Germany begins 3-year universal-basic-income trial

From what I see, it's madness. The economics make zero sense.

For example ; Canada. The Federal Government. (All of this speaks of the Federal Government).

https://www.canada.ca/en/department-finance/services/publica...

2019 Federal Revenue? $312B. That's from taxes, income from oil, any and all Federal revenue.

Now. UBI. Universal Basic Income. That means everyone over 17 gets it, as an example. That also means it must cover the basics. That you can live on it.

That's the whole point of UBI, and being "free to choose career paths", and all that other blather.

That, to me, means $2k/month. Maybe that will scale, up AND down, depending upon where you live. But let's just go with $2k/month. Or $24k/year.

Stats Canada says, out of almost 40M Canadians, around 30M are 18 and older.

What's $24k30M? 720B.

So.. the entire Federal Revenue is less than 1/2 of what UBI might cost.

Now bear in mind, that there was a deficit* in Canada, about $20B. And there is currently a debt in Canada, of about 1.1T. The GoC will say it's less, 800B, but that's if they 'use assets of 300B and deduct that from actual debt", which is meaningless, because interest on debt is on 1.1T.

Right now, 8% of Federal Revenue pays just the interest on that debt. If interest rates go up, say in a year or two.. so goes up that payment.

My point is that one year of UBI, would almost DOUBLE the ENTIRE FEDERAL DEBT. A Federal Debt that arose after decades, not one year.

If you half UBI? Now it's not basic income, it's just a supplement.

And you absolutely, positively can't get that money from taxes. About 25% of people's income is taxed (yes, that's an average), that's gas tax, income tax, federal sales tax, tax on alcohol, and other such things. My point here is, you can't just double the tax.

And, the above Federal Revenue? There is a pie chart, just under 50% of Federal Revenue came from personal tax.

You could increase taxes on business, but are you going to tax 100% of their profit? Because that still won't cover it.

Let's tax the rich you say! Well, most money is invested. For example:

https://financialpost.com/executive/posthaste-canadas-3-mill...

Note, that's ONLY 8.7 trillion. UBI is 720B for one year.

And, what are you going to do?

Seize people's real estate? Then what? Sell it again? To whom? Certainly not the people you just seized it from.

Are you going to tax ... what? Because, "wealth" is real estate, stocks, companies one owns, land, more. Are you going to seize stocks? Then what? Hold on to them? How does that fund UBI?

Are you going to seize companies? Great! Now that software company, valued at 100B, is worth $1, because the original owners are out, and they were the magic, and a government isn't going to be able to run something like that.

None of the logic behind UBI seems to make sense to me. I can't see where the cash is coming from.

This doesn't even include things like inflation, loss of productivity, or 100 other little things that are "just going to work themselves out".

I should say that my intent is not to invalidate your living experience, but rather to learn more.

Here’s what I’ve found so far:

Saudi Arabia

- dependence on foreign labor (since you claimed UBI is the cause): “ In answer to the question of why the Saudi economy is so dependent on foreign labor, the UN Arab Human Development Report blamed stunted social and economic development inhibited by lack of personal freedom, poor education and government hiring based on factors other than merit, and exclusion of women.” See “Challenges” section in https://en.m.wikipedia.org/wiki/Economy_of_Saudi_Arabia

- Reminded myself again that Saudi Arabia was a subsistence economy until the early 1930s, before their oil-based economy started.

- learned about the difficulties and the strategies (incl. the Citizens Account Program you linked to) to reduce dependency on oil reserves.

- Learned that the Citizens Account Program was introduced in 2017, so claims to its effect prior to that seems incorrect, unless there was some prior form of it.

Kuwait

The article you linked to describes a temporary program that ended 7 years ago.

I did find other articles that talk about work incentives (e.g. https://www.wellesley.edu/albright/about/blog/3926-downsides...) but haven’t digested and critically evaluated to draw a confident conclusion.

Overall observation

Your opening assertion (“ countries like Saudi, Iran, Kuwait, Qatar have done it for decades.”) doesn’t appear to be a fair appraisal.

Can you explain why? And if your answer amounts to "because people provide different amounts of [effort|value] to society" how would you reply to "so what?".

Just look at the US Bureau of Labor Statistics on how people spend their money. https://www.bls.gov/cex/2018/CrossTabs/sizbyinc/xtwo.PDF

For example, a couple making less than 15K a year is spending 2K on restaurants! A couple with that income shouldn't know what the inside of a restaurant looks like. But I don't blame people for that. I think we've let people like this down by not educating them.

Nobody teaches you how to use money to improve your life.

And this isn't just for lower income folks. I can't tell you how many high income people I know that foolishly spend their money (buying boats, new cars, etc) and hardly have anything left for retirement.

And I say this, living in a country that has had something similar to a basic income for years, although not fully universal (universal for kids, and people below certain income line), the vast majority of people get it and ended up resulting in that around half the public budget goes to social expenses. Every year that bag gets bigger, deficit gets bigger and having more currency flowing, inflation gets bigger and bigger.

So, this income is increased and salaries get adjusted, and it ends up in a never-ending cycle of income trying to catch up with inflation.

It's very hard to get out of that situation once you are in it, because now people depend on this money, and the political cost to cut it is so enormous that nobody dares trying to do it. It would mean the end of their political careers.

Maybe Germany can show us that it can be done, it will be very interesting to see the results. But from what I've experienced, this is not as simple as many people think it is.