The latest experiment in basic income will be coming to Stockton, California • Hacker News Board

Re: The latest experiment in basic income will be coming to Stockton, California

#71

Post by greedo » Thu, Oct 19, 2017, 11:40 PM UTC

yellowstuff wrote: post #18

rothbardrand wrote: post #3

One 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…

Sure, if you simply gave everyone $1 for every dollar they already have, all you do is double prices and change nothing of substance. But I think the pro-UBI argument would be that you don't need to increase the money supply to do it. About 60% of Federal spending is on Social Security, Medicare and Medicaid. Reducing the spending on these programs, and other inefficient transfers such as welfare and disability will…

The math doesn't work out. Just giving everyone $10k annually will dwarf what we're currently spending on benefits. And Social Security is the third rail of politics; it won't be reduced, ever.

Re: The latest experiment in basic income will be coming to Stockton, California

#72

Post by greedo » Thu, Oct 19, 2017, 11:47 PM UTC

erentz wrote: post #64

navigator01 wrote: post #55

Earlier quoted context omitted.

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 ju…

Of course you don’t print money. You tax everyone more. And you give everyone a share of that tax. > UBI is not an innovative idea whatsoever. It’s not claimed to be. The idea is literally hundreds of years old and is pretty well understood. There seem to be a lot who are just coming across it and applying lazy thinking and biases to it and mostly getting it wrong.

Again, the math simply doesn't work out. The tax increases will be huge, and since most of the real tax revenue is in the middle class, you'll have to bump their tax rates up dramatically.

Giving UBI of $10K/year to every citizen of the US is $3.25T. That's more than all the Federal revenues in 2017 (0). And $10K isn't enough. So you'll end up needing confiscatory tax rates on everyone, and possible a wealth tax (not just income). The distorting effect of this level of taxation would be incredible, just from an economic viewpoint. From a political view, it would lead to revolution.

[0] - http://federal-budget.insidegov.com/l/120/2017-Estimate

Re: The latest experiment in basic income will be coming to Stockton, California

#73

Post by greedo » Thu, Oct 19, 2017, 11:49 PM UTC

freeone3000 wrote: post #21

mcbruiser3 wrote: post #11

Earlier quoted context omitted.

who lives on $500 a month? and the economy will simply adjust to absorb this increase anyway, so hence my comment about zero benefits. also, for young people at least, "shitty" jobs build character, which seems ever more critical these days. after working a "shitty" job for a little while, a person may be motivated to better themselves, or at least get a better job.

9.8% of the USA lives on $6,000 a year or less, according to the IRS. So, about 10% of the population lives on $500 a month. This isn't targeted to young people, though it will benefit them. This is also targeted at displaced workers, low-skill workers, and the upcoming tens of thousands marginalized out of the workforce by increasing automation. There's not really a PATH for people to move from shitty job to non-shi…

B.S. They may "earn" $6k or less per year, but they're not living on that. There's EITC, welfare, disability, etc etc. When I was a student, I "lived" on $500/month, but that was because I was a damn student working part time waiting tables. Had I been fully employed, my annual income would have been much higher.

Re: The latest experiment in basic income will be coming to Stockton, California

#74

Post by [deleted] » Thu, Oct 19, 2017, 11:51 PM UTC

erentz wrote: post #61

Tyrek wrote: post #58

Earlier quoted context omitted.

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…

But that suggest prices are set by the available cash flow. Which means without other factors if we just lower everyone’s wages to zero everything will be free. Obviously this isn’t the case. Also it completely ignores supply and demand. Under UBI someone will raise their price to take more profit... but then no one will step in and compete because they see an ability to offer the product/service more efficiently. Se…

[deleted]

Re: The latest experiment in basic income will be coming to Stockton, California

#75

Post by vacri » Thu, Oct 19, 2017, 11:52 PM UTC

truxus wrote: post #40

The 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.

> Charity is not a legitimate role for government.

Charity is the raison d'être of government. A government is there to run your society. That means doing things for people, even if it's just printing passports and employing a police department.

Re: The latest experiment in basic income will be coming to Stockton, California

#76

Post by sokoloff » Thu, Oct 19, 2017, 11:56 PM UTC

eru wrote: post #23

rothbardrand wrote: post #3

One 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…

https://medium.com/basic-income/why-land-value-tax-and-unive... is a great article on how to do basic income. The problem is not so much general price rises, as rises in rent.

Exactly. If I had an idea that countrywide UBI was coming at a meaningful level, I'd buy as much cheap housing stock as I could get my hands on as I believe UBI would result in net household formation and net demand for low-end rental housing.

Re: The latest experiment in basic income will be coming to Stockton, California

#77

Post by donw » Thu, Oct 19, 2017, 11:56 PM UTC

erentz wrote: post #61

Tyrek wrote: post #58

Earlier quoted context omitted.

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…

But that suggest prices are set by the available cash flow. Which means without other factors if we just lower everyone’s wages to zero everything will be free. Obviously this isn’t the case. Also it completely ignores supply and demand. Under UBI someone will raise their price to take more profit... but then no one will step in and compete because they see an ability to offer the product/service more efficiently. Se…

Prices aren't set by one thing and one thing only, though.

Available cash flow definitely plays into the equation, and we can see this at work in a multitude of areas, from the skyrocketing cost of a university education, to the fact that ski resorts charge two or three times the going rate for a cup of hot chocolate (because if you have the money to go skiing, you have the money to pay extra for a hot beverage).

Costs also play a factor, of course. Dropping everybody's wages to zero doesn't mitigate the fact that raw materials, fuel, and even time are all finite resources.

Personally, while once a fan, I'm highly skeptical of UBI.

I would rather see something more like a universal assistance program: safe, government-run housing, dormitory style, with a cafeteria, available to all.

And I do mean "all". If Warren Buffet wants to bunk with Hobo Joe, that's his business. Buffet pays taxes that support the system, and shouldn't be barred from making use of it.

The people that live there are responsible for working to maintain the space: cleaning, cooking, etc. Put them near libraries and community centers, with ready access to whatever public transportation is available.

Unfortunately, given the current political climate, I doubt that this would go over well with either party.

Re: The latest experiment in basic income will be coming to Stockton, California

#78

Post by yellowstuff » Fri, Oct 20, 2017, 12:11 AM UTC

greedo wrote: post #71

yellowstuff wrote: post #18

Earlier quoted context omitted.

Sure, if you simply gave everyone $1 for every dollar they already have, all you do is double prices and change nothing of substance. But I think the pro-UBI argument would be that you don't need to increase the money supply to do it. About 60% of Federal spending is on Social Security, Medicare and Medicaid. Reducing the spending on these programs, and other inefficient transfers such as welfare and disability will…

The math doesn't work out. Just giving everyone $10k annually will dwarf what we're currently spending on benefits. And Social Security is the third rail of politics; it won't be reduced, ever.

You can raise taxes to pay for most of it because everyone has an extra $10k. You might need to do it in a sneaky way so people don't just see it as a wash for them personally. But still, I agree with you, UBI ain't happening in the US any time soon.

Re: The latest experiment in basic income will be coming to Stockton, California

#79

Post by plushpuffin » Fri, Oct 20, 2017, 12:12 AM UTC

aaron-lebo wrote: post #60

fpig wrote: post #46

Earlier quoted context omitted.

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.

How does UBI take into account mental incompetence, addictions, poor decision-making, bad luck, and bad investments, and where do you draw the line?

Don't a lot of welfare payments have strings attached, with regard to what you can spend it on? UBI explicitly does not, so you can use it for anything you want. If UBI did completely replace the social safety net, and someone gambles/fritters away their basic income and can't get a job to make more, are they allowed to starve (or depend completely on private charity)?

Re: The latest experiment in basic income will be coming to Stockton, California

#80

Post by truxus » Fri, Oct 20, 2017, 12:18 AM UTC

jaibot wrote: post #62

truxus wrote: post #45

Earlier quoted context omitted.

What if you decide to fund a self-destructive addiction? Or send the money to a foreign country? Is that in the public interest?

Letting people make mistakes is important. Letting people be altruistic is important. More specifically: I'm 0% worried about sending money overseas, since I expect that the few people who do so that will be making the world a better place on net.

In both cases real wealth is lost from the economy.

State sponsored destruction of property.