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A Basic Income Should Be the Next Big Thing

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Re: A Basic Income Should Be the Next Big Thing

#631

Earlier quoted context omitted.

Why would you get bipartisan support for the FairTax? Redesigning the tax structure to favour millionaires ( massive net beneficiaries because their US consumption expenditure is usually a tiny fraction of their capital gains tax and/or income tax bills) over the middle classes (no matter how high the stipend is someone has to pay for the millionaires' tax cut) isn't exactly a popular proposal even on the right That…

By bipartisan support, I mean that if you want to get a basic income to appeal to people on the right you can appeal to existing branding. FairTax is just a basic income with a smaller stipend. Brand it that way. When you co-brand it with the ability to gut a lot of existing federal programs so that they can be reformed without inducing panic that will also garner support. Consumption tax paired with a BI would signi…

> By bipartisan support, I mean that if you want to get a basic income to appeal to people on the right you can appeal to existing branding. FairTax is just a basic income with a smaller stipend. Brand it that way. When you co-brand it with the ability to gut a lot of existing federal programs so that they can be reformed without inducing panic that will also garner support.

That's not rebranding basic income to appeal to people on the right. That's rebranding "FairTax", a right-wing proposal, with fairly niche support on the right, despite a small group spending lots of effort trying to promote it, as basic income. Presumably, to gain some support on the left for FairTax. But Basic Income is also a fairly niche idea, and the people that do support it tend to have a fairly specific idea of the features they support and why, and not just be attached to the BI brand, so rebranding FairTax as BI probably won't get you support from left-wing UBI fans, for whom the tie to a progressive income tax is pretty central to their support (though there's probably some on the left who support UBI who would prefer moving to a Georgist Land Value Tax.)

There's nothing there getting you bipartisan support.

> Things that hurt the middle class much worse than a consumption tax are an income tax that is a percentage and continually increases in that percentage until the percentage caps at the point that most people would call "incredibly wealthy" (IMO).

How does that hurt the middle class? (And, incidentally, are we using middle class in the common modern media sense of middle income workers or are we using it in the classical sense of the petit bourgeoisie? Because it makes a pretty big difference in evaluating claims about what hurts them, and to how important that is -- how it affects the latter will, of course, vary from person to person.)

> The perk to something like a Fair Tax is that it's also an economic solution to illegal immigration.

No, its not. (OTOH, the 2001 and 2009 recessions, and the poor distribution of the gains between and after them, was an economic solution to illegal immigration. But a solution worse than the problem...)

> If you're in the country, you're paying taxes.

True without the hilariously misnamed "FairTax".

> If you're legal, you're getting the BI/stipend.

Without the "FairTax", if you can establish that you are legally present (and, for some of these, legally eligible to work, which aren't the same thing) you have access to a variety of public benefits, perks, and, well, the right to work that aren't available if you can't establish that.

Re: A Basic Income Should Be the Next Big Thing

#632
I really don't understand how a 'basic' income is supposed to work.

What if I spend my basic income on drugs and hookers? are you willing to let me starve? what about my kids? If not, then the basic income can't actually replace the existing social programs.

If nobody need to work, then if employers want employees, they have to pay more to get them, which makes prices rise, which makes your 'basic' income insufficient again.

I don't get it.

Re: A Basic Income Should Be the Next Big Thing

#633

Earlier quoted context omitted.

The only way I can see UBI working is if most people get no benefit. So someone making the average US income of $50,000/yr would get a check for $20k from the government and then see their taxes go up by ~$20k. Rich people would pay much more, effectively transferring their wealth to the poor. People who are solidly middle class wouldn't see much change, except having a new class of potential customers (the people th…

I fear it will only increase inflation to a level that the 10k people get is representing about the same in goods as the current level is they have. Free money is fake: it doesn't work in my opinion. It either increases the price level (hey - even the poor bum gets 10k a year, so he can afford a $10 bread, isn't it?) or it will stop people from over-achieving. My motivation to earn extra with a job only to see it go…

[deleted]

Re: A Basic Income Should Be the Next Big Thing

#634
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…

It's not just wealthier people who will be worse off - it's everyone. Basic income is known to create a large disincentive for work. In previous experiments (Mincome) labor supply dropped by about 10% - double what happened during the great recession. This means that fewer working mothers can find child care, fewer laborers to mow your lawn, fewer nurses, fewer teachers, etc. No matter how much money you give to peop…

https://en.wikipedia.org/wiki/Mincome

Not sure where you got your numbers from. Wikipedia suggest that it was not even half that.

>The results showed an impact on labor markets, with working hours dropping one percent for men, three percent for married women, and five percent for unmarried women.

Re: A Basic Income Should Be the Next Big Thing

#635
post #321

Earlier quoted context omitted.

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. >…

For fractional reserve, the 10X money is what's circulated in the system. The liability on the book is just accounting. The bank doesn't have 10X money to start with. It has 1X but it's allowed to lend out upto 10X. The extra 9X is created out of thin air. Of course the 10X is the theoretical max; ultimately what controls the nX (where 1 Lending out loan creates money circulated in the system. Paying off debt destroys money from the system. By controlling the interest rate, the Fed controls and levers the up and down of this huge money supply.

That's why the Fed went into the QE programs. The increasing bad loans at the banks was choking off the money circulating. By buying non-performing loans from the banks, the Fed removed the liability off the banks' books so they had more room in their fractional requirement and be able to lend again, thus restoring the money supply.

Re: A Basic Income Should Be the Next Big Thing

#636
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?

In the short term, inflation does happen. This is because the economic allocations were done according to the old distribution of incomes, which is to say disproportionately benefiting the desires of the rich. Demand changes while supply remains the same.

So lower-income housing landlords do raise their rents. Grocery stores raise prices on their beef. Low-end used cars get more expensive. More dollars chase the same quantity of goods and services.

But basic income continues into the long run. It becomes a business opportunity to undercut those inflated prices, to capture more of the basic income flow for yourself. An entrepreneur builds lower-income housing and charges lower than the prevailing rents, immediately poaching business from the opportunist landlords, who now have to compete with one another to keep tenants.

As additional competitors enter the market, the economic allocations change to match the newer distribution of incomes. More businesses that serve lower-income people become viable, so more economic activity occurs to cater to that sector. Fewer businesses that serve higher-income people remain viable, because they are taxed more. It slowly becomes more expensive to be rich, and less expensive to be poor.

In the long run, wealth distribution flattens and is less self-reinforcing. More than a few people would be willing to walk a higher wire if they were given a stronger safety net, choosing risky entrepreneurship rather than safer employment. Prices only remain high if existing businesses are protected from competition.

Re: A Basic Income Should Be the Next Big Thing

#637

Earlier quoted context omitted.

the state will literally show up with police and guns if I went out into the mountains and lived off the land Why? Is it someone else's land that you're trespassing on, using up their resources, hunting their animals, etc? Shall all of us who don't feel fulfilled do the same thing as you propose? When you hurt yourself and get an infection, are you going to crawl back out of the woods and expect there to still be oth…

>When you want something from someone - food, medicine, etc. - you're going to have to offer something in return What if the value of someone's labour is not enough for the things they need to survive? There's no function of the market that ensures it will be. At some point, you either have to help people out without anything in return, or choose to let them die.

What if the value of someone's labour is not enough for the things they need to survive?

Sure, we can make a moral argument about that. But that's not what this branch of the debate is about. We were debating the proposition that "money itself tends to disincentivise work for a lot of people" and employment is force.

But since you bring it up, my biggest concern about BI is along the same lines as your moral question. Suppose that every year we hand out $X,000 to each person. Some people are going to waste that on booze, gambling, etc., and still be left with nothing to eat. What's our moral obligation to those people?

Re: A Basic Income Should Be the Next Big Thing

#638
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…

WE NEED TO LOWER THE COST OF LIVING

Its unacceptable that food in the US is 2x the cost of that of china, for instance.

http://www.numbeo.com/cost-of-living/compare_countries_resul...

Re: A Basic Income Should Be the Next Big Thing

#639
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…

It's not just wealthier people who will be worse off - it's everyone. Basic income is known to create a large disincentive for work. In previous experiments (Mincome) labor supply dropped by about 10% - double what happened during the great recession. This means that fewer working mothers can find child care, fewer laborers to mow your lawn, fewer nurses, fewer teachers, etc. No matter how much money you give to peop…

> This means that fewer working mothers can find child care, fewer laborers to mow your lawn, fewer nurses, fewer teachers, etc. No matter how much money you give to people, fewer services provided makes us all become poorer. That's simple arithmetic.

This is, in fact, precisely backwards. There are plenty of jobs that people simply cannot do because they cannot make a living at them both through lack of money as well as lack of stability. Social workers, elderly healthcare support, child care, etc. are all very poorly paid and basically not worth doing if you have any other choice.

With a UBI, people can work those jobs for very small amounts of money knowing that they are covered.

Re: A Basic Income Should Be the Next Big Thing

#640

Earlier quoted context omitted.

Why would you get bipartisan support for the FairTax? Redesigning the tax structure to favour millionaires ( massive net beneficiaries because their US consumption expenditure is usually a tiny fraction of their capital gains tax and/or income tax bills) over the middle classes (no matter how high the stipend is someone has to pay for the millionaires' tax cut) isn't exactly a popular proposal even on the right That…

By bipartisan support, I mean that if you want to get a basic income to appeal to people on the right you can appeal to existing branding. FairTax is just a basic income with a smaller stipend. Brand it that way. When you co-brand it with the ability to gut a lot of existing federal programs so that they can be reformed without inducing panic that will also garner support. Consumption tax paired with a BI would signi…

"if you want to get a basic income to appeal to people on the right you"

Basic income is a conservative proposal (now gaining support among us liberals). My trog relatives are pimping the idea to me, a screaming pinko socialist hippie.

The conservation appeal, rationalization of BI is fairness. It lifts the floor for everyone, doesn't reward cheating, doesn't thwart personal initiative, etc. Being easier to admin is a bonus.

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