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The first results from the biggest basic income experiment

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Re: The first results from the biggest basic income experiment

#51

Post by motohagiography »

The smaller the payments, the larger the coordination problem people have to solve together to aggregate the money into a capital investment that returns growth and jobs.

Arguably, in the group who received lump sums, if only a small minority of them started businesses that employed others, they would raise the quality of life for more people than groups of people getting small payments and having to coordinate larger groups to improve their collective prospects.

Whereas, those who got a monthly stipend would very likely just come to depend on it, and maybe pursue other things like raising kids or going to school, but I'd bet the businesses kept the opportunity and wealth in the community they built it in, where the kids and educated would leave to find better ones.

Re: The first results from the biggest basic income experiment

#52

Post by ethanbond »

danenania wrote: post #50
ethanbond wrote: post #27

Earlier quoted context omitted.

A UBI of $x/month will just yield rent increases of $x/month.

That depends on how it's paid for. If the money is printed, then yes. If it's raised through taxes, then not necessarily.

It doesn’t depend on how it’s paid for. If I am a landlord and I know that my tenants now earn an additional $600/mo, and every other tenant in my market is also earning an additional $600/mo, I would be an idiot not to raise my rents by $600/mo, and so would every other landlord.

Re: The first results from the biggest basic income experiment

#53

Post by bee_rider »

ethanbond wrote: post #27
MrBlueIncognito wrote: post #4

The idea of UBI, to me at least, is a mind-blowing one. It’s a shame something like this doesn’t exist on a large scale already. I know I’m probably missing something important here, but can someone outline any good reasons, if any, that it hasn’t been implemented yet?

A UBI of $x/month will just yield rent increases of $x/month.

No it won’t, why would it?

Re: The first results from the biggest basic income experiment

#54

Post by SeanAnderson »

Bjartr wrote: post #17
SeanAnderson wrote: post #15

I don't know much about UBI. How do people generally see it being implemented? Does everyone get the exact same, flat amount? Do only people below a certain income get it? Does the amount gradually decline based on current income? Does the amount change based on cost of living? If someone remains destitute after being given UBI - is that now more clearly "on them," or do they now qualify for additional support? Genui…

AIUI, if it's not something everyone gets (universal) and it's not the same amount for everyone (basic), it's not UBI.

Thanks. The clarification that basic means same amount for everyone is helpful.

Re: The first results from the biggest basic income experiment

#55

Post by danenania »

ethanbond wrote: post #52
danenania wrote: post #50

Earlier quoted context omitted.

That depends on how it's paid for. If the money is printed, then yes. If it's raised through taxes, then not necessarily.

It doesn’t depend on how it’s paid for. If I am a landlord and I know that my tenants now earn an additional $600/mo, and every other tenant in my market is also earning an additional $600/mo, I would be an idiot not to raise my rents by $600/mo, and so would every other landlord.

You're only considering the first order effect. A tax increase large enough to fund UBI would change the whole economy.

Re: The first results from the biggest basic income experiment

#56

Post by ethanbond »

bee_rider wrote: post #53
ethanbond wrote: post #27

Earlier quoted context omitted.

A UBI of $x/month will just yield rent increases of $x/month.

No it won’t, why would it?

Rents are set by only two things: 1) the tenant markets’ ability to pay and 2) competition with other landlords.

If every single landlord knows with certainty (2) that every single tenant in their market has increased their ability to pay (1) by $1000/mo, then every landlord independently will come to the conclusion that they can raise rents by $1000/mo.

They know the tenants are able to sustain it, and they know other landlords know the same thing.

Re: The first results from the biggest basic income experiment

#57

Post by cc101 »

mantas wrote: post #3

Money flow into poor communities of course works. Relatively little money required on global scale. And they probably were given to the organization in some sort of a grant. What happens if you do this in a major economy using it as the source of money? We know what would happen if a bunch of money were printed. What if it was taken out of taxes and crapton of government programs were cancelled? Especially long term.

Actually we don't know what would happen if a bunch of money were printed. I assume you expect inflation.

What actually happens depends on who gets the money. If rich people get it, I would not expect much to happen. If middle income people get it, we could reasonably expect inflation. If low income people get it, that grows the economy even in a major economy.

Let me explain. Yes, if you give middle income people more money, then they can afford to pay more for widgets. So, the widget store owner can increase his income by increasing his prices: Inflation.

If low income people get the money, now they can buy the widget that they wanted. So, the widget store owner opens a widget store in a low income area and orders more widgets. The widget manufacturer puts on another shift. Both groups make more money and more people are employed.

Should the widget store owner raise his prices, fewer people can afford widgets and the store owner loses money. This won't happen.

The real world is more messy than this, but I think the principle applies.

"Inflation" is often a bugaboo used by resentful people to brand social innovation as harmful. Such people eventually hurt themselves and hurt their country.

Re: The first results from the biggest basic income experiment

#58

Post by ethanbond »

danenania wrote: post #55
ethanbond wrote: post #52

Earlier quoted context omitted.

It doesn’t depend on how it’s paid for. If I am a landlord and I know that my tenants now earn an additional $600/mo, and every other tenant in my market is also earning an additional $600/mo, I would be an idiot not to raise my rents by $600/mo, and so would every other landlord.

You're only considering the first order effect. A tax increase large enough to fund UBI would change the whole economy.

In ways that… mitigate rent increases? Say more what specific effect is relevant to this.

Re: The first results from the biggest basic income experiment

#59

Post by SV_BubbleTime »

legitster wrote: post #49

I think I'd still prefer a negative income tax over a UBI. Functionally they have the same result. But giving everyone money and clawing some of it back via taxes I think introduces unnecessary political liabilities and accounting headaches.

Negative tax, or not universal assistance seems quite reasonable. But like anything other tax system changes, it is basically impossible.

No one is going to have the will or capitol to reform the tax system even to this degree. Too many vested interests.

It’ll either have to be over a long enough timeline that technology or small movements eventually get there… or it’ll take war.

I feel like the only reason solution to debt and China is going to be war.

Re: The first results from the biggest basic income experiment

#60

Post by underyx »

BuyMyBitcoins wrote: post #47

It seems to me that every basic income ‘experiment’ is flawed because they don’t account for the externalities of higher taxes and the fact that the pool of recipients is limited enough that the market is unaffected. Giving a few thousand people a few thousand a month isn’t going to cause much on an impact on inflation and it’s not going to make rents go up across the market. Additionally, others outside the experime…

Great, so I guess it’s time to try UBI on a country scale then!
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