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A Dutch city is giving money away to test the basic income theory

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Re: A Dutch city is giving money away to test the basic income theory

#521

Post by chatmasta »

How good of a test could it be, if its population is limited to a single Dutch city?

Europeans from small countries love to tout their welfare policies as "so much better" than places like the U.S., but they ignore one massive difference: Small European countries are localized, ethnically homogenous populations. The U.S. has to deal with more land, and more people, from more places. You cannot make an apples-to-apples comparison between welfare systems in the U.S. and small countries.

Re: A Dutch city is giving money away to test the basic income theory

#522

Post by stephentmcm »

dagw wrote: post #111
anticon wrote: post #73

Earlier quoted context omitted.

You don't mention the fact it's completely unworkable mathematically. In the UK I believe it'd cost £240 billion a year. Where the hell would anyone be able to find that money from? (Tackling tax avoidance from Starbucks isn't a credible answer). Just to put it in context, that's twice the entire NHS's budget, or 5 times our defence spending.

To put it further into context £240 billion is slightly less than what the UK government spends on pensions and welfare. Since basic income would replace much of the need for pensions and welfare, it might just end up more or less balancing out.

Note that this £240 billion will have the overheads of running the welfare system built into it too. So the actual pension checks are only a percentage of that figure, with a basic income that's not means tested the government has far less overhead.

Re: A Dutch city is giving money away to test the basic income theory

#523

Post by stephentmcm »

chatmasta wrote: post #521

How good of a test could it be, if its population is limited to a single Dutch city? Europeans from small countries love to tout their welfare policies as "so much better" than places like the U.S., but they ignore one massive difference: Small European countries are localized, ethnically homogenous populations. The U.S. has to deal with more land, and more people, from more places. You cannot make an apples-to-apple…

I'll give you the size and population thing but "ethnically homogenous populations" is bullshit: https://www.cia.gov/library/publications/the-world-factbook/... - ~79% White

https://www.cia.gov/library/publications/the-world-factbook/... ~80% White/Dutch

So both nations have a similar level of "ethnically homogenous populations".

Re: A Dutch city is giving money away to test the basic income theory

#524

Post by chatmasta »

stephentmcm wrote: post #523
chatmasta wrote: post #521

How good of a test could it be, if its population is limited to a single Dutch city? Europeans from small countries love to tout their welfare policies as "so much better" than places like the U.S., but they ignore one massive difference: Small European countries are localized, ethnically homogenous populations. The U.S. has to deal with more land, and more people, from more places. You cannot make an apples-to-apple…

I'll give you the size and population thing but "ethnically homogenous populations" is bullshit: https://www.cia.gov/library/publications/the-world-factbook/... - ~79% White https://www.cia.gov/library/publications/the-world-factbook/... ~80% White/Dutch So both nations have a similar level of "ethnically homogenous populations".

Is the U.S. 80% Dutch?

No.

There is more than "white" and "all other ethnicities." Considering geneology is important when designing systems like healthcare, for example. If a disease is isolated to a gene present in only people of Irish descent, and not Scandanavian descent, then the country with more Irish people will pay a higher healthcare cost than one with less. The more unique subsets of genes present in a population, the greater the ethnic diversity. Since the U.S. is comprised almost entirely of immigrants, it will naturally have a more ethnically heterogenous population than a country with population centers dating back millenia.

Re: A Dutch city is giving money away to test the basic income theory

#525

Post by roblev »

branchless wrote: post #516
roblev wrote: post #501

Earlier quoted context omitted.

A lot of the confusion comes from the fact that there are two sorts of money that are in circulation: base money and bank money. This blog post is only talking about bank money, and does not reference base money. Base money (dollar bills, Euro notes, pound notes etc.) is controlled entirely by the central bank and base money can be created and destroyed by the central bank, whenever they like. Think of it as like dig…

Base money is 3% of all money. Go ahead pull the lot out. It won't matter. Only parking meters that can't take cards will feel it. Reserves are unconstrained as banks lend to each other after creating credit via deposits from borrowers. If two banks create 400k and then each borrower buys land with this 400k and the seller then deposits the fresh "money" with one another's bank they have 400k credit. Demand is pulled…

Capital is absolutely not unconstrained! It is one of the most difficult things for a bank to increase its capital base.

Base money is a low percentage compared to bank money - its true - but all bank money is a claim on base money. Pull out the base money and every bank has a liquidity crisis and would in turn have to recall every loan. More than parking meters would feel it; a bank cannot issue a loan without appropriate capital base, and only high quality liquid unencumbered assets can be considered capital, which cannot be created by a bank (a new loan/deposit is not an unencumbered asset). In practice capital can only be increase by a new share issue or by retaining profits over years.

Re: A Dutch city is giving money away to test the basic income theory

#526

Post by toong »

orangecat wrote: post #417
toong wrote: post #239

Are there any studies out there about the second order effects ? If everyone is getting BI, I'm expecting rent to go up. Like, waaaaaaay up. Up to the point where no one can live from BI anymore.

Then the third order effect is that it becomes more profitable to supply housing, and rents come back down.

Right, that's what you're seeing in SF or London right now ?

Re: A Dutch city is giving money away to test the basic income theory

#527

Post by toong »

fchollet wrote: post #422
toong wrote: post #239

Are there any studies out there about the second order effects ? If everyone is getting BI, I'm expecting rent to go up. Like, waaaaaaay up. Up to the point where no one can live from BI anymore.

When people don't have to pick their housing based on the location of low-wage jobs (dense cities), I would expect the rent to go down due to better utilization of the total housing supply.

Currently, if you are on minimal-wage pay, you need to spend all your money on basic necessities.

With BI, you increase the purchase power of a whole bunch of poor people. People that didn't live in the city before, now think they have a shot and can afford rent for a while and get a job in the city!

Demand goes up, prices go up. If you still want to live in the city, you will need to spend all of your BI-income AND all of your pay on the VERY SAME basic necessities.

Sounds pretty obvious to me and I can't really see it turn out any other way.

Moving back to the country side, where it's cheap ? Ok, you can live from BI, but you still don't have a job, your kids don't get a proper education and their future looks just like yours. Barely getting by and sitting around watching tv.

Re: A Dutch city is giving money away to test the basic income theory

#528

Post by jokoon »

dantheman wrote: post #160
jokoon wrote: post #155

I live in france (10% unemployment), and unless you're listed as seeking work, you're not given welfare. It's odd because they don't really check that you send resumes, nor do they really try to contact companies or just propose you a shitty jobs. The "get a job" mentality is really weird to me, because if you have freedom, and you can't find a job that suits you or that you're just too humiliated to beg all those em…

That money has to come from somewhere, it will either reduce the consumption from where it was taken or it will reduce capital stocks that can be used for investment.

Not if people save money.

What you're saying is some other formulation of the trickle down, and it just doesn't work.

Welfare is a form of redistribution. The economy is much better when money is spent for housing people, feeding people, and let them have a decent, small amount of leisure. It's a matter of scale. You better have more people spending money, than fewer people spending it.

You better build 25 town car than 1 ferrari. But I agree that some can praise individual success and consider that people living in poverty is okay, but I don't think it really the country as a whole.

Re: A Dutch city is giving money away to test the basic income theory

#529

Post by jokoon »

JesperRavn wrote: post #328
DanBC wrote: post #175

Earlier quoted context omitted.

Look at, eg, the English "Working family tax credits" system. People on low wages pay some tax on those wages, then apply to have some of that tax returned. There's a lot of bureaucracy involved. It's not great to be on those benefits because you can't budget your money. Scrapping that system and then just reducing the amount of tax that everyone on low wages pays would probably be better.

That may be true, but dantheman was simply correcting jokoon's implicit claim that paying people money is good in itself ("since it's injecting money that increase consumption, which in turn also increase business and growth.") I think there are good arguments for basic income, but they get obscured by the fact that it has become a political campaign, so people like you argue for their own side rather than correcting…

Voting a budget is a tricky subject. Sometimes ideals will get you nowhere, but I think developed countries have showed that redistributing improve not only the country as a whole, but it also improve the status of the wealthiest, the wealthy people will benefit from the fact that people are fed, educated and not just wandering around either stealing or doing shitty jobs.

At that political level, money becomes an abstract thing, and I think it becomes a matter of national interest, not individual interest. Try to think about absolute wealth, not relative wealth. If the koch brothers can have 100 villas, would they be able to have so many without a redistribution system ? I don't think they would. Look at developing or third world countries, and look at their wealthiest, I'm sure they don't even have proper health care.

Re: A Dutch city is giving money away to test the basic income theory

#530

Post by DanBC »

ptaipale wrote: post #414
TeMPOraL wrote: post #223

Earlier quoted context omitted.

Often benefits put you in a situation where it makes no economical sense to pursue a job. I have a friend who lost her mother and had a pension that would be taken away if she got employed, but the pension itself was much bigger than she could ever dream of earning at that time (hell, it was bigger than I was earning in my first two programming jobs). So there's your incentive to go and get employed. Or another examp…

Quite. I wouldn't call people "lazy" if they've fallen in a benefit trap. The benefits have been created with good intentions, but they have paved a road.

To be clear: I wasn't calling people claiming benefits lazy; I was saying that wozniacki was calling them lazy. I should have used scare quotes.
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