A Basic Income Should Be the Next Big Thing • Hacker News Board

Re: A Basic Income Should Be the Next Big Thing

#391

Post by throwanem » Tue, May 03, 2016, 1:34 PM UTC

brightball wrote: post #236

gjm11 wrote: post #99

This article says it's talking about a universal basic income, and makes the usual point that a completely universal, no-strings-attached income is simple to administer, doesn't have poverty traps, etc. And then, towards the end where it starts looking at numbers, it starts saying things like > But by excluding 45 million retirees who already receive a basic income through Social Security, the cost falls to $2.7 tril…

To make it work you'd have to take whatever the amount is and extract it from all other government benefit programs. You get $700 / month from the government for basic income. Your social security, welfare, unemployment, disability, etc is reduced by $700 / month. Reducing all of those programs by the first $700 would effectively gut each of them enough to finally make some reforms without inducing panic in everyone…

> You get $700 / month from the government for basic income.

I thought the idea was that it be enough to live on.

Re: A Basic Income Should Be the Next Big Thing

#392

Post by yummyfajitas » Tue, May 03, 2016, 1:34 PM UTC

lmm wrote: post #366

yummyfajitas wrote: post #331

Earlier quoted context omitted.

It's not about precision, it's about knowing if we are even in the ballpark. And it's an incredibly valuable exercise. https://en.wikipedia.org/wiki/Fermi_problem It's also about knowing what facts need to be true for a BI to work. Then we know what facts we need to verify to determine if it's true, in contrast to all the meaningless verbiage in this thread. Also, Scarmig's comment was quite valuable. It showed exact…

> Also, Scarmig's comment was quite valuable. It showed exactly what the driving effect is - that's precisely why you should do a back of the envelope calculation. And the driving effect turned out to be a disputed premise that we already knew about from our directional, non-quantitative discussions. The quantitative side is just a meaningless overcomplication (the monte carlo part especially), especially when none o…

You wouldn't value a company you were thinking about investing in that way.

That's exactly how you value an early stage company - back of the envelope calculations and monte carlo.

Re: A Basic Income Should Be the Next Big Thing

#393

Post by morgante » Tue, May 03, 2016, 1:35 PM UTC

Unklejoe wrote: post #315

goda90 wrote: post #294

Earlier quoted context omitted.

Or instead, give it universally to children, but require a certain percentage be saved in some sort of fund that they are given full control of when they turn 18. That way the parents don't have to shoulder all of the expense of a child, but the child isn't screwed over by irresponsible parents either.

Cool idea. I'd advocate for an age of 25 though. An 18 year old these days is still a child. Give them a couple years into the drinking age to get their bad decisions out of the way.

That's offensive. I am 23 and have lived away from home since I was 17. I've been financially independent since I turned 18.

Don't stereotype.

Re: A Basic Income Should Be the Next Big Thing

#394

Post by rhino369 » Tue, May 03, 2016, 1:37 PM UTC

takno wrote: post #173

felipeerias wrote: post #76

Earlier quoted context omitted.

The main problem with a general basic income is that it would be enormously wasteful, regressive and unfair. If you have a good economic situation, 250$/month is peanuts. If you are grasping for air, it won't be enough; even more so if it comes at the expense of getting rid of public programmes that can target concrete problems and leverage economies of scale. Other approaches (e.g. minimum guaranteed income for the…

If you're earning more you will effectively pay the money back in higher taxes, so the transfer will be much the same as for a minimum guaranteed income, but without the costly administration, confusing rules and moral judgement that come with minimum guaranteed incomes

How much money is actually spent on the costs of administration that would actually be eliminated by UBI, which is mostly just qualification paperwork?

You'd still need fraud prevention--people faking identities. You'd still paper pushers who coordinate payments and customer service.

I can't believe this really would create all that much savings when averaged out over 330 million people.

Re: A Basic Income Should Be the Next Big Thing

#395

Post by [deleted] » Tue, May 03, 2016, 1:37 PM UTC

MicroBerto wrote: post #205

ww520 wrote: post #92

The Fed engineers a slow inflation every year via interest rate control and gives the benefit of the newly created money to banks, the loan borrowers, and asset holders as rates lower than keeping inflation at zero. Since the money supply increases anyway, might as well give the new money as basic income to ALL people. At least the money will be spent directly by the people for economic activities, instead of indirec…

Regarding inflation... if everyone instantly has $X now, doesn't $X become worthless? For instance, why would landlords not raise rents knowing that everyone now has this cash?

[deleted]

Re: A Basic Income Should Be the Next Big Thing

#396

Post by ChrisLomont » Tue, May 03, 2016, 1:38 PM UTC

ww520 wrote: post #321

ChrisLomont wrote: post #131

Earlier quoted context omitted.

The benefit is not given to the banks - the money is added through asset purchases on open market sales. The Fed owns more assets (usually Treasuries) and the bank has cash. If you want to get in on it, buy Treasuries. Next, the Fed avoid targeting zero inflation, because it's currently impossible to hit that number so exactly, and they desire to avoid deflationary spirals. The past 150 years has shown across hundred…

Good point you raised about FOMC directly injecting money. That's another case how the Fed benefits the banks and the Have's directly. Fed buys and sells treasury to create and destroy money but with more money created over time to encourage inflation. The extra money created are given to the treasury sellers with better pricing over time. The people without treasury are left out of the new money created. Of course t…

>The people without treasury are left out of the new money created

Everybody in the US has treasuries. SS is the biggest holder of them, so when their value goes up, everyone with a SS account benefits. Next, most pension/retirement plans give another large class of adults benefits (50%+ of adults hold such plans).

Remember, Fed buys from the Open Market (the "OM" in "FOMC"), which has an effect on pricing for all.

> With 10% fractional reserve, the banks can lend out 10X of what they have

And they also have an offsetting 10X in liabilities. It's not some free money giveaway any more than lending money to my friend does not create new money - it gives him more cash and an exact same amount of debt.

Plus, if you think fractional reserve creates money (in the sense that the gain is not balanced by a matching debt), then paying it back "destroys" the exact same amount. Fractional reserve is zero sum.

>Basic income can become another mechanism for the Fed to inject money.

All other Fed injection mechanisms swap assets. And the amount needed for even a tiny UBI is massive compared to any other amounts added. This is not even remotely plausible.

Re: A Basic Income Should Be the Next Big Thing

#397

Post by PietdeVries » Tue, May 03, 2016, 1:39 PM UTC

Unklejoe wrote: post #336

danharaj wrote: post #260

Earlier quoted context omitted.

If you think it's so rational to have children for cash, you can go do it. I've never met anyone who actually thinks it's a good idea . It's always a hypothetical to malign the poor. Because people who malign the poor know exactly how poor people think, or something.

Do you really not believe that some people would start having children for the sole purpose of income if there was suddenly a program that provided people with $10,000 per year in cash for every child they have? Having children for financial benefits is a real thing. It's not just something people accuse the poor of for the purpose of hate (although it is commonly used in such a way). It's usually not as direct as "l…

And the bad thing is, that it's in general not the cleverest set of people that make extra kids to get a higher income. Overall, the more educated people are, the smaller their families are. So this will effectively reverse everything that Darwin claimed: no survival of the fittest, but victory by the 'stupid' by overpowering the educated...

Edit: yes, I do, but I am unsure if it will stand the test of Hacker News readers :)

https://www.jstor.org/stable/2172480?seq=1#page_scan_tab_con... http://www.iqtestexperts.com/iq-family.php

Re: A Basic Income Should Be the Next Big Thing

#398

Post by belorn » Tue, May 03, 2016, 1:40 PM UTC

MicroBerto wrote: post #205

ww520 wrote: post #92

The Fed engineers a slow inflation every year via interest rate control and gives the benefit of the newly created money to banks, the loan borrowers, and asset holders as rates lower than keeping inflation at zero. Since the money supply increases anyway, might as well give the new money as basic income to ALL people. At least the money will be spent directly by the people for economic activities, instead of indirec…

Regarding inflation... if everyone instantly has $X now, doesn't $X become worthless? For instance, why would landlords not raise rents knowing that everyone now has this cash?

Because the world doesn't work like that? if it did, we would be paying the same proportional amount of income to rent today in 2016 as we did during 1970. We don't. Just because there is more money doesn't mean that you get proportional increase in construction, maintained demand for housing, or demand for land for which houses are built on. It doesn't change how government rezones in order to control rents in cities.

Rent is not some basic formula derived from the average income.

Re: A Basic Income Should Be the Next Big Thing

#399

Post by whiskers08xmt » Tue, May 03, 2016, 1:40 PM UTC

MicroBerto wrote: post #202

In the early 1970s, animal behaviorist John Calhoun built a "mouse utopia" to see what would happen if he created the perfect world for mice, with unlimited food, starting with four males and four females, that could reach a population of 2500. https://www.youtube.com/watch?v=0Z760XNy4VM What happened next is absolutely astonishing. When the mice had nothing to do and nothing to work for, their society collapsed upon…

Luckily, there are other pursuits in life than those who generate wealth. I don't think it's reasonable to think, that if humans didn't have to work, they'd all spend their time idly in front of the television.

Re: A Basic Income Should Be the Next Big Thing

#400

Post by k-mcgrady » Tue, May 03, 2016, 1:41 PM UTC

notahacker wrote: post #338

k-mcgrady wrote: post #283

Earlier quoted context omitted.

>> "eliminating tax credits, disability benefits and housing benefits will net another £110bn, but also render a lot of poor people poorer or even homeless, which is the opposite of what BI is generally proposed to do)" I don't see how that's true. Isn't the UBI supposed to replace ALL of those programmes with a single number for everyone that is sufficient for everyone? If the UBI provides enough for food and shelte…

Sure, as I acknowledged in my above post , if you're comfortable with a situation where everybody living in social housing in London is forced to relocate to a different part of the country and severely disabled people are substantially poorer in pure cash terms than before, then you can replace all those programmes with a flat subsidy of £550 per month (or slightly less than the average London room rental in a share…

The disability part is definitely an important issue I had not considered before. As for the housing cost I worked out the amount based on food and a room for one person in London. It's doable at £550. You won't be incredibly comfortable but you will have enough food and decent shelter at no cost to you. If you have a partner (so two UBI's to work with) finding a 1 bedroom apartment within that budget is also doable in Zone 4/5/6. And of course we're talking about the most expensive part of the UK. I know someone who has bought a 2 bed apartment in Manchester with a mortgage of around £600pm. Easy for 2 people on a UBI of £550 to manage. Generally I'm very against the idea of poor people being forced out of a city due to it becoming unaffordable but it seems like a fair trade off for a UBI. You can take that and live anywhere else in the country without working or if you want to stay you don't need a high income job, just an average wage to supplement the UBI. It would also be interesting to see how a UBI would effect the cost of private rentals in a city like London. I'm sure a lot of people who don't need to live in London for work anymore would leave and landlords would be less interested in income and more interested in good long-term tenants.