But when you make it universal, my economics intuition says that the effect will be washed out by a commensurate rise in prices. Or put another way, you can subsidize t…
If I am understanding your argument, it is a sort of 'thermodynamics' argument against UBI. It argues that there exists a fixed supply of capital and that transfer payments funded by taxes are always counter balanced by an increases in prices to keep capital supplies in balance. If that isn't a correct interpretation of your argument, then the rest of this won't make a lot of sense. The reason this sort of thermodyna…
No, it's an inflation argument against UBI. If everyone has more money, everyone becomes less sensitive to increases in prices, and therefore prices rise into the new equilibrium. (Increase in demand without a corresponding increase in supply leads to an increase in the price level, in intro microeconomics-ese). Now, the price level may not rise to the exact level where it cancels out the entire UBI, but that's based on various factors that are effectively unobservable.
It's not quite thermodynamics, because it's not as strict of a 'law', but it's close.
Re: The latest experiment in basic income will be coming to Stockton, California
#59The problem with UBI is that it doesn't promote social behavior. In fact it promotes anti-social behavior, since a UBI recipient need not provide any value to his community as a condition of this benefit. Charity is not a legitimate role for government.
That's funny. The proponents of UBI would say that it in fact is the key to maximizing productive social behaviour.
Of course, it's a matter of worldviews. You might think innate human behaviour is laziness and only forceful contracts can get productivity out of them. I can certainly see evidence of that, but I don't think it's innate for everyone. I think many people would be eager for a sense of belonging and purpose that could only come from contributing to society.
Think about all the people that help out in times of crisis without 'reward'. That's also innate. Whether it's the majority, I think that's a matter of culture.
If you define the primary relationship people have to each other in society with forceful contracts, then yes, you might engender also a subculture of rebellion and banditry that results in laziness and exploitation. What if we defined it differently?
Re: The latest experiment in basic income will be coming to Stockton, California
#60Earlier quoted context omitted.
Sorry to be annoying on this topic, but: This is explicitly one of the goals of replacing the current social safety nets with UBI. UBI can't replace social safety nets. It's impossible. 12k for every adult is 3 trillion dollars, which almost always assumes cutting other programs. What about healthcare? I bet most would rather have comprehensive health coverage instead of 12k every year, but you can't have both. In th…
What do you mean by safety nets? If you mean economic need-based programs, so something like "if you earn less than X, you get Y for free", UBI generally assumes the elimination of all such programs, so yes, it does assume cutting other programs. In fact one of the goals of UBI is to replace many complicated welfare trap-generating programs with a single non-welfare-trap one, with the advantage of also eliminating th…
What I mean is it is no way those targeted programs can be replaced with UBI. If someone is getting 30k of value from an existing or existing welfare programs, cutting it back to 12k removes their social safety net, regardless of the straight cash they get. Worse, if they run out of that, they really have no safety net remaining.