If you are on basic income the last thing you need is a loan
Basic Income: Unintended Consequences
51–60 of 63 posts
Re: Basic Income: Unintended Consequences
#52To expand on his migration point, I worry that BI will create inland ghettos where the BI allowance is enough on it's own to cover the cost of living. At least some people would choose this lifestyle. Over time these ghettos would evolve their own cultures and start to be very separate from the rest of us. While I value personal freedom of an adult to chose to do this with their life, I worry about their children who…
I think you just described Florida (for retirees).
On the margin, basic income should make it easier to move, rather than getting stuck in one place because you're out of funds. I'd guess that applies to children too (when they grow up).
Re: Basic Income: Unintended Consequences
#53The main unintended consequence is that nobody is going to want to be a grocery store clerk for minimum wage if they get BI. Hence, salaries for menial jobs will go through the roof... All of a sudden a gallon of milk will have to cost $20 to pay grocery store salaries... Now salaries will need to go even higher so that employees can afford food, themselves... And now you've got hyperinflation.
I predict the opposite is going to happen. Most proponents of BI also propose lowering the minimum wage. So let's suppose you're on BI receiving $12K a year. That's about enough to put a roof over your head, leaving very little for food or anything else. You see a clerk job advertised for $5 an hour. You don't have to take the job, but that $5/hr is the difference between eating rice and beans yet again or actually h…
No- You're giving a person a choice between (1) getting to lounge around all day and play xbox or (2) earning 20% more income above BI by working hard all week doing an unpleasant and belittling job in a grocery store.
Re: Basic Income: Unintended Consequences
#54The individual is pretty flawed in his reasoning and examples... "Since the lifetime of the average person is roughly 78 years, net present valuing a lifetime of $12,000 yearly basic income payments works out to roughly $287,000 assuming that yearly payments total $10,000 and applying a 4% yearly discount factor. That is enough to purchase a median priced single family home" While factually true, in total, $12k a yea…
Yep, point out a non millennial point, so much down voting... #win
Re: Basic Income: Unintended Consequences
#55Earlier quoted context omitted.
Not the same thing. The tax credit I'm talking about goes to the employer. Right now, we just tax the employer (or the wealthy owners of the business) and redistribute. Let's cut out the middleman that's the government, and not tax employers who pay their employees up to the poverty level.
Ah, I misunderstood. It looks like a version of this exists which provides tax incentives to hire veterans, food stamp recipients, and other disadvantaged groups. https://www.doleta.gov/business/incentives/opptax/wotcEmploy...
Yes, this looks similar to what I was thinking....basically employers are paying what would otherwise be a government expense to provide federal benefits to these individuals, so those employers are saving the government money. I don't have time to research now, but I would be curious to learn if the program is successful - is it revenue neutral? How much of a credit do employers get? etc...
Re: Basic Income: Unintended Consequences
#56Earlier quoted context omitted.
There's some evidence to suggest that this is what has happened with tuition rates due to the availability of student loans.
Amazing how many people don't understand the concept of "supply and demand". Increase the availability of money, increasing demand, and the prices increase so long as supply can't keep up. This has been manifestly demonstrated by tuition, health care, mortgages, insurance, etc.
That's true for student tuitions, but availability of money doesn't increase demand for a specific product/market, so if the prices in supply-constrained markets increase, some people will use that money for something else instead, reducing the demand pressure.
Similarly, local minimum wage laws might be eaten by rent increases, since they're tied to those area and jobs. But a BI would make it much easier for people to move out, distributing the demand over cheaper areas.
Re: Basic Income: Unintended Consequences
#57The individual is pretty flawed in his reasoning and examples... "Since the lifetime of the average person is roughly 78 years, net present valuing a lifetime of $12,000 yearly basic income payments works out to roughly $287,000 assuming that yearly payments total $10,000 and applying a 4% yearly discount factor. That is enough to purchase a median priced single family home" While factually true, in total, $12k a yea…
Yep, point out a non millennial point, so much down voting... #win
I have no idea what a "millennial point" is, but you'd probably get a better response if you explained why not.
Re: Basic Income: Unintended Consequences
#58Earlier quoted context omitted.
There's some evidence to suggest that this is what has happened with tuition rates due to the availability of student loans.
Amazing how many people don't understand the concept of "supply and demand". Increase the availability of money, increasing demand, and the prices increase so long as supply can't keep up. This has been manifestly demonstrated by tuition, health care, mortgages, insurance, etc.
Unless you're printing money, there's no increase in supply. You're changing the distribution so there are small localized effects but overall prices should remain constant. Some will go up, some go down, but the top rate stays the same.
Re: Basic Income: Unintended Consequences
#59Earlier quoted context omitted.
Yep, point out a non millennial point, so much down voting... #win
I have no idea what a "millennial point" is, but you'd probably get a better response if you explained why not.
Most mortgage payments are under $1K a month, so you can easily buy a house with $12K of excess income.
Re: Basic Income: Unintended Consequences
#60I think this is an exceptionally stupid idea and I think part of basic income should be stipulation that it can't be used to get loans ie. make this illegal. Because first thing financial industry would use it against the poor, get them lump sum and eliminate benefits of basic income. I am sure this can be made in a way that wouldn't be limiting too much, yet prevent obvious abuses you are bringing.
Part of the point of BI is that you can do what you want with it.
Yes, the poor would be disadvantaged by this. The solution isn't to take away everyone's ability to take loans on BI; this would leave people unable to take loans on their BI once they've got a stable income. The answer is to educate, to explain that taking that lump sum leaves you unable to use BI later when you need it. At most, pass a regulation stating that loaners are liable if they don't make it clear that the loan is paid off with BI over the course of X years.