"As of 2014, the annual cost of a UBI would have been about $200 billion cheaper than the current system. By 2020, it would be nearly a trillion dollars cheaper."
Remarkable how much entitlement spending is booked in the near future.
Why is that remarkable? We make promises to people in the past and then we're shocked when the bill comes due?
No one is ever shocked about all of the SS trust fund cash put into US treasuries (general fund deficit spending), but always shocked that "thats going to need to be paid back one day."
> The Social Security trust funds hold money not needed in the current year to pay benefits and administrative costs and, by law, invest it in special Treasury bonds that are guaranteed by the U.S. Government. A market rate of interest is paid to the trust funds on the bonds they hold, and when those bonds reach maturity or are needed to pay benefits, the Treasury redeems them.
Social Security trust funds have been used to keep our dollar/treasuries inflated and are one of the biggest customers of those bonds. They will always have a buyer and part of the reason they are in demand since the mid 1930s. When people talk about removing SS they don't realize what it would do to treasuries as a product, demand would be much lower and so would the value of the dollar.
We should probably not position ourselves where we require an inflated dollar then, since those trust fund dollars are going to be drawn down as everyone ages onto Social Security.
I agree, it is a bit of a house of cards as they say. From the article:
The largest owner of U.S. debt is Social Security. Since the Social Security system is a government entity, how can the government own its own debt? Good question. This is where the “house of cards” theory resides. Some believe the federal government is merely moving the IOUs from one shell to another, hoping to escape the watchful eye of its citizens. In any event, Social Security owns about 16% of the debt followed by other federal government entities (13%), and the Federal Reserve (12%.
My guess is when it is time to pay or the money dries up, they are going to just disregard the Social Security debt owed or stretch it way out so the house of cards stays up a bit longer.
I don't think this adds up. Here (https://www.nationalpriorities.org/budget-basics/federal-bud...) is federal spending for 2015. It shows a total federal spending of 3.8 trillion dollars. This is all spending, including 0.5 trillion on the military, 0.2 trillion in interest on debt, and tons of other spending on things that are not welfare or social-safety-net programs.
Meanwhile, $13k * 300m people, results in an expense of 3.9 trillion. Greater than the entire federal budget.
EDIT: I AM WRONG. The spending proposal from the article does not exceed the entire federal budget, because people who earn more than 30k of income get payed a smaller UBI. I did a rough calculation using the best numbers I could easily find describing the USA's income distribution (good numbers are hard to find). The result was that this proposal would likely cost just short of 3 trillion dollars. Significantly less than the entire 3.8 trillion dollar budget, but still more than we currently spend on entitlements.
There's another source of money not included here. The Fed creates money from nothing. That has to go somewhere. On top of the usual inflationary dollar creation of the Fed, they were doing "Quantitative Easing" for years to the tune of about $85-100 Billion per month given to banks in exchange for known worthless mortgages. So a good quarter of that $3.9 trillion could have been covered just by some "Quantitative Easing" programs for the poor.
Since the Fed stopped publishing M2, we don't know how much money is really being created. But it seems to me the logic of "Let's give money to the banks and they will loan it to the people" doesn't work. Here, the argument seems to be: Instead of giving money to the banks with expectations, we just give it directly to the people, cutting out the inefficient middle men entirely.
I'm more sympathetic to innovative monetary policies than most people that have studied the topic, but the monetary base isn't a money tree and unfortunately virtually every claim you've made is false.
The M2 growth figures are available and published by Fed sources. They're nowhere near enough to underwrite a basic income, even if none of that newly created credit was being directed towards useful economic activity
https://research.stlouisfed.org/fred2/series/M2
M2 isn't created by the Fed anyway, it's created by private banks choosing to extend credit to entities they believe are on average productive enough to repay them at prevailing interest rates. It's possible to deter banks from making future loans of course, but I can't imagine doing that to make room for untargeted handouts being a good idea
QE was a temporary large-scale response to financial shocks which is designed in principle to be reversible so it's about the worst way of funding the steady stream of expenditure required for BI imaginable.
It also consisted of the Fed buying up swapping the cash for existing financial assets in the form of government debt. If they're giving away the newly minted money instead, the amount the Fed can inject into the economy without generating unwanted inflation is much smaller. That might be desirable for a well targeted short term stimulus programme, but a BI certainly doesn't fall into that category (plus you don't get the fringe QE benefit of shrinking the govt debt/interest burden)
He did specify certain caveats that would reduce the cost vs your estimate - adults over 21, and it would reduce as you made more, to a floor of 6500/yr. But yeah, probably still missing some piece.
I agree. (see my edit). I would love to be even more wrong - to the point where the proposal outlined in the article is clearly viable. So, if anyone has solid numbers demonstrating that, please do share.
You missed the part about people under 21, that should cut off another ~25% from your estimate. Medicare + Medicaid + Social Security is well over 2 billion, so I think it's pretty close.
Spending on social security (most programs, minus food stamps...I think) is in the neighbourhood of $930 billion. Right now, that's delivered to 65 million people. Of 330 million people total, ~80% are over 21. And it would be safe to assume 50% would qualify (because 1 in three households make between 50k-100k and 1 in four make less than 24k).
That leaves 132 million people drawing from $930 billion, which means everyone gets $7153. For everyone to get $13,000, 71 million people would be allowed to qualify.
This doesn't take into account the taper at all, so it could be stretched to reach more people. But even if 60 million people receive 13k, which leaves ~2.5k for another 60 million, that's still less than 132 million and doesn't align with the author's 6.5k number.
All this is to say: I find the idea appealing because it reduces the cost of bureaucracy and creates autonomy, but I'm not sure if it's feasible.
> Some people will still behave irresponsibly and be in need before that deposit arrives, but the UBI will radically change the social framework within which they seek help: Everybody will know that everybody else has an income stream. It will be possible to say to the irresponsible what can’t be said now: “We won’t let you starve before you get your next deposit, but it’s time for you to get your act together. Don’t try to tell us you’re helpless, because we know you aren’t.”
Less compassionate to those undeserving of it, sure. Isn't that a good thing? I'm not a fan of UBI but this aspect might turn out to be really beneficial in reversing the perverse incentives and dysgenic effects of current social benefits programs.
Who's undeserving though? Someone lazy, sure. But someone impaired through birth defect or accident or mental illness? How do you determine whether someone is lazy but claiming anxiety/depression, or actually suffering?
Maybe. Hopefully it lets us do a better job picking our compassionate response. Someone who can't get by with a sufficient regular income needs help of a different character than further handouts - giving more of the latter is not a sign of greater compassion.
The problem here is the assumption that everyone on Medicaid, Social Security, etc is capable of spending money responsibly. Take away their benefits and hand them some cash.
This will result in millions of vulnerable seniors and mentally disabled individuals being scammed out of their money each month. Whether it be "tech support" scammers or local fraudsters or even simply not being able to budget money (at a basic level) these folks will be in trouble.
I live with (and care for) a mentally disabled individual (IQ: ~60) that receives benefits through Social Security, Medicaid, and other government programs. If it were not for our help in managing these benefits she would spend her money (which is supposed to be for food/living expenses) on Amazon on $100 anime-themed coffee cups and similar widgets the moment she receives it.
Not to mention the fact that she will never understand how to sign up for such services or know who to trust when receiving services. If someone in a lab coat told her they were a government doctor and she "had to pay" for her upcoming appointment she'd likely just hand over all her money. There's no way to "educate" her out of this problem. I've taught her all sorts of things... many times and I'll have to teach her again and again.
It's not so dissimilar to walking an old person through accessing a web app/site over and over again ("no, that's the search bar"). Handing vulnerable people money every month won't solve their problems.
It's a great idea for the economy in general though! Just don't do away with government services for the needy. Especially medical care.
This is a solved problem (at least, it's solved about as well as you could expect we could do). Social Security has the notion of a REPY or "Representative Payee" for recipients deemed unable to spend their own money, a trustee who manages it on their behalf. It's similar to (but not the same as) the concept of a legal guardian.
All in all, the Social Security Administration has a huge amount of experience with all the details and problems involved in efficient day to day administration of a massive payments program like this, so there's no reason not to just reuse the existing bureaucratic infrastructure and just swap out the eligibility rules.
SSA spends just a fraction of a percentage point of the benefits it distributes on administrative costs (ie, the existence and operation of SSA itself). But even the vast majority of that is for the means-tested SSI Title 16 program, not the simpler Title 2 SS programs. Since a UBI is much simpler than either of those, SSA could easily save even more -- there would certainly be plenty of consolidation and maybe downsizing possible after passage of UBI. But there's no reason to throw away the common infrastructure for payments that already exists.
In difficult times people stop spending money, even with UBI. This means less income to spread around, the solution, print more money = inflation.
Second, under UBI a proportion of the population stops working and this increases over time as robots replace workers. Reducing earned income, lowering UBI cash availability. Solution? Print more money = inflation.
With a land value tax you get a known relatively unchanging set amount of $ based on land value. Balancing the inflation/deflation curve.
> In difficult times people stop spending money, even with UBI. This means less income to spread around, the solution, print more money = inflation.
This is... not really correct. It's true that expansionary monetary policy is often practiced in times of economic recession, but that's not really because there's 'less income to spread around'. And the reason expansionary monetary policy is practiced isn't to give people more income. (Printing money doesn't give individuals more income - if you want to do that, you need expansionary fiscal policy - that's the goal behind tax cuts).
So what does printing money do? Expansionary monetary policy reduces the costs of loans and investments. The goal is to spur long-term investment projects by making capital cheaper, which serves to jump-start the economy. But that has no direct connection to people's personal income. They're interconnected, sure - everything in the economy is, at some level. But the connection to inflation (and the connection to printing money) are completely different things.
Under UBI the payment and coverage of UBI would be one of, if not the, largest expenditures of government. Vital to getting votes will be keeping the amount received steady and high. And that might mean printing money if necessary.
With land tax the system is self correcting and balanced. With the taxes you mentioned you'd eventually get the inflationary spiral as a market correction.
> Vital to getting votes will be keeping the amount received steady and high. And that might mean printing money if necessary.
Maybe, but that's very different from what you said, which is that '[difficult times] means less income to spread around, the solution, print more money = inflation'.
> With land tax the system is self correcting and balanced.
Er, no - if anything, a property tax would reinforce inflation.
> With the taxes you mentioned you'd eventually get the inflationary spiral as a market correction.
Maybe you meant to respond to someone else? I didn't talk about any taxes. I only mentioned tax cuts as an actual example of expansionary fiscal policy to address the 'less income to spread around' problem, not as a proposal for funding income redistribution.
> Expansionary monetary policy reduces the costs of loans and investments
How does it do that?
Suppose I want to borrow $1M to build a factory, but nobody (banks, venture capitalists, whatever) can afford to invest in my endeavor.
So the fed prints a bunch of money, causing 5% inflation. Now the bank can more easily afford to loan me $1M, because that $1M is worth less.
By lowering interest rates which encourages borrowing and thus spending and thus economic activity.
> So the fed prints a bunch of money, causing 5% inflation.
Printing money causes monetary inflation, but does not directly cause price inflation so you don't need 1.05M to build your factory. Printing money can eventually lead to price inflation if too much money is printed for too long, but that doesn't mean all money printing causes price inflation as that lever can be turned both ways. Lower interest rates to spur spending and get the economy moving again and then once out of danger raise them again.
I agree that paying daily would have benefits. Give someone with poor impulse control a lump sum, and it can disappear quickly (new TV, car, big night out, etc). The daily equivalent might resist that a little, though they could still be baited into loan arrangements.
I have another (hope not stupid) fundamental question: do we have to give people a different UBI based on their location (aka cost-of-life)? If no, it will be pretty hard to find a right value. If yes, should we also change it as soon as they relocate?
My preferred answer (although others may differ) is that it should be the same for everyone. If you can't afford to live where you are now, move somewhere cheaper or get a job. If you're jobless and can't afford an expensive city that means the economy is telling you to make room for someone who can make productive use of the limited space in an area that many need to be to work together.
If you want to stay near family and friends, find a nice cheap place an hour or two away, if you want a shorter commute that's a luxury, not a necessity, and you should work for it.
Basic incomes are for the minimum needed to live a decent life, living in a specific expensive location is a luxury you should have to work for.
>"If you can't afford to live where you are now, move somewhere cheaper or get a job. If you're jobless and can't afford an expensive city that means the economy is telling you to make room for someone who can make productive use of the limited space in an area that many need to be to work together."
That's exactly how it should work, even in a system with no UBI. Sadly, people see the state as the grand fixer and enabler of everything.
Eventually, we'd all realize that certain places simply cost more to live in due to reasons outside of everyone's control. E.g. maybe it's hard to create affordable safe housing in a very earthquake/tornado prone area. Or hard to deliver fresh healthy produce to a city in the middle of nowhere like a desert. I exaggerate, of course, but these minor details still affect prices to a certain extent. We can't have cosmic-justice.
That doesn't seem like a huge issue to me. Give everyone the same amount and then let them work harder to live where they want or relocate to a place where the UBI exceeds the cost of living.
There are already neighborhoods now where most people, including me, cannot afford to live, and I don't see it as a tremendous injustice.
I think this is a critical problem to solve with UBI. If you give people in expensive areas more money, more people might crowd into cities, intensifying the affordability crises in places like SF and NYC. Plus there are strong incentives to cheat the system and lie about your address, or even to live homeless in the most expensive cities to collect the higher UBI payments, etc.
So ideally we'd avoid this and everyone would get the same amount of money. But, if we continue to let city prices shoot up, we might end up in a place where people want a job but can't get one because they live somewhere cheap and can't afford to move to the city where all the jobs are on their smaller basic income payment.
With or without basic income, we're clearly on an unsustainable path of letting cities get so much more expensive so quickly.
It isn't nearly as much of a problem if you have your necessities covered by UBI and can spend your time however you want. It gives you all the time to be innovative that you need, and if there were actual meaningful work to be done going undone in cities, owners would subsidize the costs of moving rural workers in to attract talent.
Have them stop paying for SAAS Startups next month?
Many existing welfare systems fail in this same scenario. For any feasible welfare plan it is possible to invent scenarios where someone can torpedo themselves. The goal should just be to make it harder for external forces to hurt people, and maybe a bit more difficult to torpedo yourself.
At some point welfare programs must say something along the lines of "if you take help we give you and set it on fire, that's past the line, go find a charity or psychiatrist to help you"
This question is out of scope. UBI is meant to be unconditional income (to be allocated as each individual sees fit), not unconditional food, shelter, or other necessities.
> This question is out of scope. UBI is meant to be unconditional income (to be allocated as each individual sees fit), not unconditional food, shelter, or other necessities.
Well, if it's being paid for by eliminating programs which do provide food, shelter, and other necessities, then it's not really out of scope to ask how we're going to provide those.
If you created a department to give out money for emergencies, the number of people applying and the amount of paper work required would surely cost less than the current system for benefits?
You could have a special program for those who can be shown to be mentally incapable of managing their ubi. If you don't pass the test, but accidentally waste your ubi and have no other income, there can be a loan program to be repaid at reasonably high interest rates out of your future ubi
And yes, if you are mentally capable but choose to waste your ubi, and can't repay the loan, we would let you starve. Same if you take your food stamps today and throw them in the river - we would let you starve
More realistically than administering some kind of test would be to force people to opt out of basic necessities care. So a person's UBI would be portioned off for food, health, state living facilities etc. so they would always have the bare minimum to survive. If I happened upon a person in need I would merely need to simply bring them to the nearest grocery store and their food needs would be taken care of. Since its opt out, they likely won't have the facilities to opt out.
My biggest concern is how you logistically provide money to people. What do you use to distribute it? Some sort of state owned bank? What about identification?
"The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare."
How the hell does that happen politically?
I would love to see basic income replacing a large portion of social programs in the states but no one seems to be talking about how we get from where we are to where we want to be, realistically.
The thing is, I don't think it can happen politically. What is going on now is just the research stage so that we have some sort of data point for UBI supporters to latch onto.
There are all sorts of groups inside the UBI tent, and many of them disagree with each other violently, but we're so far from a UBI that for now, everyone can agree on it in the broadest possible way.
I, personally, have a completely different take on all of this from most UBI'ers. I take the long view: in 50 years, physical labor could be eliminated. WTF do we do when this happens? Do we relegate half of society to be homeless? Or do we begin the slow march towards eliminating work altogether.
Few talk about this scenario, and those that do often tack on "... and then Skynet takes over and robots enslave us all." Yet, it's still a very valid discussion to be having. I think all this UBI research and interest is in furtherance of the elimination of work, altogether. That's not something that will happen over night, or even in 10 years, but in order for it to happen, humanity needs to begin gathering the data points necessary to enact a solution to the end of work problem.
In the short term, this would eliminate social safety nets, but let's be honest, this is NEVER going to happen in America without a revolution of some kind. Whenever that happens, hopefully the UBI research will be far enough along to support a movement to enact it.
I fear the question will be answered with some very dark times. Indeed what will people do, when most of them aren't actually "necessary", and what will they agree to, given that most of them will also be driven by fear of becoming one of those unnecessary ones?
As things stands, politically, and culturally, it's more likely to become som dystopian story of cleansing. Walled communities of elites keeping the poor outside of civilized society, and perhaps even death camps.
So I really do hope that we, along the way, not only get data on the economics of it, but also a new ethical mainstream regarding entitlement. Capitalism will be a rather dangerous as framework of ethics in a world where economic value is derived entirely from capital. Only the elite can justify their existance on that framework.
I'm currently aligned with the geo-libertarian view of things, as an example of a dissenting UBI-proponent. It seems the "mainstream" UBI thinking at the moment is rather socialistic in nature. Don't really see how that can fare much better than the capitalistic views when faced with the proposition that 10% is supposed to pay for the other 90%
>I, personally, have a completely different take on all of this from most UBI'ers. I take the long view: in 50 years, physical labor could be eliminated. WTF do we do when this happens? Do we relegate half of society to be homeless?
Just because you can't imagine what people will do after physical labor is antiquated doesn't mean the average person, who you underestimate as a bumbling fool, will not come up with ways to earn an income.
This is how I feel. A lot of people don't even think about this problem. Cost of living increasing with robots taking more and more nominal jobs that the lower class occupies the homeless rate is going to soar in the future. We are already seeing computers take lots of jobs due to the minimal pay increases in several states.
A basic income is going to be the way of life or people are going to have to deal with millions of poor and an increase in crime.
One of the things that bothers me about the saying, "I don't want to pay for all their stuff, I work hard." Is that people don't realize one of the reasons your able to work hard and not worry about your house getting robbed while your at work is that we take care of the poor and disabled. If you take away that care in the future because your too greedy to help out your fellow man, then you end up losing a lot of peace of mind as crime increases because of people having to steal for basic necessities.
UBI isn't a plausible replacement for those, because extreme medical care, and care for the disabled, is priced so far out of range with the rest. I expect part of the steps towards UBI to involve further evolution of our systems for allocating those resources.
Just checked healthsherpa plan prices for a 64-year-old, and it came to almost $900/mo with a $5000 deductible. Maybe it's possible to radically reduce healthcare costs, but we should probably do that first before eliminating Medicare.
The problem is eliminating Medicare is essentially a prerequisite to meaningfully reducing healthcare costs. As long as there is a deep pocket to pay whatever outrageous prices people are charged, people will keep getting charged outrageous prices. Take away the money and the price would come down in a hurry.
Is it really Medicare, or medical insurance in general?
What you would need to solve this is socialized medical care supervised by the government, who takes from those who can contribute and gives to those who are in need. It wouldn't have to be completely run by the government but would have to be supervised by it.
> Is it really Medicare, or medical insurance in general?
Medical insurance that works like Medicare obviously has the same problems. But imagine medical insurance where, instead of paying obscene premiums with a low deductible, you pay very low premiums with a deductible of several thousand dollars after which the insurance pays 80%. So if you get cancer you don't die of poverty but for pretty much anything else you're paying out of pocket, i.e. medical insurance, not a payment plan that hides true costs from everybody.
Now the thing that costs $10,000 in one place and $4,000 in the other place is a difference you care about, so you pay the $4,000 (and so does everybody else), causing total medical costs to fall. You also eliminate all the insurance paperwork in any year you don't blow the deductible, allowing doctors to lower their own costs significantly.
However, this leave people still exposed to diseases where the thing that maybe helps you does not cost $10,000 but $100,000 (not uncommon) or $1,000,000.
For instance, recently I read about carfilzomib or sipuleucel, both cancer medicines; $100,000 doesn't get you there yet.
The only reason they can charge $100,000 is that there is a deep pocket to pay for it. It does not cost that much to manufacture the drug. It might cost that much to do the research, but if you want taxpayer funded research then do taxpayer funded research. There is no reason to launder the research subsidy through seven layers of bureaucracy.
The cost and structure of US healthcare is rather a different problem, although potentially both have to be solved to make it work there. In Europe health insurance in many countries is 100-200/month with a few hundred in deductible.
Consider someone at the edges of the distribution of healthiness: say, someone born with severe mental and physical disabilities. A universal basic income will never take sufficient care of this person; his or her medical care will cost much much more than average, and there will be medically necessary non-medical care as well. I think we'd like to socialize those costs, using something like SSDI.
Yeah, it won't. The $10,000 left after the mandatory health payments would be a cut for many social security recipients, and many of those same people are also probably getting more than $3,000 a year in health care out of Medicare.
Similar problems with Medicaid, it's worth a lot more than $3,000 to the people that are getting it (mostly because children).
This is basically taking the desire to cut entitlement programs and rephrasing it to take advantage of the attention basic income is getting these days.
I sort of expect the best thing the US can do right now to make life better and cheaper for the average citizen is to create/fund residency programs. More doctors will actually lead to lower prices. Pouring money into the demand side won't.
Not only will the voting public oppose many of these cuts, corporations (and lobbying groups representing professionals such as doctors, or AARP) will oppose them. And the latter is more ominous to me since they have the lobbying muscle in place.
>create/fund residency programs
Don't several medical lobbying groups actively coerce the government to limit the number of new doctors that can be minted, both overall and in given areas of practice? I am not optimistic about this given the lobbying groups' strong track record of protecting and furthering their self interest.
> Don't several medical lobbying groups actively coerce the government to limit the number of new doctors that can be minted, both overall and in given areas of practice?
Not really. The AMA is often blamed for limiting the number of medical school slots available, but they have nothing to do with that - it's capped by the AAMC, which has been very deliberately raising the number of medical school positions in the US for over a decade now.
But even if that cap were lifted altogether, the number of practicing physicians would be completely unaffected, because we already have more MDs than we have residency slots available. Increasing residency programs would require funding, and currently Medicare is the source of funds for residency programs. Hospitals would typically make a loss on residency programs otherwise; contrary to what some people believe, they're actually quite expensive to operate.
>...Hospitals would typically make a loss on residency programs otherwise; contrary to what some people believe, they're actually quite expensive to operate.
How does that work? Residents make very little money and do a lot of work. How are they not a profit center for hospitals?
> Residents make very little money and do a lot of work. How are they not a profit center for hospitals?
Residents start their first year knowing literally nothing about practicing medicine. Medical school teaches the foundation, but you learn the practice during residency. In addition, the ratio of attending physicians to residents is capped by law (i believe it's 3:1).
Would a startup want to hire three fresh-out-of-high-school interns for every full-time employee? I can't think of any company that does this. At some point they'd get up to speed, yes, but in the short term they'd be a huge drag.
>Residents start their first year knowing literally nothing about practicing medicine.
If this is true, it really indicates that how we train medical practitioners needs to be reformed. (If true, maybe there should be different programs for people wanting to become medical researchers vs those who treat patients.)
>In addition, the ratio of attending physicians to residents is capped by law (i believe it's 3:1).
>...Would a startup want to hire three fresh-out-of-high-school interns for every full-time employee?
Probably closer would be companies hiring engineering students straight out of college. Those college projects the students did generally aren’t anything like the work they will be doing. Companies don’t hire at a 3 to 1 ratio, but they do hire them and they pay them more than residents get paid and don’t get subsidies from the government to do so.
I was originally replying to your comment:
>...Hospitals would typically make a loss on residency programs otherwise; contrary to what some people believe, they're actually quite expensive to operate.
Thinking about it, I guess if hospitals don’t bill patients for work done by residents, then they would obviously need to paid by the government (or someone else) but I don’t know if that is how it works.
It might if we had a free market for healthcare and if providers were the largest healthcare expense. But we don't, and they're not. Providers' take-home pay only amounts to about 10% of healthcare spending nationally[0].
Furthermore, the reason we don't have a competitive market is entirely due to the payer situation, not the providers. Providers (particularly hospitals, who account for a much larger chunk of spending) can't offer transparent pricing, because their cost structures are needlessly complex. I've written about this elsewhere, but in short, Medicare is not required to cover the direct costs[1] of the care that their patients receive in the reimbursements that they issue. This means that providers have to make up the difference in their contracts with private insurers, which is why they can't tell you how much a particular procedure will cost you - they really don't know, because it's not purely a function of what it costs them to treat that particular patient.
I dunno, I think if there were more doctors more of them would end up working outside of hospitals.
It's certainly the case around here that doctors are moving under the hospital umbrella.
This means that providers have to make up the difference in their contracts with private insurers, which is why they can't tell you how much a particular procedure will cost you - they really don't know, because it has nothing to do with what it costs them.
Yes, this is an obnoxious tax. I don't think the hospitals are forced to keep their prices obscure though (see Massachusetts or Oklahoma), it just happens to be the best way for them to make revenue because if people could easily shop prices, they would. Another component of the problem are the many people who have a plan where they simply don't care about prices because they have a low out of pocket limit.
> It's certainly the case around here that doctors are moving under the hospital umbrella.
That's part of a trend that's a few decades old, and which has accelerated in the last 5-10 years. It's not a function of the number of physicians; physicians are selling their practices to hospitals because they can no longer sustain themselves in private practice.
> I don't think the hospitals are forced to keep their prices obscure though (see Massachusetts or Oklahoma), it just happens to be the best way for them to make revenue because if people could easily shop prices, they would.
If anything, hospitals would prefer to be able to compete this way directly. They can't, though, because there is no single 'price', even if you're talking about a discrete, routine procedure that has no risk for complications. The way medical billing works, they don't necessarily have a set price for a given service per carrier. And even if they do, that doesn't always correlate to what the patient ends up paying (which is, of course, the thing the patient actually cares about). The reason they don't have a set price - even internally - isn't because they don't want to. It's because the contracts with public and private insurers have resulted in the amount of money they need to charge for a service being a function of so many external factors that they literally can't.
Chapter 224 is a perfect example of a feel-good law that doesn't actually do anything in practice, because it fails to address the underlying complexity that's the root of the current problem with price transparency.
From what I understand, they often have no idea what services cost. This is different than not having an internal price. And there shouldn't be external factors that prevent them from measuring it.
Or are you saying that they are contractually bound to avoid tracking costs?
Right, they aren't setup to bill the damn thing. It's ridiculous.
chimeracoder seems to be saying that this is because of the complexity that comes from interacting with insurance companies and the public payers. Where I don't really buy that explanation is where there is in fact a fixed capital cost associated with the machine, and a certain number of uses of the machine per year, and a pretty fixed level of complexity per use (different scans will take a different amount of time, but each type of scan will be reasonably consistent from patient to patient). So they can take a spreadsheet and put in the capital costs and the operating costs and the staffing costs and boom, they have a ballpark figure for what each scan costs. It won't be the exact number for a given scan, but it will be closer than not having any estimate at all. I don't see where complexity on the billing side prevents them from doing what I describe.
Are salaries a good measure of the income of doctors? I've read that more than half of doctors are self employed, and I suspect that their ownership stake in medical businesses produces a good portion of their incomes.
It's the other way around. As of recently, the majority of doctors are salaried (employed), not in private practice.
The numbers I cite correspond to the practice revenues, but as much as half of what doctors in private practice receive in reimbursements goes to practice expenses and insurance.
> The $10,000 left after the mandatory health payments would be a cut for many social security recipients
The easy way to do this is to give people a one-time election between social security and the basic income, so that nobody can object that they're not better off. Anybody who isn't at or close to retirement will choose the basic income because it begins paying immediately, the lifetime payments are higher and they wouldn't have to pay social security tax anymore. Then in 20 years or so there would be no one left on social security and it could be discontinued.
> Similar problems with Medicaid, it's worth a lot more than $3,000 to the people that are getting it (mostly because children).
It seems like your argument is that we can't do it because there are a relatively small number of people who would be better off under the existing system. But by that logic we could never change anything, even if the net benefits are very large, as long as there is anyone who is better off under the status quo.
> It seems like your argument is that we can't do it because there are a relatively small number of people who would be better off under the existing system. But by that logic we could never change anything, even if the net benefits are very large, as long as there is anyone who is better off under the status quo.
I think this is an incredibly unfair and callous assessment of what's going on with catastrophic health care coverage. It's not about "the relatively small number of people who would be better off under the existing system." It's about the relatively small number people who are alive under the existing system who would be dead under the proposed one.
The UBI proposal in the article (one I find pretty weak, and I'm a huge proponent of UBI) is that you're getting $10k plus healthcare. So there's that.
But.
There is no part of the proposal that covers making sure coverage is equal in value to Medicare - in a private market I'm betting benefits start getting cut post-haste. UBI without universal healthcare is a nightmare, and is all but privatizing Medicare. Surprise!
Also, since children under 18 don't get UBI, they would have to be covered by their parents' $3k/annual buy. But again, privatized "universal" healthcare? No thanks.
That's actually an incredibly short-sighted risk calculation that intentionally weighs some unknowns as higher value than others.
For example, I can make the same kind of argument in the opposite direction: if UBI creates a disincentive within inner cities for fewer kids to become drug dealers, which creates less opportunities for violence, leading to significantly less deaths in the inner city, I think that you are making "an incredibly unfair and callous assessment" as well.
Saying that any plan that transfers risk from the current state to a different state that is potentially net better for all is to miss the point that we've already chosen a system that disadvantages SOMEONE... and to change it will probably disadvantage someone different.
We do not live in some Vulcan dystopia. The idea of essentially telling people, who are currently alive, "Yes, we can keep you alive, but by letting you die, there is some probability (which we don't really know and are just guessing at) that we can use the saved money to prevent 1.2 deaths" strikes me as the plot of a horror science fiction movie.
I am all for UBI, but like another poster said I don't think it works without universal health care if you get rid of all the other current transfer payments. It seems the author of the article agrees, but I don't see how the 3K for insurance makes the numbers add up.
> The idea of essentially telling people, who are currently alive, "Yes, we can keep you alive, but by letting you die, there is some probability (which we don't really know and are just guessing at) that we can use the saved money to prevent 1.2 deaths" strikes me as the plot of a horror science fiction movie.
People hate having to make that choice. Hate it. But that doesn't make it go away. We could make cars safer in well-known obvious ways, but they would be more expensive and use more fuel. Many, many, many lives would be saved if we immediately stopped burning coal, but electricity would be more expensive, and then maybe some people would freeze to death because they can't afford heat, or because they became unemployed and lost medical coverage. And in some cases we may even be getting it wrong, but that doesn't get you out of having to make a hard decision.
What if they just said "ok everyone born before 2017 will get the old system (social security, etc), and everyone born in 2017 or later will get the new system. This way everyone alive and voting isn't losing anything they were expecting before. There would be a period of 80-100 years during which both systems are intact, but this somewhat inefficient period would end, leaving only the basic income system.
Regarding social security, that's good; it removes the entire AARP membership as no-voters. You could actually finesse it a bit by saying that anyone born after 2000 (so, turning 18 in 2018) will not be charged FICA when employed, and will not be eligible for SS when they retire -- AND anyone born after 1990 (or perhaps even earlier?) can also opt out, stop paying FICA, start getting BI, and get a tax credit good for their FICA payments to date. Retirees would stop entering the SS system in 2065 and the last survivors would finally die around 2101. The SS system would have to be funded for the rest of the century but for a declining number of beneficiaries.
The other many, many forms of social payments and supplements need individual consideration. It's not all "welfare"; one small example that occurs to me is seriously handicapped (paraplegic, e.g.) people getting financial assistance to cover in-home care. Would the proposed BI adequately cover that? If it wouldn't, this small set of people would be significantly worse off.
You get there by talking about it, and persuading people about it. There is no magical easy to way to bring about social change unless its profitable. And I'm not sure there are enough landlords foaming at the mouth for the legitimately juicy prospect of tenants with guaranteed paychecks to pay rent to push the issue against the tide of establishment profiteering resistance.
But rather than talk about it on HN (like this) talk about it on Facebook or when talking to friends and family IRL. That is how you actually spread these ideas.
The consequences of making this change are huge and IMHO hard to fully predict - or at least it's hard to have a meaningful debate about what the impact could be. Walmart for example could have a disaster on their hands - a whole swath of jobs no one really wants to do could quickly find themselves lacking staff. And that's just one example
The Walmart example is a great one of why UBI is a good idea, though. Today they only have employees exclusively due to the "work or die" negotiation position of the workers there. With a UBI, Walmart will only have people filling positions when they offer wages that, at market value, justify the work being done.
Which would also coincidentally mean treating your employees better lets you pay them less, which sounds like a desirable natural motivating force in an economy.
I do not think anyone would argue UBI would not cause a dramatic shift in everything, and as a result the only way to really implement it is slowly - IE, you start people on small cash payments per month, and scale it up to (by most examples) the poverty level over the course of years or even a decade. That way, everyone has plenty of time to react to the economic consequences without a panic, in much the same way states are raising the minimum wage to $15 over 5 years.
Any UBI plan would need to require some form of citizenship verification. E-verify to get your 13k. We could then dial up or dial down the number of naturalized citizens per year to make the UBI program sustainable.
I'm sorry libertarians, but you can't just throw a equal amount of cash at everybody and say good luck. Society just isn't that simple. Different people have different needs, and that's where the complex overhead of a bureaucracy comes in.
Stop trying to starve the beast already, and instead, help make it better. Or, admit at least, that you just don't give a damn about people who aren't like you.
UBI isn't about libertarianism, it's about reducing the fucking stupid disincentives built into current benefits systems.
Instead of telling people that they can have this money only if they work less than 16 hours a week, or only if they stay disabled, just give them the money.
That way you don't need to employ doctors to see if someone is still as disabled as they were last year, and people who get a part time job can increase their hours without penalty.
But we're not talking about 'most' people. We're talking about all people. What about the people who think to themselves, I don't want to work, I want to live off welfare. Now there will be more of those people (especially since technology satisfies more and more leisure needs for just the price of an internet connection). Also as people grow up in such a society, they don't have that driving motive in the back of their mind that if they have to eventually find employment to survive. How will such people turn out as adults?
The promise of UBI is saving money and unlocking more human potential (by allowing more risk taking, or letting artists pursue their art, or whatever). But if you think of the need to be productive (for survival) as a force/pressure that has shaped the complex system we call society since the dawn of civilisation, then I can imagine that removing that force in a large nation could result in something extremely dysfunctional or even horrifying.
I would expect them to get bored and find something interesting to do. Could be quite a positive. Regardless, most existing small studies and surveys show few people behave like this or intend to.
It would be trivial to implement it slowly and dial it back if you saw adverse outcomes. Giving everyone $20 next year probably wouldn't destroy America.
(of course a slow implementation would have to overlap with existing benefits, not replace them)
The people who are likely to drop out of the labor market are almost certainly not the motivated, high-productivity workers that actually benefit society. High achievers tend to be motivated by things like passion, creativity, need for recognition, etc, not purely income.
> The people who are likely to drop out of the labor market are almost certainly not the motivated, high-productivity workers that actually benefit society
The people who are likely to drop out of their job are plumbers, dishwashers, garbage collectors, miners, mail carriers, highway maintainers, taxi drivers, manual fruit pickers and the rest of those performing soul-crushing jobs that actually allow society to keep running.
All solvable problems though, no?
If no one has to wash dishes in order to survive then you will have to offer a quite decent wage to get people to wash dishes else pay someone to finally make the washing of dishes completely automated.
Supply and demand should dictate that the worst issue will end up being the rising cost of having a night on the town.
Same thing for any other currently low value jobs. We will have to adjust to paying people properly, even above minimum wage, to do things that suck.
I view this as a desirable outcome when considered against the current situation in which only the most glamorous jobs tend to pay well, even if the job is not necessarily most helpful.
so a minimum wage? great, so i'll pay half the dishwashers twice the previous wage for twice the work. or, if automation is possible, i'll pay one guy a minimum wage to look after dozens of dishwashing machines. result is less people working.
Not quite the same as a minimum wage. It's not enforced by bureaucrats, but by potential employees each individually deciding they have better uses for their time to do the work you're asking for the price you're offering.
If your workers are willing and able to do twice as much work in the same time for twice as much pay, you should likely make that switch anyway - at the least it'd save you bookkeeping, and it would be a better use of the workers' time.
And if people systematically decide that they have better things to do than a particular job, and we automate that job so we don't need people doing it, that seems like a win to me.
Whether it means less people working overall depends on how big these effects are, what the effects are on demand, and whether we couple it with other changes like a decreased minimum wage (which could lead to more people working on things which are more pleasant/fulfilling but less highly paid).
Can't really lump plumbers in that group; they're very well compensated, and I wouldn't describe their jobs as soul-crushing. There are a lot of trade jobs that won't be easily automated; plumbing, electricians, welders, landscapers (it's really an art) etc.
In the context of this article, it is very much about libertarianism (the strain of it that is willing to admit that we're facing a jobs crisis, at least). Check the article's author. They want to throw away any sort of a public social safety net, reduce taxes on the wealthy, throw the rest of us a bone and say good luck.
I'm very much for a UBI, but as a part of a comprehensive progressive agenda, and certainly not how the right-wingers want to do it.
Right-wingers are mostly absent from this conversation.
The question at hand is "can we give people enough to amount to a comprehensive solution and thereby save administrative costs"?
I don't think any libertarian minded individuals actually believe in tossing out all safety nets and most likely don't care to reduce taxes on the wealthy either, at least not as a goal in and of itself.
Yes they do. Read the article and read up on the article's author. It's quite literally based around eliminating the costs of the social programs and instead throwing everybody a flat $10K/year.
I'm merely trying to discourage the ambiguous "they" labeling. I think the author is, indeed, a bit to on about the "you should help yourself" mentality. Some people can't or won't even if money is offered and many civilized people want to see those types cared for as well.
Even so, he's basically on your side in the sense that whatever UBI ends up being proposed for law, he would probably vote for it.
Personally, I think we can definitely eliminate the some of the costs of the social programs by giving everyone a flat $30-$40k per year.
The driving difference in thinking being that I believe that the only viable way to make basic income happen is to assess average living expenses across the board and provide that amount to everyone while retaining the former programs at a much smaller scale.
One of the big issues with the current system is that there is a lot of trouble in determining whether a person really needs the assistance of a program or not.
UBI helps in that only those who can show a need beyond $30-$40k/yr need apply.
40,000 * 300 million = 12 trillion. US GDP is 17 trillion. The UBI wouldn't pay for the army, police, healthcare, infrastructure and so on. So the remaining 5 trillion can pay for that as well as for local government. So we're talking about a scenario where every citizen has the same income, regardless of contribution to society. It's an interesting idea, and if we can all work together as a society under these circumstances that would be great. In other words: a 40k UBI implies full communism. Pretty radical.
In my opinion, UBI is basically communism as a positive side-effect of kick ass capitalism. I tend to think of it in the Star Trek variety.
Not so much radical as a natural result of being really good at personal productivity.
It's not a bad thing to say, "we have gotten so good at being productive that we've made work essentially optional".
Doesn't seem like the same thing to me. Negative income tax means you still need to find someone who will employ you, and also you don't get any benefit if you are above the threshold so it's not universal.
I don't think it is written in stone that you must have a job to receive a negative income tax. That would be one way to implement it, but you could also have an implementation that was based on some arbitrary level of income, where if you didn't reach that income, the government gave you the difference, even if it were the full amount (this would be a bad way to do it, but nonetheless). For sure, a negative income tax that required employment would not be a UBI. So they may overlap is a better statement than saying it falls under the umbrella.
It's also the case that a UBI is only pretend universal. There are people that will see either an increase in their effective tax rate or a decrease in their buying power (the latter if you fund it by printing money).
> you still need to find someone who will employ you
Not necessarily. Negative income tax is one way to implement means-tested basic income.
One way to implement a NIT is you have a cutoff point (e.g. $20,000/year) and a rebate rate (e.g. 50%).
So, using the above rate, if your income is...
(a) $0/year ... you get $10,000/year
(b) $10k/year ... you get ($20k-$10k) x 0.5 = $5,000/year (your total income is $15k/year)
(c) $15k/year ... you get ($20k-$15k) x 0.5 = $2,500/year (your total income is $17.5k/year)
(d) $20k/year and up ... you get nothing
---
> you don't get any benefit if you are above the threshold so it's not universal
It's not universal in the sense that not everyone gets the government check, but it's universal in the sense that the same rule is applied to everyone.
True, but this would be a very different feel that the one being proposed. This system would be public assistance and so only poor people would get it. So it would come with the usual stigma.
When EVERYONE gets the same check then everyone can talk about it freely and be happy about the money. It may be that with the change in tax rate, higher income people don't really get a net change to their income so the result in similar, but the "feel" is dramatically different.
This was a bad trade, in my view. Government agencies are the worst of all mechanisms for dealing with human needs. They are necessarily bound by rules applied uniformly to people who have the same problems on paper but who will respond differently to different forms of help. Whether religious or secular, nongovernmental organization are inherently better able to tailor their services to local conditions and individual cases.
You can make the case for this as a simplification of social welfare, but btw hey - it's also a cure for the coming AI jobs apocalypse! Giving everyone 10k a year isn't going to help a worker replaced by robots. 10k doesn't get you far as an annual income. BI doesn't solve the jobs crisis.
You could view it, as subsidizing corporations to decrease wages. Taxpayers paying what the corporations don't have to. So it won't be surprising to see Basic income touted not just by the liberal crowd, but by the Wall St Journal's and corporate interests.
Why won't 10k per year help a worker replaced by robots?
1> It's definitely enough for a single person to live comfortably on, though perhaps not in the house they lived in before getting lain-off. (I agree children can be a small problem and the proposal from the article does not consider them. But if you're not working and don't need to pay for professional childcare then the cost of a child per year is only a few thousand for food.)
2> It's 10k per year plus whatever you can earn. If you don't have that pesky minimum wage restricting job openings to only those tasks that the customer base values at >$12/hr, then you can rake in a good amount of money performing tasks that people don't value quite so much.
Not a fan of the decreasing benefits at $60k. That creates a huge donut hole for those making 59k and then get a 3% promotion. All of a sudden they've take a paycut. Make it a flat income. (Also, should be closer to $15 or $18k a year).
The cut is gradual (so that each extra $1 you earn, less than $1 is reduced from your benefit). So you will never end up with a paycut by making more money.
This proposal decreases benefits between $30k and $60k. The total delta in benefits would be $6.5k. Assuming this decrease occurs linearly, this comes out to a marginal tax of 21%.
The current marginal tax rate for someone (unmarried) making between 37k and 91k is 25% [0]
This means that over this $30k interval, people would be facing about a 46% effective marginal tax [1]. The current top bracket is only 39.6% and does not kick in (for unmarried individuals) until $415k.
While this proposal does create a silly marginal tax rate, it is still below 100%, which means that making more income still leads to more money in your pocket. Our current system, if you count the value of non-monotary aid, often exceeds a marginal rate of 100%, which is a far more serious problem.
I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets.
> I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets.
This was such a dumb sentence in an otherwise interesting post.
My mistake. Still, I think it should be a flat UBI. The point shouldn't be to supplement income but to be income. Plus I think, politically it's a harder sell to provide levels is support ("WE DONT GET AS MUCH BECAUSE WE'RE SUCCESSFUL THATS BULLSHIT", etc.)
If I did not misread the article, the suggestion is do drop the benefits from 13k to 6.5k in the income range from 30k to 60k. That means you lose about 22 cents of benefits for every additional dollar of income so you will still have a net gain. I can not see how an increasing income can lead to a reduced net income unless the combination of decreasing benefits and increasing taxes exceeds one Dollar per additional Dollar of income.
Several years ago I thought a universal basic income would be a good idea but the longer I thought about it the more that went away. Now I can't even tell which problem it tries to solve. There won't be enough work for everyone in the future? Well then cut down working hours instead of having half the population work full time and pay for the other half. Some jobs don't provide enough income to make a living? Then have sufficient minimum wages, there is no point in doing any work that does not pay well enough to make a living. Also universality, what is the point? Above some income you are essentially just paying yourself. There might be a technical point because it keeps the rules simple but besides that I don't see in which way absolute universality is a feature. Reduce the overhead from many different social programs, for state and citizen? Fair point, but then again an universal basic income seems quite a huge hammer.
"Well then cut down working hours instead of having half the population work full time and pay for the other half" That doesn't work. The reality is, and I'm sorry to say, but the required IQ to be economically relevant is increasing every year. Your plan doesn't work because you can't spread out the work that way.
Increasing minimum wages will only just accelerate automation and exacerbate the problem.
My concern about UBI is that it won't properly track inflation and will quickly become not enough and all the welfare programs are gone, so people are doubly screwed.
Other than that, I like it. I'd like to see more "pay to go to school" programs, though. We'd end up with fewer Trumps...
The reality is, and I'm sorry to say, but the required IQ to be economically relevant is increasing every year. Your plan doesn't work because you can't spread out the work that way.
That is only a real problem if the population does not keep up with this development. I can not tell whether requirements are (now) growing faster then capabilities but both certainly grew ever since. The other thing is that it seems to me that - at least to some extend - the capabilities are the controlling factor here. The economy can demand whatever it needs, if it is not available the economy will have to adopt.
Increasing minimum wages will only just accelerate automation and exacerbate the problem.
I did not mean to increase minimum wages more and more just to make any job viable, this of course only leads to inflation. I meant to let non-viable [EDIT: This read »no viable« before.] jobs die or automate. If people are not willing to pay enough for getting their lawn mowed - not sure if that is a good example - to make a living from it, then there never was a market for lawn mowing. Subsidizing it by the rest of the population with government benefits of any kind is not a solution.
Are you saying you'd outlaw self-service gas pumps and checkout stations? Robotic assembly lines and autonomous vehicles?
A large fraction of the population has no distinguishing skills. That segment of the population is going to find itself with ever fewer ways to earn a living.
That was meant to read »non-viable«, i.e. if customers are not willing to pay enough for a product or service so that a full time worker can live on the salary, then efficiency must improve, the job must be automate away entirely or the business must go out of business. I consider neither simply exploiting the employees nor subsidizing the business and customers by giving benefits to the employees a good solution.
Besides that I am not sure about you comment, I am not sure how you interpreted my comment with the spelling error. I am especially confused because your first paragraph sounds like you are arguing for automation, the second paragraphs sounds like you consider it harmful for unskilled workers. I don't want to outlaw any automation, quite the opposite, I would consider the ultimate goal a world where all work is done by robots and nobody has to work.
What's wrong with letting the work be done at a market rate lower than the current (ideally abolished) minimum wage? I'd pay someone $5/hr to pull weeds, but I won't pay them $10 or $15/hr.
Now, in which system can a neighbor earn an extra $20 a week for a morning of work? In which system does my front garden look nicer from the sidewalk? Someone (probably a teen) gets some walking around money, the whole neighborhood gets a nicer sidewalk view, and I don't have to do an optional job that I dislike. Sounds like a winner all around to me, but no way is "pulling weeds" a full-time, live alone and without additional support career.
I mentioned that in another comment, there are certainly a lot of cases like your example where it makes no or not much sense to apply a minimum wage. I want the minimum wage to target specifically normal (full time) employment. An employer should not be able to pocket most of the money for say selling relatively expensive cloths but pay shitty wages to its sewers. You might argue that employees are free to negotiate wages and free to not accept bad conditions, but that easily fails if, for example, there is a surplus of possible employees. Sure, it is an important mechanism to reduce costs for consumers, but that should in my mind not come at the expenses of the employees.
I think that devolves into "I can hire Matt, the neighbor kid and pay him $5/hr, but I can't hire Matt Inc, the landscape company, because they aren't allowed to pay Matt [the neighbor kid] $5/hr"
All of which perpetuates the cash/grey economy (and the off-shoring of garment-making jobs in your example).
The thing about UBI is that it allows employees to turn down bad economic deals without starving. Sure, you can't live in a 2000 ft^2 house, drive a new car, eat and party out all the time, but you probably don't have to take a job with ridiculously bad conditions just so you can buy a can of beans or Ramen.
But that seems not unreasonable on its own. Tipping a friend $20 because he helped carrying boxes when you moved as compared to hiring a professional mover for $20 seems like a valid difference to me. But you a right that this could maybe be turned into a good argument for an universal basic income because you may be able to sidestep some otherwise relatively difficult to solve gray area issues, but I am not sure, I haven't thought that through.
You think $40 is excessive for a morning's work? I really don't know what to say to that that won't attract the wrath of dang. Perhaps he can suggest some polite words...
I didn't say I thought $10/hr was "excessive". What I said was that that was more than I was willing to pay to have that particular problem solved.
There are all sorts of things that people will pay a handful of dollars for, but that they won't/can't pay $10/hr for. Mine was just a concrete example of a low skill required task that I don't enjoy and that someone whose basic needs were already covered might be interested in doing, much like I did when I was a kid/teen and wanted to earn some extra money.
Sorry. I thought you were saying that jobs that are currently viable should not be allowed to be automated away. I was wrong.
I am in favor of automation (for the same reasons you are, I think), and automation does harm unskilled workers.
Between the present day and the future golden age of robotics that we both desire is a period of time in which some fraction of the population, who have specialized skills that are hard to automate, will work for a living, while another fraction (probably larger than the first) of the population will have nothing to offer in return for money. I don't see any way around the first group subsidizing the existence of the second.
> If people are not willing to pay enough for getting their lawn mowed - not sure if that is a good example - to make a living from it, then there never was a market for lawn mowing.
You are actually in favor of outlawing lawn mowing as a job? My 14 year old kid can't take a $20 from my neighbor to get some fresh air and weekend spending money? Are you serious????
If you are a professional lawn mower, there should be a minimum wage that ensures that you can live on that income. What is the point of mowing lawns all day long and not ending up with enough money to live? So kids mowing lawns bellow market rates because they don't have to live from that income are creating downward pressure on the price. And why wouldn't you pay market rates in the first place, same work, same pay? There seems also not to be such a huge difference to black labor - you cut some of the costs, taxes and insurances or living with your parents, and harm others trying to make a living with that job. It seems actually pretty difficult to have a balanced solution and as I acknowledged in another comment, this might actually be one of the stronger arguments for a universal basic income because it may allow to sidestep some of those difficult gray area problems.
I think these are exactly the right observations. It's no coincidence that a lot of advocacy for the UBI comes from the far right who want to use it as a pretext to dismantle the welfare state. Conventional social programs are not perfect, but they exist to address specific issues and mostly do their job well. The efficiency gains to be made here are minimal. The real cost savings are made by simply paying the needy less.
Just look at Murray's proposal. All social programs get eliminated and now a single mother with 3 kids has to make do with $10,000 a year? Impossible; a cruel joke. An elderly person on disability? They get half the money a healthy 22yo couple gets. This isn't a serious proposal.
> a single mother with 3 kids has to make do with $10,000 a year?
Actually, under Murray's proposal, she has to make do with 10k per year plus whatever she can earn. If she's earning very, then she's probably doing all the childcare herself and her living costs are not much more than a single, childless woman. If she works full time, then her total income (earned and unearned) will be 30k at minimum.
I'm not saying I support the proposal, but I do think your rhetorical question mischaracterizes it.
The point is when you give the same subsidies to a healthy 22 year old who lives with his parents and a single mother of three, we're dealing with one of two situations:
1) the subsidies are sufficient for both groups to do OK. This is fine in theory, but taxes would have to go up by a lot to have the minimum take care of the needy with the largest expenses. The UBI would have to be closer to 25,000 USD. If it's politically impossible to raise taxes to the level needed to let poor people live in dignity today, then what are the odds the American people sign off on the massive tax hikes needed to fund a non-destitution basic income?
2) the UBI simply isn't sufficient. Some people are getting money they don't need and other people are getting much less than they need just to survive. Every dollar that goes to the first group means there's less for those who really need it. In other words, the proposed system is a cruel dismantling of the welfare state.
Raising 3 children is practically a full time job, just one that happens to be unpaid. With the UBI the minimum wage would go away, meaning that the single mother is going to make a few dollars an hour in her part time job. That will barely cover the cost of the car she needs to get to her job, and the cost of the babysitter. The suggestion that being a single mother isn't much more expensive than a being a single young adult is absurd. I really struggle to respond to this. Just think about it: a single person can share an apartment and bike everywhere, enjoy the simple bohemian lifestyle. Being a beach bum doesn't cost anything. Do side jobs and hustle whenever you need a few bucks. The single mother in contrast needs a car and a house with rooms, just to start. That's going to take a big chunk out of the 10,000. Just living nearby a school is already expensive, and not optional. And the children themselves cost money too, in a million little ways. Diapers, clothing, entertainment, food, trips to the doctor, the list is endless.
I don't believe I'm misrepresenting the situation, this is just how the math works out. If the UBI means giving money to people who don't really need it then taxes must go up by a lot or the poor are getting a really raw deal.
>Or consider the unemployed young man who fathers a child. Today, society is unable to make him shoulder responsibility. Under a UBI, a judge could order part of his monthly grant to be extracted for child support before he ever sees it. The lesson wouldn’t be lost on his male friends.
> Or consider teenage girls from poor neighborhoods who have friends turning 21. They watch—and learn—as some of their older friends use their new monthly income to rent their own apartments, buy nice clothes or pay for tuition, while others have to use the money to pay for diapers and baby food, still living with their mothers because they need help with day care.
The author seems to be proposing that child support for 3 children can/should be taken from their fathers' UBI grants. Therefore, the mother would receive a larger grant based on her number of children.
Those quotes are about enforcing responsibility and repercussions for unwise decisions, and how that functions as deterrence. Taking money away from the father is framed as punishment, the mother getting money is just a happy coincedence (remember he excludes children from the UBI and then he sketches a scenario where a dad has to lose a lawsuit before having to pay). He doesn't concede that people in some situations simply need more money to live, because that concession would be fatal. After all, if some people need more money than others then you need to do means testing (oh wait, that's what every country is already doing and the root cause of all the inefficiency he seeks to eliminate), which is the exact opposite of the UBI.
That is certainly correct in many cases but I don't think you can get around gizmo's argument in the general case. The father could not simply leave the mother but for example die in an accident. A one size fits all solution seems really problematic considering the huge differences between personal circumstances.
Assuming the father is a living US citizen whose identity and whereabouts the mother knows, of course.
Either way, that doesn't really affect the argument that a BI payment supposed to be a minimum for one person to live off is unlikely to stretch to paying for the food, living space and private health insurance costs for another three, even if another parent's minimum payment is also being garnished to help.
The author's arguments you've cited essentially amount to the view that children of single parents should be punished for their parents' life decisions. It looks particularly crass in the context of accompanying arguments in favour of spending money on adults who choose to "idle away their time" and including those fortunate enough to be "already living off other people’s money".
I think you are probably right that a welfare system that does not consider the cost of dependents is likely misguided.
And we're in agreement that properly raising three kids is a tremendous undertaking that demands either a whole bunch of money or almost all of your time.
I take issue, though, with the idea that a family of 4 living on other people's money should spend so extravagantly. You do not need a car. You need a 2-bedroom home within 2 miles of a school. Housing will almost certainly be more than half of your expenses. Food for 4 people is a few thousand more. Clothing, entertainment, and diapers cost almost nothing (do not use disposable diapers except on special occasions). If you want to work part time then find another mom who will swap days with you or pay you to take her kids while she's working. I could see $10k turning out to be slightly less than what's really needed, but it shouldn't be considered "cruel joke" territory.
In the spirit of not paying people more than they need, I could suggest paying the young adult who gets free housing from her parents only $3k per year, but that opens a huge can of worms that'll have kids pretending to rent their own apartment to get more UBI while really living at their parent's house, etc.
Again, I think we're in agreement on the flaws of this UBI proposal. But I assert that, until such time as our society reaches a level of technological advancement where no one needs to work, the amount of extra work that working people are required to do to support nonworking people should be no more than the minimum amount to maintain their health and physical comfort. If you think people should get more than that, I'd like to know how you propose to decide how much.
At the present technological level tough choices have to be made to divide the scarce resources we have. In my view this necessitates means-testing and a conventional welfare state. A UBI only makes sense to me when there is so much wealth in society everybody can be gifted a subsistence income, without having to cut other necessities such as healthcare, infrastructure, and so on.
As for the example: Rural poverty is a huge problem, and not everybody can live in cities. Without a car you're stuck in the house because you can't leave your kids unattended. You need to drive miles just for groceries. People around you live in squalor and substance abuse is ubiquitous. Finding a sitter on short notice? Forget it. Move? With what money? Living on a tight budget is easy when you're young, healthy, educated, etc. In the real world poverty doesn't look like that. You can make a back of the envelope calculation where 10k a year is sufficient for a one parent family of four, but I don't think it holds up in the face of all the struggles poor people face.
Why should people be entitled to three children they can't afford rather than a beach bum lifestyle? If anything we should incentive the latter; at least it doesn't hurt anyone else.
Because not everyone chooses to have multiple children they can't afford. Maybe their breadwinner partner died. Maybe they were going to be pushing it with two kids, but the second pregnancy was twins. Or the first was triplets. Or they had great family support that allowed them to work a couple of days, but those people moved elsewhere.
I don't think people should be jumping into parenthood without knowing what it really entails (costs and brutal demands on your time) so I'm sympathetic to your angle, but reality plays out differently. And kids are the result of some pretty basic urges that are obviously difficult for many to deal with appropriately (think ahead, get/use contraceptives, actually abstain, whatever).
In Australia, we have (had) the "baby bonus". Seems a bit wrong. I'd rather support sticks to things like childcare subsidies and so on. I have two children in childcare 3 days a week and it would cost me over AU$600/wk without the subsidies.
Obviously there has to be a strong balance between an incentive that keeps a reasonable birthrate and one that overly encourages those desperate for money to procreate. The latter is disastrous for countless reasons.
You're overthinking it a bit. What it does it remove the worry that you're going to starve or have no place to live, or take you from subsistence to a level that you can invest in the future. That's all. Perhaps that's enough.
Whether this "solves" anything depends. Initial experiments are very limited, but fairly positive. Giving money to people in rural India may not translate too well to giving money to people in New Delhi, much less people in Cleveland. But I think it's worth a try to see how things work out.
What it does it remove the worry that you're going to starve or have no place to live, or take you from subsistence to a level that you can invest in the future. That's all. Perhaps that's enough.
If your income drops below 404.00 Euro per month plus rent in Germany, you get the difference. Nobody will become homeless, nobody will starve. At least in theory. They will bug you to get a job as quickly as possible, make you do courses to improve your skills. The authorities are said to be kind of control freaks, supposedly to avoid abuse.
So it is a basic income. Universal? Well, the authorities won't just let you develop you new product idea for two years. If you don't try to get a job, they will bug you a lot. If you don't play by the rules, they can even cut some of the benefits.
So maybe we should just add a program that allows you to ask for benefits for a certain amount of time so that you can develop a business idea. Maybe there are already things like that. You certainly can get support if you want to educate yourself, attend a university and so on.
Much of the appeal of UBI is that there is no massive government pork program to determine eligibility, track compliance with rules, etc. The "U" is important to many of us, provided it allows the disassembly of the massive bureaucracy present today.
That is of course valuable to other people or the society and it may also be valuable to you because you enjoy doing it. But that is not what I meant. When you do some work to make a living, then you have to earn enough to live on the income. What is the point of working full time and then starving anyway? What you can do voluntarily is not affected in any way, you can make paintings and write open source software for no money as long as you want.
The proposed problem - and it's an elitist one - is that if you try to solve the basic income problem with minimum wages, the skill level required to be productive also rises, and eventually you get to the point where employers try hard to automate the job out of existence. The argument is that at some point, the skill level required to justify an income becomes so high, large portions of the populace become unable to meet that bar.
You can't simply cut down working hours, since the problem isn't that there aren't enough jobs for people - it's that there are people who are unable to be productive enough to fill a job.
The UBI gradually transfers responsibility for someone from the government to an employer, as opposed to a minimum wage + welfare system, where the transfer is a lot more sharp.
(I haven't decided if I agree with this, and how plausible it actually is - but I think this is the argument for why UBIs are necessary, and necessary now.)
>The proposed problem - and it's an elitist one - is that if you try to solve the basic income problem with minimum wages, the skill level required to be productive also rises, and eventually you get to the point where employers try hard to automate the job out of existence.
"We'll just automate your job away" is one of the biggest empty threats along with "we'll just fire everybody, causing mass unemployment".
Employers fear a rising minimum wage because it eats into their profits. That fear translates into histrionics, threats and utopianistic predictions about the near future state of robot technology.
In the end when it happens they just deal with it and end up posting lower profits. As is the case in Seattle.
Indeed. The question clearly isn't "do people even want automat restaurants?" it's just "did the technology to push a button and have food delivered reach some sort of tipping point in 2016?"
Did you also know that original automats from the 30s mostly went bankrupt in the same decades (60s/70s) that the inflation adjusted minimum wage was at its highest and Americans had the most disposable income?
If there is a job that does not pay for a living, then there are two possible reasons. Customers actually value the work enough and pay enough for the product but the business owners take the money. In this case there should be a minimum wage cutting into the profits of the business owners making it a viable job.
On the other hand customers may not value the work enough and the job is just not viable, there is no market. Then you have to either bring the costs down by improving efficiency or automating it, or the job has to go away. Not paying a livable wage to the employers is just exploitation, giving benefits to the employers just means subsidizing the business owners and customers.
I am a bit unsure about the scenario when we just let the job go away and have a new unemployed we may have to support with benefits. Wouldn't it have been better to just subsidize the job a bit instead of having to pay for a new unemployed? But that of course creates incentives to underpay employees and take advantage of subsidies. It is probably harder to reason about this case because it is now a dynamic scenario and it is not obvious how things will turn out.
I am still struggling a bit to follow your thought process but I think you may have a point. I will probably have to add something later.
If we are in a situation where a part of the population is plainly unable to perform any work that pays for a living and we are unable to improve their skills, then we are really is some kind of trouble. They would essentially be like handicapped people. In analogy we would have a moral obligation to support them and it seems better to let them do some work not paying for a living and provide benefits on top of that instead of just having them fully on benefits. Kind of contradicting what I wrote above. And we are also back at the point from above of creating incentives to underpay employees.
The obvious solution would be to not get into this situation in the first place, to heavily invest into education and training. But if that is not good enough? How does reality compare to this scenario? What is the outlook? It is also not obvious to me whether a universal basic income or minimum wages and a conventional welfare system would provide better incentives. But I think I now at least understand the argument.
> If we are in a situation where a part of the population is plainly unable to perform any work that pays for a living and we are unable to improve their skills, then we are really is some kind of trouble.
And that's exactly the situation UBI is intended to solve because that's where automation is taking us. In the near future, only the very intelligent or machines will work because the machines will put most people out of work leaving only room for the very skilled.
> The obvious solution would be to not get into this situation in the first place, to heavily invest into education and training.
That is not a solution because it assumes wrongly that everyone is capable of performing knowledge work; they aren't. A very large minority of people simply won't be able to do anything worth paying them for, they won't have the capacity to do anything we can't get machines to do for far cheaper. When the machines take over blue collar work, and they will, the economy will have to change to something like UBI for it to continue working.
In parallel with everything relating to employment opportunities, I wonder if we are honestly doing enough about helping individuals with everything that goes with performing job tasks. Things like:
- being punctual
- staying healthy
- staying positive/motivated, not making excuses
- presenting and speaking well
- importance of attention to detail and initiative
Even before jobs are lost to automation, there are countless tasks that are very simple to do, but I imagine many people fall and stay out of work due to the above issues rather than lacking skills relating directly to their tasks.
Why should every job provide a 'living wage'? A high school kid working through the summer at an ice cream shop is learning to work, learning responsibility, and getting a little spending money - why would you want to outlaw that?
I addressed this in other comments, I only want that a normal (full time) job pays for a living, I did not want to discuss all kind of edge cases and so it may not apply to your example. But if working at an ice cream shop is sufficiently easy to learn within a few days and the kid does all the same work including cleaning up and what not, how would you justify paying less than to a regular employee doing the same work and having to live on that income?
Nobody specifically wants to outlaw that. Literally nobody. Laws have to have a tradeoff between being too general and being too specific (and having too many special cases). Being too general means catching too many edge cases where it does more harm than good. Handling too many special cases creates a moral hazard where there's more benefit in finding loopholes or plainly ignoring poorly enforced parts of the laws than honest work.
Anecdotally, I did work as a kid, didn't learn anything useful, did not learn responsibility, a bit of money I didn't really need, and it felt like a waste of time and left a bad taste overall.
I fully believe that in many, possibly most cases, work is beneficial for kids (as long as they're not from poor families in which case there will be too much pressure to overwork, affecting school/homework and taking away whatever little time they have to enjoy childhood).
> There won't be enough work for everyone in the future? Well then cut down working hours instead of having half the population work full time and pay for the other half.
Which doesn't work when jobs require uncommon abilities or highly specialized training and thus either can't be done by the other people or would be highly inefficient to train them to do and then not have them working full time.
> Some jobs don't provide enough income to make a living? Then have sufficient minimum wages, there is no point in doing any work that does not pay well enough to make a living.
And then any jobs whose economic value is below that minimum wage disappear, leading back to the first problem.
> Also universality, what is the point? Above some income you are essentially just paying yourself.
You are. Which means it has a built in phase out -- you effectively stop getting it once you've paid more taxes than you receive in basic income. Adding another phase out causes the marginal tax rate on middle income people to be unreasonably high and takes money away from them that would otherwise have come from higher income people.
A universal basic income has rich people paying poor people and middle income people paying themselves. A basic income with a phase out instead has middle income people paying poor people so the rich can have a tax cut.
I won't address the first to points, they came already up in other comments and made me change my position a bit.
A universal basic income has rich people paying poor people and middle income people paying themselves. A basic income with a phase out instead has middle income people paying poor people so the rich can have a tax cut.
This does not have to be true. You can simply phase it out and then adjust the tax structure accordingly. It is a zero sum game, you lower taxes by the same amount you cut the basic income for that person. At the high end you take away 11k basic income and reduce taxes by 11k, somewhere in the middle you reduce the basic income and taxes by 6k each and at the lower end you do nothing.
With matching tax structures there is really no difference between paying an universal basic income to everyone or only paying it towards the lower income range. I am not disagreeing that a flat basic income might be a lot simpler than trying to carefully adjust tax rates.
> With matching tax structures there is really no difference between paying an universal basic income to everyone or only paying it towards the lower income range.
If there is literally no difference then what benefit is to be gained from the added complexity?
One of the big advantages of a universal basic income is that it gives you effective progressive taxation without a complicated system amoral people can game. If you have different tax rates then it creates opportunities for tax arbitrage and rich people can avoid paying the higher rates by doing things like paying a middle income salary to their otherwise zero-income college-attending children who pay a lower rate.
But flat tax + UBI is inherently progressive, so that's it. No phase outs + no tax brackets does exactly what everyone wanted anyway, but everyone universally pays the same rate and receives the same UBI so there is nothing to game. You get one choice, what the flat tax rate should be, which sets the amount of the UBI and determines how progressive the system is. It takes away all the knobs that politicians who don't know what they're doing (or corrupt politicians who know exactly what they're doing) can use to screw up the economy or shift more of the tax burden from the rich to the middle class.
Not sure why this person is being downvoted. It seems like a perfectly logical question. If there's a good answer for it, people should be posting that here instead of downvoting.
Price of goods with limited supply will rise, where the price floor is mostly determined by how much people are willing to pay.
Price of goods with unlimited supply, where the price floor is determined by cost, will not rise.
Although everything kind of fall somewhere in between the two extremes -- rent will probably go up, whereas food not so much. And many things will not be affected because poor people will not buy them with or without BI.
Only if the world were zero-sum, which it's not. Remember how only rich people used to have cell phones, and now billions of people have them? The price of most goods is close to the marginal cost of production, which means that giving more people money may actually lower the cost of many goods (by increasing volume). Artificially scarce goods, such as an apartment in SF, may get more expensive however since their price is set by the marginal ability to pay. The good news is, you don't have to live in SF.
I guess apartments in San Fransisco already cost more than what someone living off basic income could afford, so the prices should not be driven up at all. Indeed, people living there would presumably get a net reduction in income (from tax increases to pay for the BI), so the prices should go down.
If you read the article, the BI being proposed would drop off after you began earning more than $30k and the drop would stop at $60k in earned income. I imagine a rather high percentage of people living in San Francisco already earn well above $60k annually.
The article proposes that we replace welfare programs, social security, etc, with this UBI. Then, at some point, it says this:
Government agencies are the worst of all mechanisms for dealing with human needs. They are necessarily bound by rules applied uniformly to people who have the same problems on paper but who will respond differently to different forms of help. Whether religious or secular, nongovernmental organization are inherently better able to tailor their services to local conditions and individual cases.
I find it ironic that this individual is for the so called UBI.
> I find it ironic that this individual is for the so called UBI.
Why do you find it ironic? UBI gives people money without telling them what to do with it. It lets the market (i.e. the people) decide what they need instead of the government.
For example, you can imagine a shelter that will provide food, housing and services for the disabled in exchange for their UBI, which doesn't cover the entire cost but covers most of it and the rest is covered by donations.
It's all the same. Otherwise, you're going to increase taxes even more for people making more than the UBI to compensate. This is simply pushing numbers around on the page - either you're getting the UBI and paying it all back in taxes, or you're not getting the UBI and not paying it back in taxes.
No, it's not the same, because the big benefit of UBI is you don't have to pay a huge gaggle of bureaucrats to verify this person gets benefits and that person doesn't.
I've never understood why subsidies like this almost always come with income phaseouts. What's wrong with giving everyone a basic income? People who make a lot of money would more than repay it in taxes, and taxes would have to go up on higher earners, but that's not a real problem.
I didn't write the article and I am not for the so called UBI. I am very much against it. I am willing to be convinced otherwise, and the start of this article sounded not crazy to me, but I stopped at reading at some point because later remarks reflected enormous cognitive dissonance in the writer, suggesting they really haven't thought it through and full of baloney.
The difference is you have to make more money first.
"Phase out" means middle income people receive lower benefits in exchange for higher income people paying lower taxes. It's just a code word for screwing over the middle class.
Except that the marginal cost of production will go up because of the increased competition for scarce goods, of which every single produced item has some component, not the least of which is land and labor.
So yes, there is likely an inflationary effect, but it is impossible to accurately predict.
It also depends on the net change in people's overall income as most basic income proposals include scrapping piecemeal and overlapping welfare systems.
Personally I think I could be convinced if it was essentially a replacement and thus simple to administer, but would have to be coupled with strict immigration control for the first country to try it.
If everyone is given money for a specific product and suppliers are universally aware of exactly how much people can spend on that product then, yes, that can happen.
However, under UBI, I think suppliers of goods and services would still be faced with the basic issue of not knowing exactly how much consumers value any given product and competition would still exist so prices would likely still be set by supply vs demand.
The price of everything would rise proportionally to the amount of consumption added to the economy - for example, if you funded this entirely by printing money, you'd get a combination of inflation and an equal amount of money going to everyone, causing a redistribution effect on its own. e.g. if you gave everyone $10,000 of newly-printed money, inflation would be very high, but unless it's 100% or more (doubtful) a poor person making $10,000 or less before the change would still have a higher standard of living - it's a redistributionary effect.
If you actually fund this by taxes, like most proposals say, you'd probably still have an inflationary effect (since the lower your income is, the likelier you are to spend each marginal dollar), but likely not enough to outweigh the extra money.
If UBI was carried out as a series of one-time cash injections (such as QE), then yes it would simply lead to inflation as a large proportion of UBI recipients would have the propensity to spend that money immediately on rent, food, debt, releasing the cash into circulation and ramping up inflation. Spending would probably remain unchanged for middle/upper class folk who would view UBI income as negligible.
If UBI was carried out as an exercise in wealth redistribution through higher taxes on the upper/middle class, then the inflationary effects would not be quite as high, although I would still expect to see some inflationary effects as middle/upper class folk drew down spending on some durable/luxury goods, while lower class folk would increase spending on staple goods. I think the overall effect would be slightly positive inflation.
I'm upper middle class, and I can already barely afford to live in this country. What we need isn't more taxes but a more judicious use of taxes that are already being levied. An effective and workable UBI scheme would replace all other forms of means-tested social support payments, foreign aid, and expenditures on meaningless warfare overseas. In such a perfect-world version of the United States UBI suddenly becomes feasible. One may only dream.
I'm going to guess you either bought a house you can't afford or have more than 2 kids or have a lot of student loan debt. (Not judging at all) Correct?
I can barely afford to live in the US because I live in a pretty expensive part of it. I'll blindly guess that my zip code is the second most expensive one in NYC. My thesis is that you (and I, and my family, and everyone else who has ever lived) live only once. I refuse to live a gazillion miles away from work while wasting countless hours of my life commuting. This costs me, as the most desirable areas of Manhattan are also the most expensive.
To be able to afford such a lifestyle, I have to make a considerable amount of money. This leads to my family being ineligible for any kind of freebies from the government. We're forced to look on while other families receive handouts in the form of food stamps, free school lunches, free healthcare and subsidized housing. Many of those families cheat the system by finding loopholes in eligibility criteria. They sneak through and enjoy significant free comforts on my dime... and that of every other taxpayer in the country.
So yes, I can barely afford to live here because I'm being taxed to the gills while freebies are flying to countless others who don't deserve it. I'd much rather cancel the whole rigmarole and just flat out pay everyone the same basic income every year. At least my family will get its fair share of it.
That's interesting. My employer is also based in Manhattan. I live in Minnesota. I live in a 4-br home that costs me $800/mo including taxes in downtown Minneapolis. I go and work in Manhattan once every 3-6 months for a week or so. I could never live there though; I would be throwing my money away. I like certain aspects of NYC, but not enough to take such a paycut. There have been a lot of studies that show that what kind of home or city has almost no bearing on your happiness. You might reconsider.
Also, seriously, if someone is on food stamps or their kids are in the free lunch program, they are not advantaged, they are not comforted: they are living on the edge. Trust me.
On the other hand, I live in subsidized housing. The mortgage interest deduction is the largest (in terms of $) subsidized housing program on earth.
The whole concept of countries creating way too much currency to pay their bills is a good reflection of this -- Zimbabwe and Venezuela being two recent and current examples. The irony is that all of that "extra" money actually means the recipients become substantially poorer as the supply chains get fucked up.
If it is just a little extra injection, the outcome would not be as extreme. In the most general cases, my guess is somewhere with a tight housing market would see a lot of the money just flow to landlords, in a renter's market the money might flow to consumable goods like drugs and alcohol.
If social & welfare programs are removed in exchange for BI, it is possible all the money would just have to be spent on medical and education. I don't really know the math behind everything but it could just be a restructuring of things that are already occurring. Do extra marketing and "profit" costs exceed government waste? Who knows. Certainly the ability for the government to influence social behavior would be reduced by a lot.
If UBI seems possible to pass within 5 years, that will be signal to ramp up investments in low-end rental properties. You have to do it before it's certain to pass (else the purchase price runs up), but I can't see anything happening to rents other than a sharp move up.
I still don't understand this argument. The vast majority of people who would receive the UBI are not homeless. They live somewhere now. Why would the same number of people suddenly demand substantially more housing?
Have you ever counted the number of families that live in a single low-end housing unit? It's not uncommon for it to be 2 or 3 in more expensive areas. If those families each get $20k/yr in UBI, many of them would be looking to move out on their own.
The families who live two and three to a housing unit are the ones who qualify for as much existing welfare as the UBI would provide. It would be trading food stamps for cash but you have to expect most people are still going to buy food.
Replacing housing assistance with the equivalent cash might even reduce rents because then people can decide they would rather live in cheaper housing and use that money to go to college.
The whole thing with a UBI is that unless you make it more progressive than the existing system, all you're really doing is replacing vouchers with cash. If you do make it more progressive (i.e. provide more cash than you would have provided vouchers) then you get the same economic consequences as providing more vouchers (i.e. possible price inflation), but it's still more economically efficient than providing more vouchers, because then people can choose between college or better housing or better medical coverage etc., instead of having the government decide for you.
Only if the government added money to the system without removing it elsewhere.
Any sane policy doesn't involve just printing money and giving it to people. It involves taking that money from someone else, through taxes, and THEN giving it to people.
The current government deficit is more than 500 billion. We can't currently pay for current government spending - not sure why you think the government would try and pay for a huge new entitlement when the political firestorm from that would probably kill it.
Take a food stuff. In theory the current price is the cross section of supply and demand (price equilibrium), your idea is that with BI we have just increased demand while supply remains unchanged naturally price equilibrium changes resulting in a price increase. However, with a growth in demand, the market should respond and supply should increase to meet the increased demand, thus readjusting price equalibrium. Obviously this is for a food stuff not something more finite like housing.
Still food stuffs or housing, we don't really live in a free capitalist market as much as we would like to believe. There are many government subsidies artificially impacting current supply/demand/price. One example, farm subsidies where farmers are paid to not grow crops/farm their land (~$1.3B/year). I think its ridiculous, but economists more knowledgeable than me (even if on the farmer's dime) argue its necessary to keep supply artificially low to keep prices artificially high otherwise the entire industry would fail and we would all be starving.
Assuming BI did have such an overall impact on the prices of everything or even just the basics (food stuffs, housing, gas, etc...) there are all types of mechanisms the government currently employees to artificially raise and lower prices and special interests won't be going away with BI.
The Murray UBI plan is paid for in part by eliminating agricultural subsidies. So any stabilizing effect of these subsidies would go away. Would food producers keep their prices high, since each consumer has an extra 10k to spend? Or would prices collapse as growers, with no incentive to leave fields fallow, flood the market with cheaper food?
Consider a society with 2 members, Mr Rich (net worth $10M) and Mr. Poor (net worth $100). Mr. Rich is 100,000 X richer than Mr. Poor right now.
Institute a ridiculous UBI of $1M/year for everyone. At the end of the year, Mr. Poor has $1,000,100 and Mr Rich has $11M but Mr Rich is now only ~ 11 X richer than Mr Poor.
Now sure cheeseburgers at Micky-D's are now $700 but the fact has changed that before, Mr Rich could buy a hundred thousand burgers for every one Mr Poor could buy. Now he can only buy 11.
UBI works like gravity. Continually pulling the unequal towards a center. The rich will still stay rich, but unlike today where rich automatically makes richer, the force will be reversed. It will take "energy" to stay rich.
Well that's the question, isn't it. What are the (un)intended consequences of forced leveling of inequality? Especially automatic and predictable forced leveling.
Right now, it seems that Mr. Rich eats as many burgers as he wants (which isn't many really) while all of the Mr. Poors who would be happy to eat them if they could afford them, and happy to make them if someone would buy them (and then could afford to eat them themselves) sit around hungry because there's a recession donchaknow.
Its almost as if the mass of Mr. Rich's on-paper money is blocking the natural signalling between the makers and the eaters so the cycle jams up. It seems like something that needs fixing. So how?
I didn't really see any weighing of the proposition here, just motivated reasoning. Such a one-sided view is especially scary because, at least to me, the cons for this are pretty apparent and serious.
What's one big negative of funneling even more money into the government? Further centralizing power in the government, which definitely cools my own fever to implement UBI, and definitely warrants some careful consideration. Since trust in government seems to be at an all time low, this point probably deserves some addressing [1].
For one, theories of economy were created in order to better serve the people's needs and wants using scarce resources - if they can be demonstrated (as in western Europe) to represent very large increases in the hedonic calculus, they are objectively superior. For two, a liberal democracy's functioning is premised on a degree of middle class participation: a large group of people with sufficient assets that they have a stake in the future (beyond entertainment value), but insufficient assets and numbers too great to corrupt the system towards their own ends.
> if they can be demonstrated (as in western Europe) to represent very large increases in the hedonic calculus, they are objectively superior.
The only way this could be true is the extraordinarily unlikely case where every individual provably had better experienced utility in one system than another, otherwise, the fact that there is no one objectively correct method of aggregating utilities across individuals to get a single measure of societal good means that there is no objectively correct ordering.
But what if Mr. Rich was rich because he owned a McDs? Now he's selling burgers for $700, and rolling around in his money like Scrooge McDuck.
Prices go up for two reasons, when they can and when they must. Which one do you think would be the factor here?
* Note, this is specifically in response to the parent's scenario - I actually doubt that a UBI like the one in the article would lead to appreciable inflation, as the current entitlement plans already spread around more money than this would.
I think the most popular opinion around here is that once Mr. Poor is liberated by the UBI from the impossible treadmill of minimum wage working-poor jobs and a legal system that is outright hostile to those of lesser means, he might make a few burgers of his own and compete with Mr. Rich's defacto monopoly instead of being his near-servant at his former Mcjob.
This introduces inefficiency. One worker working 8 hours is more useful than 2 workers working 4 hours. While this might end up being a good trade off (as workers might be willing to sell 4 hours of work for less than half the price of 8 hours), attempting to legislate this would be a market distortion.
What does inefficiency matter if there is not enough work for everyone anyway? It may be a problem during the transition but I am not sure about that. But in the end two people working five hours each seems a better and fairer solution to me than one working eight hours and giving half of what he produced to the other guy for free.
Minimum wages distort the market.
Why? I am not arguing for arbitrarily high minimum wages, just high enough to be able to make a living. Working for less makes no sense - if you work full time and can not live from the income, what is the point? It's exploitation, slavery if you like. If the state provides benefits to make it a livable income, then the tax payers are just subsidizing your employer or customer. I am here not worrying about all the edge case, being frech out of school with little experience, already having enough money and voluntarily working for little or no money and whatnot.
The "universality" has two components. One is that there are no strings attached (eg. you are not required to be seeking employment).
This is feature and bug. It will for example remove incentives to get a job but it will also allow you to take time to develop a new product or something like that. I am neutral on that.
The other one is that it is not dependent on your income. As I explained in another comment, making a BI decrease as ones income increases is equivalent to a progressive tax. As we already have a progressive tax system, we can achieve the same result by modify our tax brackets, which is mathematically equivalent but easier to understand.
I am not sure what you want to say here, seems like it does no harm and provides no benefits.
>What does inefficiency matter if there is not enough work for everyone anyway?
I am using the term "efficiency" in a technical sense. An inefficiency means that there exists an alternative way of distributing resources (including time) such that no one is worse off, and at least one person is better off. By this definition if their is an inefficient, then we would have a strictly better world if we could remove that inefficiency without causing any secondary effects.
Suppose we have a widget X that can be produced by person A in 8 hours, or by persons A and B in 10 man-hours (at 5 hours each). Further, assume that both A and B value their time at a constant $100/hr [0].
Suppose that we live in the second world, where A and B each spend 5 hours working on X. At the end of the day, A and B are both down by 5 hours of their time, and up by $500, and society is up by 1 X.
Suppose that, the next day, B hire A to do his share of the work. We have defined that A can do the entire job 8 hours, which means that this transaction only add 3 hours of work to A's day, meaning that A would be willing to do this for only $300. At the end of this day, A is down by 8 hours, and up by $800, B is up by $200, and society is up by 1 X. Again, A breaks even in this exchange, and society still has just as many Xs, however by B got $200 out of thin air.
We can modify the above example to where B pays A $400, in which case both A and B can $100 worth of value out of this exchange. This extra wealth is not just fictitious money. In doing this exchange, we saved 2 hours of human time, which is a real, limited, resource.
Of course, in the above situation, there is no way of deciding how exactly how much B should pay A, all we know is that any value between $300 and $500 produces an efficient system. However, we may, as a society prefer, the situation where the profit is split, and both A and B walk away with a surplus $100. In fact, we may prefer this possibility so much, that we are willing to destroy $2 of wealth somewhere else in the system to assure that A and B split the surplus. The argument for a BI is that a minimum wage achieves the desired result by destroying wealth (in the form of exchanges that never get made), whereas a BI can achieve the same desired goals while destroying less wealth. If that is the case, then a BI is strictly better than a minimum wage.
Of course, a BI itself introduces a market distortion (in the form of tax). The questions that need to be answered is how much wealth does the BI tax destroy, how much wealth does the minimum wage destroy, and how effective are both the BI and minimum wage at achieving the social goal of providing resources for all citizens.
>I am not sure what you want to say here, seems like it does no harm and provides no benefits.
In a society of perfectly rational actors, this would be correct. However, having multiple contributors to the effective marginal tax rate obscures the issue, and is how we get into situations where we have unreasonably high (in some cases >100%) rates.
[0] This is clearly a simplification, but it should not affect the analysis. The important thing is that there exists an "indifference" curve, whereby for any quantity of time, there exists a dollar value at which the worker is equally happy getting paid for doing the work as he is with doing nothing and not getting paid. The only potentially important assumption about this curve that I can think of is that the derivative is non-decreasing. This means that if I am willing to sell my first hour of labor at $100, I will sell my next hour for no less than $100, although I may need more than an extra $100 to be willing to spend an extra hour.
I obviously have to disagree with your analysis, let me offer an alternative. The difference between the two scenarios is the difference between value(X) + value(8 hours leisure time) and value(X) + 2 * value(3 hours leisure time). Therefore in case the value of 3 hours of leisure time exceeds half of the value of 8 hours of leisure time, i.e. the value of additional leisure time diminishes sufficiently quickly, the second scenario provides the better total value.
By restricting the entire world to the two actors wanting to produce one X one can keep money out of the equation. I argue your analysis fails or at least may fail because you don't assign a value to the leisure time. Also the assignment of monetary values obscures things, where is this money coming from? From selling the X to the society? In that case you will have to take into account that producing one X may take either 8 or 10 hours - will this raise the price or decrease the monetary value of an hour of work?
Because value(X) is constant, your observation boils down to a comparison of value(8 hours leisure time) and value(X) + 2 * value(3 hours leisure time).
I did consider the value of leisure time, which I arbitrarily set to $100/hr (I just called this time, but unsold time can be exchanged 1:1 for leisure time). You seem to be objecting to my assumption that the marginal value of time is constant for the workers. I agree with this objection (in fact, I raised it myself in the footnote). However, even without this simplifing assumption, there are still situations where selling ones time is a net positive.
>By restricting the entire world to the two actors wanting to produce one X one can keep money out of the equation.
My entire argument can be made without invoking money. Indeed, I believe the non monetary form is more compelling, but also more abstract. Again, I will invoke the idea indifference. We say that things X and Y have equal value to person A if she is just as happy receiving 1 X as she is receiving 1 Y. With this concept we can replace "money" with any object of value and have an equivalent analysis. Of course, the selected object would itself have diminishing returns, but this is equivalent to an increasing marginal value of ones time, which I have already addressed. Ultimately, to properly explore this route, I would formalize an abstract notion of "utility" as an equivalence class over indifference. I hope this explanation makes sense, doing it properly would take far to much effort to put into an internet comment.
>where is this money coming from, From selling the X to the society?
The above framework provides a nice way to sidestep this issue. Let U be the utility function. So U(5 hours) is the value of 5 hours of time. [0]. For simplicity, assume that A and B share a utility function.
Suppose that A and B are not selling X, but rather using it themselves (for simplicity, suppose that X is a widget that A and B can share without conflict). We know that X is worth at least 2 * U(5 hours). Suppose that 2 * U(5 hours) > U(8 hours). In this case, by my previous argument, it would be preferable for A to do all of the work, and B to barter something worth between U(8 hours) - U(5 hours) and U(5 hours) for his share of X.
Ultimately, this argument is just a rediscovery of the value of trade and specialization. To translate a minimum wage into this framework, we would define some artificial lower bound for the compensation A needs to be provided in a trade such as this. If this minimum value is less than U(8 hours) - U(5 hours) or U(5 hours), then we are just influencing how wealth gets distributed between A and B. However, if the minimum value to big, than the above trade is prohibited, even though we have seen that it is strictly beneficial.
>will this raise the price or decrease the monetary value of an hour of work?
What do you mean by "monetary value of an hour of work". Returning to a more realistic employer/employee example, there are two important monetary values: the value the employee gives to an hour of work, and the value the employer gives to an hour of work.
From the employer perspective, the value of an hour of work is V(X)/T, where V(X) is the value of X [1], and T is the time spent making it. V(X) is independent of how long it took to make, which means that as the work takes longer, the value of an hour goes down to the employer.
From the employee perspective, the issue is a question of their utility function. Assuming a reasonable utility function, I would expect the marginal value of an hour to increase to the employee. That is to say that the employee needs more money to be indifferent to working the last 2 hours than she does for any of the prior 2 hours. If this is the case, than the value of an hour to the employee goes up with the time.
[0] More formally, U(5 hours) is the equivalance class of objects for which the person would be indifferent to spending 5 hours of time to obtain.
Okay, after rethinking it once a gain I will move a bit towards your position. By increasing the required work for one X from 8 to 10 hours we are definitely introducing an inefficiency so we are losing something somewhere, we are doing 2 hours of unnecessary work. Assuming both agents can share the X or get to use half the X in both scenarios, we can just leave it out of the equation as mentioned before. If one gets the same value from X in both scenarios, then working 5 hours is strictly preferable over working 8 hours and not working is strictly preferable over working for 5 hours.
So this looks somewhat like the prisoner's dilemma. Let A and B be the scenario that agent A respectively agent B works 8 hours and AB the scenario that both agents work 5 hours each. Then the preferences for agent A are B > AB > A and for agent B they are A > AB > B. But that doesn't help much, no matter which transition you consider, one agent will be better off and one will be worse off.
So there is still a conflict. I acknowledge that an inefficiency gets introduced when the work is split but also want to maintain that 3 hours of leisure time twice is more valuable than 8 hours of leisure time once. Surly value can not increase and decrease at the same time. I am more certain that the inefficiency is real than what the shape of the value function for leisure time is so I will pick the former one and conclude that 8 hours of leisure time are - contrary to my earlier comment - more valuable than 3 hours of leisure time twice.
So do I have to say that maximizing the total value is the wrong metric? Do I have to try to assign a value to the fairness of work distribution? Why wouldn't that already show up in the individual value functions? I am a bit stuck here. But I may have a way around that, I am just not sure how good the argument is. One obvious problem is that in case agent A does all the work, then agent B has no means to transfer some of the additional value from his additional leisure time to A. Maybe he could give away some of his share of X.
But now I can no longer ignore the value function for X and that hopefully saves my argument and I avoid the conflict between decreasing and increasing total value without the need to explicitly appeal to the value of fair work work distribution because it is in the two value functions for X and leisure time. But I am not sure, I did not think this fully through.
I think in the end it boils down to nonlinearities between the individual and the global view, i.e. we can globally waste 2 hours of work but still increase the total value because we have to take the global set of things, split it up for all individuals, push them through the nonlinear value functions and then sum it up again. Now it is no longer necessary that a global loss of 2 hours results in a global loss of value even if all the individual value functions are monotone.
Something I haven't seen anyone else mention, if UBI is introduced won't that cause prices to increase? For example, supermarket 'own brands' are usually cheaper than branded products, but if everyone is getting a minimum income then those prices won't need to be as cheap, just cheaper than alternatives.
Eggs and milk aren't getting more expensive to produce. So, if the currently-cheapest brand increases its price, it's opening a window for new competition to sell at the old low price.
It's possible that anticompetitive forces would prevent that competition from emerging in many cases, but I would not say that it is obvious that prices will increase under UBI.
Except that it does become more expensive to produce those eggs. That is, assuming some of UBI gets paid for out of increased taxes that the farmer would have to pay.
We shouldn't be talking about government paying basic income. We should talk about millionaires and billionaires paying living wage to everyone working in their home and every employee in their companies that they share ownership in. That would be a better conversation to have.
We shouldn't be talking about government paying basic income. We should talk about millionaires and billionaires paying living wage to everyone working in their home and every employee in their companies that they share ownership in. That would be a better conversation to have.
While it is an interesting idea it is going to have to be crafted in such a way that politicians don't just treat it like tax law and start carving out exceptions.
another area people need to look into is changing the direction of though that has crept into society which that "you deserve this, that, and this, as its your right" and instead get back to the days where people were encouraged to strive to return more to society than society gave them.
I am all for Basic Income but the way the author wants to implement it would be a disaster.
My mother is fully disabled and unable to work as a result of her stroke and she relies on Medicaid, Food Stamps and SSI to live. $13000 per person would be lower than what she gets right now and that's without considering the insurance issues. These changes would quite literally kill or leave homeless a large amount of America's disabled, poor or elderly population.
If Basic Income is to work then it needs to be actually liveable and adjusted based upon the CoL in each area.
>If Basic Income is to work then it needs to be actually liveable and adjusted based upon the CoL in each area.
There's a good argument to be made for a larger sum for the disabled who cannot work. But I'd be extremely opposed to any regional adjustments. If individual cities and states want to supplement the UBI, then that's up to them, but people moving out of high-cost areas and into low-cost ones is part of the natural ebb and flow that keeps the cost of living reasonable. And can you imagine what a CoL adjusted UBI for San Francisco would look like? A massive ripoff of the rest of the country.
> There's a good argument to be made for a larger sum for the disabled who cannot work. But I'd be extremely opposed to any regional adjustments. If individual cities and states want to supplement the UBI, then that's up to them, but people moving out of high-cost areas and into low-cost ones is part of the natural ebb and flow that keeps the cost of living reasonable. And can you imagine what a CoL adjusted UBI for San Francisco would look like? A massive ripoff of the rest of the country.
I don't know what the solution is here but if in this hypothetical reality, the garden state didn't supplement but California did then I'd move to California in a heartbeat. I am sure I'd be broke even with any supplement in San Diego but at least I'll be broke in San Diego.
Edit: I cannot support any discrimination in basic income based on "ability to work". I'd rather the whole thing fail. I'd rather we never have basic income implemented at all than this bastardization go through. Personally, I'm all for death panels. We should not try to keep everyone alive at all costs. If I get in a freak accident and it'd cost me $10M+ to keep me alive with little to no chance of a full recovery, please let me die.
Something we need to discuss separately from universal basic income is the need to reduce cost in healthcare. I'd gladly support expanding Medicare to everyone without having to qualify. We would need significantly greater penalties for Medicare fraud and add incentives for whistleblowers and make it easier to report fraud. I'm OK with "lite" Medicare that drops expensive procedures and lets patients suffering from rare cases fending for themselves in order to cut costs especially if there is little chance that the patient will ever recover fully.
My preferred approach for health insurance is to eliminate all of the regulations about what insurance plans must cover, and any other rules that prevent high-deductible catastrophic insurance from being available on the market. You could then buy a very cheap plan that covers everything once expenses exceed, say, 20k, and be responsible for everything before that out of your pocket. Then, unlike now, people would actually factor in cost into their decisions about which doctors and hospitals to visit, which would hopefully drive down wasteful spending.
The other thing I'd support is removing medical licensure from the law. People would still be free to visit only AMA-approved physicians, but there's no reason to give that guild a monopoly on providing health care. The artificial caps on medical school seats, imposed by the AMA, is one of the biggest reasons for the absurd cost of medical care in the US.
>I don't know what the solution is here but if in this hypothetical reality, the garden state didn't supplement but California did then I'd move to California in a heartbeat. I am sure I'd be broke even with any supplement in San Diego but at least I'll be broke in San Diego.
Sure, and when the people of California realize that they're attracting all of the deadbeats from around the country, they'd be forced to adjust.
I can support letting the bottom fall out like this provided we had full single payer coverage for everyone. Any additional coverage can then be whatever you want with the only protection from law being protection from false advertising.
I can also support removing the ama-fia's control on licenses but I'm afraid we'll just replace it with something similar when it comes to which providers are eligible to reimbursements from the new single payer healthcare system.
My idea is that these catastrophic insurance plans would be affordable by anyone with their basic income. Debt financing could cover anything below the deductible, for the indigent. Getting such loans would also be easier because of the UBI. Again, people would be financially responsible for their own healthcare, which restores sane incentives, but it wouldn't be possible for it to financially destroy them. No need for a single payer system if this works as I envision it.
"Debt financing" and plans that may be absent or sometimes cover nothing much, is the dystopian nightmare we're trying to escape. Healthcare is not a normal consumer good subject to normal pricing pressures and amenable to substitutes. Single payer works extremely well.
As I stated in a response to the parent commenter,
the AMA does not control the number of medical school seats/new physicians in the country. Indeed, medical licensing is done by the states and is not a federal process.
> there's no reason to give that guild a monopoly on providing health care. The artificial caps on medical school seats, imposed by the AMA, is one of the biggest reasons for the absurd cost of medical care in the US.
First, the AMA does not control the number of medical school seats in the country. Accreditation of US medical schools is done by the LCME, part of the AAMC. With some research, you'd find that the number of medical school seats is growing each year.
Second, the limiting factor for physician training is NOT medical school but residency. In point of fact, the US imports residency trainees from overseas - we're not constraining ourselves artificially but instead of surplus training positions.
Through a historical fluke, residency training depends on funds allocated by Congress through Medicare funding.
I understand your frustration at healthcare costs, but please research these issues.
> if in this hypothetical reality, the garden state didn't supplement but California did then I'd move to California in a heartbeat.
I am guessing so would a lot of other people, which would create an opportunity of a lifetime for California landlords, adjusting the rents to the point where UBI would only offer marginal incremental benefit.
The problem of course with that argument is that people also need to move into higher-cost areas in order to find jobs for certain industries. If there was no regional adjustment that encourages individuals to stay put. Poor people congregate in low-cost areas with low job opportunities.
A CoL adjustment for San Francisco isn't the problem, but rather the fact that San Francisco costs so much to begin with.
The blame for the high cost-of-living in SF lies with the people of California, and especially the people of SF. It'd create a massive moral hazard to have the federal government subsidize that. Run your city like a gravy-train and everyone else will bail you out. People will, I hope, never stand for that. I'm very wary of insulating people from the consequences of their decisions, especially entire political units.
> The problem of course with that argument is that people also need to move into higher-cost areas in order to find jobs for certain industries. If there was no regional adjustment that encourages individuals to stay put. Poor people congregate in low-cost areas with low job opportunities.
That isn't a problem. You get a concentration of people collecting a basic income who move into a low cost area, then they have money to buy housing and food and so on so there are jobs needed to construct housing and sell food, so then some of them get those jobs. Then they have even more money which leads to even more jobs etc. and soon enough the low cost area isn't so low cost, but that isn't a problem anymore because now they have jobs.
This is far too simplistic, especially when you consider the issue of gentrification and the rise of housing costs associated with it. You ignore that this leads back to the same issue: Poor people are now living in a higher-cost area where their previously held job no longer suffices to live.
So now you force these poor people out of homes that they used to be able to afford into even poorer areas with worse job security. This is assuming that they're even able to acquire new jobs. And it would only get worse with automation.
A basic income that doesn't scale based off of CoL is one that's bound to fail in the face of automation.
How is a basic income that scales based off of CoL even supposed to work?
A UBI causes the cost of living to rise in the short run. If you readjust the UBI the cost of living will rise again and again.
Cities like San Francisco will become more attractive because they not only have more jobs they also pay you more UBI. The more people move in, the higher the cost of living if housing supply is constrained. Readjusting the UBI then makes the city even more attractive. At the same time small cities become less attractive because not only are people moving into the city but their UBI is shrinking too.
> This is far too simplistic, especially when you consider the issue of gentrification and the rise of housing costs associated with it. You ignore that this leads back to the same issue: Poor people are now living in a higher-cost area where their previously held job no longer suffices to live.
A basic income would allow you to move to some town in Oregon or Colorado without having to worry about starving to death until you can find a job as a bouncer or the like. Once you do the presence of people like you creates some other jobs for plumbers and carpenters etc. The idea that this is going to turn every Podunk town in America into San Francisco or New York City and leave the poor with nowhere to live is clearly untrue.
Many retirees choose to live in Florida because they no longer have a job and would rather live somewhere sunny with low expenses.
UBI would have a similar effect - maybe you still want to have a job, but you can choose to accept a somewhat lower paying job to live somewhere nice. It would also put less pressure on places like San Francisco.
Being less dependent on jobs is a good thing. We should allow this migration to happen naturally, rather than subsidizing people to stay where they are.
San Francisco costs so much because so many people want to live there. Not every person who wants to live there should be able to live there - there's only so much housing in the city.
Yeah. The solution is to property tax those businesses out of the high cost of living areas. If basic income were paid for entirely by a new progressive property tax (or even better, a land value tax) it could ratchet down the wealth inequality, not just the income inequality.
Would people in high cost of living area paying higher income taxes which subsidize the lower cost areas be a massive ripoff to those in the high cost areas?
The article's author also wrote a book advocating a universal basic income, “In Our Hands: A Plan to Replace the Welfare State,” which was first published in 2006. In that book he allows that services for the disabled would need to be retained and could not be replaced with a UBI.
Of course. The problems of the disabled, the mentally ill and so forth are obvious, and the solution is obvious: don't remove all the social security besides UBI.
But that's also the downfall of UBI, because it means that most of the other transfers will remain a necessity, and the bureaucracy to distribute it will remain a necessity, and the whole issue of welfare dependency is back with us, and so is the constant discussion of what support and subsidy should be expanded.
(I'm looking at this from European angle where the welfare is often, though not always, stronger than in the US).
> and the solution is obvious: don't remove all the social security besides UBI.
I think that's where there are two camps within UBI supporters: those who want social security + UBI, and those who want to replace all or most social services with UBI. You can probably see how that maps to the political spectrum.
> The problems of the disabled, the mentally ill and so forth are obvious, and the solution is obvious: don't remove all the social security besides UBI.
The solution isn't to either remove all other benefit programs or to retain them all. in a static, unchanging way.
Its to build UBI in a way that it naturally grows with productivity, and keep existing means-tested benefit programs (whether general or targetted to specific narrow needs like disability) and count UBI income the same as earned income in the means tests for those programs, phasing the programs out as the UBI rises to a level where it is no longer possible to qualify for them. This does leave you with the administrative costs of those programs for some time, but with dropping caseload which reduces the total costs (both benefit and administrative) over time, eventually to zero when the programs are retired because UBI makes them obsolete.
This also lets you start UBI at a very level level, and reduces risks and provides opportunities to address unforseen consequences of the UBI implementation, because you aren't doing a big-bang implementation where immediately the entire social support structure depends on UBI alone.
(Essentially, instead of being obsolete and removed when UBI is first implemented, other programs are deprecated and to be removed in the future with defined criteria.)
Under the Murray UBI plan recipients would be required to spend $3000 per year on health insurance. That would be your mother's replacement for Medicaid. However, that doesn't factor in co-pays, deductibles, balance-billing, and the myriad other costs of private insurance. A health care premium of $3000 is going to have a high deductible. My premium is close to $3000 a year, and my deductible is $5250. Under this plan a disabled person requiring frequent medical care would have $4750 to live off of, after health care costs. That's a whopping $395 per month.
UBI is not feasible absent a universal single-payer system. Health care is just too damn expensive to be paid for by the individual.
> Under the Murray UBI plan recipients would be required to spend $3000 per year on health insurance. That would be your mother's replacement for Medicaid.
And this is in the marketplace that purposefully excludes Medicare recipients, who are older and are disproportionately more likely to have health problems and pre-death expenses.
It seems to me the simple calculation is to see that, currently, the US spends ~$9,500 per capita annually for healthcare (that number seems so crazy to me, but therein lies the problem). The WSJ article didn't go into more detail, but I don't understand how $3k per year goes to cover that $9500 amount without huge deductibles and copays, which disabled people won't be able to pay because they will have no other assistance beyond their UBI.
I don't see how UBI works without some other form of guaranteed health insurance for the poor.
Her SSI should not go way. She paid into that system and deserves what she was promised. SSI is a retirement plan (albeit a coerced one) not a welfare system. I am all for SSI reform in the light of UBI, but that doesn't nullify the need for retirement, and it should effect only future retirees.
Depends on how its implemented: one that is implemented as suggested in the source article here (below poverty level and replaces existing poverty supports with aid that is in many cases less valuable in total -- including replacing programs that are federal/state cooperative programs whose value currently is sensitive to local, or at least state-by-state, costs) may well not do so, and indeed may make it harder (as well as making it harder for the poor to even survive.)
If only all of the things that needed doing for the common good were actually being done now, either by robots, or by a small number of people with machine assistance, this discussion might make more sense.
Once the roads are fixed, and the parks are clean, the disabled are cared for, etc, etc, etc. THEN maybe we should have a discussion about "Basic Income".
Our current technology is NOT "The Culture". There is still work to do, it is "simply" (not so simple) a matter of clawing back some cash from those who benefitted most from a stable society.
The WSJ's "10K" plan just sounds like a scam to cut more government jobs while throwing out a small consolation prize to prevent outright rebellion.
The way I understand the motivation behind UBI is that it is inspired by the notion that we have (mostly) automated production of goods and therefore human work has been (mostly) delegated to machines. It is therefore perfectly reasonable for people to receive UBI so they can purchase all the robot-produced goods.
The reason I am skeptical of such a view is that production of goods is a tiny fraction of the work humans actually do. A lot of people these days work on solving problems, not on producing goods. And we are far from being short on problems to solve... Alzheimer's, clean energy, climate change...
Saying that humans should not need to work is like saying: This is it. We're done here. This is the world we want.
> Saying that humans should not need to work is like saying: This is it. We're done here. This is the world we want.
That's not what's being said. We're not done. This is not the world we want. We should be able to work on Alzheimer's, clean energy and climate change without worrying about where our next meal is coming from.
And, sure, many researches have salaries. But many potential researchers aren't employed, aren't trained, aren't educated. Think of the millions of folks whose passion for helping people, taking care of the planet or tinkering is getting sidelined while they work a cash register to save up for community college. Those people can use a basic income to find a better, more productive, more fulfilling and more useful position in life.
In economics there is a saying: "There's no free lunch."
Basic Income gives people a free lunch.
What is the "opportunity cost" of that free lunch?
For those of you unfamiliar with "opportunity cost", here's an example:
- you have two passions at age 18: software and playing in rock bands. You want to become a professional in one of those fields. The rock band choice prevents you from being in a place long enough to be hired to write code. And vice versa.
- You choose to write code. Ten years later you are at the top of your game, age 32. You own a condo and are married and on an 'executive track' at the company you work for.
But had you chosen the 'rock band' career, who knows? Maybe you would have taken off and at age 32 have a string of hit records, millions of fans and million$ in wealth.
That's the 'opportunity cost' -- you cannot do both.
Okay back to Basic Income. A person receiving Basic Income could replace that income by working more. But they don't work more because, why should they?
The opportunity cost of Basic Income is that lost productivity in the economy, the lost output from that person. Who knows how large that economic benefit to society is, when it's replaced by "Basic Income for everyone."
Maybe a silly question, but why $13,000? Why not $5,000? Why not $20,000?
How does the risk/reward tradeoff of this proposal change as that magic number changes?
Also:
> The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare.
What about education funding? What does corporate welfare entail? Defense spending, for example?
Kind of a meta comment, but it wouldn't surprise me at all if the basic income movement was (for the most part) started and promoted by an intelligence agency.
After reading about the literary magazines and abstract art that the CIA funded I started thinking what a current program would look like. I think it would look like how basic income is developing.
Could you be more specific? What literary magazines and abstract art did the CIA fund? What about the way basic income is developing gives you the impression that it's a CIA program? Without detail this seems like an unsupported conspiracy theory. What would be their incentive in this instance?
Totally speculation at this point. Just the way that the movement arose. There were a few articles covering it. Then a few communities created around it. Then more and more research done on it. Its emergence was interesting.
At the very least it seems like UBI would further centralize power within government by simply funneling even more money into it. Depends on your POV whether or not you think this is a good thing.
Murray is known for his eugenics arguments. He's pushing for economic Darwinism. The use of 'DNA' in his article belies his propensities. He uses pseudoscience to sell his brand of politics. Firing salvos for a Trump advisor.
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[ 4.4 ms ] story [ 347 ms ] threadRemarkable how much entitlement spending is booked in the near future.
No one is ever shocked about all of the SS trust fund cash put into US treasuries (general fund deficit spending), but always shocked that "thats going to need to be paid back one day."
https://www.ssa.gov/news/press/factsheets/WhatAreTheTrust.ht...
> The Social Security trust funds hold money not needed in the current year to pay benefits and administrative costs and, by law, invest it in special Treasury bonds that are guaranteed by the U.S. Government. A market rate of interest is paid to the trust funds on the bonds they hold, and when those bonds reach maturity or are needed to pay benefits, the Treasury redeems them.
Trust fund stats: https://www.ssa.gov/oact/STATS/table4a3.html
The mind boggles. We've been living like a college student on credit cards, and the bill is coming due.
Social Security is the largest owner of US Debt: http://www.forbes.com/sites/mikepatton/2014/10/28/who-owns-t...
The largest owner of U.S. debt is Social Security. Since the Social Security system is a government entity, how can the government own its own debt? Good question. This is where the “house of cards” theory resides. Some believe the federal government is merely moving the IOUs from one shell to another, hoping to escape the watchful eye of its citizens. In any event, Social Security owns about 16% of the debt followed by other federal government entities (13%), and the Federal Reserve (12%.
My guess is when it is time to pay or the money dries up, they are going to just disregard the Social Security debt owed or stretch it way out so the house of cards stays up a bit longer.
I disagree. Taxes with simply rise (as they should've long ago).
Meanwhile, $13k * 300m people, results in an expense of 3.9 trillion. Greater than the entire federal budget.
EDIT: I AM WRONG. The spending proposal from the article does not exceed the entire federal budget, because people who earn more than 30k of income get payed a smaller UBI. I did a rough calculation using the best numbers I could easily find describing the USA's income distribution (good numbers are hard to find). The result was that this proposal would likely cost just short of 3 trillion dollars. Significantly less than the entire 3.8 trillion dollar budget, but still more than we currently spend on entitlements.
Since the Fed stopped publishing M2, we don't know how much money is really being created. But it seems to me the logic of "Let's give money to the banks and they will loan it to the people" doesn't work. Here, the argument seems to be: Instead of giving money to the banks with expectations, we just give it directly to the people, cutting out the inefficient middle men entirely.
The M2 growth figures are available and published by Fed sources. They're nowhere near enough to underwrite a basic income, even if none of that newly created credit was being directed towards useful economic activity https://research.stlouisfed.org/fred2/series/M2
M2 isn't created by the Fed anyway, it's created by private banks choosing to extend credit to entities they believe are on average productive enough to repay them at prevailing interest rates. It's possible to deter banks from making future loans of course, but I can't imagine doing that to make room for untargeted handouts being a good idea
The monetary base the Fed actually is responsible for issuing is much smaller and has actually shrunk since 2014. https://research.stlouisfed.org/fred2/series/BASE
QE was a temporary large-scale response to financial shocks which is designed in principle to be reversible so it's about the worst way of funding the steady stream of expenditure required for BI imaginable.
It also consisted of the Fed buying up swapping the cash for existing financial assets in the form of government debt. If they're giving away the newly minted money instead, the amount the Fed can inject into the economy without generating unwanted inflation is much smaller. That might be desirable for a well targeted short term stimulus programme, but a BI certainly doesn't fall into that category (plus you don't get the fringe QE benefit of shrinking the govt debt/interest burden)
Sorry, typo. I meant M3.
https://en.wikinews.org/wiki/US_Federal_Reserve_ceases_to_pu...
So the population over 21 is about 230M.
That leaves 132 million people drawing from $930 billion, which means everyone gets $7153. For everyone to get $13,000, 71 million people would be allowed to qualify.
This doesn't take into account the taper at all, so it could be stretched to reach more people. But even if 60 million people receive 13k, which leaves ~2.5k for another 60 million, that's still less than 132 million and doesn't align with the author's 6.5k number.
All this is to say: I find the idea appealing because it reduces the cost of bureaucracy and creates autonomy, but I'm not sure if it's feasible.
Sources: https://www.ssa.gov/finance/2015/Overview%20SSA.pdf https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/i... http://www.npr.org/sections/money/2012/07/16/156688596/what-... https://en.wikipedia.org/wiki/Social_programs_in_the_United_...
Let them starve? Go without Shelter?
> Some people will still behave irresponsibly and be in need before that deposit arrives, but the UBI will radically change the social framework within which they seek help: Everybody will know that everybody else has an income stream. It will be possible to say to the irresponsible what can’t be said now: “We won’t let you starve before you get your next deposit, but it’s time for you to get your act together. Don’t try to tell us you’re helpless, because we know you aren’t.”
Only if we want to continue to have addicts and the mentally ill homeless, abused, and taken advantage of.
This will result in millions of vulnerable seniors and mentally disabled individuals being scammed out of their money each month. Whether it be "tech support" scammers or local fraudsters or even simply not being able to budget money (at a basic level) these folks will be in trouble.
I live with (and care for) a mentally disabled individual (IQ: ~60) that receives benefits through Social Security, Medicaid, and other government programs. If it were not for our help in managing these benefits she would spend her money (which is supposed to be for food/living expenses) on Amazon on $100 anime-themed coffee cups and similar widgets the moment she receives it.
Not to mention the fact that she will never understand how to sign up for such services or know who to trust when receiving services. If someone in a lab coat told her they were a government doctor and she "had to pay" for her upcoming appointment she'd likely just hand over all her money. There's no way to "educate" her out of this problem. I've taught her all sorts of things... many times and I'll have to teach her again and again.
It's not so dissimilar to walking an old person through accessing a web app/site over and over again ("no, that's the search bar"). Handing vulnerable people money every month won't solve their problems.
It's a great idea for the economy in general though! Just don't do away with government services for the needy. Especially medical care.
All in all, the Social Security Administration has a huge amount of experience with all the details and problems involved in efficient day to day administration of a massive payments program like this, so there's no reason not to just reuse the existing bureaucratic infrastructure and just swap out the eligibility rules.
SSA spends just a fraction of a percentage point of the benefits it distributes on administrative costs (ie, the existence and operation of SSA itself). But even the vast majority of that is for the means-tested SSI Title 16 program, not the simpler Title 2 SS programs. Since a UBI is much simpler than either of those, SSA could easily save even more -- there would certainly be plenty of consolidation and maybe downsizing possible after passage of UBI. But there's no reason to throw away the common infrastructure for payments that already exists.
Also the only way to make a basic income work is through a land or land value tax. Else you get massive inflation.
Second, under UBI a proportion of the population stops working and this increases over time as robots replace workers. Reducing earned income, lowering UBI cash availability. Solution? Print more money = inflation.
With a land value tax you get a known relatively unchanging set amount of $ based on land value. Balancing the inflation/deflation curve.
This is... not really correct. It's true that expansionary monetary policy is often practiced in times of economic recession, but that's not really because there's 'less income to spread around'. And the reason expansionary monetary policy is practiced isn't to give people more income. (Printing money doesn't give individuals more income - if you want to do that, you need expansionary fiscal policy - that's the goal behind tax cuts).
So what does printing money do? Expansionary monetary policy reduces the costs of loans and investments. The goal is to spur long-term investment projects by making capital cheaper, which serves to jump-start the economy. But that has no direct connection to people's personal income. They're interconnected, sure - everything in the economy is, at some level. But the connection to inflation (and the connection to printing money) are completely different things.
With land tax the system is self correcting and balanced. With the taxes you mentioned you'd eventually get the inflationary spiral as a market correction.
Maybe, but that's very different from what you said, which is that '[difficult times] means less income to spread around, the solution, print more money = inflation'.
> With land tax the system is self correcting and balanced.
Er, no - if anything, a property tax would reinforce inflation.
> With the taxes you mentioned you'd eventually get the inflationary spiral as a market correction.
Maybe you meant to respond to someone else? I didn't talk about any taxes. I only mentioned tax cuts as an actual example of expansionary fiscal policy to address the 'less income to spread around' problem, not as a proposal for funding income redistribution.
How does it do that? Suppose I want to borrow $1M to build a factory, but nobody (banks, venture capitalists, whatever) can afford to invest in my endeavor.
So the fed prints a bunch of money, causing 5% inflation. Now the bank can more easily afford to loan me $1M, because that $1M is worth less.
But now I need a $1.05M loan to build my factory.
By lowering interest rates which encourages borrowing and thus spending and thus economic activity.
> So the fed prints a bunch of money, causing 5% inflation.
Printing money causes monetary inflation, but does not directly cause price inflation so you don't need 1.05M to build your factory. Printing money can eventually lead to price inflation if too much money is printed for too long, but that doesn't mean all money printing causes price inflation as that lever can be turned both ways. Lower interest rates to spur spending and get the economy moving again and then once out of danger raise them again.
If you want to stay near family and friends, find a nice cheap place an hour or two away, if you want a shorter commute that's a luxury, not a necessity, and you should work for it.
Basic incomes are for the minimum needed to live a decent life, living in a specific expensive location is a luxury you should have to work for.
That's exactly how it should work, even in a system with no UBI. Sadly, people see the state as the grand fixer and enabler of everything.
Eventually, we'd all realize that certain places simply cost more to live in due to reasons outside of everyone's control. E.g. maybe it's hard to create affordable safe housing in a very earthquake/tornado prone area. Or hard to deliver fresh healthy produce to a city in the middle of nowhere like a desert. I exaggerate, of course, but these minor details still affect prices to a certain extent. We can't have cosmic-justice.
There are already neighborhoods now where most people, including me, cannot afford to live, and I don't see it as a tremendous injustice.
So ideally we'd avoid this and everyone would get the same amount of money. But, if we continue to let city prices shoot up, we might end up in a place where people want a job but can't get one because they live somewhere cheap and can't afford to move to the city where all the jobs are on their smaller basic income payment.
With or without basic income, we're clearly on an unsustainable path of letting cities get so much more expensive so quickly.
Many existing welfare systems fail in this same scenario. For any feasible welfare plan it is possible to invent scenarios where someone can torpedo themselves. The goal should just be to make it harder for external forces to hurt people, and maybe a bit more difficult to torpedo yourself.
At some point welfare programs must say something along the lines of "if you take help we give you and set it on fire, that's past the line, go find a charity or psychiatrist to help you"
Ideally, social service workers could still help these folks.
Well, if it's being paid for by eliminating programs which do provide food, shelter, and other necessities, then it's not really out of scope to ask how we're going to provide those.
My biggest concern is how you logistically provide money to people. What do you use to distribute it? Some sort of state owned bank? What about identification?
How the hell does that happen politically?
I would love to see basic income replacing a large portion of social programs in the states but no one seems to be talking about how we get from where we are to where we want to be, realistically.
There are all sorts of groups inside the UBI tent, and many of them disagree with each other violently, but we're so far from a UBI that for now, everyone can agree on it in the broadest possible way.
I, personally, have a completely different take on all of this from most UBI'ers. I take the long view: in 50 years, physical labor could be eliminated. WTF do we do when this happens? Do we relegate half of society to be homeless? Or do we begin the slow march towards eliminating work altogether.
Few talk about this scenario, and those that do often tack on "... and then Skynet takes over and robots enslave us all." Yet, it's still a very valid discussion to be having. I think all this UBI research and interest is in furtherance of the elimination of work, altogether. That's not something that will happen over night, or even in 10 years, but in order for it to happen, humanity needs to begin gathering the data points necessary to enact a solution to the end of work problem.
In the short term, this would eliminate social safety nets, but let's be honest, this is NEVER going to happen in America without a revolution of some kind. Whenever that happens, hopefully the UBI research will be far enough along to support a movement to enact it.
As things stands, politically, and culturally, it's more likely to become som dystopian story of cleansing. Walled communities of elites keeping the poor outside of civilized society, and perhaps even death camps.
So I really do hope that we, along the way, not only get data on the economics of it, but also a new ethical mainstream regarding entitlement. Capitalism will be a rather dangerous as framework of ethics in a world where economic value is derived entirely from capital. Only the elite can justify their existance on that framework.
I'm currently aligned with the geo-libertarian view of things, as an example of a dissenting UBI-proponent. It seems the "mainstream" UBI thinking at the moment is rather socialistic in nature. Don't really see how that can fare much better than the capitalistic views when faced with the proposition that 10% is supposed to pay for the other 90%
Just because you can't imagine what people will do after physical labor is antiquated doesn't mean the average person, who you underestimate as a bumbling fool, will not come up with ways to earn an income.
A basic income is going to be the way of life or people are going to have to deal with millions of poor and an increase in crime.
One of the things that bothers me about the saying, "I don't want to pay for all their stuff, I work hard." Is that people don't realize one of the reasons your able to work hard and not worry about your house getting robbed while your at work is that we take care of the poor and disabled. If you take away that care in the future because your too greedy to help out your fellow man, then you end up losing a lot of peace of mind as crime increases because of people having to steal for basic necessities.
What you would need to solve this is socialized medical care supervised by the government, who takes from those who can contribute and gives to those who are in need. It wouldn't have to be completely run by the government but would have to be supervised by it.
Medical insurance that works like Medicare obviously has the same problems. But imagine medical insurance where, instead of paying obscene premiums with a low deductible, you pay very low premiums with a deductible of several thousand dollars after which the insurance pays 80%. So if you get cancer you don't die of poverty but for pretty much anything else you're paying out of pocket, i.e. medical insurance, not a payment plan that hides true costs from everybody.
Now the thing that costs $10,000 in one place and $4,000 in the other place is a difference you care about, so you pay the $4,000 (and so does everybody else), causing total medical costs to fall. You also eliminate all the insurance paperwork in any year you don't blow the deductible, allowing doctors to lower their own costs significantly.
For instance, recently I read about carfilzomib or sipuleucel, both cancer medicines; $100,000 doesn't get you there yet.
Similar problems with Medicaid, it's worth a lot more than $3,000 to the people that are getting it (mostly because children).
This is basically taking the desire to cut entitlement programs and rephrasing it to take advantage of the attention basic income is getting these days.
I sort of expect the best thing the US can do right now to make life better and cheaper for the average citizen is to create/fund residency programs. More doctors will actually lead to lower prices. Pouring money into the demand side won't.
>create/fund residency programs
Don't several medical lobbying groups actively coerce the government to limit the number of new doctors that can be minted, both overall and in given areas of practice? I am not optimistic about this given the lobbying groups' strong track record of protecting and furthering their self interest.
So start talking about how we need more doctors in the US.
Not really. The AMA is often blamed for limiting the number of medical school slots available, but they have nothing to do with that - it's capped by the AAMC, which has been very deliberately raising the number of medical school positions in the US for over a decade now.
But even if that cap were lifted altogether, the number of practicing physicians would be completely unaffected, because we already have more MDs than we have residency slots available. Increasing residency programs would require funding, and currently Medicare is the source of funds for residency programs. Hospitals would typically make a loss on residency programs otherwise; contrary to what some people believe, they're actually quite expensive to operate.
How does that work? Residents make very little money and do a lot of work. How are they not a profit center for hospitals?
Residents start their first year knowing literally nothing about practicing medicine. Medical school teaches the foundation, but you learn the practice during residency. In addition, the ratio of attending physicians to residents is capped by law (i believe it's 3:1).
Would a startup want to hire three fresh-out-of-high-school interns for every full-time employee? I can't think of any company that does this. At some point they'd get up to speed, yes, but in the short term they'd be a huge drag.
If this is true, it really indicates that how we train medical practitioners needs to be reformed. (If true, maybe there should be different programs for people wanting to become medical researchers vs those who treat patients.)
>In addition, the ratio of attending physicians to residents is capped by law (i believe it's 3:1).
Are hospitals actually at that 3:1 ratio? The AAMC seems to be saying the limiting factor right now is the limits on medicare subsidies for residents: https://www.aamc.org/advocacy/gme/71178/gme_gme0012.html
>...Would a startup want to hire three fresh-out-of-high-school interns for every full-time employee?
Probably closer would be companies hiring engineering students straight out of college. Those college projects the students did generally aren’t anything like the work they will be doing. Companies don’t hire at a 3 to 1 ratio, but they do hire them and they pay them more than residents get paid and don’t get subsidies from the government to do so.
I was originally replying to your comment: >...Hospitals would typically make a loss on residency programs otherwise; contrary to what some people believe, they're actually quite expensive to operate.
Thinking about it, I guess if hospitals don’t bill patients for work done by residents, then they would obviously need to paid by the government (or someone else) but I don’t know if that is how it works.
It might if we had a free market for healthcare and if providers were the largest healthcare expense. But we don't, and they're not. Providers' take-home pay only amounts to about 10% of healthcare spending nationally[0].
Furthermore, the reason we don't have a competitive market is entirely due to the payer situation, not the providers. Providers (particularly hospitals, who account for a much larger chunk of spending) can't offer transparent pricing, because their cost structures are needlessly complex. I've written about this elsewhere, but in short, Medicare is not required to cover the direct costs[1] of the care that their patients receive in the reimbursements that they issue. This means that providers have to make up the difference in their contracts with private insurers, which is why they can't tell you how much a particular procedure will cost you - they really don't know, because it's not purely a function of what it costs them to treat that particular patient.
[0] http://economix.blogs.nytimes.com/2008/11/14/do-doctors-sala...
[1] I'm referring to COGS - the marginal cost per patient, which excludes markup and overhead.
It's certainly the case around here that doctors are moving under the hospital umbrella.
This means that providers have to make up the difference in their contracts with private insurers, which is why they can't tell you how much a particular procedure will cost you - they really don't know, because it has nothing to do with what it costs them.
Yes, this is an obnoxious tax. I don't think the hospitals are forced to keep their prices obscure though (see Massachusetts or Oklahoma), it just happens to be the best way for them to make revenue because if people could easily shop prices, they would. Another component of the problem are the many people who have a plan where they simply don't care about prices because they have a low out of pocket limit.
That's part of a trend that's a few decades old, and which has accelerated in the last 5-10 years. It's not a function of the number of physicians; physicians are selling their practices to hospitals because they can no longer sustain themselves in private practice.
> I don't think the hospitals are forced to keep their prices obscure though (see Massachusetts or Oklahoma), it just happens to be the best way for them to make revenue because if people could easily shop prices, they would.
If anything, hospitals would prefer to be able to compete this way directly. They can't, though, because there is no single 'price', even if you're talking about a discrete, routine procedure that has no risk for complications. The way medical billing works, they don't necessarily have a set price for a given service per carrier. And even if they do, that doesn't always correlate to what the patient ends up paying (which is, of course, the thing the patient actually cares about). The reason they don't have a set price - even internally - isn't because they don't want to. It's because the contracts with public and private insurers have resulted in the amount of money they need to charge for a service being a function of so many external factors that they literally can't.
Chapter 224 is a perfect example of a feel-good law that doesn't actually do anything in practice, because it fails to address the underlying complexity that's the root of the current problem with price transparency.
Or are you saying that they are contractually bound to avoid tracking costs?
chimeracoder seems to be saying that this is because of the complexity that comes from interacting with insurance companies and the public payers. Where I don't really buy that explanation is where there is in fact a fixed capital cost associated with the machine, and a certain number of uses of the machine per year, and a pretty fixed level of complexity per use (different scans will take a different amount of time, but each type of scan will be reasonably consistent from patient to patient). So they can take a spreadsheet and put in the capital costs and the operating costs and the staffing costs and boom, they have a ballpark figure for what each scan costs. It won't be the exact number for a given scan, but it will be closer than not having any estimate at all. I don't see where complexity on the billing side prevents them from doing what I describe.
The numbers I cite correspond to the practice revenues, but as much as half of what doctors in private practice receive in reimbursements goes to practice expenses and insurance.
The easy way to do this is to give people a one-time election between social security and the basic income, so that nobody can object that they're not better off. Anybody who isn't at or close to retirement will choose the basic income because it begins paying immediately, the lifetime payments are higher and they wouldn't have to pay social security tax anymore. Then in 20 years or so there would be no one left on social security and it could be discontinued.
> Similar problems with Medicaid, it's worth a lot more than $3,000 to the people that are getting it (mostly because children).
It seems like your argument is that we can't do it because there are a relatively small number of people who would be better off under the existing system. But by that logic we could never change anything, even if the net benefits are very large, as long as there is anyone who is better off under the status quo.
I think this is an incredibly unfair and callous assessment of what's going on with catastrophic health care coverage. It's not about "the relatively small number of people who would be better off under the existing system." It's about the relatively small number people who are alive under the existing system who would be dead under the proposed one.
But.
There is no part of the proposal that covers making sure coverage is equal in value to Medicare - in a private market I'm betting benefits start getting cut post-haste. UBI without universal healthcare is a nightmare, and is all but privatizing Medicare. Surprise!
Also, since children under 18 don't get UBI, they would have to be covered by their parents' $3k/annual buy. But again, privatized "universal" healthcare? No thanks.
For example, I can make the same kind of argument in the opposite direction: if UBI creates a disincentive within inner cities for fewer kids to become drug dealers, which creates less opportunities for violence, leading to significantly less deaths in the inner city, I think that you are making "an incredibly unfair and callous assessment" as well.
Saying that any plan that transfers risk from the current state to a different state that is potentially net better for all is to miss the point that we've already chosen a system that disadvantages SOMEONE... and to change it will probably disadvantage someone different.
I am all for UBI, but like another poster said I don't think it works without universal health care if you get rid of all the other current transfer payments. It seems the author of the article agrees, but I don't see how the 3K for insurance makes the numbers add up.
People hate having to make that choice. Hate it. But that doesn't make it go away. We could make cars safer in well-known obvious ways, but they would be more expensive and use more fuel. Many, many, many lives would be saved if we immediately stopped burning coal, but electricity would be more expensive, and then maybe some people would freeze to death because they can't afford heat, or because they became unemployed and lost medical coverage. And in some cases we may even be getting it wrong, but that doesn't get you out of having to make a hard decision.
The other many, many forms of social payments and supplements need individual consideration. It's not all "welfare"; one small example that occurs to me is seriously handicapped (paraplegic, e.g.) people getting financial assistance to cover in-home care. Would the proposed BI adequately cover that? If it wouldn't, this small set of people would be significantly worse off.
But rather than talk about it on HN (like this) talk about it on Facebook or when talking to friends and family IRL. That is how you actually spread these ideas.
Which would also coincidentally mean treating your employees better lets you pay them less, which sounds like a desirable natural motivating force in an economy.
I do not think anyone would argue UBI would not cause a dramatic shift in everything, and as a result the only way to really implement it is slowly - IE, you start people on small cash payments per month, and scale it up to (by most examples) the poverty level over the course of years or even a decade. That way, everyone has plenty of time to react to the economic consequences without a panic, in much the same way states are raising the minimum wage to $15 over 5 years.
I suspect this is poisoning the well.
Stop trying to starve the beast already, and instead, help make it better. Or, admit at least, that you just don't give a damn about people who aren't like you.
Instead of telling people that they can have this money only if they work less than 16 hours a week, or only if they stay disabled, just give them the money.
That way you don't need to employ doctors to see if someone is still as disabled as they were last year, and people who get a part time job can increase their hours without penalty.
People continue to work after they have enough money not to; people making $40K per year go to night school to try to increase their income.
Most people continue to want more after their basic needs are met.
And beyond money, work can give a sense of purpose and a connection to other people.
The promise of UBI is saving money and unlocking more human potential (by allowing more risk taking, or letting artists pursue their art, or whatever). But if you think of the need to be productive (for survival) as a force/pressure that has shaped the complex system we call society since the dawn of civilisation, then I can imagine that removing that force in a large nation could result in something extremely dysfunctional or even horrifying.
That's why UBI is only now becoming a possibility.
The need for everyone to be productive is diminishing. The labor force participation rate has dropped enormously since 2000.
https://research.stlouisfed.org/fred2/series/CIVPART
(of course a slow implementation would have to overlap with existing benefits, not replace them)
The people who are likely to drop out of their job are plumbers, dishwashers, garbage collectors, miners, mail carriers, highway maintainers, taxi drivers, manual fruit pickers and the rest of those performing soul-crushing jobs that actually allow society to keep running.
Same thing for any other currently low value jobs. We will have to adjust to paying people properly, even above minimum wage, to do things that suck. I view this as a desirable outcome when considered against the current situation in which only the most glamorous jobs tend to pay well, even if the job is not necessarily most helpful.
If your workers are willing and able to do twice as much work in the same time for twice as much pay, you should likely make that switch anyway - at the least it'd save you bookkeeping, and it would be a better use of the workers' time.
And if people systematically decide that they have better things to do than a particular job, and we automate that job so we don't need people doing it, that seems like a win to me.
Whether it means less people working overall depends on how big these effects are, what the effects are on demand, and whether we couple it with other changes like a decreased minimum wage (which could lead to more people working on things which are more pleasant/fulfilling but less highly paid).
I'm very much for a UBI, but as a part of a comprehensive progressive agenda, and certainly not how the right-wingers want to do it.
I don't think any libertarian minded individuals actually believe in tossing out all safety nets and most likely don't care to reduce taxes on the wealthy either, at least not as a goal in and of itself.
Even so, he's basically on your side in the sense that whatever UBI ends up being proposed for law, he would probably vote for it.
Personally, I think we can definitely eliminate the some of the costs of the social programs by giving everyone a flat $30-$40k per year.
The driving difference in thinking being that I believe that the only viable way to make basic income happen is to assess average living expenses across the board and provide that amount to everyone while retaining the former programs at a much smaller scale.
One of the big issues with the current system is that there is a lot of trouble in determining whether a person really needs the assistance of a program or not. UBI helps in that only those who can show a need beyond $30-$40k/yr need apply.
It's not a bad thing to say, "we have gotten so good at being productive that we've made work essentially optional".
It's also the case that a UBI is only pretend universal. There are people that will see either an increase in their effective tax rate or a decrease in their buying power (the latter if you fund it by printing money).
Not necessarily. Negative income tax is one way to implement means-tested basic income.
One way to implement a NIT is you have a cutoff point (e.g. $20,000/year) and a rebate rate (e.g. 50%).
So, using the above rate, if your income is...
(a) $0/year ... you get $10,000/year
(b) $10k/year ... you get ($20k-$10k) x 0.5 = $5,000/year (your total income is $15k/year)
(c) $15k/year ... you get ($20k-$15k) x 0.5 = $2,500/year (your total income is $17.5k/year)
(d) $20k/year and up ... you get nothing
---
> you don't get any benefit if you are above the threshold so it's not universal
It's not universal in the sense that not everyone gets the government check, but it's universal in the sense that the same rule is applied to everyone.
When EVERYONE gets the same check then everyone can talk about it freely and be happy about the money. It may be that with the change in tax rate, higher income people don't really get a net change to their income so the result in similar, but the "feel" is dramatically different.
Yet, ironically, he is for a UBI.
You could view it, as subsidizing corporations to decrease wages. Taxpayers paying what the corporations don't have to. So it won't be surprising to see Basic income touted not just by the liberal crowd, but by the Wall St Journal's and corporate interests.
1> It's definitely enough for a single person to live comfortably on, though perhaps not in the house they lived in before getting lain-off. (I agree children can be a small problem and the proposal from the article does not consider them. But if you're not working and don't need to pay for professional childcare then the cost of a child per year is only a few thousand for food.)
2> It's 10k per year plus whatever you can earn. If you don't have that pesky minimum wage restricting job openings to only those tasks that the customer base values at >$12/hr, then you can rake in a good amount of money performing tasks that people don't value quite so much.
The current marginal tax rate for someone (unmarried) making between 37k and 91k is 25% [0]
This means that over this $30k interval, people would be facing about a 46% effective marginal tax [1]. The current top bracket is only 39.6% and does not kick in (for unmarried individuals) until $415k.
While this proposal does create a silly marginal tax rate, it is still below 100%, which means that making more income still leads to more money in your pocket. Our current system, if you count the value of non-monotary aid, often exceeds a marginal rate of 100%, which is a far more serious problem.
I agree that the UBI should be flat, because anything else is equivalent to changing our tax brackets; and if we want to do that, we should just change our tax brackets.
[0] https://www.irs.gov/pub/irs-drop/rp-15-53.pdf
[1] This number might be slightly different if the two taxes interact with each other.
Which I guess doesn't mean it wouldn't happen.
This was such a dumb sentence in an otherwise interesting post.
Increasing minimum wages will only just accelerate automation and exacerbate the problem.
My concern about UBI is that it won't properly track inflation and will quickly become not enough and all the welfare programs are gone, so people are doubly screwed.
Other than that, I like it. I'd like to see more "pay to go to school" programs, though. We'd end up with fewer Trumps...
That is only a real problem if the population does not keep up with this development. I can not tell whether requirements are (now) growing faster then capabilities but both certainly grew ever since. The other thing is that it seems to me that - at least to some extend - the capabilities are the controlling factor here. The economy can demand whatever it needs, if it is not available the economy will have to adopt.
Increasing minimum wages will only just accelerate automation and exacerbate the problem.
I did not mean to increase minimum wages more and more just to make any job viable, this of course only leads to inflation. I meant to let non-viable [EDIT: This read »no viable« before.] jobs die or automate. If people are not willing to pay enough for getting their lawn mowed - not sure if that is a good example - to make a living from it, then there never was a market for lawn mowing. Subsidizing it by the rest of the population with government benefits of any kind is not a solution.
Are you saying you'd outlaw self-service gas pumps and checkout stations? Robotic assembly lines and autonomous vehicles?
A large fraction of the population has no distinguishing skills. That segment of the population is going to find itself with ever fewer ways to earn a living.
Besides that I am not sure about you comment, I am not sure how you interpreted my comment with the spelling error. I am especially confused because your first paragraph sounds like you are arguing for automation, the second paragraphs sounds like you consider it harmful for unskilled workers. I don't want to outlaw any automation, quite the opposite, I would consider the ultimate goal a world where all work is done by robots and nobody has to work.
Now, in which system can a neighbor earn an extra $20 a week for a morning of work? In which system does my front garden look nicer from the sidewalk? Someone (probably a teen) gets some walking around money, the whole neighborhood gets a nicer sidewalk view, and I don't have to do an optional job that I dislike. Sounds like a winner all around to me, but no way is "pulling weeds" a full-time, live alone and without additional support career.
All of which perpetuates the cash/grey economy (and the off-shoring of garment-making jobs in your example).
The thing about UBI is that it allows employees to turn down bad economic deals without starving. Sure, you can't live in a 2000 ft^2 house, drive a new car, eat and party out all the time, but you probably don't have to take a job with ridiculously bad conditions just so you can buy a can of beans or Ramen.
There are all sorts of things that people will pay a handful of dollars for, but that they won't/can't pay $10/hr for. Mine was just a concrete example of a low skill required task that I don't enjoy and that someone whose basic needs were already covered might be interested in doing, much like I did when I was a kid/teen and wanted to earn some extra money.
I am in favor of automation (for the same reasons you are, I think), and automation does harm unskilled workers.
Between the present day and the future golden age of robotics that we both desire is a period of time in which some fraction of the population, who have specialized skills that are hard to automate, will work for a living, while another fraction (probably larger than the first) of the population will have nothing to offer in return for money. I don't see any way around the first group subsidizing the existence of the second.
You are actually in favor of outlawing lawn mowing as a job? My 14 year old kid can't take a $20 from my neighbor to get some fresh air and weekend spending money? Are you serious????
Have the Fed stop causing inflation?
Just look at Murray's proposal. All social programs get eliminated and now a single mother with 3 kids has to make do with $10,000 a year? Impossible; a cruel joke. An elderly person on disability? They get half the money a healthy 22yo couple gets. This isn't a serious proposal.
Actually, under Murray's proposal, she has to make do with 10k per year plus whatever she can earn. If she's earning very, then she's probably doing all the childcare herself and her living costs are not much more than a single, childless woman. If she works full time, then her total income (earned and unearned) will be 30k at minimum.
I'm not saying I support the proposal, but I do think your rhetorical question mischaracterizes it.
1) the subsidies are sufficient for both groups to do OK. This is fine in theory, but taxes would have to go up by a lot to have the minimum take care of the needy with the largest expenses. The UBI would have to be closer to 25,000 USD. If it's politically impossible to raise taxes to the level needed to let poor people live in dignity today, then what are the odds the American people sign off on the massive tax hikes needed to fund a non-destitution basic income?
2) the UBI simply isn't sufficient. Some people are getting money they don't need and other people are getting much less than they need just to survive. Every dollar that goes to the first group means there's less for those who really need it. In other words, the proposed system is a cruel dismantling of the welfare state.
Raising 3 children is practically a full time job, just one that happens to be unpaid. With the UBI the minimum wage would go away, meaning that the single mother is going to make a few dollars an hour in her part time job. That will barely cover the cost of the car she needs to get to her job, and the cost of the babysitter. The suggestion that being a single mother isn't much more expensive than a being a single young adult is absurd. I really struggle to respond to this. Just think about it: a single person can share an apartment and bike everywhere, enjoy the simple bohemian lifestyle. Being a beach bum doesn't cost anything. Do side jobs and hustle whenever you need a few bucks. The single mother in contrast needs a car and a house with rooms, just to start. That's going to take a big chunk out of the 10,000. Just living nearby a school is already expensive, and not optional. And the children themselves cost money too, in a million little ways. Diapers, clothing, entertainment, food, trips to the doctor, the list is endless.
I don't believe I'm misrepresenting the situation, this is just how the math works out. If the UBI means giving money to people who don't really need it then taxes must go up by a lot or the poor are getting a really raw deal.
>Or consider the unemployed young man who fathers a child. Today, society is unable to make him shoulder responsibility. Under a UBI, a judge could order part of his monthly grant to be extracted for child support before he ever sees it. The lesson wouldn’t be lost on his male friends.
> Or consider teenage girls from poor neighborhoods who have friends turning 21. They watch—and learn—as some of their older friends use their new monthly income to rent their own apartments, buy nice clothes or pay for tuition, while others have to use the money to pay for diapers and baby food, still living with their mothers because they need help with day care.
The author seems to be proposing that child support for 3 children can/should be taken from their fathers' UBI grants. Therefore, the mother would receive a larger grant based on her number of children.
Either way, that doesn't really affect the argument that a BI payment supposed to be a minimum for one person to live off is unlikely to stretch to paying for the food, living space and private health insurance costs for another three, even if another parent's minimum payment is also being garnished to help.
The author's arguments you've cited essentially amount to the view that children of single parents should be punished for their parents' life decisions. It looks particularly crass in the context of accompanying arguments in favour of spending money on adults who choose to "idle away their time" and including those fortunate enough to be "already living off other people’s money".
And we're in agreement that properly raising three kids is a tremendous undertaking that demands either a whole bunch of money or almost all of your time.
I take issue, though, with the idea that a family of 4 living on other people's money should spend so extravagantly. You do not need a car. You need a 2-bedroom home within 2 miles of a school. Housing will almost certainly be more than half of your expenses. Food for 4 people is a few thousand more. Clothing, entertainment, and diapers cost almost nothing (do not use disposable diapers except on special occasions). If you want to work part time then find another mom who will swap days with you or pay you to take her kids while she's working. I could see $10k turning out to be slightly less than what's really needed, but it shouldn't be considered "cruel joke" territory.
In the spirit of not paying people more than they need, I could suggest paying the young adult who gets free housing from her parents only $3k per year, but that opens a huge can of worms that'll have kids pretending to rent their own apartment to get more UBI while really living at their parent's house, etc.
Again, I think we're in agreement on the flaws of this UBI proposal. But I assert that, until such time as our society reaches a level of technological advancement where no one needs to work, the amount of extra work that working people are required to do to support nonworking people should be no more than the minimum amount to maintain their health and physical comfort. If you think people should get more than that, I'd like to know how you propose to decide how much.
As for the example: Rural poverty is a huge problem, and not everybody can live in cities. Without a car you're stuck in the house because you can't leave your kids unattended. You need to drive miles just for groceries. People around you live in squalor and substance abuse is ubiquitous. Finding a sitter on short notice? Forget it. Move? With what money? Living on a tight budget is easy when you're young, healthy, educated, etc. In the real world poverty doesn't look like that. You can make a back of the envelope calculation where 10k a year is sufficient for a one parent family of four, but I don't think it holds up in the face of all the struggles poor people face.
I don't think people should be jumping into parenthood without knowing what it really entails (costs and brutal demands on your time) so I'm sympathetic to your angle, but reality plays out differently. And kids are the result of some pretty basic urges that are obviously difficult for many to deal with appropriately (think ahead, get/use contraceptives, actually abstain, whatever).
Look what the birth rate was 200 years ago when children were considered retirement investments (or elsewhere in the world where that's still true).
Obviously there has to be a strong balance between an incentive that keeps a reasonable birthrate and one that overly encourages those desperate for money to procreate. The latter is disastrous for countless reasons.
Not sure how they'd balance it with a UBI.
Whether this "solves" anything depends. Initial experiments are very limited, but fairly positive. Giving money to people in rural India may not translate too well to giving money to people in New Delhi, much less people in Cleveland. But I think it's worth a try to see how things work out.
If your income drops below 404.00 Euro per month plus rent in Germany, you get the difference. Nobody will become homeless, nobody will starve. At least in theory. They will bug you to get a job as quickly as possible, make you do courses to improve your skills. The authorities are said to be kind of control freaks, supposedly to avoid abuse.
So it is a basic income. Universal? Well, the authorities won't just let you develop you new product idea for two years. If you don't try to get a job, they will bug you a lot. If you don't play by the rules, they can even cut some of the benefits.
So maybe we should just add a program that allows you to ask for benefits for a certain amount of time so that you can develop a business idea. Maybe there are already things like that. You certainly can get support if you want to educate yourself, attend a university and so on.
Artwork, open source software, charity work...
You can't simply cut down working hours, since the problem isn't that there aren't enough jobs for people - it's that there are people who are unable to be productive enough to fill a job.
The UBI gradually transfers responsibility for someone from the government to an employer, as opposed to a minimum wage + welfare system, where the transfer is a lot more sharp.
(I haven't decided if I agree with this, and how plausible it actually is - but I think this is the argument for why UBIs are necessary, and necessary now.)
"We'll just automate your job away" is one of the biggest empty threats along with "we'll just fire everybody, causing mass unemployment".
Employers fear a rising minimum wage because it eats into their profits. That fear translates into histrionics, threats and utopianistic predictions about the near future state of robot technology.
In the end when it happens they just deal with it and end up posting lower profits. As is the case in Seattle.
That combination looks bad for fast food front of house workers...
https://en.wikipedia.org/wiki/Automat#/media/File:Stollwerck...
Those things are bound to replace most food service workers by the 1920s at the very latest.
Did you also know that original automats from the 30s mostly went bankrupt in the same decades (60s/70s) that the inflation adjusted minimum wage was at its highest and Americans had the most disposable income?
Funny that.
On the other hand customers may not value the work enough and the job is just not viable, there is no market. Then you have to either bring the costs down by improving efficiency or automating it, or the job has to go away. Not paying a livable wage to the employers is just exploitation, giving benefits to the employers just means subsidizing the business owners and customers.
I am a bit unsure about the scenario when we just let the job go away and have a new unemployed we may have to support with benefits. Wouldn't it have been better to just subsidize the job a bit instead of having to pay for a new unemployed? But that of course creates incentives to underpay employees and take advantage of subsidies. It is probably harder to reason about this case because it is now a dynamic scenario and it is not obvious how things will turn out.
I am still struggling a bit to follow your thought process but I think you may have a point. I will probably have to add something later.
If we are in a situation where a part of the population is plainly unable to perform any work that pays for a living and we are unable to improve their skills, then we are really is some kind of trouble. They would essentially be like handicapped people. In analogy we would have a moral obligation to support them and it seems better to let them do some work not paying for a living and provide benefits on top of that instead of just having them fully on benefits. Kind of contradicting what I wrote above. And we are also back at the point from above of creating incentives to underpay employees.
The obvious solution would be to not get into this situation in the first place, to heavily invest into education and training. But if that is not good enough? How does reality compare to this scenario? What is the outlook? It is also not obvious to me whether a universal basic income or minimum wages and a conventional welfare system would provide better incentives. But I think I now at least understand the argument.
And that's exactly the situation UBI is intended to solve because that's where automation is taking us. In the near future, only the very intelligent or machines will work because the machines will put most people out of work leaving only room for the very skilled.
> The obvious solution would be to not get into this situation in the first place, to heavily invest into education and training.
That is not a solution because it assumes wrongly that everyone is capable of performing knowledge work; they aren't. A very large minority of people simply won't be able to do anything worth paying them for, they won't have the capacity to do anything we can't get machines to do for far cheaper. When the machines take over blue collar work, and they will, the economy will have to change to something like UBI for it to continue working.
Anecdotally, I did work as a kid, didn't learn anything useful, did not learn responsibility, a bit of money I didn't really need, and it felt like a waste of time and left a bad taste overall.
I fully believe that in many, possibly most cases, work is beneficial for kids (as long as they're not from poor families in which case there will be too much pressure to overwork, affecting school/homework and taking away whatever little time they have to enjoy childhood).
Which doesn't work when jobs require uncommon abilities or highly specialized training and thus either can't be done by the other people or would be highly inefficient to train them to do and then not have them working full time.
> Some jobs don't provide enough income to make a living? Then have sufficient minimum wages, there is no point in doing any work that does not pay well enough to make a living.
And then any jobs whose economic value is below that minimum wage disappear, leading back to the first problem.
> Also universality, what is the point? Above some income you are essentially just paying yourself.
You are. Which means it has a built in phase out -- you effectively stop getting it once you've paid more taxes than you receive in basic income. Adding another phase out causes the marginal tax rate on middle income people to be unreasonably high and takes money away from them that would otherwise have come from higher income people.
A universal basic income has rich people paying poor people and middle income people paying themselves. A basic income with a phase out instead has middle income people paying poor people so the rich can have a tax cut.
A universal basic income has rich people paying poor people and middle income people paying themselves. A basic income with a phase out instead has middle income people paying poor people so the rich can have a tax cut.
This does not have to be true. You can simply phase it out and then adjust the tax structure accordingly. It is a zero sum game, you lower taxes by the same amount you cut the basic income for that person. At the high end you take away 11k basic income and reduce taxes by 11k, somewhere in the middle you reduce the basic income and taxes by 6k each and at the lower end you do nothing.
With matching tax structures there is really no difference between paying an universal basic income to everyone or only paying it towards the lower income range. I am not disagreeing that a flat basic income might be a lot simpler than trying to carefully adjust tax rates.
If there is literally no difference then what benefit is to be gained from the added complexity?
One of the big advantages of a universal basic income is that it gives you effective progressive taxation without a complicated system amoral people can game. If you have different tax rates then it creates opportunities for tax arbitrage and rich people can avoid paying the higher rates by doing things like paying a middle income salary to their otherwise zero-income college-attending children who pay a lower rate.
But flat tax + UBI is inherently progressive, so that's it. No phase outs + no tax brackets does exactly what everyone wanted anyway, but everyone universally pays the same rate and receives the same UBI so there is nothing to game. You get one choice, what the flat tax rate should be, which sets the amount of the UBI and determines how progressive the system is. It takes away all the knobs that politicians who don't know what they're doing (or corrupt politicians who know exactly what they're doing) can use to screw up the economy or shift more of the tax burden from the rich to the middle class.
Price of goods with unlimited supply, where the price floor is determined by cost, will not rise.
Although everything kind of fall somewhere in between the two extremes -- rent will probably go up, whereas food not so much. And many things will not be affected because poor people will not buy them with or without BI.
Government agencies are the worst of all mechanisms for dealing with human needs. They are necessarily bound by rules applied uniformly to people who have the same problems on paper but who will respond differently to different forms of help. Whether religious or secular, nongovernmental organization are inherently better able to tailor their services to local conditions and individual cases.
I find it ironic that this individual is for the so called UBI.
Why do you find it ironic? UBI gives people money without telling them what to do with it. It lets the market (i.e. the people) decide what they need instead of the government.
For example, you can imagine a shelter that will provide food, housing and services for the disabled in exchange for their UBI, which doesn't cover the entire cost but covers most of it and the rest is covered by donations.
There are funding options other than income tax.
> .. Our own San Francisco Association of Realtors says that the city’s median household income is a mere $77,700
http://sf.curbed.com/2016/2/23/11101182/11-percent-of-househ...
Doesn't that amount to the same thing?
"Phase out" means middle income people receive lower benefits in exchange for higher income people paying lower taxes. It's just a code word for screwing over the middle class.
So yes, there is likely an inflationary effect, but it is impossible to accurately predict.
It also depends on the net change in people's overall income as most basic income proposals include scrapping piecemeal and overlapping welfare systems.
Personally I think I could be convinced if it was essentially a replacement and thus simple to administer, but would have to be coupled with strict immigration control for the first country to try it.
However, under UBI, I think suppliers of goods and services would still be faced with the basic issue of not knowing exactly how much consumers value any given product and competition would still exist so prices would likely still be set by supply vs demand.
If you actually fund this by taxes, like most proposals say, you'd probably still have an inflationary effect (since the lower your income is, the likelier you are to spend each marginal dollar), but likely not enough to outweigh the extra money.
If UBI was carried out as an exercise in wealth redistribution through higher taxes on the upper/middle class, then the inflationary effects would not be quite as high, although I would still expect to see some inflationary effects as middle/upper class folk drew down spending on some durable/luxury goods, while lower class folk would increase spending on staple goods. I think the overall effect would be slightly positive inflation.
I can barely afford to live in the US because I live in a pretty expensive part of it. I'll blindly guess that my zip code is the second most expensive one in NYC. My thesis is that you (and I, and my family, and everyone else who has ever lived) live only once. I refuse to live a gazillion miles away from work while wasting countless hours of my life commuting. This costs me, as the most desirable areas of Manhattan are also the most expensive.
To be able to afford such a lifestyle, I have to make a considerable amount of money. This leads to my family being ineligible for any kind of freebies from the government. We're forced to look on while other families receive handouts in the form of food stamps, free school lunches, free healthcare and subsidized housing. Many of those families cheat the system by finding loopholes in eligibility criteria. They sneak through and enjoy significant free comforts on my dime... and that of every other taxpayer in the country.
So yes, I can barely afford to live here because I'm being taxed to the gills while freebies are flying to countless others who don't deserve it. I'd much rather cancel the whole rigmarole and just flat out pay everyone the same basic income every year. At least my family will get its fair share of it.
Also, seriously, if someone is on food stamps or their kids are in the free lunch program, they are not advantaged, they are not comforted: they are living on the edge. Trust me.
On the other hand, I live in subsidized housing. The mortgage interest deduction is the largest (in terms of $) subsidized housing program on earth.
The whole concept of countries creating way too much currency to pay their bills is a good reflection of this -- Zimbabwe and Venezuela being two recent and current examples. The irony is that all of that "extra" money actually means the recipients become substantially poorer as the supply chains get fucked up.
If it is just a little extra injection, the outcome would not be as extreme. In the most general cases, my guess is somewhere with a tight housing market would see a lot of the money just flow to landlords, in a renter's market the money might flow to consumable goods like drugs and alcohol.
If social & welfare programs are removed in exchange for BI, it is possible all the money would just have to be spent on medical and education. I don't really know the math behind everything but it could just be a restructuring of things that are already occurring. Do extra marketing and "profit" costs exceed government waste? Who knows. Certainly the ability for the government to influence social behavior would be reduced by a lot.
Replacing housing assistance with the equivalent cash might even reduce rents because then people can decide they would rather live in cheaper housing and use that money to go to college.
The whole thing with a UBI is that unless you make it more progressive than the existing system, all you're really doing is replacing vouchers with cash. If you do make it more progressive (i.e. provide more cash than you would have provided vouchers) then you get the same economic consequences as providing more vouchers (i.e. possible price inflation), but it's still more economically efficient than providing more vouchers, because then people can choose between college or better housing or better medical coverage etc., instead of having the government decide for you.
Any sane policy doesn't involve just printing money and giving it to people. It involves taking that money from someone else, through taxes, and THEN giving it to people.
Take a food stuff. In theory the current price is the cross section of supply and demand (price equilibrium), your idea is that with BI we have just increased demand while supply remains unchanged naturally price equilibrium changes resulting in a price increase. However, with a growth in demand, the market should respond and supply should increase to meet the increased demand, thus readjusting price equalibrium. Obviously this is for a food stuff not something more finite like housing.
Still food stuffs or housing, we don't really live in a free capitalist market as much as we would like to believe. There are many government subsidies artificially impacting current supply/demand/price. One example, farm subsidies where farmers are paid to not grow crops/farm their land (~$1.3B/year). I think its ridiculous, but economists more knowledgeable than me (even if on the farmer's dime) argue its necessary to keep supply artificially low to keep prices artificially high otherwise the entire industry would fail and we would all be starving.
Assuming BI did have such an overall impact on the prices of everything or even just the basics (food stuffs, housing, gas, etc...) there are all types of mechanisms the government currently employees to artificially raise and lower prices and special interests won't be going away with BI.
Consider a society with 2 members, Mr Rich (net worth $10M) and Mr. Poor (net worth $100). Mr. Rich is 100,000 X richer than Mr. Poor right now.
Institute a ridiculous UBI of $1M/year for everyone. At the end of the year, Mr. Poor has $1,000,100 and Mr Rich has $11M but Mr Rich is now only ~ 11 X richer than Mr Poor.
Now sure cheeseburgers at Micky-D's are now $700 but the fact has changed that before, Mr Rich could buy a hundred thousand burgers for every one Mr Poor could buy. Now he can only buy 11.
UBI works like gravity. Continually pulling the unequal towards a center. The rich will still stay rich, but unlike today where rich automatically makes richer, the force will be reversed. It will take "energy" to stay rich.
Right now, it seems that Mr. Rich eats as many burgers as he wants (which isn't many really) while all of the Mr. Poors who would be happy to eat them if they could afford them, and happy to make them if someone would buy them (and then could afford to eat them themselves) sit around hungry because there's a recession donchaknow.
Its almost as if the mass of Mr. Rich's on-paper money is blocking the natural signalling between the makers and the eaters so the cycle jams up. It seems like something that needs fixing. So how?
What's one big negative of funneling even more money into the government? Further centralizing power in the government, which definitely cools my own fever to implement UBI, and definitely warrants some careful consideration. Since trust in government seems to be at an all time low, this point probably deserves some addressing [1].
[1]: http://www.people-press.org/2015/11/23/1-trust-in-government...
The only way this could be true is the extraordinarily unlikely case where every individual provably had better experienced utility in one system than another, otherwise, the fact that there is no one objectively correct method of aggregating utilities across individuals to get a single measure of societal good means that there is no objectively correct ordering.
Prices go up for two reasons, when they can and when they must. Which one do you think would be the factor here?
* Note, this is specifically in response to the parent's scenario - I actually doubt that a UBI like the one in the article would lead to appreciable inflation, as the current entitlement plans already spread around more money than this would.
What does inefficiency matter if there is not enough work for everyone anyway? It may be a problem during the transition but I am not sure about that. But in the end two people working five hours each seems a better and fairer solution to me than one working eight hours and giving half of what he produced to the other guy for free.
Minimum wages distort the market.
Why? I am not arguing for arbitrarily high minimum wages, just high enough to be able to make a living. Working for less makes no sense - if you work full time and can not live from the income, what is the point? It's exploitation, slavery if you like. If the state provides benefits to make it a livable income, then the tax payers are just subsidizing your employer or customer. I am here not worrying about all the edge case, being frech out of school with little experience, already having enough money and voluntarily working for little or no money and whatnot.
The "universality" has two components. One is that there are no strings attached (eg. you are not required to be seeking employment).
This is feature and bug. It will for example remove incentives to get a job but it will also allow you to take time to develop a new product or something like that. I am neutral on that.
The other one is that it is not dependent on your income. As I explained in another comment, making a BI decrease as ones income increases is equivalent to a progressive tax. As we already have a progressive tax system, we can achieve the same result by modify our tax brackets, which is mathematically equivalent but easier to understand.
I am not sure what you want to say here, seems like it does no harm and provides no benefits.
I am using the term "efficiency" in a technical sense. An inefficiency means that there exists an alternative way of distributing resources (including time) such that no one is worse off, and at least one person is better off. By this definition if their is an inefficient, then we would have a strictly better world if we could remove that inefficiency without causing any secondary effects.
Suppose we have a widget X that can be produced by person A in 8 hours, or by persons A and B in 10 man-hours (at 5 hours each). Further, assume that both A and B value their time at a constant $100/hr [0].
Suppose that we live in the second world, where A and B each spend 5 hours working on X. At the end of the day, A and B are both down by 5 hours of their time, and up by $500, and society is up by 1 X.
Suppose that, the next day, B hire A to do his share of the work. We have defined that A can do the entire job 8 hours, which means that this transaction only add 3 hours of work to A's day, meaning that A would be willing to do this for only $300. At the end of this day, A is down by 8 hours, and up by $800, B is up by $200, and society is up by 1 X. Again, A breaks even in this exchange, and society still has just as many Xs, however by B got $200 out of thin air.
We can modify the above example to where B pays A $400, in which case both A and B can $100 worth of value out of this exchange. This extra wealth is not just fictitious money. In doing this exchange, we saved 2 hours of human time, which is a real, limited, resource.
Of course, in the above situation, there is no way of deciding how exactly how much B should pay A, all we know is that any value between $300 and $500 produces an efficient system. However, we may, as a society prefer, the situation where the profit is split, and both A and B walk away with a surplus $100. In fact, we may prefer this possibility so much, that we are willing to destroy $2 of wealth somewhere else in the system to assure that A and B split the surplus. The argument for a BI is that a minimum wage achieves the desired result by destroying wealth (in the form of exchanges that never get made), whereas a BI can achieve the same desired goals while destroying less wealth. If that is the case, then a BI is strictly better than a minimum wage.
Of course, a BI itself introduces a market distortion (in the form of tax). The questions that need to be answered is how much wealth does the BI tax destroy, how much wealth does the minimum wage destroy, and how effective are both the BI and minimum wage at achieving the social goal of providing resources for all citizens.
>I am not sure what you want to say here, seems like it does no harm and provides no benefits.
In a society of perfectly rational actors, this would be correct. However, having multiple contributors to the effective marginal tax rate obscures the issue, and is how we get into situations where we have unreasonably high (in some cases >100%) rates.
[0] This is clearly a simplification, but it should not affect the analysis. The important thing is that there exists an "indifference" curve, whereby for any quantity of time, there exists a dollar value at which the worker is equally happy getting paid for doing the work as he is with doing nothing and not getting paid. The only potentially important assumption about this curve that I can think of is that the derivative is non-decreasing. This means that if I am willing to sell my first hour of labor at $100, I will sell my next hour for no less than $100, although I may need more than an extra $100 to be willing to spend an extra hour.
By restricting the entire world to the two actors wanting to produce one X one can keep money out of the equation. I argue your analysis fails or at least may fail because you don't assign a value to the leisure time. Also the assignment of monetary values obscures things, where is this money coming from? From selling the X to the society? In that case you will have to take into account that producing one X may take either 8 or 10 hours - will this raise the price or decrease the monetary value of an hour of work?
I did consider the value of leisure time, which I arbitrarily set to $100/hr (I just called this time, but unsold time can be exchanged 1:1 for leisure time). You seem to be objecting to my assumption that the marginal value of time is constant for the workers. I agree with this objection (in fact, I raised it myself in the footnote). However, even without this simplifing assumption, there are still situations where selling ones time is a net positive.
>By restricting the entire world to the two actors wanting to produce one X one can keep money out of the equation.
My entire argument can be made without invoking money. Indeed, I believe the non monetary form is more compelling, but also more abstract. Again, I will invoke the idea indifference. We say that things X and Y have equal value to person A if she is just as happy receiving 1 X as she is receiving 1 Y. With this concept we can replace "money" with any object of value and have an equivalent analysis. Of course, the selected object would itself have diminishing returns, but this is equivalent to an increasing marginal value of ones time, which I have already addressed. Ultimately, to properly explore this route, I would formalize an abstract notion of "utility" as an equivalence class over indifference. I hope this explanation makes sense, doing it properly would take far to much effort to put into an internet comment.
>where is this money coming from, From selling the X to the society?
The above framework provides a nice way to sidestep this issue. Let U be the utility function. So U(5 hours) is the value of 5 hours of time. [0]. For simplicity, assume that A and B share a utility function.
Suppose that A and B are not selling X, but rather using it themselves (for simplicity, suppose that X is a widget that A and B can share without conflict). We know that X is worth at least 2 * U(5 hours). Suppose that 2 * U(5 hours) > U(8 hours). In this case, by my previous argument, it would be preferable for A to do all of the work, and B to barter something worth between U(8 hours) - U(5 hours) and U(5 hours) for his share of X.
Ultimately, this argument is just a rediscovery of the value of trade and specialization. To translate a minimum wage into this framework, we would define some artificial lower bound for the compensation A needs to be provided in a trade such as this. If this minimum value is less than U(8 hours) - U(5 hours) or U(5 hours), then we are just influencing how wealth gets distributed between A and B. However, if the minimum value to big, than the above trade is prohibited, even though we have seen that it is strictly beneficial.
>will this raise the price or decrease the monetary value of an hour of work?
What do you mean by "monetary value of an hour of work". Returning to a more realistic employer/employee example, there are two important monetary values: the value the employee gives to an hour of work, and the value the employer gives to an hour of work.
From the employer perspective, the value of an hour of work is V(X)/T, where V(X) is the value of X [1], and T is the time spent making it. V(X) is independent of how long it took to make, which means that as the work takes longer, the value of an hour goes down to the employer.
From the employee perspective, the issue is a question of their utility function. Assuming a reasonable utility function, I would expect the marginal value of an hour to increase to the employee. That is to say that the employee needs more money to be indifferent to working the last 2 hours than she does for any of the prior 2 hours. If this is the case, than the value of an hour to the employee goes up with the time.
[0] More formally, U(5 hours) is the equivalance class of objects for which the person would be indifferent to spending 5 hours of time to obtain.
[1] Or rather, V(X) is the...
So this looks somewhat like the prisoner's dilemma. Let A and B be the scenario that agent A respectively agent B works 8 hours and AB the scenario that both agents work 5 hours each. Then the preferences for agent A are B > AB > A and for agent B they are A > AB > B. But that doesn't help much, no matter which transition you consider, one agent will be better off and one will be worse off.
So there is still a conflict. I acknowledge that an inefficiency gets introduced when the work is split but also want to maintain that 3 hours of leisure time twice is more valuable than 8 hours of leisure time once. Surly value can not increase and decrease at the same time. I am more certain that the inefficiency is real than what the shape of the value function for leisure time is so I will pick the former one and conclude that 8 hours of leisure time are - contrary to my earlier comment - more valuable than 3 hours of leisure time twice.
So do I have to say that maximizing the total value is the wrong metric? Do I have to try to assign a value to the fairness of work distribution? Why wouldn't that already show up in the individual value functions? I am a bit stuck here. But I may have a way around that, I am just not sure how good the argument is. One obvious problem is that in case agent A does all the work, then agent B has no means to transfer some of the additional value from his additional leisure time to A. Maybe he could give away some of his share of X.
But now I can no longer ignore the value function for X and that hopefully saves my argument and I avoid the conflict between decreasing and increasing total value without the need to explicitly appeal to the value of fair work work distribution because it is in the two value functions for X and leisure time. But I am not sure, I did not think this fully through.
I think in the end it boils down to nonlinearities between the individual and the global view, i.e. we can globally waste 2 hours of work but still increase the total value because we have to take the global set of things, split it up for all individuals, push them through the nonlinear value functions and then sum it up again. Now it is no longer necessary that a global loss of 2 hours results in a global loss of value even if all the individual value functions are monotone.
It's possible that anticompetitive forces would prevent that competition from emerging in many cases, but I would not say that it is obvious that prices will increase under UBI.
another area people need to look into is changing the direction of though that has crept into society which that "you deserve this, that, and this, as its your right" and instead get back to the days where people were encouraged to strive to return more to society than society gave them.
1) So, someone who has 8 kids gets the same exact income as someone who has 0 kids?
2) What happens when health insurance costs escalate?
My mother is fully disabled and unable to work as a result of her stroke and she relies on Medicaid, Food Stamps and SSI to live. $13000 per person would be lower than what she gets right now and that's without considering the insurance issues. These changes would quite literally kill or leave homeless a large amount of America's disabled, poor or elderly population.
If Basic Income is to work then it needs to be actually liveable and adjusted based upon the CoL in each area.
There's a good argument to be made for a larger sum for the disabled who cannot work. But I'd be extremely opposed to any regional adjustments. If individual cities and states want to supplement the UBI, then that's up to them, but people moving out of high-cost areas and into low-cost ones is part of the natural ebb and flow that keeps the cost of living reasonable. And can you imagine what a CoL adjusted UBI for San Francisco would look like? A massive ripoff of the rest of the country.
I don't know what the solution is here but if in this hypothetical reality, the garden state didn't supplement but California did then I'd move to California in a heartbeat. I am sure I'd be broke even with any supplement in San Diego but at least I'll be broke in San Diego.
Edit: I cannot support any discrimination in basic income based on "ability to work". I'd rather the whole thing fail. I'd rather we never have basic income implemented at all than this bastardization go through. Personally, I'm all for death panels. We should not try to keep everyone alive at all costs. If I get in a freak accident and it'd cost me $10M+ to keep me alive with little to no chance of a full recovery, please let me die.
Something we need to discuss separately from universal basic income is the need to reduce cost in healthcare. I'd gladly support expanding Medicare to everyone without having to qualify. We would need significantly greater penalties for Medicare fraud and add incentives for whistleblowers and make it easier to report fraud. I'm OK with "lite" Medicare that drops expensive procedures and lets patients suffering from rare cases fending for themselves in order to cut costs especially if there is little chance that the patient will ever recover fully.
The other thing I'd support is removing medical licensure from the law. People would still be free to visit only AMA-approved physicians, but there's no reason to give that guild a monopoly on providing health care. The artificial caps on medical school seats, imposed by the AMA, is one of the biggest reasons for the absurd cost of medical care in the US.
>I don't know what the solution is here but if in this hypothetical reality, the garden state didn't supplement but California did then I'd move to California in a heartbeat. I am sure I'd be broke even with any supplement in San Diego but at least I'll be broke in San Diego.
Sure, and when the people of California realize that they're attracting all of the deadbeats from around the country, they'd be forced to adjust.
I can also support removing the ama-fia's control on licenses but I'm afraid we'll just replace it with something similar when it comes to which providers are eligible to reimbursements from the new single payer healthcare system.
First, the AMA does not control the number of medical school seats in the country. Accreditation of US medical schools is done by the LCME, part of the AAMC. With some research, you'd find that the number of medical school seats is growing each year.
Second, the limiting factor for physician training is NOT medical school but residency. In point of fact, the US imports residency trainees from overseas - we're not constraining ourselves artificially but instead of surplus training positions.
Through a historical fluke, residency training depends on funds allocated by Congress through Medicare funding.
I understand your frustration at healthcare costs, but please research these issues.
Further, the LCME is run in equal parts between the AMA and the AAMC. http://www.ohsu.edu/xd/education/schools/school-of-medicine/... See "Who serves on the LCME?"
I am guessing so would a lot of other people, which would create an opportunity of a lifetime for California landlords, adjusting the rents to the point where UBI would only offer marginal incremental benefit.
A CoL adjustment for San Francisco isn't the problem, but rather the fact that San Francisco costs so much to begin with.
That isn't a problem. You get a concentration of people collecting a basic income who move into a low cost area, then they have money to buy housing and food and so on so there are jobs needed to construct housing and sell food, so then some of them get those jobs. Then they have even more money which leads to even more jobs etc. and soon enough the low cost area isn't so low cost, but that isn't a problem anymore because now they have jobs.
So now you force these poor people out of homes that they used to be able to afford into even poorer areas with worse job security. This is assuming that they're even able to acquire new jobs. And it would only get worse with automation.
A basic income that doesn't scale based off of CoL is one that's bound to fail in the face of automation.
A UBI causes the cost of living to rise in the short run. If you readjust the UBI the cost of living will rise again and again.
Cities like San Francisco will become more attractive because they not only have more jobs they also pay you more UBI. The more people move in, the higher the cost of living if housing supply is constrained. Readjusting the UBI then makes the city even more attractive. At the same time small cities become less attractive because not only are people moving into the city but their UBI is shrinking too.
A basic income would allow you to move to some town in Oregon or Colorado without having to worry about starving to death until you can find a job as a bouncer or the like. Once you do the presence of people like you creates some other jobs for plumbers and carpenters etc. The idea that this is going to turn every Podunk town in America into San Francisco or New York City and leave the poor with nowhere to live is clearly untrue.
UBI would have a similar effect - maybe you still want to have a job, but you can choose to accept a somewhat lower paying job to live somewhere nice. It would also put less pressure on places like San Francisco.
Being less dependent on jobs is a good thing. We should allow this migration to happen naturally, rather than subsidizing people to stay where they are.
But that's also the downfall of UBI, because it means that most of the other transfers will remain a necessity, and the bureaucracy to distribute it will remain a necessity, and the whole issue of welfare dependency is back with us, and so is the constant discussion of what support and subsidy should be expanded.
(I'm looking at this from European angle where the welfare is often, though not always, stronger than in the US).
I think that's where there are two camps within UBI supporters: those who want social security + UBI, and those who want to replace all or most social services with UBI. You can probably see how that maps to the political spectrum.
The solution isn't to either remove all other benefit programs or to retain them all. in a static, unchanging way.
Its to build UBI in a way that it naturally grows with productivity, and keep existing means-tested benefit programs (whether general or targetted to specific narrow needs like disability) and count UBI income the same as earned income in the means tests for those programs, phasing the programs out as the UBI rises to a level where it is no longer possible to qualify for them. This does leave you with the administrative costs of those programs for some time, but with dropping caseload which reduces the total costs (both benefit and administrative) over time, eventually to zero when the programs are retired because UBI makes them obsolete.
This also lets you start UBI at a very level level, and reduces risks and provides opportunities to address unforseen consequences of the UBI implementation, because you aren't doing a big-bang implementation where immediately the entire social support structure depends on UBI alone.
(Essentially, instead of being obsolete and removed when UBI is first implemented, other programs are deprecated and to be removed in the future with defined criteria.)
UBI is not feasible absent a universal single-payer system. Health care is just too damn expensive to be paid for by the individual.
"Annual premiums edged beyond $17,500 for an average family." http://www.ncsl.org/research/health/health-insurance-premium...
And this is in the marketplace that purposefully excludes Medicare recipients, who are older and are disproportionately more likely to have health problems and pre-death expenses.
Here's data on per capita spending on Medicaid, there are very few states where non-disabled adult spending is less than $3k http://kff.org/medicaid/state-indicator/medicaid-spending-pe...
I don't see how UBI works without some other form of guaranteed health insurance for the poor.
What's the point of that? Moving isn't difficult.
Once the roads are fixed, and the parks are clean, the disabled are cared for, etc, etc, etc. THEN maybe we should have a discussion about "Basic Income".
Our current technology is NOT "The Culture". There is still work to do, it is "simply" (not so simple) a matter of clawing back some cash from those who benefitted most from a stable society.
The WSJ's "10K" plan just sounds like a scam to cut more government jobs while throwing out a small consolation prize to prevent outright rebellion.
The reason I am skeptical of such a view is that production of goods is a tiny fraction of the work humans actually do. A lot of people these days work on solving problems, not on producing goods. And we are far from being short on problems to solve... Alzheimer's, clean energy, climate change...
Saying that humans should not need to work is like saying: This is it. We're done here. This is the world we want.
That's not what's being said. We're not done. This is not the world we want. We should be able to work on Alzheimer's, clean energy and climate change without worrying about where our next meal is coming from.
And, sure, many researches have salaries. But many potential researchers aren't employed, aren't trained, aren't educated. Think of the millions of folks whose passion for helping people, taking care of the planet or tinkering is getting sidelined while they work a cash register to save up for community college. Those people can use a basic income to find a better, more productive, more fulfilling and more useful position in life.
Basic Income gives people a free lunch.
What is the "opportunity cost" of that free lunch?
For those of you unfamiliar with "opportunity cost", here's an example:
- you have two passions at age 18: software and playing in rock bands. You want to become a professional in one of those fields. The rock band choice prevents you from being in a place long enough to be hired to write code. And vice versa.
- You choose to write code. Ten years later you are at the top of your game, age 32. You own a condo and are married and on an 'executive track' at the company you work for.
But had you chosen the 'rock band' career, who knows? Maybe you would have taken off and at age 32 have a string of hit records, millions of fans and million$ in wealth.
That's the 'opportunity cost' -- you cannot do both.
Okay back to Basic Income. A person receiving Basic Income could replace that income by working more. But they don't work more because, why should they?
The opportunity cost of Basic Income is that lost productivity in the economy, the lost output from that person. Who knows how large that economic benefit to society is, when it's replaced by "Basic Income for everyone."
How does the risk/reward tradeoff of this proposal change as that magic number changes?
Also:
> The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare.
What about education funding? What does corporate welfare entail? Defense spending, for example?
After reading about the literary magazines and abstract art that the CIA funded I started thinking what a current program would look like. I think it would look like how basic income is developing.
https://theawl.com/literary-magazines-for-socialists-funded-...
Totally speculation at this point. Just the way that the movement arose. There were a few articles covering it. Then a few communities created around it. Then more and more research done on it. Its emergence was interesting.
Any links?
https://theawl.com/literary-magazines-for-socialists-funded-...