The Mincome Experiment of 1974-79 • Hacker News Board

Re: The Mincome Experiment of 1974-79

#51

Post by sosuke » Thu, Feb 05, 2015, 7:14 PM UTC

maxerickson wrote: post #40

JonFish85 wrote: post #37

Earlier quoted context omitted.

According to [1], for a family of 4 the poverty line is just under $24k? [1] http://aspe.hhs.gov/poverty/14poverty.cfm

Uh-huh. 4*8=32. You used 316 million as one of your multipliers, that presumably includes children.

I think there would need to be some structure around children, what an incentive to make babies! $8k per baby per year, the Duggar family would be making $168k per year! I'd rather it be something as an adult. So the number of people 18 years or older is 242,470,820 [0]. Double the $8k to meet that poverty line as a couple. So at $16k per adult you come out to just under $3.9 trillion a year.

Edit: from the poverty data [1] you could say that only ~45 million people get the full $8k, the rest starts to taper off at the 50 cents to a dollar pace. That means this would cost considerably less. $360 billion is the minimum. The cost out would be $3.9 trillion, but those extra $8k checks would be collected at tax time. A one job two adult household, the job holder would have to pay back all the $8k, but the partner wouldn't if they didn't make any money.

[0] http://quickfacts.census.gov/qfd/states/00000.html

[1] https://www.census.gov/hhes/www/poverty/about/overview/

Re: The Mincome Experiment of 1974-79

#52

Post by aetherson » Thu, Feb 05, 2015, 7:14 PM UTC

corin_ wrote: post #39

ars wrote: post #10

Earlier quoted context omitted.

Taxes have to go up to pay for this so there isn't actually more money supply than there was before, it's just distributed differently.

That doesn't mean prices won't change because of it. As a simplified example, let's say poor person A is renting an apartment from rich person B for $500/month. The new system gives everyone $500/month basic income, but to pay for this rich person B has to pay $1000/month more in tax (of which he gets back half as basic income), while poor person A doesn't pay more tax. So essentially poor person A is getting $500/mo…

Your example doesn't work because it's a monopoly situation. That is, in your world there's only one landlord, so given that housing is a fundamental need and he controls 100% of the supply of housing, he can always raise his prices.

Now, that's not to say that a guaranteed income wouldn't necessarily cause inflation in some goods and services. It probably would! But the standard answer to "why doesn't the provider of a good or service just increase the cost of their service to the maximum disposable income of the buyer" is competition.

Re: The Mincome Experiment of 1974-79

#53

Post by mason240 » Thu, Feb 05, 2015, 7:16 PM UTC

Zikes wrote: post #7

mchanson wrote: post #2

Hope we start experimenting with this in the US also. Maybe at a state level.

It would have to be in an extremely liberal area. Socialism is still a four letter word in the US, and this is the epitome of socialist initiatives.

BI is NOT socialism at all. We still have private property and capitalism based economy, just like now.

If anything this is the pure form of the mixed capitalism/democratic economy/government model that every Western nation already has.

BI is a way of reconciling capitalism with the "post-work" work world we are moving into.

Re: The Mincome Experiment of 1974-79

#54

Post by czr80 » Thu, Feb 05, 2015, 7:18 PM UTC

lowboy wrote: post #29

innguest wrote: post #24

Earlier quoted context omitted.

I'm sorry but you are wrong. Inflation is nothing but the increase of money supply without an equivalent increase in production. What you are doing is being a good Keynesian and trying to make people believe that this stuff is too complicated for them to even start having an opinion on it. That strategy is condescending and not productive, and encourages helplessness in people.

> Inflation is nothing but the increase of money supply without an equivalent increase in production Wouldn't that mean that inflation would also be caused by a decrease in production without an equivalent decrease in the money supply?

Yes. Google "stagflation".

Re: The Mincome Experiment of 1974-79

#55

Post by corin_ » Thu, Feb 05, 2015, 7:21 PM UTC

aetherson wrote: post #52

corin_ wrote: post #39

Earlier quoted context omitted.

That doesn't mean prices won't change because of it. As a simplified example, let's say poor person A is renting an apartment from rich person B for $500/month. The new system gives everyone $500/month basic income, but to pay for this rich person B has to pay $1000/month more in tax (of which he gets back half as basic income), while poor person A doesn't pay more tax. So essentially poor person A is getting $500/mo…

Your example doesn't work because it's a monopoly situation. That is, in your world there's only one landlord, so given that housing is a fundamental need and he controls 100% of the supply of housing, he can always raise his prices. Now, that's not to say that a guaranteed income wouldn't necessarily cause inflation in some goods and services. It probably would! But the standard answer to "why doesn't the provider o…

Sure competition is one of the many reasons it's way more complicated than my simple version, but it doesn't mean prices won't change to counter basic income. It's possible competition will force prices to remain where they are, but it's also possible that everyone raises prices, step by step in line with competition. Housing is one area I would assume would definitely go up in price, though not to 100% of the basic income. My biggest reason for thinking this is that housing costs in many (most?) areas are driven not by material costs but by demand. Give everyone basic income and the demand alone (i.e. competition between buyers/renters) would raise prices. This would happen if you, for example, gave everyone in NYC $1000/month and didn't tax anyone for it. Then add in motivation from owners who rent to make more money to balance out their tax losses..

But yes, my comment was a very, very simplified example, to counter "prices won't change, we're not printing more cash" arguments - not a direct tale of what could happen in the real world.

Re: The Mincome Experiment of 1974-79

#56

Post by mason240 » Thu, Feb 05, 2015, 7:22 PM UTC

irremediable wrote: post #28

Zikes wrote: post #7

Earlier quoted context omitted.

It would have to be in an extremely liberal area. Socialism is still a four letter word in the US, and this is the epitome of socialist initiatives.

It's a weird one, actually; lots of socialists like the idea, but so do lots of libertarians. Alas, conservatives hate it.

Socialists hate the idea because it's still based on capitalism.

Re: The Mincome Experiment of 1974-79

#57

Post by bduerst » Thu, Feb 05, 2015, 7:24 PM UTC

aetherson wrote: post #49

bduerst wrote: post #43

Earlier quoted context omitted.

Nothing. Nothing is in place to stop basic income from causing housing prices to raise, and is one of the reasons we have food stamps and medicare instead of basic income. Housing is a good/service with a price that is set by income-elastic demand. If you push up the income across the entire market (as true basic income would), then the price of housing and cars and other goods with income-elastic demand will increas…

Raising the income for the entire population would indeed just inflate the currency. But a basic income would not in fact raise the income of the entire population. It would lower the income of the rich and raise the income of the poor. Because it would be paid for with taxes, not deficit spending. The rich would GET basic income, yes -- but their taxes would increase by an amount that would more-than-compensate for…

Assuming that housing is fungible, sure.

But it's not. There are different segments by quality, location, etc. What percentage of the housing market is only for "the rich"? What extra tax percentage is middle-income going to pay?

Lower income isn't going to be taxed more, so lower income housing prices are going to raise, as their market segment gets a boost in income.

And now you're back at people who couldn't afford housing before still being unable to afford it - which was part of the problem that basic income was trying to solve.

Re: The Mincome Experiment of 1974-79

#58

Post by maxerickson » Thu, Feb 05, 2015, 7:26 PM UTC

sosuke wrote: post #51

maxerickson wrote: post #40

Earlier quoted context omitted.

Uh-huh. 4*8=32. You used 316 million as one of your multipliers, that presumably includes children.

I think there would need to be some structure around children, what an incentive to make babies! $8k per baby per year, the Duggar family would be making $168k per year! I'd rather it be something as an adult. So the number of people 18 years or older is 242,470,820 [0]. Double the $8k to meet that poverty line as a couple. So at $16k per adult you come out to just under $3.9 trillion a year. Edit: from the poverty d…

Maybe. I think people mostly see children as a responsibility though, so I wonder if the problem would live up to the concern.

I wonder if you could try to measure the differences in birth rates for people receiving the EIC, comparing across numbers of children (at some income levels the first child provides ~2x the benefit as the third).

edit: Searching "EITC birth rates" shows that people have looked at it.

Re: The Mincome Experiment of 1974-79

#59

Post by aidenn0 » Thu, Feb 05, 2015, 7:26 PM UTC

Zikes wrote: post #7

mchanson wrote: post #2

Hope we start experimenting with this in the US also. Maybe at a state level.

It would have to be in an extremely liberal area. Socialism is still a four letter word in the US, and this is the epitome of socialist initiatives.

Actually, both economic liberals and progressives seem to like it.

Re: The Mincome Experiment of 1974-79

#60

Post by dragonwriter » Thu, Feb 05, 2015, 7:26 PM UTC

mason240 wrote: post #53

Zikes wrote: post #7

Earlier quoted context omitted.

It would have to be in an extremely liberal area. Socialism is still a four letter word in the US, and this is the epitome of socialist initiatives.

BI is NOT socialism at all. We still have private property and capitalism based economy, just like now. If anything this is the pure form of the mixed capitalism/democratic economy/government model that every Western nation already has. BI is a way of reconciling capitalism with the "post-work" work world we are moving into.

The modern mixed economy that every Western nation has is called that because it is a mixture of capitalism and socialism.

Its true that BI is consistent with that mix, but that's not a counterargument to it being from the socialist side of the capitalist/socialist divide. (Of course, the utility of that divide and the breakdown of arguments over economic arrangements into "which side of the divide does that fall into?" followed by "if capitalist, good; if socialist, bad", or vice-versa, is dubious.)