What If Andrew Yang Was Right?

Your numbers seem fictitious to me. 78% of Americans living paycheck to paycheck? Look at what they are spending their paycheck on. One car per person. 2.1 people per house. 3.2 game consoles per person. A new laptop every 15 months. A new car every 36 months. A new $800 smartphone every 11 months.

Every low-income 10 year old I see is carrying around $1000+ of electronics and treating them like they're disposable. But our school district offers free breakfast to 100% of the students. We have student parking lots for 16 year old kids.

We're all living paycheck to paycheck, but I claim there is still huge excess. Giant houses for average families, computers, ATVs, boats, cars, TVs, 2 movies every night, 4 Amazon deliveries a week, direct access to Chinese suppliers, personal juice presses, occasional cruises.

Air-bnb and uber are not luxuries for 1%ers. These are basic human rights chiseled into the constitution.

There are, of course, truly poor people in the population. But our definition of poor sure has changed a lot in 50 years.

Show me any random collection of 10,000 Americans and I will show you $2 million/year of disposable income without sacrificing a single smartphone or smart TV.

Societies' advancements in technology & productivity decrease the effective cost (as percentage of GDP) of meeting the very base needs of a human being. Food, cheap medicines like tylenol & antibiotics, most facets of human life are dirt cheap from a production perspective, and this trend will continue from automation.

This means someone who is currently unproductive can be subsidized to survive for 10 full years, and if there's even a small chance they become a high-productivity individual afterwards then society comes out ahead on net value. The actual numbers depend on how low we can push production costs with automation, but in the limit as human survival cost approaches zero relative to the economy, the only rational decision is to subsidize all human survival and work within that framework to encourage citizens to be even more productive. After all, if someone dies of lack of healthcare, or starves, or lives in the streets and doesn't know how to get back off the streets, that's a net loss to humanity in opportunity cost. If that person had just been subsidized through their hard times, there's a non-zero chance they become high value to society.

UBI allows us to reap these benefits in an efficient manner: using the free market. But, speaking today not in the long term, there are exceptions to the low cost of human survival which would hamper UBI from being effective.

In our (American) society, there are a few base needs that we haven't adequately driven down costs. Shelter mostly, also any healthcare that is more involved than taking a pill a day (notably: seeing a doctor). Humankind in general CAN make these costs low for the most part, but American society in particular has NOT made these costs low.

We need to address the housing & urban development crisis, and we need to address the healthcare crisis.

The housing & urban development crisis is a system of regulations and inaction that have simultaneously limited the amount of housing near desirable locations, while failing to provide efficient transportation to bring people in from less desirable locations. In other words, housing costs are dominated not by the cost to build a house, but the cost of land. This can be addressed by reforming our awful & piecemeal zoning, construction, and transportation systems and their respective regulations. Optionally, some might suggest that we try to fight against the ongoing trends of urban consolidation; if people have a reason to move to upstate new york or the midwest, instead of to NYC, then housing costs aren't a problem. But right now all economic incentives point to moving to NYC metro, given the choices, and personally I don't like to wage war against the tide of the free market.

The healthcare crisis is one of rent seeking by insurance companies upon our awful half-assed nearly-free-market approach to healthcare. Quite simply, people don't have choices (your healthcare options are restricted by your insurance, which is restricted by your employer), and no prices on anything are known ahead of time. This adds up to an ultra-inefficient system. By doing just about anything that stops the rent seeking of the insurance system upon the healthcare system so we can more efficiently treat a healthy society (there are free market solutions, but personally I would put my weight behind medicare-for-all).

In conclusion, if we give everyone $1000/mo, that's going to get funneled into bidding up rent in big cities or surprise healthcare bills. We need to solve these issues with our free market before we take a free market approach to the common welfare; until then I would advocate more targeted approaches that are less likely to invite rent seeking behavior (foodstamps and such).

1. On the margin, UBI reduces employment and production. This contributes to inflation.

2. On the margin, UBI increases consumption of consumer staples. This contributes to inflation.

3. On the margin, UBI increases the velocity of money. This contributes to inflation.

4. Under most assumptions, UBI increases government spending. Either taxes will rise, increasing the real cost of goods and services, or the money supply will increase, contributing to inflation.

UBI advocates should not dismiss these effects outright but should argue that they are small in comparison to the benefits of UBI. The lack of proper consideration of these arguments (and other arguments) by UBI advocates is pretty dang spooky.

>I don't understand this argument. I've seen it so many times among a certain crowd of people, but I still don't get it.

Wealth tax makes no sense because if you earned that money, then you have already paid taxes on it. Taxing assets/stocks makes no sense because the value is constantly changing. One day you could have millions and the next you could be broke. Plus, if you had zero cash on hand, you would have to liquidate an asset just to pay the taxes on it?

> Sure, an omnipotent being that knew all outcomes in advance could set a perfect single-tax rate for each person's individual circumstance that only affected their income.

A flat tax would work fine too, and be the most "fair".

> taxing wealth as a correction

I don't think the main purpose of taxation is redistribution. Who says there needs to be a correction in the first place? I don't think people really care about equality, because no one cares about the inequality of the rich vs. the super rich. They care about the lowest end, and if they have at least enough to support themselves. Which if you're making under a certain amount and have kids you pay basically zero taxes. In fact, you may even get money from the government.

either lower the tax or start offering monthly tax refunds?

would that work as an alternative or equivalent to UBI or am I thinking of something very different?