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A Guaranteed Income for Every American

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Re: A Guaranteed Income for Every American

#121

Post by chimeracoder »

maxerickson wrote: post #33
throwaway13337 wrote: post #4

"The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare." How the hell does that happen politically? I would love to see basic income replacing a large portion of social programs in the stat…

Yeah, it won't. The $10,000 left after the mandatory health payments would be a cut for many social security recipients, and many of those same people are also probably getting more than $3,000 a year in health care out of Medicare. Similar problems with Medicaid, it's worth a lot more than $3,000 to the people that are getting it (mostly because children). This is basically taking the desire to cut entitlement progr…

> More doctors will actually lead to lower prices

It might if we had a free market for healthcare and if providers were the largest healthcare expense. But we don't, and they're not. Providers' take-home pay only amounts to about 10% of healthcare spending nationally[0].

Furthermore, the reason we don't have a competitive market is entirely due to the payer situation, not the providers. Providers (particularly hospitals, who account for a much larger chunk of spending) can't offer transparent pricing, because their cost structures are needlessly complex. I've written about this elsewhere, but in short, Medicare is not required to cover the direct costs[1] of the care that their patients receive in the reimbursements that they issue. This means that providers have to make up the difference in their contracts with private insurers, which is why they can't tell you how much a particular procedure will cost you - they really don't know, because it's not purely a function of what it costs them to treat that particular patient.

[0] http://economix.blogs.nytimes.com/2008/11/14/do-doctors-sala...

[1] I'm referring to COGS - the marginal cost per patient, which excludes markup and overhead.

Re: A Guaranteed Income for Every American

#122

Post by zanny »

dcosson wrote: post #67
yulaow wrote: post #11

Earlier quoted context omitted.

I have another (hope not stupid) fundamental question: do we have to give people a different UBI based on their location (aka cost-of-life)? If no, it will be pretty hard to find a right value. If yes, should we also change it as soon as they relocate?

I think this is a critical problem to solve with UBI. If you give people in expensive areas more money, more people might crowd into cities, intensifying the affordability crises in places like SF and NYC. Plus there are strong incentives to cheat the system and lie about your address, or even to live homeless in the most expensive cities to collect the higher UBI payments, etc. So ideally we'd avoid this and everyon…

It isn't nearly as much of a problem if you have your necessities covered by UBI and can spend your time however you want. It gives you all the time to be innovative that you need, and if there were actual meaningful work to be done going undone in cities, owners would subsidize the costs of moving rural workers in to attract talent.

Re: A Guaranteed Income for Every American

#123

Post by TrevorJ »

trbvm2 wrote: post #107
arbre wrote: post #73

Wouldn't the price of everything raise accordingly, so that you basically can't afford anything with the basic income?

If everyone is given money for a specific product and suppliers are universally aware of exactly how much people can spend on that product then, yes, that can happen. However, under UBI, I think suppliers of goods and services would still be faced with the basic issue of not knowing exactly how much consumers value any given product and competition would still exist so prices would likely still be set by supply vs de…

Demand would rise though.

Re: A Guaranteed Income for Every American

#124

Post by azernik »

arbre wrote: post #73

Wouldn't the price of everything raise accordingly, so that you basically can't afford anything with the basic income?

The price of everything would rise proportionally to the amount of consumption added to the economy - for example, if you funded this entirely by printing money, you'd get a combination of inflation and an equal amount of money going to everyone, causing a redistribution effect on its own. e.g. if you gave everyone $10,000 of newly-printed money, inflation would be very high, but unless it's 100% or more (doubtful) a poor person making $10,000 or less before the change would still have a higher standard of living - it's a redistributionary effect.

If you actually fund this by taxes, like most proposals say, you'd probably still have an inflationary effect (since the lower your income is, the likelier you are to spend each marginal dollar), but likely not enough to outweigh the extra money.

Re: A Guaranteed Income for Every American

#125

Post by chimeracoder »

brador wrote: post #109
mac01021 wrote: post #101

Earlier quoted context omitted.

How does the redistribution of wealth by using taxes on personal spending or on earned income to fund UBI cause inflation?

In difficult times people stop spending money, even with UBI. This means less income to spread around, the solution, print more money = inflation. Second, under UBI a proportion of the population stops working and this increases over time as robots replace workers. Reducing earned income, lowering UBI cash availability. Solution? Print more money = inflation. With a land value tax you get a known relatively unchangin…

> In difficult times people stop spending money, even with UBI. This means less income to spread around, the solution, print more money = inflation.

This is... not really correct. It's true that expansionary monetary policy is often practiced in times of economic recession, but that's not really because there's 'less income to spread around'. And the reason expansionary monetary policy is practiced isn't to give people more income. (Printing money doesn't give individuals more income - if you want to do that, you need expansionary fiscal policy - that's the goal behind tax cuts).

So what does printing money do? Expansionary monetary policy reduces the costs of loans and investments. The goal is to spur long-term investment projects by making capital cheaper, which serves to jump-start the economy. But that has no direct connection to people's personal income. They're interconnected, sure - everything in the economy is, at some level. But the connection to inflation (and the connection to printing money) are completely different things.

Re: A Guaranteed Income for Every American

#126

Post by roymurdock »

arbre wrote: post #73

Wouldn't the price of everything raise accordingly, so that you basically can't afford anything with the basic income?

If UBI was carried out as a series of one-time cash injections (such as QE), then yes it would simply lead to inflation as a large proportion of UBI recipients would have the propensity to spend that money immediately on rent, food, debt, releasing the cash into circulation and ramping up inflation. Spending would probably remain unchanged for middle/upper class folk who would view UBI income as negligible.

If UBI was carried out as an exercise in wealth redistribution through higher taxes on the upper/middle class, then the inflationary effects would not be quite as high, although I would still expect to see some inflationary effects as middle/upper class folk drew down spending on some durable/luxury goods, while lower class folk would increase spending on staple goods. I think the overall effect would be slightly positive inflation.

Re: A Guaranteed Income for Every American

#128

Post by brc »

paul wrote: post #96
arbre wrote: post #73

Wouldn't the price of everything raise accordingly, so that you basically can't afford anything with the basic income?

Only if the world were zero-sum, which it's not. Remember how only rich people used to have cell phones, and now billions of people have them? The price of most goods is close to the marginal cost of production, which means that giving more people money may actually lower the cost of many goods (by increasing volume). Artificially scarce goods, such as an apartment in SF, may get more expensive however since their pr…

Except that the marginal cost of production will go up because of the increased competition for scarce goods, of which every single produced item has some component, not the least of which is land and labor.

So yes, there is likely an inflationary effect, but it is impossible to accurately predict.

It also depends on the net change in people's overall income as most basic income proposals include scrapping piecemeal and overlapping welfare systems.

Personally I think I could be convinced if it was essentially a replacement and thus simple to administer, but would have to be coupled with strict immigration control for the first country to try it.

Re: A Guaranteed Income for Every American

#129

Post by gizmo »

trbvm2 wrote: post #98
jkelsey wrote: post #86

Earlier quoted context omitted.

Yes they do. Read the article and read up on the article's author. It's quite literally based around eliminating the costs of the social programs and instead throwing everybody a flat $10K/year.

I'm merely trying to discourage the ambiguous "they" labeling. I think the author is, indeed, a bit to on about the "you should help yourself" mentality. Some people can't or won't even if money is offered and many civilized people want to see those types cared for as well. Even so, he's basically on your side in the sense that whatever UBI ends up being proposed for law, he would probably vote for it. Personally, I…

40,000 * 300 million = 12 trillion. US GDP is 17 trillion. The UBI wouldn't pay for the army, police, healthcare, infrastructure and so on. So the remaining 5 trillion can pay for that as well as for local government. So we're talking about a scenario where every citizen has the same income, regardless of contribution to society. It's an interesting idea, and if we can all work together as a society under these circumstances that would be great. In other words: a 40k UBI implies full communism. Pretty radical.

Re: A Guaranteed Income for Every American

#130

Post by harryf »

zanny wrote: post #118
throwaway13337 wrote: post #4

"The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare." How the hell does that happen politically? I would love to see basic income replacing a large portion of social programs in the stat…

You get there by talking about it, and persuading people about it. There is no magical easy to way to bring about social change unless its profitable. And I'm not sure there are enough landlords foaming at the mouth for the legitimately juicy prospect of tenants with guaranteed paychecks to pay rent to push the issue against the tide of establishment profiteering resistance. But rather than talk about it on HN (like…

The consequences of making this change are huge and IMHO hard to fully predict - or at least it's hard to have a meaningful debate about what the impact could be. Walmart for example could have a disaster on their hands - a whole swath of jobs no one really wants to do could quickly find themselves lacking staff. And that's just one example
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