Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

nytimes.com

Post reply on HN
Print view View original

51–60 of 70 posts

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#51

Post by white-flame »

pmiller2 wrote: post #11

I still haven't seen a good explanation for how UBI on a truly universal scale isn't going to just raise housing prices to capture the surplus. I mean, if my landlord knew I (and anybody else who could theoretically live in my apartment) had a spare $2000/month, forever, I'm pretty sure he'd want it.

I'm of the mind that UBI might work with the absolute minimum of amounts. Give enough for food, a bus pass, renting a room (not an entire apartment), and some for incidentals. It would basically be "stay out of trouble" money, from which people can physically live, which allows them to then go forth and pursue something societally beneficial, because you don't just want to stay at that level. In theory, this might make their income less available to predatory targeting.

However, with a looming jobs crisis, the assumption of being able to go out to earn more remains to be seen.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#52

Post by Veelox »

pmiller2 wrote: post #11

I still haven't seen a good explanation for how UBI on a truly universal scale isn't going to just raise housing prices to capture the surplus. I mean, if my landlord knew I (and anybody else who could theoretically live in my apartment) had a spare $2000/month, forever, I'm pretty sure he'd want it.

I think that if the government work to provide a lower UBI of say ~$750/month, healthcare, and also provide housing similar to military barracks available to everyone free of charge it would circumvent the instance increase in rent and would also provide an incentive for people to do some work.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#53

Post by prewett »

This is first-order thinking. The problem with the poor is not that they have no money, it's that they have no ability to make money. So giving out money isn't going to fix things, you need to fix the lack of ability. In fact, giving out money is harmful, because it enslaves both the recipients and the givers. If everyone gets $100, prices will simply rise (as mentioned in other threads). But now you can't stop giving them the money, because they need it worse than before.

The people doing this justify it that they will get "valid scientific data," but they won't get any valid scientific data on how UBI performs, because they aren't doing UBI. There's a big difference between giving 100 poor people money and giving all the poor people (or even everyone) money.

A bit unrelated, but the article mentions that these ideas have been around a long time, citing Thomas More's "Utopia." However, they fail to follow up with the modern connation of the word, that utopia is unachievable. We've tried these ideas again and again, in American utopian societies of the 1800s, in communes, in Communism, and it doesn't work. Maybe it's time we stopped trying to do the same thing over and over again expecting different results the next time.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#54

Post by zach »

jpao79 wrote: post #33

Honestly asking - would it be a good thing or a bad thing if the major high cost of living areas like cities in the CA such San Francisco, Orange County, etc., were actually significantly funding UBI to people with a permanent address in a lower cost of living Central California city long term?

Interesting. It would be similar to this concept in American sports, where a team like the New York Yankees (the San Francisco housing market of baseball) can keep their economic advantage but has to pay a tax on it, the proceeds going to less-profligate teams so they can remain somewhat competitive:

https://en.wikipedia.org/wiki/Luxury_tax_(sports)

I guess the real difficulty would be measuring how high San Francisco's housing-supply border wall is.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#55

Post by d1zzy »

dwc wrote: post #15
pmiller2 wrote: post #11

I still haven't seen a good explanation for how UBI on a truly universal scale isn't going to just raise housing prices to capture the surplus. I mean, if my landlord knew I (and anybody else who could theoretically live in my apartment) had a spare $2000/month, forever, I'm pretty sure he'd want it.

The money in (real) UBI comes from somewhere, obviously. It's not like everyone just has more money. If you can already afford the basics then it's going to come out of your money in taxes to a greater or lesser degree. So for people in a normal middle income range you pay and then get the money back. Higher income people would pay more and get back the same as you. Low income people would pay little or nothing and g…

Even if the money comes from somewhere, if a large percentage of the population suddenly has more money to spend then inflation happens. I've seen this happen every time the government of a certain Eastern European country decided to raise pensions, a large percentage of the population depends on those pensions. Every time they did that, inflation went up, so it only provided a temporary benefit to those people. But it's a cool electoral trick so it happened quite often.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#56

Post by getsugablitz2 »

marme wrote: post #22
pmiller2 wrote: post #11

I still haven't seen a good explanation for how UBI on a truly universal scale isn't going to just raise housing prices to capture the surplus. I mean, if my landlord knew I (and anybody else who could theoretically live in my apartment) had a spare $2000/month, forever, I'm pretty sure he'd want it.

That is not how any market works. Just because your customers have more money does not change the supply or demand for your product. A luxury apartment fetches a high price because there is demand from tenants willing to pay the luxury price. No one is going to pay more for the same apartment unless there is more demand for apartments than there is supply like you have in NYC and SF. More income causes prices to rise…

Of course your customers having more money means that businesses will try to capture that excess, that's the foundation of price discrimination. The whole concept of coupons is that some customers with more money won't care enough about the price difference, so they'll ignore the coupons and pay full retail price while more price sensitive customers will use the coupon and pay less.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#57

Post by modeless »

pmiller2 wrote: post #45
modeless wrote: post #37

Earlier quoted context omitted.

> everyone can afford a little bit more now. This is not true. UBI doesn't create money out of nowhere. It redistributes existing money. Poor people can afford more, and rich people can afford less, because taxes increase.

Rich people spend less relative to their wealth and income than poor people do. That means more people are going to be buying more things, increasing demand, which... raises prices.

Sure, the same is true of anything that increases the incomes of poor people. There's no reason to believe that the price increase would cancel out the entire benefit of UBI.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#58

Post by peterwwillis »

rarec wrote: post #13
pmiller2 wrote: post #11

I still haven't seen a good explanation for how UBI on a truly universal scale isn't going to just raise housing prices to capture the surplus. I mean, if my landlord knew I (and anybody else who could theoretically live in my apartment) had a spare $2000/month, forever, I'm pretty sure he'd want it.

That's always been what I wondered as well. UBI solves everything, except for the part where an actor who knows explicitly that all of his tenants will be getting a flat amount per month, then why not raise prices to capture some of that as well? Why wouldn't everything just increase in price slightly, everyone can afford a little bit more now.

> UBI solves everything

?

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#59

Post by Kalium »

PurpleBoxDragon wrote: post #35
Kalium wrote: post #12

Earlier quoted context omitted.

You're right! That would be a major concern and an incredibly serious flaw in such a program. Maybe the description could be parsed slightly differently? Some might read parent's description to be proposing a bonus on W2 income the a limit on the bonus only of $7,500. Thus an income greater than that receives the full bonus. The structural problem you have correctly identified thus does not arise!

So everyone is getting an extra $7,500, assuming they make at least that much? How isn't that just a tax credit on W2 taxes? It would make sense to assume there is some cut off, and given how government cut offs work in the past, it would be reasonable to assume the cut off will be implemented in a fashion that creates a graph where sometimes raises will result in less pay, at least when combined with existing govern…

> So everyone is getting an extra $7,500, assuming they make at least that much? How isn't that just a tax credit on W2 taxes?

Depends how it's implemented, probably. People react differently to larger paychecks and tax refunds, for example. And certainly people react differently if you call it a bonus, even if it is just a negative income tax that would please Friedman.

> It would make sense to assume there is some cut off, and given how government cut offs work in the past, it would be reasonable to assume the cut off will be implemented in a fashion that creates a graph where sometimes raises will result in less pay, at least when combined with existing government aid programs.

That's a completely, fully, absolutely 100% reasonable comment on how poorly implemented current government aid programs are far too often implemented.

It might be a slightly less reasonable comment on the details as written of the proposition above.

Re: Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try

#60

Post by peterwwillis »

prewett wrote: post #53

This is first-order thinking. The problem with the poor is not that they have no money, it's that they have no ability to make money. So giving out money isn't going to fix things, you need to fix the lack of ability. In fact, giving out money is harmful, because it enslaves both the recipients and the givers. If everyone gets $100, prices will simply rise (as mentioned in other threads). But now you can't stop givin…

"The problem with the poor" is definitely multifaceted. You need to fix transportation, health care, availability of jobs, cost of housing, availability of essentials such as groceries/laundry, cost of utilities, availability and quality of public services such as schools and job training programs, and stem systemic incarceration of minorities, in addition to providing special services such as child care/day care, family planning, counseling, and so on.

Imagining that $10k is going to solve these things is insane. Even if you took all the money you gave to each of the people in an area and added it all up, it still couldn't even pay for a fraction of the services mentioned above.

This isn't to say UBI wouldn't be helpful. But let's face it, UBI is just some academic's moon-shot that they hope will magically improve everything, without thinking through all the complex logistical issues that require more than a bigger paycheck to solve. Sure, give people money, but don't imagine for a second that it will end poverty. It may make poverty more tolerable, possibly extending it.

Post reply on HN