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An Engineering Argument for Basic Income

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Re: An Engineering Argument for Basic Income

#61

Post by composer »

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…

> $2.5 Trillion every year

Actually it will cost $3T ONCE, one-time.

Actually the USA has already paid for a UBI from just its pandemic-related stimulus alone, e.g. CARES Act.

The way to achieve an perpetual ongoing UBI with just a one time expediture of $3T is... drum roll... Stipulate that all payments must be spent on basics & essentials. AND then issue the payments & handle collection digitally/electronically like with debit cards. I sit astounded that the country's best leaders have not proposed a "basics only" amendment.

Re: An Engineering Argument for Basic Income

#62

Post by adkadskhj »

AnthonyMouse wrote: post #48
adkadskhj wrote: post #46

Earlier quoted context omitted.

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.

I'm definitely not criticizing people for proposing an alternative. However, literally all of the .. group of people i know who might by lumped in that statement offer no alternative. Or rather, the alternative is a complete lack of social safety nets.

If you propose an alternative you're not throwing the baby out with the bathwater.

Re: An Engineering Argument for Basic Income

#63

Post by cecilpl2 »

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.

By that argument we shouldn't have any safety nets at all.

Re: An Engineering Argument for Basic Income

#64

Post by leetcrew »

clairity wrote: post #43
gumby wrote: post #13

Earlier quoted context omitted.

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.

it can absolutely make sense to finance a depreciating asset.

example one: I have just been offered a good job that requires a car for commuting. I have no car and negligible other assets. it is rational to take out a loan for a reasonably priced car as long as I can comfortably make the payments on my new wages. if I later lose my job but am not upside-down on the loan, I am still better off than I started.

example two: I make $200k and have $500k in assets and I want to buy a $20k car. I could easily afford to buy the car outright by selling some assets, but then I would have to pay capital gains and forgo future appreciation. if the expected appreciation + capital gains tax on those assets is significantly higher than the loan interest over the full term, it is rational to finance the vehicle.

Re: An Engineering Argument for Basic Income

#65

Post by ouid »

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…

There are essentially two types of economic regulation. Blacklist regulation and whitelist regulation. Whitelist regulation works like an elevator, or more accurately, an airplane. You can reason over it, and speculate over the effects of adding new items to the list. It is a constrained problem. The blacklist style results in more innovation, but also more chaos.

Hayek may not have realized this himself, but he was certainly talking about the blacklist style when he said this. In further support of this idea, the repeal of Glass-Steagal, which precipitated the 2008 crisis, essentially moved the investment banking system from a whitelist to a blacklist, and the result of this, was a bunch of insurance companies maximizing their correlated risk through a convoluted series of loopholes because that is always the goal of a limited liability enterprise. This was the event that made the equations invalid.

Re: An Engineering Argument for Basic Income

#66

Post by clairity »

gumby wrote: post #58
clairity wrote: post #43

Earlier quoted context omitted.

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.

Sure it does, for the cash flow reason I mentioned. Consider the debt payments as an insurance premium against financial problems. A municipality can take on debt for a capital expenditure on a bridge or something that might reasonably be dismantled or replaced around the time the bond is paid off, for the same reason. I would not consider either case to be irresponsible or economically irrational in principle. Espec…

sure, a bridge provides net economic benefit, so is not simply a depreciating asset. it's paying for broad benefits that accrue widely across society, rather than strictly to the government (externalized benefits). that doesn't happen with cars. in fact, cars produce large negative externalities. there's also fewer viable, affordable substitutes for bridges, whereas cars have multiple viable such alternatives, which makes debt often a bad choice for cars but not bridges.

but to the point of bonds, a lot of bond measures are not for net economic benefit, but rather political gain (school funding bonds, for example, tend to fail to improve educational outcomes despite the political rhetoric).

Re: An Engineering Argument for Basic Income

#67

Post by clairity »

leetcrew wrote: post #64
clairity wrote: post #43

Earlier quoted context omitted.

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.

it can absolutely make sense to finance a depreciating asset. example one: I have just been offered a good job that requires a car for commuting. I have no car and negligible other assets. it is rational to take out a loan for a reasonably priced car as long as I can comfortably make the payments on my new wages. if I later lose my job but am not upside-down on the loan, I am still better off than I started. example…

no, you're not considering opportunity costs or lower cost alternatives.

Re: An Engineering Argument for Basic Income

#68

Post by rapind »

somethoughts wrote: post #35
danenania wrote: post #14

It feels like the combination of Yang's presidential run and covid has broken the seal on the idea of UBI in the US. After having the experience of the government sending everyone direct payments, I think it's all but inevitable that we'll arrive at some level of formal UBI in the future. Given its sky high bipartisan popularity, it's hard to imagine how any non-UBI supporting politician will be able to compete with…

Re: 2 - It'd be kind of interesting if the UBI was tied to a 30 hour work week or 4 day work week. A bit like ok we want to give you money to pursue your dreams but we also want to make sure you have your act together with some cadence so you don't drift off into nowhere-ville. And before you downvote - I'm coming off reading this story which is on the HN front-page where the guy basically created his own UBI and the…

Let’s assume forcing people to work for UBI is a good thing (something I completely disagree with) and focus on the practicality of it instead.

As soon as you put in qualifiers it is no longer universal. Inevitably with gatekeepers you will have corruption (controlling who qualifies gives you power) as there is always an incentive. On the flip side you incentivize cheating (loopholes in the qualifiers, lying, etc.) and then all the $ spent staffing and building tools to enforce those qualifiers, then the staff who regulate them, etc.

So with good intentions you’ve completely ruined what could have been a very simple, fair, and efficient system. Basically what government does every day (usually with good intentions).

Re: An Engineering Argument for Basic Income

#69

Post by tharga8616 »

Geminidog wrote: post #18

The author misunderstands science, math and engineering. He says "Whatever can go wrong, will go wrong," then uses this argument to cite the need to use UBI as "fault tolerance" and cites examples of planes and safety systems. The irony here is that his statement of whatever "will go wrong" applies to fault tolerant systems as well. You can't deploy redundant safety features without testing that it works. Is UBI test…

And economics nowadays have nothing to do with mathematics, because, where is the rational use of resources to provide for everyone's basic needs?

So, UBI is just a fist step outside of this wasteful system to acknowledge that economy should serve and preserve the whole human species, and not the other way around.

Re: An Engineering Argument for Basic Income

#70

Post by tharga8616 »

ouid wrote: post #30

I have a simpler argument. The necessity of being fed, clothed, and housed, comes with a monthly price tag. The price of an annuity which pays for these things is the amount of debt that you are born with. That debt is completely undischargeable in bankruptcy, and is, in fact, the zero value to which you are set should you declare bankruptcy. The (inflation adjusted) price of that annuity varies wildly with the econo…

Debt and money are invented abstract objects. Pure ideas. The question is, do we have the resources to feed, clothe and house everyone? Yes we do. UBI is just another formal tool to wake you up to this truth. Ephemeralisation. We can each day do more with less, but our irrational economic system is impeding adequate distribution of resources.
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