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If You Think Basic Income Is “Free Money” or Socialism, Think Again

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Re: If You Think Basic Income Is “Free Money” or Socialism, Think Again

#61

Post by Simon_says »

pedrocr wrote: post #55
Simon_says wrote: post #42

Earlier quoted context omitted.

I never really understood the argument that taxing spending taxes rich people a lower proportion of their income. Even allowing for investments and savings, rich and poor are all going to spend the money they have in their life (ignore or tax the estates). If there’s a 10% sales tax, then 9.0909...% of your wealth will go to it, no matter how much you make, invest, save.

>rich and poor are all going to spend the money they have in their life (ignore or tax the estates). This is a spherical cow in a vaccum style argument. If you ignore estates and also ignore property and other investments that don't pay sales tax then yes, everyone pays the same sales tax. But the rich will disproportionally own investments and properties that will then be passed on to their heirs. Over any period an…

Sure, rich people will invest, and then get (hopefully more) money back and then spend it, subjecting it to same sales tax. And the tax on estates is higher than sales tax (over $5MM), so that’s hardly a dodge.

I still really don’t understand the argument, and I still sort of suspect that it’s fallacious, though I’d enjoy being proven wrong.

It seems to me that given a sales tax, a flat and identical percentage of every individual’s spending will go to the sales tax. If a person is “rich” but it doesn’t translate into spending or their estate, then what does that mean?

Re: If You Think Basic Income Is “Free Money” or Socialism, Think Again

#62

Post by dtech »

candiodari wrote: post #6
uoaei wrote: post #2

Basic income is a bottom-up stimulus package, like how bailouts for banks are "stimulus" packages but nestled in Reaganomics, i.e., expecting the money to trickle down. Except that bailouts sequester the money almost exclusively in the banking industry and so are useless for everyone except those who are already rich, and the government itself. Basic income fills the economy with money that can be really spent, and l…

How about I just point out the huge flaw here: Bank bailouts, in theory, are to be paid back, with interest. In a lot of cases they were. Not all, of course, but the economy turned. Net, bank bailouts were a good investment. QE may turn out to be as well (I may doubt that, but truth it the jury's still out) If that same deal can be made, believably, for basic income, we wouldn't be having this argument: we'd provide…

> What we cannot have in the economy, is a large, and potentially exponentially growing, group of expenses without any useful work.

I'm no economist, but that proposition seems flawed. Income support for people without jobs has more-or-less worked in western countries, in that those people aren't starving to death and are actually buying things.

It has similar advantages and disadvantages as other non-investment costs: but x million people decide how to spend the money instead of the government.

A feasible way for it to fail would be if enough people decided to stop working and rely on basic income, leading to not enough produced goods and rapid inflation, essentially make basic income too low. I think this is highly unlikely to happen, practically because there will always be people incentivised to work because they will earn more money, and morally because people seek fulfillment in live, and a large amount of people find that in their jobs.

Re: If You Think Basic Income Is “Free Money” or Socialism, Think Again

#63

Post by jganetsk »

candiodari wrote: post #6
uoaei wrote: post #2

Basic income is a bottom-up stimulus package, like how bailouts for banks are "stimulus" packages but nestled in Reaganomics, i.e., expecting the money to trickle down. Except that bailouts sequester the money almost exclusively in the banking industry and so are useless for everyone except those who are already rich, and the government itself. Basic income fills the economy with money that can be really spent, and l…

How about I just point out the huge flaw here: Bank bailouts, in theory, are to be paid back, with interest. In a lot of cases they were. Not all, of course, but the economy turned. Net, bank bailouts were a good investment. QE may turn out to be as well (I may doubt that, but truth it the jury's still out) If that same deal can be made, believably, for basic income, we wouldn't be having this argument: we'd provide…

We can analyze the effect of basic income using MMT, modern monetary theory.

Every dollar spent by the government is a dollar in someone else's pocket. That dollar will be split and used in 3 ways: spending, taxation, saving. So here's the algorithm...

int saved = 0, taxed = 0;

1) For every cent taxed, add that to "taxed"

2) For every cent saved, add that to "saved"

3) For every cent spent, recurse

So, every dollar spent by the government, with the algorithm fully applied, is completely distributed into taxation and savings. And taxation is simply a return back into the government's hands.

So the net effect is that some fraction of each dollar spent by the government goes into private savings. You end up with "twin peaks of debt and savings", in this case government debt and private savings. Government spending is essentially monetary policy... and basic income is government spending that is fair and democratic.

But government debt doesn't grow forever, because there's income outside of basic income, and that income is taxed as well.

Re: If You Think Basic Income Is “Free Money” or Socialism, Think Again

#64

Post by Nelkins »

IvanK_net wrote: post #27

"First, saying basic income is socialism is as absurd as saying money is socialism. It’s money. It’s all it is. What do people do with money? They use it in markets. In other words, basic income is fuel for markets." The brilliant flow of thoughts and deduction just blew my mind.

Kind of reminds me of the old Batman-style deduction.

https://youtu.be/HXKYQvP0zQ0

Re: If You Think Basic Income Is “Free Money” or Socialism, Think Again

#65

Post by creaghpatr »

akvadrako wrote: post #47
Simon_says wrote: post #35

Earlier quoted context omitted.

If Basic Income isn’t socialism, I shudder to think of what the author would consider socialism.

Socialism might be central planning. Basic income is almost the opposite of central planning, because it replaces all sorts of conditional and focused welfare with what is equivalent to a negative income tax. That's why so many libertarians are on board with the idea.

Libertarians are not on board with the idea- libertarians are absolutely be against mandated handouts without critical purpose. A disingenuous claim at best.

Re: If You Think Basic Income Is “Free Money” or Socialism, Think Again

#66

Post by Retric »

candiodari wrote: post #40
Retric wrote: post #21

Earlier quoted context omitted.

In risk adjusted terms bailouts lose money by having easier terms than private investments. Further, bailout money came from loans (bonds), and the government lost money both from the loan payment and the higher interest rate from selling more bonds. People in prison do no work yet society has plenty of surplus to cover them. The reality is minimum wage jobs are a tiny slice of the economy because they create so litt…

> In risk adjusted terms bailouts lose money by having easier terms than private investments. That's similar to saying I lost money because a bank offered you your mortgage for 4% when I could have lent you that money at 10%.

You are not the market.

If the government pays above market rates for gold then they are clearly losing money. Why do you think there is a difference if they offer a loan at say 1%?

Re: If You Think Basic Income Is “Free Money” or Socialism, Think Again

#67

Post by Firadeoclus »

Simon_says wrote: post #59
akvadrako wrote: post #47

Earlier quoted context omitted.

Socialism might be central planning. Basic income is almost the opposite of central planning, because it replaces all sorts of conditional and focused welfare with what is equivalent to a negative income tax. That's why so many libertarians are on board with the idea.

That doesn’t sound right to me. Speaking as someone with mild Libertarian tendencies, UBI seems pretty contra to Libertarian ideals. Not the UBI itself, but the taxation required to fund it. Can you give references to any well-known Libertarian thinkers who are on board with UBI?

There is more than one strand of libertarianism, and not all of them strive to minimize taxation. See e.g. https://en.wikipedia.org/wiki/Left-libertarianism

Re: If You Think Basic Income Is “Free Money” or Socialism, Think Again

#68

Post by theyregreat »

pmorici wrote: post #43
Retric wrote: post #21

Earlier quoted context omitted.

In risk adjusted terms bailouts lose money by having easier terms than private investments. Further, bailout money came from loans (bonds), and the government lost money both from the loan payment and the higher interest rate from selling more bonds. People in prison do no work yet society has plenty of surplus to cover them. The reality is minimum wage jobs are a tiny slice of the economy because they create so litt…

Lots of prisoners work and they are paid below minimum wage to subsidize there housing cost.

In the US, paying prisoners is technically optional per the 13th amendment loophole.

Furthermore, the US has the highest incarceration rate in the world, and combined with for-profit prisons’ political contributions, there are perverse incentives and outright corruption to overprosecute poor and minorities, as evidenced by the skewed prison vs. entire US demographics.

And it’s ”their”

Re: If You Think Basic Income Is “Free Money” or Socialism, Think Again

#69

Post by Firadeoclus »

jasonlfunk wrote: post #37

> Everyone should get enough money to be able to refuse to work. That way, the incentive is shifted to employers, where it should be. Want someone to do something? Pay them enough to do it. This sounds nice in theory, but how doesn’t this result in price inflation? Not only are you going to be taking a portion of businesses’ profits in taxes, but now you are increasing the cost of labour. And frankly, some jobs suck…

There would be a rebalancing of prices, which is really an intended effect. Things would be in flux for a time, then settle at a new equilibrium. Food prices may go up, other prices may go down. The new equilibrium prices may well be higher on average, but the more important question is, how much can a poor person afford to buy?

Re: If You Think Basic Income Is “Free Money” or Socialism, Think Again

#70

Post by mmjaa »

flotillo wrote: post #25
mmjaa wrote: post #9

I feel like this basic income ideology is really rooted in laziness - like, everyone likes free things, right? You don't have to work for it? But - do we ever really ask where that money is coming from? The rich just give it? So then, why would I work hard to become rich, if its just going to be taken from me? Its like income tax. Everyone loves paying tax on their income, right? (I, personally, do not.). So why don'…

> So then, why would I work hard to become rich Why do you think that working hard will make you rich? For the vast majority of people, this isn't the case at all. Let's not revere the rich. Most of them acquired their wealth through a mixture of luck, unethical behaviour, and corruption.

No, this is incorrect, and you are clearly inexperienced on the subject of being poor, or rich. Perhaps somewhere in between?

I started off poor. I worked very hard. I'm much richer now as a result of it. Nobody will ever take that away from me.

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