Replacing welfare payments with “basic income” for all is alluring, but expensive • Hacker News Board

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#101

Post by maxerickson » Sun, May 24, 2015, 5:18 PM UTC

karmacondon wrote: post #65

Money doesn't disappear. If you give people a basic income, they'll spend it. On rent, beer, education, their kids, all the things people normally spend money on. And some of it is going to come back to all of us in one way or another. Maybe more people will have money to buy apps or pay for services offered by hn members' startups. Or they'll buy lottery tickets and the additional money that goes to education will b…

The thing to do is take a step back from money and consider production and consumption.

A basic income would hopefully create some increase in consumption.

The more interesting question is what it would do to production. The big fear is that it would cause a drop in production, a drop big enough that mean consumption would have to drop below where it is today.

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#102

Post by spacehome » Sun, May 24, 2015, 5:29 PM UTC

dagw wrote: post #73

spacehome wrote: post #21

I haven't really made up my mind about Basic Income, but one thing I never heard advocates of Basic Income talk about is that incentives matter to human behavior. BI will tax people who work more and give handouts to those who don't. This disincentivizes working and incentivizes not working. For example, the increasing numbers of people on Social Security Disability Insurance seems like a similar phenomenon and is no…

This disincentivizes working and incentivizes not working. Some might see that as a good thing. Being forced to do something you hate for fear of not being able to feed your family is probably not healthy for anyone involved. Imagine if that person could quit their job and spend time with their kids instead. Imagine the passionate painter or musician being able to paint or make music full time without worrying about…

We're all "forced" to work because living requires resources. This is not an effect of civilization - wild animals work harder for their livings, and have nasty brutish lives to boot.

If the corporate programmer is willing to live a very frugal life (See Mr. Money Mustache, Jacob Lundfisker, etc.), then it won't take him or her very long at all to build up a 6-month cost-of-living fund. Perhaps it takes working three months to six months? (I know it's possible because I've done it.) And I'm not sure it's the job of society to support artists in their art independent of its value to society. At least I know I'm not interested in supporting it in my taxes. So I'm not so sure these examples are persuasive.

However, I do agree that it will become much harder to get people to do 'shit' jobs. One side effect is that it would give a serious additional kick towards automation, and so long as BI is implemented, that's good thing in terms of elevating the human condition.

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#103

Post by unclebucknasty » Sun, May 24, 2015, 5:47 PM UTC

ebiester wrote: post #97

unclebucknasty wrote: post #80

Earlier quoted context omitted.

What's interesting about your point 3. is that it speaks to these archetypes we have defined for people. We have so ingrained in our minds that a person's value to society is defined by his/her economic contribution in the traditional sense (i.e. via a job or business ownership), that we assume that a person who does not work has no value by definition. In fact, they are even morally deficient. So, how can they possi…

There's even more to it -- it's that the only thing of value to society is that which can be traded for money.

Indeed. When companies that otherwise have the wherewithal choose not to pursue cures or vaccines because there isn't enough profit in it, larger society barely pauses to register the true awfulness of such a calculus.

But, this is the type of stucture that we've engineered to allocate the world's resources--one where human value is malleable and always somewhere along the economic continuum. It's the same structure that precipitates the need for a BI and, sadly, also produces the minds that resist it.

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#104

Post by asuffield » Sun, May 24, 2015, 5:49 PM UTC

learnstats2 wrote: post #94

asuffield wrote: post #36

Earlier quoted context omitted.

There is no shortage of incentive for that in most of western Europe - such property is significantly profitable. The reason why not much gets built is because (a) cheap housing blocks results in ghettoisation, which most governments try to prevent with mixed-dwelling planning requirements, and (b) local residents invariably object to any planning request for housing more low-income people near them.

I've seen enough uncompleted estates and empty unsellable new buildings over time to suspect that such property is significantly risky. Maybe such property is significantly profitable today, but we can't be sure by the time the building is complete. I suspect it's more likely a simple business decision: the profit doesn't outweigh the risk. In London, construction companies work hard to avoid the commitment to afford…

London's a special case: every single unit that can be converted from "affordable housing" to "luxury accommodation" is a massive profit realised by the developer. You can make a lot of money from building low-cost housing, but you can make an awful lot more from building really expensive housing, because there is essentially unlimited demand for both.

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#105

Post by ChrisLomont » Sun, May 24, 2015, 8:12 PM UTC

maxerickson wrote: post #101

karmacondon wrote: post #65

Money doesn't disappear. If you give people a basic income, they'll spend it. On rent, beer, education, their kids, all the things people normally spend money on. And some of it is going to come back to all of us in one way or another. Maybe more people will have money to buy apps or pay for services offered by hn members' startups. Or they'll buy lottery tickets and the additional money that goes to education will b…

The thing to do is take a step back from money and consider production and consumption. A basic income would hopefully create some increase in consumption. The more interesting question is what it would do to production. The big fear is that it would cause a drop in production, a drop big enough that mean consumption would have to drop below where it is today.

>A basic income would hopefully create some increase in consumption.

But you took the money to pay for basic income from someone else. They would have used it for consumption and possibly investment (or savings, which is also invested). So it is not at all clear this would result in a better economy.

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#106

Post by netfire » Sun, May 24, 2015, 8:18 PM UTC

csandreasen wrote: post #86

transfire wrote: post #13

The article also doesn't seem to take into account that we already spend of hundreds of billions of dollars every year of welfare programs that could be saved. The article just piles BI on as an additional expense. I also think most BI supporters tend to shoot too high. The equivalent income of just a 16hr per week job at min wag would do wonders for the economy without putting a great deal of pressure on people not…

The US spends $454B on welfare programs[1], but has a population of 321M. If you scrapped the existing welfare program in favor of BI, you'd be able to give everyone only $117 per month. You can make adjustments for things like children not requiring as much, but we're still nowhere near a livable wage. [1] http://www.usgovernmentspending.com/year_spending_2015USbn_1...

I think you'd need to expand beyond what's generally classified as welfare. You could probably also get reduce or eliminate social security benefits (another $745.3B)

You could also probably greatly simplify the tax code, which has become a form of welfare with the poor paying less and the richer paying more relative to the amount they earn.

Then there's other potential benefits or reductions in cost, that are harder to quantify and predict. Would there be a reduction in crime? (which could reduce police costs) A decrease in sickness and health costs? (due to increased nutrition and better shelter) An increase in productivity and a boost to the economy? (due to people being in better health, being able to get more education and a tax code and welfare system that doesn't incentivize making less) What about all the non-profit organizations that spend millions helping the unfortunate? (What could that be spent on instead?)

I'm not necessarily in favor of a basic income to the extent mentioned in the article. I do wonder, however, if some limited basic income could be more effective than our current programs designed to help the poor and needy and if it would provide some better stability in people's lives generally. Either way, it would have a broader impact on the economy than simply removing welfare programs from federal and state budgets.

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#107

Post by maxerickson » Sun, May 24, 2015, 8:21 PM UTC

ChrisLomont wrote: post #105

maxerickson wrote: post #101

Earlier quoted context omitted.

The thing to do is take a step back from money and consider production and consumption. A basic income would hopefully create some increase in consumption. The more interesting question is what it would do to production. The big fear is that it would cause a drop in production, a drop big enough that mean consumption would have to drop below where it is today.

>A basic income would hopefully create some increase in consumption. But you took the money to pay for basic income from someone else. They would have used it for consumption and possibly investment (or savings, which is also invested). So it is not at all clear this would result in a better economy.

I more or less said that in the next paragraph there.

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#108

Post by richardbrevig » Sun, May 24, 2015, 10:06 PM UTC

jeza wrote: post #45

transfire wrote: post #13

The article also doesn't seem to take into account that we already spend of hundreds of billions of dollars every year of welfare programs that could be saved. The article just piles BI on as an additional expense. I also think most BI supporters tend to shoot too high. The equivalent income of just a 16hr per week job at min wag would do wonders for the economy without putting a great deal of pressure on people not…

That would hardly keep people without jobs out of poverty, which I read in another article is just over $20k.

A $20k poverty threshold is for a household of 3. For 1, it's a little under $12k.

http://aspe.hhs.gov/poverty/15poverty.cfm#thresholds

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#109

Post by ChuckMcM » Sun, May 24, 2015, 10:21 PM UTC

raldi wrote: post #3

This analysis doesn't seem to account for the savings and increased efficiency from all the policy changes basic income would enable. For example, water and parking spaces could be priced at their actual cost, rather than being subsidized. This would make the water market function properly and allocate it efficiently, and remove a bunch of car-related externalities. Need public housing? Not if you set a high enough b…

I agree and that is in part because you can "guess" what those effects will be but its not possible to say definitively they will or won't be produced.

Assuming 280M adults[1], $200 a month, per person, would be over 672 billion dollars a year if I did my math correctly. So you have to take that cost and figure out how much crime and welfare expense would be removed from the system.

I think most politicians assume that no entitlement program is ever successfully removed from the system so they would just add it on to the annual budget in full. So it makes it a hard pill to swallow. The Department of Health and Human Services is only $961B [2] and a big chunk of that is the institutes of health, the FDA, etc.

That said, I tend to agree that if you set the amount high enough that it can drive a services market at the BI level then you convert an inefficent fiat economy into a more efficient market economy for basic human services.

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

[2] http://www.hhs.gov/about/budget/budget-in-brief/index.html

Re: Replacing welfare payments with “basic income” for all is alluring, but expensive

#110

Post by dllthomas » Sun, May 24, 2015, 11:12 PM UTC

netfire wrote: post #106

csandreasen wrote: post #86

Earlier quoted context omitted.

The US spends $454B on welfare programs[1], but has a population of 321M. If you scrapped the existing welfare program in favor of BI, you'd be able to give everyone only $117 per month. You can make adjustments for things like children not requiring as much, but we're still nowhere near a livable wage. [1] http://www.usgovernmentspending.com/year_spending_2015USbn_1...

I think you'd need to expand beyond what's generally classified as welfare. You could probably also get reduce or eliminate social security benefits (another $745.3B) You could also probably greatly simplify the tax code, which has become a form of welfare with the poor paying less and the richer paying more relative to the amount they earn. Then there's other potential benefits or reductions in cost, that are harder…

"You could probably also get reduce or eliminate social security benefits"

"Eliminate" would never fly politically, and to be honest I don't think it's the right thing anyway. We probably could reduce/consolidate, if we did so in a way that meant (BI + SSI) was never lower than SSI before the change, which would certainly still mean savings.