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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

#61

Post by AaronM »

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…

Why would giving everyone basic income below a certain income level immediately cause inflation to match it?

Inflation doesnt track directly to minimum wage, which seems to be a very similar principal.

Re: The first results from the biggest basic income experiment

#62

Post by danbruc »

Ajay-p wrote: post #40
crooked-v wrote: post #11

Earlier quoted context omitted.

There's a huge difference between typical welfare programs and UBI, in that the fundamental principle of the latter is just handing over money with no strins attached and trusting people to (on average) use it efficiently and effectively.

Not everyone gets typical welfare, only those who meet certain criteria. A UBI.. Universal by it's very name.. is given to everyone.

Depends on the country, here there is some bottom welfare tier that will support everyone who is not eligible for support by higher tiers or other means.

Re: The first results from the biggest basic income experiment

#63

Post by YiraldyGuber78 »

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?

To me it is some combination of ridiculous, naive, and pointless. I don't have a positive view of the Western welfare state, with its excesses, inefficiencies, and catastrophic effect on incentives especially for the poorer and more dysfunctional demographics.

And you want to fix this by making it unconditional? The few who need (and warrant) state financial support will get less than they need; the many rorting the system won't even have to lift a finger to do so; the many many low-income earners disillusioned with the state of Western economies and cultures will happily down tools the moment the first payment hits their account; people like you and I who probably have no need at all for it still get paid regardless.

These stories of Kenyan entrepreneurs changing their villages with a $500 lump sum are completely irrelevant. It's absurd to think this in any way represents the way it will mess with incentive structures in the West, and the cynic in me sees it as a very transparent appeal to doe-eyed progressive types desperate to fawn over darker-skinned people enjoying tiny successes. Or grasping for any "scientific" evidence that we should give them money just for being a lazy dropout. Or playing into their fantasy that they would be a productive master artist if not for the oppressive demands of the capitalist.

It's a con. It's silly. But it makes people like me look like meanies so people like you turn out in droves to vote for the "good guy" progressives who just want to give everyone free money.

Re: The first results from the biggest basic income experiment

#64

Post by judofyr »

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.

"Well, I'm a [store, café, bar, gym, etc] owner and I know that my customers now earn an additional $600/mo, and every other customer in my market is also earning an addition $600/mo, I would be an idiot not to raise my prices by $600/mo, and so would every other owner."

"Oh, also, I'm building a new set of apartments and I discovered that when I set the rent to today's price + $300/mo then suddenly everyone was interested since everyone else on the market now takes +$600/mo."

Yes, inflation is a real concern which should be discussed, but "duh, all the money will just go to X" is far too a simplistic argument.

Re: The first results from the biggest basic income experiment

#65

Post by YiraldyGuber78 »

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.

True, instead of just the low-income earners dropping out now that they have an unconditional deposit in their bank every week, now you also have a significant number of middle and high income earners consciously choosing to earn less because of the crushingly high taxes.

Re: The first results from the biggest basic income experiment

#66

Post by AaronM »

ethanbond wrote: post #21
coffeebeqn wrote: post #12

Earlier quoted context omitted.

I always figured UBI would basically replace and end all government poverty programs at least

Nope landlords will just raise rents back to approximately the same level of poverty.

Can you point to a single reputable study that shows this would likely happen?

Re: The first results from the biggest basic income experiment

#67

Post by gretch »

A lot of people are commenting on the merits of UBI vs no UBI.

The article is mostly about lump sum vs periodic distribution and the effects it has on recipients behavior.

I recommend everyone read it - even if you’re generally against UBI (I am), it still has something to say about behavioral economics.

Re: The first results from the biggest basic income experiment

#68

Post by geysersam »

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…

I definitely agree the experiments are flawed. But I'd like to raise that there also are positive effects that are not accounted for. You mentioned the impact on market prices, I think the impact on prices would be net positive, because the market would become more inclined to provide products and services for people with lower incomes, where every marginal spent dollar has a much higher impact on overall well being than in higher income brackets. Market economies are more efficient when purchasing power is close to evenly distributed in the population.

Re: The first results from the biggest basic income experiment

#69

Post by danenania »

ethanbond wrote: post #58
danenania wrote: post #55

Earlier quoted context omitted.

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.

Well, you have the UBI increasing incomes at the lower end of the economy, which does apply upward pressure on lower-cost rents. But on the other side, you'd be decreasing the income/wealth at the top, which applies downward pressure at the high end of the market. The ultimate effect is not a straightforward calculation. I think the total size of the money supply is probably the most significant factor, and that wouldn't change if the UBI is funded by taxes.

Re: The first results from the biggest basic income experiment

#70

Post by ethanbond »

judofyr wrote: post #64
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.

"Well, I'm a [store, café, bar, gym, etc] owner and I know that my customers now earn an additional $600/mo, and every other customer in my market is also earning an addition $600/mo, I would be an idiot not to raise my prices by $600/mo, and so would every other owner ." "Oh, also, I'm building a new set of apartments and I discovered that when I set the rent to today's price + $300/mo then suddenly everyone was int…

Store, cafe, bar, gym owners will try to raise their prices, and they’ll succeed (obviously not everyone independently by the $UBI amount).

But then ya know what will happen? The store, cafe, bar, and gyms’ landlords will raise their rent accordingly and eat approximately all of the gains that came from their price increases.

Why on earth do you think rent is so expensive near high-productivity? The buildings aren’t better. The land itself isn’t higher quality. The landlords aren’t better. It’s more expensive because it can be due to the market’s productivity, and corollary ability to pay high prices.

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