right because it's always the case that those who do and have got to their situation unfairly, not due to hard work and intelligence or looking for opportunities, and that's the reason those who don't are poor, and therefore they deserve to die.
yes, the pragmatic consequences of not adapting are being left behind. life is not fair, and it never will be. even if we implemented a UBI, there would be some other "injustice" to complain about or excuse for inequality. there is no end to it. the only fair system is one where you make your own way.
More accurately, the labor most people are suited for is becoming less valuable relative to capital and the labor of a narrowing elite.
If one allows arbitrarily low wages, jobs wouldn't disappear, just the pay most people could earn in them would drop in relative (and possibly absolute real) terms.
I wonder how much of a deal breaker his lack of charisma is. Certainly people have been elected without it, but it's a nice equalizer if you're short in other areas, like experience.
On the experience front he'd be stuck with the Trump Paradox.
Either Trump's lack of experience will prove to be a huge negative and hurt Zuckerberg due to his similar lack of experience, OR Trump will somehow turn things around and be successful enough to be competitive in 2020 and Trump can claim he has more experience.
presidential politics is mostly about charisma and emotion these days. If he thinks people will listen to good ideas and policy, he'll be sorely mistaken.
Does he sell the data? My impression was that Facebook generally hoards the data and then sells products that use it. The data itself stays inside and then you can use it in very specific ways by using Facebook tools. So you could use Facebook's users' data to target them on Facebook but Mark Zuckerberg isn't giving you the data.
A fair complaint. Let me attempt to justify the difference:
If the data is kept within, then there's a reasonable chance that I'm functionally anonymous to people using Facebook's products. I'm all right if people target ads and stuff. That's cool. It wouldn't bother me.
If they give people access to the raw data, FB'd have to anonymize well, or I'd have to trust all their clients to make sure they don't do anything nefarious. Now I don't like this second part. This would bother me.
That's why I made the distinction. But I understand if you don't and therefore see it is as nitpicking.
Interesting. How about a president that orders bombings on a country (or several of them) which hasn't attacked the US? Or a president that orders drone strikes that kill civilians?
Moore's Law was not a law, only a good fit of the data for a very long time.
The ability of machines to replace people is advancing to points we've never seen before, and I don't think any of us can really predict what will happen.
The ability of machines to replace people advanced to points we've never seen before in every other era either. And we got rid of whole other classes of jobs in the West for entirely different reasons like international trade (textile manufacturing) or culture (domestic servitude). What was persistently underestimated was people's willingness and ability to find new things which people wanted to pay for, many of them hitherto impossible without the ability to manufacture stuff at low cost, and many of them in areas which machines are still very bad at.
Not being able to predict the future is a very strong argument against redesigning the welfare state to give more people money on the assumption that historic links between economic growth and the labour force are about to disappear.
The people assuming Moore's Law will last forever are the people who are making "today I made some radiologists redundant, tomorrow not many jobs in medicine" connections
I'm arguing "as things get cheaper because fewer people were used to make it, you'd better have really good reasons to believe people won't just use the excess money to buy more stuff as we've always observed them do in the past". If there's one resource that seems to consistently fulfil Jevons' Paradox it's labour. We might have fewer radiologists instead of more X-ray scans in future, but I see little reason to believe that won't be offset by the need for highly trained people to calmly reassure them about other diagnostic tools that have only just been invented. Throw in a bit of Veblen "people with excess money actually really like paying people to do things for them in unnecessarily laborious ways to signal how wealthy they are". It's rooted in human psychology as well as a couple of hundred years of empirical observations.
I rather think the burden of proof - especially when calling for drastic action - is on the people arguing this time it'll be different, and they're the ones reliant on projections of trend lines to try to argue that computers that do everything better than humans are [still] only a decade away.
"as things get cheaper because fewer people were used to make it"
You're saying price drops when cost drops, and that's empirically not true.
Price drops when demand drops, or when supply increases.
When the cost drops, then the producer just gets more profit. And if they're wise, they buy or merge with their slightly less efficient competitors, because collusion is illegal, but no one is stopping M&A these days. And for necessary goods like food, water, shelter, clothing, it's not like the demand drops much over time, so the demand stays where it was (or grows with population.)
Worker productivity is through the roof. That's automation.
Real wages are going down. That's evidence. What happens when they keep dropping? "Nothing changes," is your answer?
As I said, it's the neo-Luddites saying "but if you project these country-specific short term trend lines forward indefinitely, we'll all be unemployed...".
Whereas we've got 200 years of data confirming the basic logic that the relative prices of basic food and clothing get much cheaper as lower costs increase competitors' ability to supply, something I'm genuinely amazed you can argue doesn't happen. Sure, individual companies can prop up their monopoly profit margins through IP protection or M&A or positioning themselves as a luxury item, but only in the same sense that water can be forced, in certain circumstances, to flow uphill.
Stop putting words in my mouth, and we can maybe have a real conversation. I'm not advocating protectionism, so that's not a fruitful branch of this conversation.
Food and clothing are cheaper - that's great. The barriers to entry there are pretty low.
How much cheaper is healthcare? Housing? Cars? College?
Is there not enough competition in any of those? (Obviously not.)
> Folks said the same thing before for every industrial revolution. I'd like to see more facts than religion on this matter.
I agree with you that the "jobs are running out" is an argument that requires evidence, given its history of being wrong, but there are good reasons to believe it's going to be true, eventually. To be clear "because it's never happened before" is -also- an argument that's always right, until its wrong.
For example, if you look at the list of most widely held jobs that don't require a college degree and pay middle class salary. It's a rapidly dwindling list and has been declining for a long time. Of the ones that employ many of people, there's basically one left: truck driver. That's the reason that the rise of automated automobiles is coinciding with this conversation.
I don't think that argument holds true for anything other than "automated-away factory worker." There is an increasing demand for most trade jobs like plumbers & electricians as boomers start to retire and fewer people are entering the trades. Someone's always going to have to be there to run wiring in a new building or hook up the gas line when you buy a new stove.
This is something a robot could eventually do, I don't see any reason a bot can't fix plumbing issues... It'll start out as a bot that goes in and sprays something on pipes to repair them, or goes into the drains itself and drills out muck to clear clogs, then the bots will show up via delivery drone and be able to do all that on their own without a plumber, and you just ship back when the issue is fixed...
Machines do steal jobs - the repetitive, manual labor jobs that humans do not want. They also increase efficiency and profits for companies, leading to lower costs for consumers and investments in new industries that may not have existed before.
I worked in Medical Imaging for a decade. I made it so that one Radiologist with my software could do the work of two Radiologists without my software.
Radiologists are highly trained, highly specialized, and earn big, big bucks.
And I was making machines that stole their jobs.
Everyone, and I mean everyone, is at danger of automation helping replace their job.
I had this debate with people all the time, and it turns out I was wrong.
There WILL be jobs.
They were right about that, I believe.
It's just that they won't pay enough to be able to provide for yourself.
We have divisions of labor, because they work.
But your ability to sit in an office, type on a computer, answer phone calls, and go to meetings, only translates into your ability to feed yourself, clothe yourself, have a living space, because of supply and demand. Those skills are in short enough supply right now, that they have enough value... to trade with the people who make your food, clothing, housing.
But if you imagine that in the future, automation is going to make it so that smaller and smaller numbers of people are necessary to do your job (it's happening to Radiologists and Physicists, it can happen to anyone), then essentially there's far too many of you in the supply, so you won't be able to demand good wages.
On the other hand, it's not like the demand for food, clothing, and housing will drop. And even though the COST to make food, clothing, and housing will drop, THAT'S NOT HOW THINGS ARE PRICED. They are priced by their scarcity.
And the machines that make the food, clothing, and housing, are still going to be relatively expensive. (Lucky for the people who own them!)
So the people who own the machines will have you over a barrel. You need what they can make, and you have nothing they want in exchange.
Without Universal Basic Income, I think we'd have to resort to Socialism (literally, the government control of the means of production of basic needs like food, clothing, housing), in order to not have people starving in the streets.
OR
People will stop "dividing their labor," and they'll get good at taking care of themselves. Like the Amish. Farming. Sewing. Textiles. Chopping wood. I don't mean this sarcastically, there's nothing wrong with that kind of life. If you look at history, the Amish are very healthy in comparison to everyone else. Maybe they're more puritanical than any of us would accept, but their DIY, hands on, back to nature life isn't a crazy idea.
But if we do have Universal Basic Income, I think people will find ways to keep busy, and to make some extra money for luxuries.
Want to go to Disney World? Well, work in the record shop you like. Listen to tunes all day, discuss music with people with similar interests. You only earn about $2 an hour, but that's fine. It's all just gravy.
Want to be a Radiologist? That's great - use your UBI to pay for college. Earn tons of money. Go to Disney World all the time.
UBI + Progressive taxes just makes tons of sense to me.
Don't tax me much when I'm getting started in my career. Tax the crap out of me when I'm figuring out whether I can afford 5 weeks or only 4 at Disney World each year.
> On the other hand, it's not like the demand for food, clothing, and housing will drop. And even though the COST to make food, clothing, and housing will drop, THAT'S NOT HOW THINGS ARE PRICED. They are priced by their scarcity.
But if the cost of making food, clothing, and housing drops, but the price doesn't, then a bunch of people are going to look at the situation and see that there's big money to be made. And this will increase the supply until there isn't much scarcity left.
(This argument sweeps a bunch of stuff under the rug, like collusion/cartels, regulation, lag time, and probably a few others. Still, I think the overall point is valid.)
I think the barriers to entry will be sufficiently high, and the mergers and acquisitions will be rapid enough that we won't even need to worry about the things you listed.
You points seem to me as a microcosm of the globalism vs nationalism debate.
Nations specialize to a ridiculous degree and benefit (for a while) from free trade, but then more and more jobs within wealthy nations get priced out of their country.
So a country has less and less they can be competitive on the global stage, while more of their people become unemployed (drain on economy anyways as a result of welfare or UBI needs), if they intend to fully squeeze out all excess costs of goods.
OR
They hedge: Keep some markets local (national) and pay the price of not optimizing all jobs to global maximum efficiency, but retain opportunities for millions more of their citizens to be productively(?) employed.
One point supporting this is you don't want to go years as a country without any experience working in certain markets that you abandoned long ago... if in the future labor costs will rise globally and keeping those jobs at home would become more viable anyways. (well.. automation might make this a moot point. that is probably the bigger issue.. but medium term "globalism" destroying jobs has merit)
Also, hedging your bets as an economy and not putting your eggs in one (highly skilled) basket while depending completely on foreign countries for everything else (global supply chain issues, foreign policy, etc.) just seems prudent.
This is just a case of policy and culture not keeping up with technology.
Globalism happened so fast that the policies of countries who have been somewhat hurt by it have erred on the side of nationalistic rather than redistributive (which would have accounted for the higher marginal productivity of capital vs labor)
Free money for no work, or subsidized jobs? Know what I'm saying?... I personally resist jumping to redistribution with no work attached and would rather see some support of industry that will at least enable people to be gainfully employed.
At the end of the day, you'd be getting money in the hands of those that otherwise couldn't earn it on their own, at the expense of those that can (higher costs for the domestic products produced), but with lesser socially destructive costs of perpetual dependence on welfare transfer payments, food stamps, UBI, etc.
I actually don't see how we have erred on the side of nationalistic policy, yet.. though I see the demand for it now.
Still don't understand how UBI is not inflationary?
No real value is created since its not tied to any productive work. So supply of real good remains static, and in a local market, won't there be sudden increased demand for housing, for example?
QE devalues all dollars equally, but then who receives that wealth? Do all people receive that wealthy equally? Do poor receive that wealth? Do rich people receive that wealth?
Because that money is eventually spent by the govt, whomsoever receives that wealth gets the redistribution of wealth from everyone to them.
I'm saying that large businesses, governments, banks etc. are able to borrow in large quantities, at relative lower rates.
Governments often borrow in astronomical numbers.
Anyone who does this (think of taking on massive debt to finance a real estate business, building apartment complexes for example) has incentives to prefer inflation, QE, devaluing the currency.
Over the course of lets say 30 years, they collect rents from tenants. They can increase the rents over time. Their payment on that debt will stay the same. So in "real" terms, the payments decrease over time, while the rent collected at least matches inflation.
Do you see now how those with ability to borrow large amounts to finance.. whatever.. have incentives to prefer inflation.
Think about the renter. Or the saver. Their dollars are going down in real value. The renter's monthly rent goes up.
Wages? They are sticky. They stay flat for long periods, which in real terms implies a wage cut.
"Inflation is taxation without legislation"
- Milton Friedman
“the arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislature. The inflation tax has a fantastic ability to simply consume capital. It makes no difference to a widow with her saving in a 5 percent passbook account whether she pays 100 percent income tax on her interest income during a period of zero inflation, or pays no income taxes during years of 5 percent inflation. Either way, she is 'taxed' in a manner that leave her no real income whatsoever. Any money she spends comes right out of capital. She would find outrageous a 120 percent income tax, but doesn't seem to notice that 5 percent inflation is the economic equivalent.”
>"Anyone who does this (think of taking on massive debt to finance a real estate business, building apartment complexes for example) has incentives to prefer inflation, QE, devaluing the currency."
I understand why they might prefer devaluation and QE but not why anyone would prefer inflation. Can you explain? Inflation means that I need to borrow that much more.
QE increases the supply of money, which reduces its value, just like most things that are in demand have their price lowered when supply increases.
The reduction in value of cash transfers wealth from people who are cash-rich to people who are asset-rich or have large currency-denominated debt. And because things like salaries are sticky, it also devalues salaried work; this is only partly offset by stickiness in prices, because some goods are imported.
Can you honestly say that, within some defined boundary, whether you think of it as geographic (some predominately low income community) or by product segment (local real estate markets for example), that the money supply hasn't increased after this policy?
Are there not now more dollars chasing the same goods?
I guess $15,000 at the bottom of the market would not tend to have huge localized effects on housing (I think people would be more inclined to move towards cheaper housing than to compete for scarce housing; the $15,000 eases pressure on moving to better paying jobs).
For goods like food, the supply is pretty freaking elastic.
Those concepts aren't really mutually exclusive in this case. What's it matter if the money is being conjured out of thin air by a central bank or being pulled from a billionaire who would otherwise park it somewhere? Either way it's going to create a whole lot of extra demand and cash being spent on goods & services, which will drive inflation.
What does this have to do with the specific criticism of the policy being inflationary?
You could have said "Was it over when the Germans bombed Pearl Harbor?" and it would have had as much bearing on the discussion as undervaluing the growth of the PC market.
Whether one is hopeful or young, or not... doesn't allow them to escape basic economic forces. Do you have an economic argument to inform the conversation?
Believe it or not, I wasn't trying to be snarky. I honestly didn't know if I misunderstood your argument. It was possible that you were talking about using a flawed premise or something that I wasn't understanding.
It's not generally inflationary. Some goods will go up in prices, some will go down, depending on if they're essentials or luxury goods.
Though supply of real goods also wouldn't remain static. To the extent that some people can't afford basic necessities, capital would shift to making those.
The largest "basic necessity" is housing. In popular areas, its price is supported not by the cost of construction materials and labor, but by the interest on circular real estate valuations.
The counter argument seems to be that people could stop working, move to economically unproductive areas (where rent doesn't rise to consume all surplus income), and effectively retire on UBI. To me, this sounds like the polar opposite of a distributed economy, further cementing the rich-poor divide. But centralizing puppetmasters don't consolidate power by advocating for fiscal responsibility.
The dystopia you envision foisted on us by evil centralizing puppetmasters isn't realistic.
For the most highly productive places, a UBI isn't going to result in fresh bidding wars that substantially impact prices. For one, it's simply way too small to have anything but a marginal effect. For two, any plausible funding mechanism for a UBI will substantially tax people and investments in those areas. You're more likely to see a drop in prices in SF and Manhattan than an increase. (Yes, that means a decline in the standard of living for most people commenting here.)
A UBI would have a centrifugal effect, in that it would encourage many people to leave the most costly areas for cheaper areas. But, there would also be centripetal forces too, because of the microstructure of how labor mobility happens: many people are stuck where they live now in Bumblefuck because they lack any liquid capital and are stuck in an economic and social rut. The places that would see the real influx of people, and substantial inflation in real estate prices, are regions that are not top performers but also still economically productive.
That has winners and losers, and it does mean that some of the UBI would be consumed by real estate inflation. But it's implausible that all of it, or even a majority of it, would be.
Prices will go up! So you are right! The immediate effect would definitely be inflationary. Underneath that, though, UBI would be a slight equalizing force on actual purchasing power. Therefore, I guess even in that inflated economy, there would be a bit more demand for apartments. Longer-term, this would mean that more would be built, I'd think.
I suspect that UBI is a very good idea, but also that its fans tend to ignore the second order effects and its critics tend to ignore its third-order effects, which are where I think the real benefits are.
There'd also be a lot more demand for minimal apartments/housing in which you can live in while you save... which, no joke, is exactly the kind of thing I'm looking for at the moment, without much success. ._.
Frankly I figured bezos or etc would've been the first tech leader on that train.
After all, when you're in the business of (A) optimizing every nook and cranny and (B) selling to the masses new luxury technologies, it's in your interests to see that they have the money to waste on such excesses and/or can afford you optimizing away their sources of income.
Same for a company that makes money from advertisers, though. Facebook needs their audience to be able to afford things (or think they can afford things) their advertisers want to sell.
But that's exactly the opposite of what universal basic income should be used for (waste on excesses/luxuries before basic needs are met).
I grew up in a household with relatively little income, where you barely have enough for food and housing. I cannot imagine being in that situation and spending much on random next day delivery luxuries from Amazon - you literally would starve. The first thing on my mind would be upgrading from beans and rice to other foods, etc... that sort of thing.
Buying into luxuries only really occurs when you exceed the ability to provide for basic needs. Basic income if implemented will be tuned to provide basic needs, not luxuries -- the only time I see this changing is in a distant future post-scarcity economy.
Sure, there are extreme levels of poverty where you have to scrounge for spare change just to get one meal per day. Most people would argue that's what existing welfare and unemployment programs should be tuned to better solve.
UBI goes further than those programs, but how many times have you driven past a trailer park or dilapidated rural home or inner city building with plywood on the windows and see a new Silverado or CTS parked outside? There are a lot of people for whom living on credit is already the norm. Giving them additional cash per month isn't going to fix the fact that the US as a whole is already conditioned to buy everything with debt.
> But that's exactly the opposite of what universal basic income should be used for (waste on excesses/luxuries before basic needs are met)
BI going towards fundamentals mean people can work jobs to pay for luxuries rather than having to work jobs and save just to cover the fundamentals, was the point.
It does in whatever amount is mailed out to everyone every month in the form of a UBI check. That is literally money earned without work or without creating value.
UBI is just a "basic" subsistence income with the intent that everyone can afford to participate in society at the most basic level (not the case today). If you want more you can work for it just like you do today. There will still be plenty of jobs that need doing.
I love the idea of a universal basic income. It makes sense from a humanitarian standpoint, an automation taking away jobs standpoint and a minimizing bureaucracy standpoint.
But I have to admit, if you look at it from a pure numbers perspective, it does not make sense financially, even with simple back of the envelope calculations. Take the population of a country. Multiply that by, say something as little as $1000 a month, per person. $12,000 per year.
Completely discard any systems in the government budget that would no longer be needed due to UBI- You'll STILL come up way, way short. This is true even if you completely zero out all the additional services that would become less needed (ie less money to Medicaid because people would be healthier, etc). And this is for just the $1000 dollars a month variant.
Could someone please point me to what kind of tax structure a country would need to have to realistically be able to afford UBI? I would love to see UBI become a reality.
With the limited reading I've done on UBI, it seems like a land value tax could be a good candidate system. We should tax things we want to remove like pollution and congestion, not income and investment.
Generally, UBI schemes advocate some sort of drop-off in payout as people earn money outside of the program (but structured in such a way as to ensure no sticking points of greater than 100% effective marginal tax).
So in net you're not actually giving that $1k/month out to everyone, only the people who don't otherwise make anything. Then someone who makes $1k/month from other sources might pay $500/month in tax, thus reducing their effective, net UBI payment. (note, I made up these numbers completely off the top of my head)
Someone who makes much more than that would also pay much more taxes.
So in the end, UBI needs to be accompanied with some sort of tax reform, and isn't just about sending out checks to everyone (including Warren Buffet) on top of the existing system.
> Generally, UBI schemes advocate some sort of drop-off in payout as people earn money outside of the program
That's the first time I've heard of this. Everything I've seen, everybody gets the same check.
Problem with tracking based on income, you're right back to the same welfare system we already have. You'll need a bureaucracy to track income and eligibility, deal with fraud, etc.
I haven't seen the math. I imagine it depends highly on the amount you want to pay out, savings due to cutting away current programs, etc., but it's certainly a wonderful opportunity to redo our tax structure, which is unnecessarily complex.
> So in the end, UBI needs to be accompanied with some sort of tax reform, and isn't just about sending out checks to everyone (including Warren Buffet) on top of the existing system.
Yes - and the tax reform, fundamentally, has to address the imbalance (colloquial 'income inequality') between the sectors that make money from money (tech, finance, law) and leech it away from people 'trapped' working within sectors that use money as their actual lifeblood (spending it on resources as much as they take in from their sales of goods or services).
Tire companies (or whatever) don't exactly create "cash hoards" quite like Apple - who have $250B just in their offshore fund (i.e. doing nothing for American citizens). The entire basis of this country is apparently this idea that jobs and taxes serve to make access to resources accessible to all; but taxes are written in the orders-of-magnitude wealthier realms that're all but blinded to what even a day in a poor slum looks like.
> So in net you're not actually giving that $1k/month out to everyone, only the people who don't otherwise make anything
Wrong! Wrong wrong! That is BI, not UBI!
This is not just a technicality. The difference between these two is fundamental and massive. A BI scheme (where working means a deterioration of your passive check) ACTIVELY DISCOURAGES WORKING and should absolutely be fought against at every turn, as it paves a bad path for UBI adoption.
UBI - Universal basic income - argues for everyone receiving a baseline to cover fundamentals - shelter, food, clothing - and encouraging them to work to gain things beyond those fundamentals.
UBI should be reworked - for instance, subsidizing housing or food or using 'colored coins' or crypto tokens (or some other technology) to ensure the use on those resources is assured and economically sustainable - but BI is not a workable idea as it actually likely to result in the failure mode that people are quick to assume - a lazy populace - would be the end result of basic income efforts.
Or it's universal in that everyone gets $12k every year but it's taxed back as you earn more. Say, once you start making 75k we tax back $1000 of UBI. Then at $95k you tax back $2k. At $115k wetax back $3k.
Obviously a sliding scale along the way.
That means a person won't start getting the UBI "taken away" until they make 140% of the median household income.
Should mostly reduce the affect UBI has on working.
There's a foundational difference between a world wherein everyone is considered equal for the basic human resources and those who earn more are effectively told that because they do they're an outgroup to that basic net.
Giving the Bill Gates $12k each is a drop in the bucket and absolutely shouldn't be trimmed away in the name of optimization. Those who believe in UBI as I do maintain a hard-line on this.
Under capitalism, those with capital derive profit through the use of their capital (can be money, factories, machines, etc). A substantial pressure on that profit is labor costs. As labor gets removed from the picture through automation, that capital will be even more profitable.
> Could someone please point me to what kind of tax structure a country would need to have to realistically be able to afford UBI?
Personally, I would like to see no corporate tax, 10% for individuals, then X% for anything over $1 mil. I don't have a problem that X% being high enough to pay for whatever is needed to keep society stable and I'm quite sure those paying it wouldn't have an issue either. Far better that than the unemployed masses rioting.
The problem with universal basic income ... is that you'll only get it into law through bi-partisan action. Its appeal on the right primarily comes from the idea that it would replace all the myriad of programs we currently have. Welfare, section 8, food stamps, medicaid, etc. Getting rid of all that bureaucracy and replacing it with a simple system is appealing.
Problem with that is ... all those specialized programs are built so that you are forced to spend that money on specific things. Shelter, food, medicine, etc.
If you give someone a check for $1k and they blow it all on a nice TV ... what then?
Sincere question - wouldn't welfare programs still be needed? I don't think 100% of UBI recipients would spend their money wisely and we'd still end up with people in need of basic services or food.
Often people set up trusts to care for the individuals who are unable to responsibly care for themselves. I'd imagine their UBI check would be deposited into one of those trusts instead of directly into the account of the incapable individual.
It only works when it comes in lieu of traditional entitlements (medicaid, social security, food stamps, etc). Which is also why it is so politically infeasible.
Keeping the calculation back of the envelope, if the population is 320 million and you want $12k a year for everyone, that's 3.9 trillion dollars. If US GDP is 18 trillion, you would need tax an additional 20% of everything to fund UBI. The US taxes a lower share of its GDP than many countries (https://fivethirtyeight.com/datalab/u-s-tax-rates-the-big-pi...), but taxing 20% more would make it far and away the most taxed country in the world.
Everyone shares the home, so I'd think I'd do it by household...but cut 2 checks, average home rental cost nationwide + average cost of food at grocer. Then for each dependent add cost of food..maybe $100-200 extra. So say it's 1200 for rent, and 300 for food, and 3 kids at $100 extra they'd get like 1800 for everyone in household..
While we're at it, a good starting point might be that UBI only be used for those under the poverty line. We just guarantee people make it to the poverty line.
But if we only look at below poverty we have 45m people making under 12k (per person, not household). So that's only $580B. That's a much easier number to come by. And could be less if you're bringing them up to that level, but I think this would need to be above poverty level.
We could make it a little more fair and diminish the amount given based on income. If you're worried about incentives, this might ease problems on those near (but above) poverty line. Possibly providing more social mobility.
This is just me spit-balling here though. We could look at "hybrid" methods that can help ease us into this shift in economy.
I agree, but I'm suggesting it as a good starting step. And what about the graded case? Surely there is a diminishing effect of handing people money once they make a certain amount.
And I'm just saying, with so many against the idea of UBI, just start with a small step. Not as effective, but better than where we're at, right?
It's a lot of money but keep in mind that everyone is getting some portion of it back again. You need to look at the net amount, which (assuming it's funded by a progressive income tax) will depend on income. Another question would be whether it's on top of social security or (more reasonably) social security is lowered so there is no net change.
So the questions to ask are: (1) at what income do you break even? And (2) at what income does the tax increase become significant? It will depend on the details.
Here's a spreadsheet with the math. Bottom right column is the net cost.
Input is two numbers: incremental tax rate R and tax threshold T. Your net UBI is (I-T)*R.
Let's tweak the spreadsheet to get a payment of $12K per household if income is 0. One way to get that is T=30K and R=20%. (The average size of a low-income household is ~2) With those two numbers, the net cost is approximately 0.
But the whole point of UBI is that it can replace welfare, so if you can find $1T in savings, UBI can work with T=60K and R=10%.
UBI is such a fundamental shift to the model that the back-of-the-napkin calculations would look even more basic and stripped away than that. The questions become much more 'fundamental' in nature.
"What is our net import and export? Do the resources we have and import support the mouths we currently have?" "Is there enough developed land to house the homeless who'd otherwise not benefit from that $1000 or whatever you allocate them?"
One of the beautiful things about UBI is that it has the potential to strip away the artificial excesses created in the pockets of the world today that have more money than literally they know what to do with. The sectors in which money simply indicates abstractions like "the degree to which person X has control over companies A/B/C" or "what their risk is if Y thing does or does not happen". The derivatives market, wall street - highly-dressed-up casinos and skill games, essentially, as far as their value to society goes.
> Could someone please point me to what kind of tax structure a country would need to have to realistically be able to afford UBI?
I'm right there with you hoping for this kind of analysis to become more common discourse, but to me the answers that even begin to get at the heart of the problem have much less to do with the money than the fundamentals you're trying to have that money "create".
People would have said the same thing about universal health care before it was done. Providing health care to everyone has a massive price tag, especially by the standards of the day when it was introduced (mid 20th century -- NHS was founded in Britain in 1948). Income tax was relatively new as a major source of government revenue, so if you asked someone before it was introduced how to fund a public health care system, they would have said it's impossible because it's so fantastically expensive. You would have spent all of the government's revenues on the program, and then some. Just like people say now about basic income.
The thing is, the money is going to be spent anyway. Everyone needs health care when they're sick, just like they need to spend money to eat and live. So the net effect on the economy should be negligible. Any difference is because people are currently too cash-poor to spend the money they need to, and that's precisely the social issue you're trying to solve.
But the main difference difference is that to provide it universally you need to make the government a middleman to handle redistributing the money. That means expanding the tax base to cover the difference, so the money is routed through the government rather than being spent directly. For universal health care, income tax provided this extra tax revenue. We'll need to either expand income tax or find a new source of tax revenue to fund universal basic income.
I view universal basic income as the 21st century version of universal health care: the next evolution in the role of governments in society.
I think you might underestimate the cost of services that address the extended consequences of basic poverty. There is lots of criminal enforcement, healthcare, housing, etc., that is disproportionally expensive to maintain due to the perverse incentives created by existing policies.
With basic income, the only people who would need additional services would be those with physical or mental illnesses which prevent them from being able to escape from squalor. Whereas today there are many people whose skill-set consists of many clever ways of exploiting the social programs that are intended to provide much-needed assistance.
Also, with basic income, there would still be taxation of that income so many blighted areas would begin to have a tax base for things like law enforcement and other important infrastructure.
When you consider that nearly half of Americans effectively pay zero income tax today (1), their productive output is very low and most of it goes directly into state taxes and payroll taxes (which are highly regressive).
So the accounting of basic income would necessitate removing the regressive shackles of payroll tax AND replacing the demographically unsustainable social security system with something funded out of general revenue.
The thing I like best about basic income is that it corrects for the political distortions caused by social security. The annual statements are expressed in highly misleading future dollars and the whole thing is a self-perpetuating shell game that nobody can count on.
But imagine instead a large number of voters of all ages who happen to have had to lean on basic income for some period of time in their lives. We'd end up with a system driven (politically) by empathy and experience, at least compared to the status quo when it comes to social welfare programs.
Imagine if everyone who ever took out unemployment insurance, had to consider filing for bankruptcy, ruined his/her credit score due to unexpected job loss, etc., could relate to the usefulness of having that basic income to fall back on.
There would be a huge impact on things like payday lending and all the gray market (or even black market) lending that victimizes the poorest among us. Suddenly a whole swath of minor organized crime vanishes.
Similarly, kids whose parents are unable to create a stable financial environment would have some degree of additional stability. Not to mention the reduced stress placed on the lowest earners. Studies show that low status work is among the most stressful things humans experience, and I would not be surprised if a lot of substance abuse and domestic abuse were reduced by the type of broad cushion that basic income provides.
Even Milton Friedman advocated for Basic Income, calling it "negative taxation" so that there would be a consistent incentive to work which lacked the distortions caused by typical approaches to welfare.
Not to mention as money dries up locally when people lose jobs--more and more businesses will close. Causing more people to be out of work, and more businesses to close, then the big box stores will start closing because nobody can afford to shop anymore---when the poorest people have more money, businesses thrive because they have new customers..Even Ford knew this and it's why he lowered the work week but not the pay, because he wanted people to have time/money to go out and buy new cars.
UBI would need to implemented as a Negative Income Tax where all welfare programs are effectively replaced by the NIT. I think the one caveat would be that for UBI to work under this model, that there is universal healthcare in the mix. The cost of healthcare is used as a benchmark against which the NIT threshold is set.
It would be great if these tech scions spent as much time defending our existing social insurance programs (e.g. food stamps) as they did with these utopian fantasies. UBI will never become a reality in a cultural context that constantly paints any kind of floor on poverty as parasitism and moral failure, which is where we are right now in the US.
Arguments to its effectiveness aside, the current welfare systems seem to have the primary goal of providing for citizens until they can reenter the workforce.
UBI seems to have the primary goal of making sure people can maintain basic living standards when the jobs vanish. There will be a day when "just go flip burgers until something better comes along" will no longer be a valid retort.
Why do you think that? I'd hope that it would lead to outcomes similar to those achieved by some Scandanavian countries with their big social welfare programs.
Gross world product is about $16,000 per capita. So that's about how much your income would be if it was all evenly distributed. That's actually enough to boost you over the poverty line in the US. But people in the US also receive other benefits from the government.
However, given 50 years of modest 2% economic growth, you'd be up to a respectable $43,000 per person.
I don't think it would make sense to have a single equal UBI for the whole world - Not initially at least.
To a poor person in Africa, 16K per year would be like winning the lottery - This is not the case for someone living in a developed country. We should take into account that poverty is relative. UBI is not about making everyone equal (not yet at least), initially it's about giving everyone the freedom to do what they really want.
I am not fan of Zuck. Have never used FB. But I think it was a good speech. He doesn't have to do this. He can be like Larry Page and disconnect from the world and no one is going bother him.
But he seems to have some ideas that I am not going to discount. The point about helping others find purpose and the role of community resonates deeply with me.
I wouldn't be where I am without it. Most of our successful open source work happens exactly this way. Allowing people to discover purpose and feel part of a community. You will constantly hear these words from people at Mozilla or Wikipedia or Khan Academy to pick just places where corporate robots aren't driving the usage of words.
With religious institutions in the west loosing their influence, with capitalism, consumerism, individualism having a cost and being antithetical to solving global problems...talking about helping others find purpose and creating a sense of community feels at least better than anything else I usually here from politicians.
The problem with stabilizing the economic system is that there is too much demand on account of (1) too much greed and (2) too much population.
This creates excessive economic inductance which can only be balanced with economic capacitance (true resources or value - e.g., in goods or services).
The social welfare program is nothing more than an open-ended credit balance system which creates a false capital industry to give nonproductive people a roof over their heads and food in their stomachs. This can be useful, however, because the recipients become state property in return for the "gift," a standing army for the elite. For he who pays the piper picks the tune.
Those who get hooked on the economic drug, must go to the elite for a fix. In this, the method of introducing large amounts of stabilizing capacitance is by borrowing on the future "credit" of the world. This is a fourth law of motion - onset, and consists of performing an action and leaving the system before the reflected reaction returns to the point of action - a delayed reaction.
The means of surviving the reaction is by changing the system before the reaction can return. By this means, politicians become more popular in their own time and the public pays later. In fact, the measure of such a politician is the delay time.
The same thing is achieved by a government by printing money beyond the limit of the gross national product, and economic process called inflation. This puts a large quantity of money into the hands of the public and maintains a balance against their greed, creates a false self-confidence in them and, for awhile, stays the wolf from the door.
They must eventually resort to war to balance the account, because war ultimately is merely the act of destroying the creditor, and the politicians are the publicly hired hit men that justify the act to keep the responsibility and blood off the public conscience. (See section on consent factors and social-economic structuring.)
If the people really cared about their fellow man, they would control their appetites (greed, procreation, etc.) so that they would not have to operate on a credit or welfare social system which steals from the worker to satisfy the bum.
Since most of the general public will not exercise restraint, there are only two alternatives to reduce the economic inductance of the system.
1. Let the populace bludgeon each other to death in war, which will only result in a total destruction of the living earth.
2. Take control of the world by the use of economic "silent weapons" in a form of "quiet warfare" and reduce the economic inductance of the world to a safe level by a process of benevolent slavery and genocide.
The latter option has been taken as the obviously better option. At this point it should be crystal clear to the reader why absolute secrecy about the silent weapons is necessary. The general public refuses to improve its own mentality and its faith in its fellow man. It has become a herd of proliferating barbarians, and, so to speak, a blight upon the face of the earth.
They do not care enough about economic science to learn why they have not been able to avoid war despite religious morality, and their religious or self-gratifying refusal to deal with earthly problems renders the solution of the earthly problem unreachable to them.
It is left to those few who are truly willing to think and survive as the fittest to survive, to solve the problem for themselves as the few who really care. Otherwise, exposure of the silent weapon would destroy our only hope of preserving the seed of the future true humanity.
Not to imply that UBI doesn't have its implementation issues, or that the country is culturally prepared to support it, but Kudos to Mark Z for using his platform to move the discussion out of the narrow spaces of tech and economics communities and into the general conversation.
The spirit of his statements is in direct opposition to the spirit of the recently released white house budget proposal. Hopefully the timing triggers a transformative debate.
Something nobody has mentioned so far: Immigration control. If you have UBI, you probably have to either restrict it to citizens, or control immigration.
I don't think you understand.. some folks in the gov't want to have as much of the population dependent on the gov't as possible. The more people dependent on the gov't the better.
That doesn't change the issue I was mentioning, which is sustainability. And creating a bunch of dependents, then going bankrupt and having to cut off the dependents, won't work out well politically in the long run...
Of course it's not sustainable, that's obvious. But that never stopped idiot politicians who just want votes from the plebes... just look at obamacare.
The premise on which the Universal Basic Income is being sold is that in the future there will be fewer jobs due to automation and therefore we will need to increase the welfare state to compensate. In my opinion that premise is incredibly pessimistic; I don't believe we will ever run out of productive uses for labor. In either case implementing a Universal Basic Income on a national level seems like a logistical and fiscal nightmare. In a world where more countries are attractive places to live, will the rich want to stay in the USA if you can live a better life elsewhere?
I like Zuckerberg because he understands technology, but I'm worried about UBI.
UBI is based on the assumption that everyone will take basic income money and use it responsibly. But we know that's not true for a large part of the population. Gambling and drugs exist, for example. That's not to mention other short term rewards that hurt people in the long term.
UBI in its most corrupt form turns into communism. And we know from the 20th century that communism is corruptible almost by default. We've paid for this knowledge with 100s of millions of humans dieing in multiple countries.
I think of capitalism as a type of learning system that depends on a individual reward signal. Government can also be thought of as a learning system.
In a corrupt system capitalism stops learning and even regresses. People stop participating. In a corrupt government, the government mandates based on really bad abstractions.
So the question becomes "how do we prevent, measure, and fix corruption" than which system we should live by.
Having said that, I'll end up voting for anyone who understands technology. I think it will disrupt employment for essentially everyone, given enough time.
"UBI is based on the assumption that everyone will take basic income money and use it responsibly."
I don't think UBI advocates are assuming anything of the sort. Of course some people are going to spend it on booze and drugs. How is that different from the system we have now, where some people spend their welfare money on...booze and drugs?
> UBI is based on the assumption that everyone will take basic income money and use it responsibly.
No, it's not; neither the libertarian nor the progressive arguments for UBI assume that.
> UBI in its most corrupt form turns into communism
Wait, what? Perhaps some form of communism, by the broadest definition, could be linked to UBI, but even then you'd be equivocating at best when you say:
> And we know from the 20th century that communism is corruptible almost by default. We've paid for this knowledge with 100s of millions of humans dieing in multiple countries.
Since in that bit you are clearly narrowly referring to what has been learned specifically about Leninist vanguardism in the 20th Century (which, actually, plenty of people—including many other communists—observed about its structure and departures from Marxism even before practical experience underlined the problems.)
> I think of capitalism as a type of learning system that depends on a individual reward signal.
Capitalism is an politico-economic system in which, by way of a particular model of property rights, society is ordered to favor the interests of a particular class, the owners of capital ("capitalists"). Hence the name given to that system by its critics when it was the dominant world system.
Now, arguably, the politico-economic systems of modern representative democracies with mixed economies combine a base drawn from 19th Century capitalism and its basic model of property rights with various redistributive and power-limiting mechanisms to implement a "learning system" of the type you describe, but UBI is essentially a retuning and streamlining of some of the redistributive mechanisms in modern mixed economies, not a fundamental change.
UBI in its most corrupt form turns into communism. A
I know it's fashionable to label any level of government involvement in the economy as "communism", but unless the means of production are collectively owned, it's not communism.
Public financing with private delivery is just a form of hybrid capitalism (and is the model used for socialized healthcare delivery in a number of nations).
UBI is supposed to be some kind of safety net, is that right? Isn't that what savings are for? i.e. you're supposed to have 3 months emergency savings, which falls under the personal responsibility category. If you remove personal responsibility, what happens?
Any any rate, I don't think the numbers will ever pencil out, end of story. It's a non starter.
And of course Zuck advocates a UBI, so more people stay at home surfing FB!
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[ 4.9 ms ] story [ 204 ms ] threadJobs are vanishing and no amount of bootstraps will change that.
No, jobs are changing. Adapt or die.
The French aristocracy circa 1789 was certainly surprised. Likewise the Russian aristocracy circa 1917.
The pragmatic consequences of ignoring the people who are "left behind" are guillotines and scaffolds.
"the only fair system is one where you make your own way."
Once again: "fair" doesn't enter into it.
More accurately, the labor most people are suited for is becoming less valuable relative to capital and the labor of a narrowing elite.
If one allows arbitrarily low wages, jobs wouldn't disappear, just the pay most people could earn in them would drop in relative (and possibly absolute real) terms.
Either Trump's lack of experience will prove to be a huge negative and hurt Zuckerberg due to his similar lack of experience, OR Trump will somehow turn things around and be successful enough to be competitive in 2020 and Trump can claim he has more experience.
Also, I can see his taking a position on UBI now as an indicator, and as a way to literally buy votes.
If the data is kept within, then there's a reasonable chance that I'm functionally anonymous to people using Facebook's products. I'm all right if people target ads and stuff. That's cool. It wouldn't bother me.
If they give people access to the raw data, FB'd have to anonymize well, or I'd have to trust all their clients to make sure they don't do anything nefarious. Now I don't like this second part. This would bother me.
That's why I made the distinction. But I understand if you don't and therefore see it is as nitpicking.
Because there are going to be fewer and fewer jobs in the future (automation, etc).
Folks said the same thing before for every industrial revolution. I'd like to see more facts than religion on this matter.
The ability of machines to replace people is advancing to points we've never seen before, and I don't think any of us can really predict what will happen.
Not being able to predict the future is a very strong argument against redesigning the welfare state to give more people money on the assumption that historic links between economic growth and the labour force are about to disappear.
Except you're presuming that Moore's Law will last forever.
How will you know when it's about to stop?
I'm arguing "as things get cheaper because fewer people were used to make it, you'd better have really good reasons to believe people won't just use the excess money to buy more stuff as we've always observed them do in the past". If there's one resource that seems to consistently fulfil Jevons' Paradox it's labour. We might have fewer radiologists instead of more X-ray scans in future, but I see little reason to believe that won't be offset by the need for highly trained people to calmly reassure them about other diagnostic tools that have only just been invented. Throw in a bit of Veblen "people with excess money actually really like paying people to do things for them in unnecessarily laborious ways to signal how wealthy they are". It's rooted in human psychology as well as a couple of hundred years of empirical observations.
I rather think the burden of proof - especially when calling for drastic action - is on the people arguing this time it'll be different, and they're the ones reliant on projections of trend lines to try to argue that computers that do everything better than humans are [still] only a decade away.
You're saying price drops when cost drops, and that's empirically not true.
Price drops when demand drops, or when supply increases.
When the cost drops, then the producer just gets more profit. And if they're wise, they buy or merge with their slightly less efficient competitors, because collusion is illegal, but no one is stopping M&A these days. And for necessary goods like food, water, shelter, clothing, it's not like the demand drops much over time, so the demand stays where it was (or grows with population.)
Worker productivity is through the roof. That's automation.
Real wages are going down. That's evidence. What happens when they keep dropping? "Nothing changes," is your answer?
Whereas we've got 200 years of data confirming the basic logic that the relative prices of basic food and clothing get much cheaper as lower costs increase competitors' ability to supply, something I'm genuinely amazed you can argue doesn't happen. Sure, individual companies can prop up their monopoly profit margins through IP protection or M&A or positioning themselves as a luxury item, but only in the same sense that water can be forced, in certain circumstances, to flow uphill.
Food and clothing are cheaper - that's great. The barriers to entry there are pretty low.
How much cheaper is healthcare? Housing? Cars? College?
Is there not enough competition in any of those? (Obviously not.)
I agree with you that the "jobs are running out" is an argument that requires evidence, given its history of being wrong, but there are good reasons to believe it's going to be true, eventually. To be clear "because it's never happened before" is -also- an argument that's always right, until its wrong.
For example, if you look at the list of most widely held jobs that don't require a college degree and pay middle class salary. It's a rapidly dwindling list and has been declining for a long time. Of the ones that employ many of people, there's basically one left: truck driver. That's the reason that the rise of automated automobiles is coinciding with this conversation.
I worked in Medical Imaging for a decade. I made it so that one Radiologist with my software could do the work of two Radiologists without my software.
Radiologists are highly trained, highly specialized, and earn big, big bucks.
And I was making machines that stole their jobs.
Everyone, and I mean everyone, is at danger of automation helping replace their job.
I had this debate with people all the time, and it turns out I was wrong.
There WILL be jobs.
They were right about that, I believe.
It's just that they won't pay enough to be able to provide for yourself.
We have divisions of labor, because they work.
But your ability to sit in an office, type on a computer, answer phone calls, and go to meetings, only translates into your ability to feed yourself, clothe yourself, have a living space, because of supply and demand. Those skills are in short enough supply right now, that they have enough value... to trade with the people who make your food, clothing, housing.
But if you imagine that in the future, automation is going to make it so that smaller and smaller numbers of people are necessary to do your job (it's happening to Radiologists and Physicists, it can happen to anyone), then essentially there's far too many of you in the supply, so you won't be able to demand good wages.
On the other hand, it's not like the demand for food, clothing, and housing will drop. And even though the COST to make food, clothing, and housing will drop, THAT'S NOT HOW THINGS ARE PRICED. They are priced by their scarcity.
And the machines that make the food, clothing, and housing, are still going to be relatively expensive. (Lucky for the people who own them!)
So the people who own the machines will have you over a barrel. You need what they can make, and you have nothing they want in exchange.
Without Universal Basic Income, I think we'd have to resort to Socialism (literally, the government control of the means of production of basic needs like food, clothing, housing), in order to not have people starving in the streets.
OR
People will stop "dividing their labor," and they'll get good at taking care of themselves. Like the Amish. Farming. Sewing. Textiles. Chopping wood. I don't mean this sarcastically, there's nothing wrong with that kind of life. If you look at history, the Amish are very healthy in comparison to everyone else. Maybe they're more puritanical than any of us would accept, but their DIY, hands on, back to nature life isn't a crazy idea.
But if we do have Universal Basic Income, I think people will find ways to keep busy, and to make some extra money for luxuries.
Want to go to Disney World? Well, work in the record shop you like. Listen to tunes all day, discuss music with people with similar interests. You only earn about $2 an hour, but that's fine. It's all just gravy.
Want to be a Radiologist? That's great - use your UBI to pay for college. Earn tons of money. Go to Disney World all the time.
UBI + Progressive taxes just makes tons of sense to me.
Don't tax me much when I'm getting started in my career. Tax the crap out of me when I'm figuring out whether I can afford 5 weeks or only 4 at Disney World each year.
But if the cost of making food, clothing, and housing drops, but the price doesn't, then a bunch of people are going to look at the situation and see that there's big money to be made. And this will increase the supply until there isn't much scarcity left.
(This argument sweeps a bunch of stuff under the rug, like collusion/cartels, regulation, lag time, and probably a few others. Still, I think the overall point is valid.)
Nations specialize to a ridiculous degree and benefit (for a while) from free trade, but then more and more jobs within wealthy nations get priced out of their country.
So a country has less and less they can be competitive on the global stage, while more of their people become unemployed (drain on economy anyways as a result of welfare or UBI needs), if they intend to fully squeeze out all excess costs of goods.
OR
They hedge: Keep some markets local (national) and pay the price of not optimizing all jobs to global maximum efficiency, but retain opportunities for millions more of their citizens to be productively(?) employed.
One point supporting this is you don't want to go years as a country without any experience working in certain markets that you abandoned long ago... if in the future labor costs will rise globally and keeping those jobs at home would become more viable anyways. (well.. automation might make this a moot point. that is probably the bigger issue.. but medium term "globalism" destroying jobs has merit)
Also, hedging your bets as an economy and not putting your eggs in one (highly skilled) basket while depending completely on foreign countries for everything else (global supply chain issues, foreign policy, etc.) just seems prudent.
Globalism happened so fast that the policies of countries who have been somewhat hurt by it have erred on the side of nationalistic rather than redistributive (which would have accounted for the higher marginal productivity of capital vs labor)
Free money for no work, or subsidized jobs? Know what I'm saying?... I personally resist jumping to redistribution with no work attached and would rather see some support of industry that will at least enable people to be gainfully employed.
At the end of the day, you'd be getting money in the hands of those that otherwise couldn't earn it on their own, at the expense of those that can (higher costs for the domestic products produced), but with lesser socially destructive costs of perpetual dependence on welfare transfer payments, food stamps, UBI, etc.
I actually don't see how we have erred on the side of nationalistic policy, yet.. though I see the demand for it now.
No real value is created since its not tied to any productive work. So supply of real good remains static, and in a local market, won't there be sudden increased demand for housing, for example?
What will happen to apartment prices?
QE vastly inflated equity and real estate values, benefiting the wealthiest (at least in the US).
Because that money is eventually spent by the govt, whomsoever receives that wealth gets the redistribution of wealth from everyone to them.
QE is the creation of something new i.e money supply. A transfer of wealth is ex post facto(that wealth already exists somewhere.)
Or from savers to debtors, no?
The wealth existed in the dollars saved, and the loan asset that was devalued and transferred to the debtor
Why governments love doing it so much because they are the biggest borrowers, and corporations don't mind inflation because it's a cut to real wages.
I found this article which is an interesting read on QE as a means of wealth transfer if anyone else is interested:
https://dealbook.nytimes.com/2014/10/22/how-quantitative-eas...
Governments often borrow in astronomical numbers.
Anyone who does this (think of taking on massive debt to finance a real estate business, building apartment complexes for example) has incentives to prefer inflation, QE, devaluing the currency.
Over the course of lets say 30 years, they collect rents from tenants. They can increase the rents over time. Their payment on that debt will stay the same. So in "real" terms, the payments decrease over time, while the rent collected at least matches inflation.
Do you see now how those with ability to borrow large amounts to finance.. whatever.. have incentives to prefer inflation.
Think about the renter. Or the saver. Their dollars are going down in real value. The renter's monthly rent goes up.
Wages? They are sticky. They stay flat for long periods, which in real terms implies a wage cut.
"Inflation is taxation without legislation"
- Milton Friedman
“the arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislature. The inflation tax has a fantastic ability to simply consume capital. It makes no difference to a widow with her saving in a 5 percent passbook account whether she pays 100 percent income tax on her interest income during a period of zero inflation, or pays no income taxes during years of 5 percent inflation. Either way, she is 'taxed' in a manner that leave her no real income whatsoever. Any money she spends comes right out of capital. She would find outrageous a 120 percent income tax, but doesn't seem to notice that 5 percent inflation is the economic equivalent.”
― Warren Buffett
I understand why they might prefer devaluation and QE but not why anyone would prefer inflation. Can you explain? Inflation means that I need to borrow that much more.
The reduction in value of cash transfers wealth from people who are cash-rich to people who are asset-rich or have large currency-denominated debt. And because things like salaries are sticky, it also devalues salaried work; this is only partly offset by stickiness in prices, because some goods are imported.
Are there not now more dollars chasing the same goods?
For goods like food, the supply is pretty freaking elastic.
A "move towards cheaper housing" by others would be competing against basic income dependents within this market segment.
This is what I meant by within some defined boundary. Here, its the lower end housing market.
You could have said "Was it over when the Germans bombed Pearl Harbor?" and it would have had as much bearing on the discussion as undervaluing the growth of the PC market.
Whether one is hopeful or young, or not... doesn't allow them to escape basic economic forces. Do you have an economic argument to inform the conversation?
http://bfy.tw/C1Mr
Sorry to offend.
Though supply of real goods also wouldn't remain static. To the extent that some people can't afford basic necessities, capital would shift to making those.
The counter argument seems to be that people could stop working, move to economically unproductive areas (where rent doesn't rise to consume all surplus income), and effectively retire on UBI. To me, this sounds like the polar opposite of a distributed economy, further cementing the rich-poor divide. But centralizing puppetmasters don't consolidate power by advocating for fiscal responsibility.
For the most highly productive places, a UBI isn't going to result in fresh bidding wars that substantially impact prices. For one, it's simply way too small to have anything but a marginal effect. For two, any plausible funding mechanism for a UBI will substantially tax people and investments in those areas. You're more likely to see a drop in prices in SF and Manhattan than an increase. (Yes, that means a decline in the standard of living for most people commenting here.)
A UBI would have a centrifugal effect, in that it would encourage many people to leave the most costly areas for cheaper areas. But, there would also be centripetal forces too, because of the microstructure of how labor mobility happens: many people are stuck where they live now in Bumblefuck because they lack any liquid capital and are stuck in an economic and social rut. The places that would see the real influx of people, and substantial inflation in real estate prices, are regions that are not top performers but also still economically productive.
That has winners and losers, and it does mean that some of the UBI would be consumed by real estate inflation. But it's implausible that all of it, or even a majority of it, would be.
I suspect that UBI is a very good idea, but also that its fans tend to ignore the second order effects and its critics tend to ignore its third-order effects, which are where I think the real benefits are.
After all, when you're in the business of (A) optimizing every nook and cranny and (B) selling to the masses new luxury technologies, it's in your interests to see that they have the money to waste on such excesses and/or can afford you optimizing away their sources of income.
I grew up in a household with relatively little income, where you barely have enough for food and housing. I cannot imagine being in that situation and spending much on random next day delivery luxuries from Amazon - you literally would starve. The first thing on my mind would be upgrading from beans and rice to other foods, etc... that sort of thing.
Buying into luxuries only really occurs when you exceed the ability to provide for basic needs. Basic income if implemented will be tuned to provide basic needs, not luxuries -- the only time I see this changing is in a distant future post-scarcity economy.
UBI goes further than those programs, but how many times have you driven past a trailer park or dilapidated rural home or inner city building with plywood on the windows and see a new Silverado or CTS parked outside? There are a lot of people for whom living on credit is already the norm. Giving them additional cash per month isn't going to fix the fact that the US as a whole is already conditioned to buy everything with debt.
BI going towards fundamentals mean people can work jobs to pay for luxuries rather than having to work jobs and save just to cover the fundamentals, was the point.
But I have to admit, if you look at it from a pure numbers perspective, it does not make sense financially, even with simple back of the envelope calculations. Take the population of a country. Multiply that by, say something as little as $1000 a month, per person. $12,000 per year.
Completely discard any systems in the government budget that would no longer be needed due to UBI- You'll STILL come up way, way short. This is true even if you completely zero out all the additional services that would become less needed (ie less money to Medicaid because people would be healthier, etc). And this is for just the $1000 dollars a month variant.
Could someone please point me to what kind of tax structure a country would need to have to realistically be able to afford UBI? I would love to see UBI become a reality.
326e6*12000/18e12 = .21
Which is inline with the size of
https://fred.stlouisfed.org/series/FYONGDA188S
With the limited reading I've done on UBI, it seems like a land value tax could be a good candidate system. We should tax things we want to remove like pollution and congestion, not income and investment.
So in net you're not actually giving that $1k/month out to everyone, only the people who don't otherwise make anything. Then someone who makes $1k/month from other sources might pay $500/month in tax, thus reducing their effective, net UBI payment. (note, I made up these numbers completely off the top of my head)
Someone who makes much more than that would also pay much more taxes.
So in the end, UBI needs to be accompanied with some sort of tax reform, and isn't just about sending out checks to everyone (including Warren Buffet) on top of the existing system.
That's the first time I've heard of this. Everything I've seen, everybody gets the same check.
Problem with tracking based on income, you're right back to the same welfare system we already have. You'll need a bureaucracy to track income and eligibility, deal with fraud, etc.
But some combination of 2 other things also happens, the tax regime changes (to fund the checks) or money is printed.
There's no avoiding it.
I haven't seen the math. I imagine it depends highly on the amount you want to pay out, savings due to cutting away current programs, etc., but it's certainly a wonderful opportunity to redo our tax structure, which is unnecessarily complex.
Sales taxes, value-added taxes, property taxes, excise taxes, tariffs...
Yes - and the tax reform, fundamentally, has to address the imbalance (colloquial 'income inequality') between the sectors that make money from money (tech, finance, law) and leech it away from people 'trapped' working within sectors that use money as their actual lifeblood (spending it on resources as much as they take in from their sales of goods or services).
Tire companies (or whatever) don't exactly create "cash hoards" quite like Apple - who have $250B just in their offshore fund (i.e. doing nothing for American citizens). The entire basis of this country is apparently this idea that jobs and taxes serve to make access to resources accessible to all; but taxes are written in the orders-of-magnitude wealthier realms that're all but blinded to what even a day in a poor slum looks like.
Wrong! Wrong wrong! That is BI, not UBI!
This is not just a technicality. The difference between these two is fundamental and massive. A BI scheme (where working means a deterioration of your passive check) ACTIVELY DISCOURAGES WORKING and should absolutely be fought against at every turn, as it paves a bad path for UBI adoption.
UBI - Universal basic income - argues for everyone receiving a baseline to cover fundamentals - shelter, food, clothing - and encouraging them to work to gain things beyond those fundamentals.
UBI should be reworked - for instance, subsidizing housing or food or using 'colored coins' or crypto tokens (or some other technology) to ensure the use on those resources is assured and economically sustainable - but BI is not a workable idea as it actually likely to result in the failure mode that people are quick to assume - a lazy populace - would be the end result of basic income efforts.
Obviously a sliding scale along the way.
That means a person won't start getting the UBI "taken away" until they make 140% of the median household income.
Should mostly reduce the affect UBI has on working.
There's a foundational difference between a world wherein everyone is considered equal for the basic human resources and those who earn more are effectively told that because they do they're an outgroup to that basic net.
Giving the Bill Gates $12k each is a drop in the bucket and absolutely shouldn't be trimmed away in the name of optimization. Those who believe in UBI as I do maintain a hard-line on this.
> Could someone please point me to what kind of tax structure a country would need to have to realistically be able to afford UBI?
Personally, I would like to see no corporate tax, 10% for individuals, then X% for anything over $1 mil. I don't have a problem that X% being high enough to pay for whatever is needed to keep society stable and I'm quite sure those paying it wouldn't have an issue either. Far better that than the unemployed masses rioting.
The problem with universal basic income ... is that you'll only get it into law through bi-partisan action. Its appeal on the right primarily comes from the idea that it would replace all the myriad of programs we currently have. Welfare, section 8, food stamps, medicaid, etc. Getting rid of all that bureaucracy and replacing it with a simple system is appealing.
Problem with that is ... all those specialized programs are built so that you are forced to spend that money on specific things. Shelter, food, medicine, etc.
If you give someone a check for $1k and they blow it all on a nice TV ... what then?
Which is what happens currently with these systems.
Adult population is 240 million. That's $2.8 trillion. Quite a bit less than your number.
Sure, except that would discourage co-habitation/marriage. You get more checks by living apart. Balancing incentives is actually quite hard.
But if we only look at below poverty we have 45m people making under 12k (per person, not household). So that's only $580B. That's a much easier number to come by. And could be less if you're bringing them up to that level, but I think this would need to be above poverty level.
We could make it a little more fair and diminish the amount given based on income. If you're worried about incentives, this might ease problems on those near (but above) poverty line. Possibly providing more social mobility.
This is just me spit-balling here though. We could look at "hybrid" methods that can help ease us into this shift in economy.
And I'm just saying, with so many against the idea of UBI, just start with a small step. Not as effective, but better than where we're at, right?
So the questions to ask are: (1) at what income do you break even? And (2) at what income does the tax increase become significant? It will depend on the details.
Input is two numbers: incremental tax rate R and tax threshold T. Your net UBI is (I-T)*R.
Let's tweak the spreadsheet to get a payment of $12K per household if income is 0. One way to get that is T=30K and R=20%. (The average size of a low-income household is ~2) With those two numbers, the net cost is approximately 0.
But the whole point of UBI is that it can replace welfare, so if you can find $1T in savings, UBI can work with T=60K and R=10%.
https://docs.google.com/spreadsheets/d/1plUkyt9PuZ_WaLC_BaHg...
"What is our net import and export? Do the resources we have and import support the mouths we currently have?" "Is there enough developed land to house the homeless who'd otherwise not benefit from that $1000 or whatever you allocate them?"
One of the beautiful things about UBI is that it has the potential to strip away the artificial excesses created in the pockets of the world today that have more money than literally they know what to do with. The sectors in which money simply indicates abstractions like "the degree to which person X has control over companies A/B/C" or "what their risk is if Y thing does or does not happen". The derivatives market, wall street - highly-dressed-up casinos and skill games, essentially, as far as their value to society goes.
> Could someone please point me to what kind of tax structure a country would need to have to realistically be able to afford UBI?
I'm right there with you hoping for this kind of analysis to become more common discourse, but to me the answers that even begin to get at the heart of the problem have much less to do with the money than the fundamentals you're trying to have that money "create".
The thing is, the money is going to be spent anyway. Everyone needs health care when they're sick, just like they need to spend money to eat and live. So the net effect on the economy should be negligible. Any difference is because people are currently too cash-poor to spend the money they need to, and that's precisely the social issue you're trying to solve.
But the main difference difference is that to provide it universally you need to make the government a middleman to handle redistributing the money. That means expanding the tax base to cover the difference, so the money is routed through the government rather than being spent directly. For universal health care, income tax provided this extra tax revenue. We'll need to either expand income tax or find a new source of tax revenue to fund universal basic income.
I view universal basic income as the 21st century version of universal health care: the next evolution in the role of governments in society.
With basic income, the only people who would need additional services would be those with physical or mental illnesses which prevent them from being able to escape from squalor. Whereas today there are many people whose skill-set consists of many clever ways of exploiting the social programs that are intended to provide much-needed assistance.
Also, with basic income, there would still be taxation of that income so many blighted areas would begin to have a tax base for things like law enforcement and other important infrastructure.
When you consider that nearly half of Americans effectively pay zero income tax today (1), their productive output is very low and most of it goes directly into state taxes and payroll taxes (which are highly regressive).
So the accounting of basic income would necessitate removing the regressive shackles of payroll tax AND replacing the demographically unsustainable social security system with something funded out of general revenue.
The thing I like best about basic income is that it corrects for the political distortions caused by social security. The annual statements are expressed in highly misleading future dollars and the whole thing is a self-perpetuating shell game that nobody can count on.
But imagine instead a large number of voters of all ages who happen to have had to lean on basic income for some period of time in their lives. We'd end up with a system driven (politically) by empathy and experience, at least compared to the status quo when it comes to social welfare programs.
Imagine if everyone who ever took out unemployment insurance, had to consider filing for bankruptcy, ruined his/her credit score due to unexpected job loss, etc., could relate to the usefulness of having that basic income to fall back on.
There would be a huge impact on things like payday lending and all the gray market (or even black market) lending that victimizes the poorest among us. Suddenly a whole swath of minor organized crime vanishes.
Similarly, kids whose parents are unable to create a stable financial environment would have some degree of additional stability. Not to mention the reduced stress placed on the lowest earners. Studies show that low status work is among the most stressful things humans experience, and I would not be surprised if a lot of substance abuse and domestic abuse were reduced by the type of broad cushion that basic income provides.
Even Milton Friedman advocated for Basic Income, calling it "negative taxation" so that there would be a consistent incentive to work which lacked the distortions caused by typical approaches to welfare.
1: http://www.marketwatch.com/story/45-of-americans-pay-no-fede...
Replacing welfare would still be welfare reform, but it wouldn't really resemble means tested welfare as we have it.
Arguments to its effectiveness aside, the current welfare systems seem to have the primary goal of providing for citizens until they can reenter the workforce.
UBI seems to have the primary goal of making sure people can maintain basic living standards when the jobs vanish. There will be a day when "just go flip burgers until something better comes along" will no longer be a valid retort.
It's probably better than pushing everybody into the federal disability program.
However, given 50 years of modest 2% economic growth, you'd be up to a respectable $43,000 per person.
To a poor person in Africa, 16K per year would be like winning the lottery - This is not the case for someone living in a developed country. We should take into account that poverty is relative. UBI is not about making everyone equal (not yet at least), initially it's about giving everyone the freedom to do what they really want.
With religious institutions in the west loosing their influence, with capitalism, consumerism, individualism having a cost and being antithetical to solving global problems...talking about helping others find purpose and creating a sense of community feels at least better than anything else I usually here from politicians.
This creates excessive economic inductance which can only be balanced with economic capacitance (true resources or value - e.g., in goods or services).
The social welfare program is nothing more than an open-ended credit balance system which creates a false capital industry to give nonproductive people a roof over their heads and food in their stomachs. This can be useful, however, because the recipients become state property in return for the "gift," a standing army for the elite. For he who pays the piper picks the tune.
Those who get hooked on the economic drug, must go to the elite for a fix. In this, the method of introducing large amounts of stabilizing capacitance is by borrowing on the future "credit" of the world. This is a fourth law of motion - onset, and consists of performing an action and leaving the system before the reflected reaction returns to the point of action - a delayed reaction.
The means of surviving the reaction is by changing the system before the reaction can return. By this means, politicians become more popular in their own time and the public pays later. In fact, the measure of such a politician is the delay time.
The same thing is achieved by a government by printing money beyond the limit of the gross national product, and economic process called inflation. This puts a large quantity of money into the hands of the public and maintains a balance against their greed, creates a false self-confidence in them and, for awhile, stays the wolf from the door.
They must eventually resort to war to balance the account, because war ultimately is merely the act of destroying the creditor, and the politicians are the publicly hired hit men that justify the act to keep the responsibility and blood off the public conscience. (See section on consent factors and social-economic structuring.)
If the people really cared about their fellow man, they would control their appetites (greed, procreation, etc.) so that they would not have to operate on a credit or welfare social system which steals from the worker to satisfy the bum.
Since most of the general public will not exercise restraint, there are only two alternatives to reduce the economic inductance of the system.
1. Let the populace bludgeon each other to death in war, which will only result in a total destruction of the living earth.
2. Take control of the world by the use of economic "silent weapons" in a form of "quiet warfare" and reduce the economic inductance of the world to a safe level by a process of benevolent slavery and genocide.
The latter option has been taken as the obviously better option. At this point it should be crystal clear to the reader why absolute secrecy about the silent weapons is necessary. The general public refuses to improve its own mentality and its faith in its fellow man. It has become a herd of proliferating barbarians, and, so to speak, a blight upon the face of the earth.
They do not care enough about economic science to learn why they have not been able to avoid war despite religious morality, and their religious or self-gratifying refusal to deal with earthly problems renders the solution of the earthly problem unreachable to them.
It is left to those few who are truly willing to think and survive as the fittest to survive, to solve the problem for themselves as the few who really care. Otherwise, exposure of the silent weapon would destroy our only hope of preserving the seed of the future true humanity.
--Silent Weapons for Quiet Wars
The spirit of his statements is in direct opposition to the spirit of the recently released white house budget proposal. Hopefully the timing triggers a transformative debate.
UBI is based on the assumption that everyone will take basic income money and use it responsibly. But we know that's not true for a large part of the population. Gambling and drugs exist, for example. That's not to mention other short term rewards that hurt people in the long term.
UBI in its most corrupt form turns into communism. And we know from the 20th century that communism is corruptible almost by default. We've paid for this knowledge with 100s of millions of humans dieing in multiple countries.
I think of capitalism as a type of learning system that depends on a individual reward signal. Government can also be thought of as a learning system.
In a corrupt system capitalism stops learning and even regresses. People stop participating. In a corrupt government, the government mandates based on really bad abstractions.
So the question becomes "how do we prevent, measure, and fix corruption" than which system we should live by.
Having said that, I'll end up voting for anyone who understands technology. I think it will disrupt employment for essentially everyone, given enough time.
I don't think UBI advocates are assuming anything of the sort. Of course some people are going to spend it on booze and drugs. How is that different from the system we have now, where some people spend their welfare money on...booze and drugs?
No, it's not; neither the libertarian nor the progressive arguments for UBI assume that.
> UBI in its most corrupt form turns into communism
Wait, what? Perhaps some form of communism, by the broadest definition, could be linked to UBI, but even then you'd be equivocating at best when you say:
> And we know from the 20th century that communism is corruptible almost by default. We've paid for this knowledge with 100s of millions of humans dieing in multiple countries.
Since in that bit you are clearly narrowly referring to what has been learned specifically about Leninist vanguardism in the 20th Century (which, actually, plenty of people—including many other communists—observed about its structure and departures from Marxism even before practical experience underlined the problems.)
> I think of capitalism as a type of learning system that depends on a individual reward signal.
Capitalism is an politico-economic system in which, by way of a particular model of property rights, society is ordered to favor the interests of a particular class, the owners of capital ("capitalists"). Hence the name given to that system by its critics when it was the dominant world system.
Now, arguably, the politico-economic systems of modern representative democracies with mixed economies combine a base drawn from 19th Century capitalism and its basic model of property rights with various redistributive and power-limiting mechanisms to implement a "learning system" of the type you describe, but UBI is essentially a retuning and streamlining of some of the redistributive mechanisms in modern mixed economies, not a fundamental change.
I know it's fashionable to label any level of government involvement in the economy as "communism", but unless the means of production are collectively owned, it's not communism.
Public financing with private delivery is just a form of hybrid capitalism (and is the model used for socialized healthcare delivery in a number of nations).
Any any rate, I don't think the numbers will ever pencil out, end of story. It's a non starter.
And of course Zuck advocates a UBI, so more people stay at home surfing FB!