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The Mincome Experiment of 1974-79

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Re: The Mincome Experiment of 1974-79

#71

Post by aetherson »

corin_ wrote: post #55
aetherson wrote: post #52

Earlier quoted context omitted.

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…

You haven't given any reason to believe that demand would go up. Demand doesn't increase because wealth increases.

Now, you MIGHT see increased demand in some areas! For example, some people who previously lived at home might look for an apartment if they had a higher income. Or people who are currently homeless might move into the housing market.

At the same time, some people would presumably graduate out the top of the lowest-income housing market, and put increased demand on the middle-income market. Or whatever. And of course we might say that it's a huge victory if a bunch of homeless people got out of the vicious cycle of homelessness, even if it does increase housing demand for the working poor.

The problem was not that your example was simplified, it was that it introduced a brand new element (monopoly) to the matter under discussion. If you want to make a simple example that actually shows some kind of demand-increase, rather than illustrating monopoly power, you should do so.

Re: The Mincome Experiment of 1974-79

#72

Post by Yen »

corin_ wrote: post #55
aetherson wrote: post #52

Earlier quoted context omitted.

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…

Cities like NYC and SF are a bit of an exception in the US - they're very desirable cities, and their housing stock is more or less filled. Getting a place to live, even with sufficient income, is a bit of a chore.

In other markets, there are houses that sit vacant. Bringing the minimum income up helps narrow the gap between the price floor on these properties, and the amount people are able to pay. That is, a basic income would help more efficiently distribute housing in less desirable areas.

If someone on basic income wants to move to NYC, they'll still need to work hard, and get enough money to compete with all the other people who want to live in NYC.

Re: The Mincome Experiment of 1974-79

#73

Post by dragonwriter »

bduerst wrote: post #43
intopieces wrote: post #5

Earlier quoted context omitted.

I like this idea a lot, but what would stop goods/housing from rising in price to meet the influx of free money?

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…

> 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.

Aside from any concerns about your basic premise, I think you've confused Medicare (the old-age/disability medical insurance system funded by payroll taxes) with Medicaid (the medical insurance system for the poor funded by general funds).

Re: The Mincome Experiment of 1974-79

#74

Post by bduerst »

dragonwriter wrote: post #70
bduerst wrote: post #57

Earlier quoted context omitted.

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 affor…

> 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. Predictably, it will raise less proportionately than the increase in income in that segment, so housing will become more affordable, though not as much more affordable as it would be considering only the income increase and not the effect on price levels.

>Predictably, it will raise less proportionately than the increase in income in that segment,

How are you predicting this?

Re: The Mincome Experiment of 1974-79

#75

Post by bduerst »

aetherson wrote: post #68
bduerst wrote: post #57

Earlier quoted context omitted.

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 affor…

It is certainly possible that some goods or services that are inelastic in supply will experience cost inflation if they are goods or services that are mostly or entirely consumed by a market segment that becomes richer from basic income. I'm not convinced that housing is generally an example of such a good, but some housing may well be. However, the same is true of targeted assistance to only the poor for only housi…

That was my point - Basic Income doesn't provide any additional benefits to targeted assistance, and would actually be a detriment in markets with income-elastic demand.

Re: The Mincome Experiment of 1974-79

#76

Post by venaoy »

intopieces wrote: post #5
jnbiche wrote: post #3

Where true basic income differs from this experiment by Canada is that true basic income should be for every adult, regardless of income, race, marital status, sexuality, etc. Not just for poor people, as with Mincome in this Canadian town. A few arguments for: 1) It becomes a defacto emergency lifeline when a ostensibly middle class person loses their job or suffers an extremely expensive illness. In the US, it can…

I like this idea a lot, but what would stop goods/housing from rising in price to meet the influx of free money?

Most of the people who replied to you are wrong.

Basic income could be implemented by NOT raising taxes. So it would NOT cause inflation. Eliminate current social services (and all the financial overhead associated to it: entire government departments who sole job is to administer these services, etc), and just redistribute the funds that would have gone to these services to be, instead, redistributed as basic income. There. All you are doing is shuffling money around to change its distribution while reducing financial overhead. You are not raising taxes or creating new money. Money is just better distributed and hence spent on different areas of the economy.

(I don't know why, in the article, James Manzi says tax increases would be required. Maybe he has a certain opinion that in order to be effective, basic income should be greater than a minimum level that would not be met by my description above? I think my basic income would be sufficient. The US spends $1.5 trillion per year on welfare and pensions. If you take that money, one could redistribute it as a basic income of $1070 per month per household. That's significant enough to very helpful for society IMHO.)

Re: The Mincome Experiment of 1974-79

#77

Post by dragonwriter »

mason240 wrote: post #50
_dark_matter_ wrote: post #36

Earlier quoted context omitted.

>316 million Americans, at a $30k/year money sample works out to be $9 trillion dollars a year. I'm not sure if you read the article. But the proposition in Canada was essentially a negative income tax for the lowest tax brackets. And it didn't reach nearly your $30k a year - I have no idea where you came up with that number. Current deliberation on the issue would not even consider nearly that amount. >On a large sc…

>And it didn't reach nearly your $30k a year - I have no idea where you came up with that number. The whole point of BI is to be a low-middle class income, which is currently about $30k/year.

> The whole point of BI is to be a low-middle class income

Some advocates of BI may support that as the desired level, but few even of those who support it as a target level see it as the point.

A couple things that people generally cite as the point of BI:

(1) replacing means-tested social support programs with high bureaucratic oversight costs and perverse incentives (disincentives to outside income from means-testing) with a simpler system with lower bureaucratic oversight costs and fewer perverse incentives,

(2) increasing labor market mobility, mid-career educational opportunities, and entrepreneurial opportunities by making voluntary temporary lack of outside income less catastrophic of a cost.

(3) accommodating a transition to more automated society where market income will increasingly go to capital holders and labor will drop in value by redistributing gains that otherwise would become intensely concentrated.

People can dispute about the ideal target levels (both initial and long-term goals) for BI while supporting it, and I don't see many people seeing "low-middle class income" or $30K/yr as the point of BI, or even necessarily either the short or long-term target level. (I personally think its both too high as a near-term target and too low as a long-term target level.)

Re: The Mincome Experiment of 1974-79

#78

Post by aetherson »

bduerst wrote: post #75
aetherson wrote: post #68

Earlier quoted context omitted.

It is certainly possible that some goods or services that are inelastic in supply will experience cost inflation if they are goods or services that are mostly or entirely consumed by a market segment that becomes richer from basic income. I'm not convinced that housing is generally an example of such a good, but some housing may well be. However, the same is true of targeted assistance to only the poor for only housi…

That was my point - Basic Income doesn't provide any additional benefits to targeted assistance, and would actually be a detriment in markets with income-elastic demand.

I know what your point is, but if you imagined that I repeated your point, you're wrong. What I said was that targeted assistance was MORE likely to cause price inflation in areas like, say, housing than guaranteed income was, precisely because it generates "income" that can only be spent in competition for this particular housing category.

The benefit of basic income over targeted assistance is that basic income is relatively low-administration cost to flexibly meet the needs of people who don't have housing needs, and in that it is a relatively non-market-distorting intervention.

Re: The Mincome Experiment of 1974-79

#79

Post by irremediable »

aidenn0 wrote: post #62
irremediable wrote: post #28

Earlier quoted context omitted.

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

Socialists and neoconservatives seem to hate it, but economic liberals and progressives seem to like it.

I'd take issue with your description that socialists seem to hate it. Plenty of socialists (especially libertarian socialists) like it a lot.

Re: The Mincome Experiment of 1974-79

#80

Post by dragonwriter »

bduerst wrote: post #74
dragonwriter wrote: post #70

Earlier quoted context omitted.

> 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. Predictably, it will raise less proportionately than the increase in income in that segment, so housing will become more affordable, though not as much more affordable as it would be considering only the income increase and not the effect on price levels.

>Predictably, it will raise less proportionately than the increase in income in that segment, How are you predicting this?

Its the consequence of assuming no change in supply and assuming that there are other competing goods (e.g., food) which will compete for the marginal dollars for the same population of buyers (and hence that demand is not perfectly inelastic.)
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