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An Engineering Argument for Basic Income

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Re: An Engineering Argument for Basic Income

#41

Post by codekilla »

jkingsbery wrote: post #24

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. To the naive mind that can conceive of order only as the product of deliberate arrangement..." - Frederick Hayek Whether or not UBI is a good idea, a useful idea, or a moral idea is an interesting question (I generally think not, but it seems that position is losing the debate). Arguing for UBI…

I think it's worth bearing in mind that Hayek lived before the information age, and that there are real limits to the validity of the idea that design isn't useful (and especially in economics/finance).

UBI may not be a good idea, but the reason being that it's likely not the best design (I would say Minsky had it largely correct [0]).

[0] http://www.levyinstitute.org/publications/ending-poverty-job...

Re: An Engineering Argument for Basic Income

#42

Post by bluGill »

It won't help. Too many people will fall for schemes that just take all the UBI payments. They will apply the UBI plus their income to get the amount of mortgage they can afford, and then when (not if - bad things will happen, though how bad differs!) bad things happens they can't afford their payments. Or worse they will get involved in some sort of scam which takes all their UBI for some reward that never happens.

Re: An Engineering Argument for Basic Income

#43

Post by clairity »

gumby wrote: post #13
tengbretson wrote: post #11

Earlier quoted context omitted.

> Does this not discourage lending Yes. The goal is to reduce debt.

Why? Buying a house or car through debt is not a bad way to match your payment stream to the usable lifetime of the asset. Even if you can pay cash, unless you have a huge cushion this could make a lot of sense (taking your savings to 0 is worse than taking your savings to n months of cost of living, including the loan payments). I am lucky enough to be a cash buyer but I can still see the logic of using debt in this…

from an economic perspective, it doesn't make sense to buy a depreciating asset, like a car, with debt. a house, on the other hand, is generally considered a stable asset, so debt is appropriate there.

Re: An Engineering Argument for Basic Income

#44

Post by adkadskhj »

fiftyfifty wrote: post #34
nyghtly wrote: post #32

Earlier quoted context omitted.

> The Social Security Administration sends out checks each month to 64 million people, mostly the elderly and disabled. Unemployment Insurance programs send out checks each month to 2.1 million people. In other countries, the government, in addition to paying these kinds of old-age, disability, and unemployment benefits, also pays out a monthly benefit to every child. In the US that would mean checks going out to the…

There are roughly 209 million adults in the US. Providing a $1,000/month UBI (which seems to be what's commonly proposed) will cost us $2.5 Trillion every year. That is a lot of tax to collect. If we are not careful it will be become a debt burden and it will cause inflation. I'm not saying that it can't be done but I think we would all like to see a very careful plan on where exactly that much money is going to come…

While i am very pro-tax and pro-support nets, i don't think we can have UBI - an insanely high tax social program - without a tax overhaul.

Most specifically, the more social programs you provide the more transparent taxation becomes. Right now our tax programs are not only lacking in transparency but are straight obtuse. This exists, i assume, because they had to work around peoples aversion to taxes and sticker shock when paying taxes.

A massively increased tax spend will only serve to illustrate the sticker-shock problem more. I just don't see UBI happening until people can learn to pay for the common good, recognizing what they're getting out of it and how the common good has material impacts on their self - even if entirely selfishly motivated (as most Americans seem).

Unfortunately the only way i see UBI (or similar) happening is in the face of mass layoffs and lack of work due to a large technology change - like various forms of automation. Until then, it's a problem people can't see, aren't directly affected by, and won't want to pay for.

Re: An Engineering Argument for Basic Income

#45

Post by AnimalMuppet »

tengbretson wrote: post #6
mandelbrotwurst wrote: post #5

Earlier quoted context omitted.

Yes, that would be nice. What policy would you suggest to get there?

State-enforced debt jubilees.

But, see, who holds the debt? It's not just evil people who deserve to lose their ill-gotten gains. It's things like pension funds, too. So a debt jubilee sounds great. A "lose your pension fund jubilee" sounds a lot less nice.

Re: An Engineering Argument for Basic Income

#46

Post by adkadskhj »

hnrodey wrote: post #36
rocketpastsix wrote: post #21

Earlier quoted context omitted.

>People who have unemployment don't want to work because they'll loose unemployment hasn't this been debunked repeatedly? While yes, Im sure there are some people who do their hardest not to work to collect money, most people want to be out there working. I dont think youre correct per se, but I do think that part of the reason people linger on unemployment is because jobs that they are able to get dont pay nearly en…

>People who have unemployment don't want to work because they'll loose unemployment It's not all people do this or all people do that. It 100% happens that a non-trivial percentage of people on government benefits (unemployment, etc.) choose to stay on these benefits for their entire duration and only then pursue work opportunities.

And in traditional fashion many people (mostly just one group, lets be honest..) throw out the baby with the bathwater on social safety nets. Because some people exploit it, the people who need it get damned.

edit: Edited to be a bit less pointed... A bit.

Re: An Engineering Argument for Basic Income

#47

Post by greysphere »

bluGill wrote: post #42

It won't help. Too many people will fall for schemes that just take all the UBI payments. They will apply the UBI plus their income to get the amount of mortgage they can afford, and then when (not if - bad things will happen, though how bad differs!) bad things happens they can't afford their payments. Or worse they will get involved in some sort of scam which takes all their UBI for some reward that never happens.

Your argument makes no meaningful differentiation between UBI and any other forms of income.

Re: An Engineering Argument for Basic Income

#48

Post by AnthonyMouse »

adkadskhj wrote: post #46
hnrodey wrote: post #36

Earlier quoted context omitted.

>People who have unemployment don't want to work because they'll loose unemployment It's not all people do this or all people do that. It 100% happens that a non-trivial percentage of people on government benefits (unemployment, etc.) choose to stay on these benefits for their entire duration and only then pursue work opportunities.

And in traditional fashion many people (mostly just one group, lets be honest..) throw out the baby with the bathwater on social safety nets. Because some people exploit it, the people who need it get damned. edit : Edited to be a bit less pointed... A bit.

It seems weird to be criticizing a group for identifying a problem that actually exists (welfare traps / phase out cliffs / perverse incentives) while proposing a solution to it that would actually work better (NIT/UBI). There are proponents of a negative income tax on both sides, e.g. conservative economist Milton Friedman.

Re: An Engineering Argument for Basic Income

#49

Post by s1artibartfast »

hnrodey wrote: post #37
m1117 wrote: post #2

People who have unemployment don't want to work because they'll loose unemployment :/ UBI seems like a good motivation and a fun experiment, looking forward to hopefully AY launching it in NYC.

>People who have unemployment don't want to work because they'll loose unemployment It's not all people do this or all people do that. It 100% happens that some people on government benefits (unemployment, etc.) choose to stay on these benefits for their entire duration and then pursue work opportunities.

Much of this has to do with well understood welfare cliffs. Sure, some people won't work if they have the option for a menial existence on welfare. Many more would like to increase their income, but would suffer loss of healthcare, housing, or other necessities if they do.

Re: An Engineering Argument for Basic Income

#50

Post by nevi-me »

The argument works, but is too simplistic as other comments mention, and only looks at an ideal-state.

It's unfortunate that politicians are often responsible for making this decision, because most of the time they fail to understand the economics, and make decisions that optimise their term in office or other selfish interests.

I live in South Africa. Last week the governing party made a resolution to "look into" UBI/basic grants. [0] Today, thousands of disabled and old people were queuing for their basic grants, in inhumane ways, during a pandemic + a South African virus variant that's more aggressive. The Minister in charge of social development, said "there's no money" [1].

Revisiting the engineering argument. It talks about fail-safes if the elevator stops working. This partly assumes that the elevator is maintained, because it not plunging is less of a concern than it being stuck for weeks at a time. If governments fulfilled their social duties, the overall cost of living would remain low, those in need of social services would regularly get them (without the strong need to pay people money). This reduces the bang-bang effect mentioned.

Productive labour forces also minimise the length of elevator failures. If we look at Maslow's Hierarchy of Needs, with a view of universally solving them; we'd be incentivised to optimise for food production (reduce hunger), providing basic + better shelter (reduce homelessness). Play fair with resources to improve safety (colonialisation, domination, creating wars, displacing people, increasing crime).

Doing a lot of these things, and addressing the ills of capitalism, become the fail-safes that diminish the preconditions that allow people to argue for basic income (where the recipient is an able-body who is not being productive by choice or circumstance).

[0] https://businesstech.co.za/news/finance/459738/government-to... [1] https://www.news24.com/news24/southafrica/news/auntie-theres...

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