Thought we already tried this with all the covid assistance. People took the money a did a combination of 3 things: 1) repaid debt, 2) left the job market, 3) spent the money on toys.
Do you have any charts that are specific to a population receiving welfare vs non welfare recipients rather than the general population? Also one that accounts for the fairly significant confounding variable that was the covid pandemic?
I do appreciate how you're lambasting someone for providing sources by commenting on how a guy won't provide...more sources. Incredible.
Yeah... "just an extra couple thousands dollars". The government pumped in excess of 4 trillion dollars into the market going directly to people [0]. Only 20% of these people spent their second and third check on necessary expenses [1]. So by grade school mathematics 80% of the money was spent on non-necessities.
You don't honestly believe this didn't contribute to inflation? YOLOing money via robinhood, buying electronics, car payments (0% APR loans were everywhere and flying off the shelves), trips, etc. This all contributes to inflation by pumping more money into the system. These people didn't save their money. They spent it like it was going out of style. The result of an overheated economy is...inflation.
Then you pair this with supply constraints induced by government incompetence, large amounts of money printed to buy back treasuries and bail out banks, etc. In total, there is so much extra money in the system we are probably going to see inflation for a while.
I live in a low COL area and my grocery bill has gone up almost 100%. My friends in California have seen that much or more. Gas prices have just tripled in my area. "bogus right wing propaganda" is the ultimate cop-out to such an important issue. Burying your head in the sand and blaming your favorite boogeyman isn't going to make your grocery bill cheaper.
Asset bubbles are a predictable consequence of monetary inflation.
Speculative assets differ from most forms of gambling in very important ways:
1: they lack expiration dates (last year's lottery ticket is not gonna become a winner tomorrow night)
2: even if their value diminishes they still maintain a miniscule probability of 'going to the moon.'
Mix in real stories of folks becoming overnight millionaires along with a guaranteed future check that you can use to cover needs while you are flexing your diamond hodl hands and you've got an addictive recipe to destroy any functioning marketplace.
Trying to stop it thru regulations is going to net you another metric ton of complexity and unintended consequences.
We live in a world of limited resources. Those resources have dynamic & personalized value depending on an arbitrary context at a moment in time. Money is the best worst abstraction we have to quantify and reason about those values. Printing more money doesn't make assigning values to things any easier, it actually complicates it by destroying the unit of account.
Not quite the same. A lot of “give money away” programs look the same. But the incentive design is important. This program is over 3 years and is monthly. This means a few things:
1) if you make a mistake a blow 1k on stupid things, you have a chance to learn next month
2) it is over a 3 year period, which allows the recipient to make decisions like try go to school to improve their overall productivity in society in the long run
When you do cash relief in lump sums and without any long term reliability, the above effects are diminished.
The money is also being given to people who are enrolled in the "General Relief Opportunities for Work, or GROW, program, which provides employment and training services for young adults who face employment and educational barriers and often come from vulnerable backgrounds, including being unhoused or unsheltered."
So, it might be the case that these are exactly the people who are motivated and can realize huge benefits from a little extra cash as they're trying to start their career. The obvious negative alternative is that they're coming from vulnerable backgrounds, and having easy cash in their pocket might lead them back to the same troubles that they are trying to escape from. Well, I guess that's the reason for the pilot program!
Studies of UBI never fail to indicate the lives of people given UBI are better than before. What they don't seem to ever do is try to compare the improvement caused by UBI to alternative ways of spending the same money. Personally I find it unlikely that non-targeted financial assistance is or can ever be as efficient a way to spend funds as targeted assistance.
By this do you mean you think money is better spent by giving people food stamps, subsidized housing, and the like as opposed to simply giving someone cash?
UBI is not only more humane but also creates less overhead than the alternative of the government having to figure out not only how to allocate the funds, but how to actually distribute it to people that need it. Welfare is a complex system and there's a lot of available funding to different "targeted programs" but the burden of knowledge is placed on the people who need the assistance to seek those out. I find that burden unreasonable.
This is the reason UBI was historically popular among (some) libertarians, even though most current proponents in the U.S. probably come from some variety of left-liberalism or market socialism. Milton Friedman supported a version of UBI as a replacement for the welfare state, for example. His view was that if you think it's the role of the state to provide some minimum floor for standard of living, fine. But instead of trying to administer a dozen different programs with complex eligibility requirements and a whole bureaucracy behind them (food stamps, public housing, housing vouchers, Medicaid, etc.), it would be more efficient, less economically distorting, and less invasive into the lives of the recipients, to just pick whatever level of spending you're willing to put towards this goal, and give it out as unrestricted cash.
I am a big fan of Friedman and I think the negative income tax is probably the best form of UBI since it doesn't create much disincentive to find work. The numbers would have to be just so which can be tricky, which does make it a bit more complicated. There is of course some concern about how you'd implement a negative income tax and how that kind of thing could reach the homeless.
A negative income tax is equivalent to UBI combined with increased taxes on mid to top bracket earners. There are some practical concerns such as potential administrative waste from having to distribute and then immediately tax away UBI money or ensuring that NIT is set up to not strain the already extremely tight liquidity/cashflow of low income households (also a problem with the EITC).
> There is of course some concern about how you'd implement a negative income tax
The machinery for this already exists due to the EITC. Expanding it to people without employment is a valid concern, but tax rebates based on income are not a totally foreign idea.
Targeted programs end up with a lot of overhead, and the people doing the targeting tend to have quite different backgrounds and experiences from the people most in need of assistance.
> Personally I find it unlikely that non-targeted financial assistance is or can ever be as efficient a way to spend funds as targeted assistance.
So this may be true, but I think there's good reason to think UBI is more efficient than most aid programs for much the same reason free markets are usually more efficient than planned economies. Targeted systems tend to suffer from a few inefficiencies:
1. The bureaucracy consumes a large amount of money employing people and maintaining infrastructure
2. The burden placed on recipients of the money to ensure they meet the requirements lowers the efficiency of the aid. Even a few hours of appointments a month can end up being very costly in practical terms when you're poor.
3. The more the aid is constrained (e.g. a special card etc.) the higher the likelihood that it doesn't meet the need of the recipient as well as cash would.
The attentive reader may not all three of these inefficiencies are coming from the state's desire to more information about people's needs and wants. I can speak from firsthand experience that each of this issues can drop efficiency substantially.
We must also consider that many targeted programs are... not well considered, shall we say. We've known for decades that putting hard cliffs on benefit based on eligibility criteria is disastrous and yet it keeps happening. I have more than one disabled friends stuck in poverty wage they'll lose medicaid and instantly go bankrupt. This is wildly inefficient.
This is even assuming the eligibility criteria make sense in the first place, which is not a given. All that said, you could still be right, but I think there's enough possible upside it's still worth looking at very seriously.
Giving a person money and then telling them to invest it wisely is not necessarily the worst idea ever.
The risky part is that you're giving the money to random people; as opposed to smart, promising entrepreneurs.
The question becomes what's the risk of free riding & unwise investment, versus indifferent investment, versus people who indeed invest wisely.
Personally I think that -in most of the OECD- the average/net risk already lies somewhat on the wise investment side. (slightly out on a limb: else how could the economy grow to begin with?)
Surely there is a huge difference in getting a one-time amount of "extra" money (which most people would see as a "present") and knowing you'll keep receiving the same amount of money regularly every month for a few years. Furthermore, I clearly remember when we got the covid assistance money a lot of it was to incentivise local spending to support local businesses (at least it was here in Japan, I admit I'm not American so the message maybe was different over there).
In some states in America it was a lot more than a 1 time payment. People got overpaid on unemployment and unemployment extended even to people that didn’t ever have a job to begin with. People were overpaid ten of thousands of dollars too. And on top of that businesses got PPP loans and that was even more money, hundreds of thousands if not millions. Everyone around me raised their truck or bought a camper. It definitely created a lot of government entitlement. I want to be clear I’m not judging this as good or bad but the one time “extra” money was nothing compared to the other payouts people were able to figure out
I used to be a big proponent of UBI, I really believed it had the potential to solve a broad range of problems, but after the pandemic I have to say I think I was completely wrong, perhaps I projected my own "nature" on to other people. I think now that I am an outlier, and probably a lot of people who supported it are outliers as well, while a lot of people who opposed it are just regular people who understand just how lazy regular people are. I am still in shock at how many of my friends intentionally lost their (cushy, white collar, work 4 hours a day from home) jobs and went on unemployment, spent the summer watching sports, smoking weed, and playing games, how many people I knew did really shady stuff to get PPP money to fund luxury purchases, etc. (And all the while complaining about "the billionaires" and how unfair the system was.)
I'll say at least that from where we are now we just had by far the greatest natural experiment we could ever hope for and UBI stands invalidated. Those who still want to push it have a much greater burden of proof, and I'm a bit nervous about UBI programs getting rolled out without proper validation and where that will take us.
A cash infusion and a couple of months of unemployment at a time when most people were afraid to leave their houses does not amount to a strong datapoint against (or for) UBI. Testing UBI's null hypothesis requires normal economic activity.
UBI (in its contemporary form) is most famous for being a product of neoliberal economic and political theory, not socialist economics. The only state in the US that has anything resembling UBI is Alaska[1], and you'd be hard-pressed to characterize them as "socialist."
Most of the world has some amount of socialism mixed in.
Originally this was a strategy devised by Otto von Bismark, a Prussian conservative who thought providing concessions to workers might help keep the communists out of Germany. He succeeded.
Over time, it turned out that social benefits can actually be quite effective for other reasons too.
Today, many OECD countries are explicitly social-democratic. Some countries claim to not be socialist at all, but still do have some (possibly more limited) social programs (eg in education and health care).
> Most of the world has some amount of socialism mixed in.
Why do people keep misusing the definition of socialism. Do workers own the means of production? If not, it's not socialism. Now I'm not a socialist but I'd like the words we use to have meaning so that we all know what we're collectively talking about.
Social benefits and social democracy != socialism, people should just use that term instead.
Richard Nixon was the closest a president has ever been to implementing UBI and one of the biggest proponents for UBI was Milton Friedman through the negative income tax.
That is simply not true. If you did not work you would file an income tax with 0 earned income and be eligible for basic income up to the percentage of the break even point. If the break even point was 10k at a 50% rate a person with 0 income would be entitled to 5k.
The whole point of UBI is that it's designed to preserve capitalism, it keeps people consuming and spending in the face of massive automation and job loss, because if masses of people are out of work and hungry, you will get a real revolution.
UBI keeps the means of production in the hands of those who already hold them.
I disagree. I mean this wasn't a perfect UBI experiment, but there are some core assumptions baked in to the arguments I used to make that are clearly flawed.
In particular it was as close as you're ever going to get to being "universal". For obvious reasons, every other experiment I've ever seen made or proposed was not, and I think that's a pretty significant aspect to the idea.
The flaw isn't just in the fact that it wasn't universal (I didn't receive money, for example). It's also in the fact that most (nearly all?) of the people receiving money were receiving it in lieu of income, and in fact were disabled from obtaining income.
Tack that onto a snarled global supply chain, and it's very difficult to pull meaningful outcomes from the noise: did people increase luxury and discretionary purchases just because they could, or were they influenced by an early glut of staple food purchases? Did people increase discretionary spending to entertain children and compensate for a lack of time spent outdoors and socializing? Did they purchase more expensive foodgoods for similar reasons?
I am not a particular proponent of UBI. But I don't think we (meaning us laypeople on HN) are going to be able, from our vantage point, to draw a useful conclusion from the last 30 months' economic activity. It's simply too weird.
Except so many people did do exactly that. UBI enthusiasts are saying people won’t quit their jobs etc. if it isn’t universal and forever. But they did.
I don't know what a "UBI enthusiast" is, but I'm not it.
I'm not aware of anybody who claims that people won't quit their jobs if you (1) make them stay indoors and (2) give them money, and (3) invert the economy (justifiably!) for 6 months.
The claim that UBI advocates make is that UBI, when actually applied, is just a negative income tax. Alaska has one, and it doesn't make people quit their jobs.
> I'll say at least that from where we are now we just had by far the greatest natural experiment we could ever hope for and UBI stands invalidated.
What about the hoards of people who took the opportunity to stop working at soul crushing jobs and who went and learned a new skill that lead to an actual career?
What about the armies of new artists and creators? The pandemic brought about a slew of new, successful, medium sized educational channels on YouTube.
Restaurants can't find employees because a lot of their previous employees took a year or two off and improved themselves and are now making better money at better jobs.
Did some people piss the money away? Sure. But the explosion of artists, creativity, and self improvement, says that the experiment was a success, and it was only a handful of payments.
Some economists are going to need to do some research to determine that!
Likewise, research is needed to determine under what circumstances people best benefit from UBI and UBI like programs.
We already know that hope is one of the most important factors when it comes to the success of UBI programs. People who have hope for the future, who believe they can improve their lot in life, do great with UBI programs. They go to school, get new jobs, save to buy a house, they plan for the future.
People without hope will spend money on short term indulgences.[1]
One interesting thing is that UBI tends to increase hope, it gives people a stable foundation to fall back on while making improvements in their life. Think about how founders from wealthy families are willing to take risks to make money, until they find something that sticks. Having a real life financial cushion means people can pivot until they find something that works for them.
UBI isn't going to be perfect, some people will leech off the system and do nothing. Some people just aren't motivated. But those people are likely already not doing anything with life, and paying someone enough $ to keep them housed and fed so they aren't living on the street or stealing food is a net financial savings for society anyway.
[1] The most striking examples are people who grew up in neighborhoods that have extremely short life expectancies. If most everyone you know died before they got to 30, why would you ever save up money to buy a house on a 30 year mortgage? If someone's world view is that they are probably going to die in the next few years, of course they are going to spend all their money on indulgences, that is in fact a very rational thing to do! The solution is to show people an out, a way to escape that world view, yelling at people "you are wrong, open a savings account!" doesn't work, especially if friends and family are dying at a steady rate all around.
Sounds like your friends are simply unmotivated to voluntarily work for a system they believe is corrupt.
Laziness has always been a capitalist codeword for "noncompliant worker."
Also, you have to look at the bigger picture here. We can't just put our blinders on and ignore the conditions of this natural UBI experiment, as you are putting it. There was no sense that with this UBI--it wasn't--they were going to be productive members of some socialist society. No, it was a moment where people felt like it was their turn to exploit a system that has been exploiting them since they were children.
I agree with the sentiment that in this context, under the current conditions created by corporate capitalism, UBI would be a horrible idea. It would be better for the people in the long run if they --we--we're out in the streets than packed away in some small rat hole of an apartment, suckling on the corporate dole.
Not coming out for or against UBI, but... isn't that the whole point of universal basic income? That there's no means testing, and everyone qualifies, even grifters?
> a lot of people who opposed it are just regular people who understand just how lazy regular people are
I feel like your underlying assumption is that "if UBI leads people to leave their jobs, UBI has obviously failed", whereas it's literally the very goal of UBI to reduce (or even eliminate, in the case of "full" basic income) the need to hold a job just to have enough income to merely survive. You can argue that's a bad goal if you want, but expecting everyone to continue working despite receiving free money is kind of missing the entire point of handing out that money.
Btw, just because people act a certain way in a short period of time (especially during a time that was so out of the ordinary) that doesn't mean they'd act the same way for ~half a century. Sure some fraction of them might, but lots of people would get bored and try new things. Having nothing to do for months or even a year or two can be fun and exciting for some, but that doesn't mean they'd love the idea of having nothing to do for the rest of their lives. People get bored, people want luxury, people want variety, people want fulfilment, people have kids to raise, etc.
> it's literally the very goal of UBI to reduce (or even eliminate, in the case of "full" basic income) the need to hold a job just to have enough income to merely survive
Without significantly raising taxes on the people who decide to continue to work, how can this be paid for? Genuine question.
I mean, do you really have an incentive to work if 90% of the money is going to taxes which pay for the other people not working? Obviously not, that’s a terrible deal.
And if it’s that hard to find employees, companies will just have to pay a LOT for labor, most of which still goes to taxes, but also causes prices to go up because the company’s costs are so high. Which causes COL to increase because all products have higher costs. Which means “basic” income needs increases, driving up costs, etc etc.
> I mean, do you really have an incentive to work if 90% of the money is going to taxes which pay for the other people not working? Obviously not, that’s a terrible deal.
It's not obvious at all; in fact the tax percentage is meaningless on its own. People get too hung up on tax rates instead of focusing on purchasing power and quality of life. It's almost like adding zeros to the currency. The only thing that matters is your purchasing power (which comes from your net income), not your gross income or what percentage tax that corresponded to. Like if (in today's economy) you pay me $10M/year and I have to pay 90% of that in taxes, I would happily work for you. If you pay me $10k/year, I wouldn't even work for you if my "tax" rate was -100%.
Is there a way to make the math work out? Honestly, I don't know. Maybe it's impossible, maybe it's practical, or maybe it would come with so much baggage that we'll prefer the status quo. What I do know is that the people who declare the answer is obvious consistently arrive at that conclusion by artificially constraining the problem in some way that is not implied by the premises, like "you can't raise taxes significantly", or "you can't touch defense spending", or "we won't decrease healthcare costs", or numerous other things.
>It's not obvious at all; in fact the tax percentage is meaningless on its own. People get too hung up on tax rates instead of focusing on purchasing power and quality of life.
1. in an economy where 30% (or whatever) of people aren't working and the remaining are getting taxed higher % of their income to fund the people who are not working, how is the living standard of the people who are working go up?
2. A sense of "fairness" factors into this as well. People are known to reject "unfair" deals, even though the said unfair deal would still give them strictly positive values.
1. They try to find higher paying jobs to earn more money to raise their living standards. Which is exactly what people who want higher living standards would do right now. I'm not sure I understand your question.
2. The "fairness" that's relevant here is a function of (say) "net income/expended effort", not "tax rate". People get mad that others who put similar effort earn a lot more net income than them, not a lot more gross income.
I think the issue though is that one can not look at money in this situation. A higher paying job means you are more productive, at least to whoever is employing you. It maybe, imo will be, the case that the few people who remain cannot increase the amount of goods and services they produce to provide for the rest of the population.
For example, if before UBI a worker on average was producing one car, and assuming that after UBI half the working population quits their job, that worker now needs to produce two cars for everyone to maintain their standard of living. Except since that additional car must go to the UBI recipient, in other words his income was taxed, his quality of life does not go up despite becoming more productive. So either he needs to become more productive through than one more car so that he can raise his own standard of living, or he just won’t do it.
The rational play is to live off UBI and diamond hands speculative assets, not find a better job. The reason is that with UBI you can believe enough other people will be doing the same, leading to speculative bubble after speculative bubble.
There might be some small amount of leftover for a few of the population, but I doubt it would be much to speculate with other than on scratch off lotteries.
Presumably, UBI would be a single number nationwide. For example, a politically acceptable minimum quality of life in the middle of Mississippi or whatever is cheapest. There is no worrying about people’s variable costs. If they want to live somewhere more expensive, they work for it.
> 1. They try to find higher paying jobs to earn more money to raise their living standards. Which is exactly what people who want higher living standards would do right now. I'm not sure I understand your question.
Where will these higher paying jobs come from? Are they coming from automation or by virtue of UBI being implemented? If it's the former, if I'm 2x more productive, why should I have to give up 0.8x of that productivity to non-workers? Moreover, why should I stay in a jurisdiction that taxes me the productivity gains, as opposed to another jurisdiction that lets me keep all the gains?
>2. The "fairness" that's relevant here is a function of (say) "net income/expended effort", not "tax rate". People get mad that others who put similar effort earn a lot more net income than them, not a lot more gross income.
Is there any research to suggest that people only care about net income/effort rather than gross? It seems pretty obvious in this thread that at least some people are care about the gross income/effort, as evidenced by the disdain of people on UBI as lazy weed smokers.
> do you really have an incentive to work if 90% of the money is going to taxes
There's no reason the tax rate would have to hit that number, or anywhere close to that number. I'd like to see math that supports it. Most math I've seen suggests a far more modest increase in taxes.
UBI is generally thought of as a solution to rising AI. The taxes would come from the corporations generating income from AI and redistributed towards the people, in a sort of "fake" market economy, because the alternative is that the rich own all assets and their economy grinds to a halt because consumers don't have money to buy the corporations' goods anymore, which also causes the corporations to fail too.
lol yeah the guy up there who uses the example of a worker now needing to make "two cars" is very short-sighted and kinda misses the point overall, I can't think of an industry that is a better example of human beings regularly being replaced by machines than manufacturing.
I think the reason youd want to rule this out is because of democracy and the unwillingness of workers to pay UBI to non-workers.
I don’t see a situation where people would be comfortable where workers pay more taxes so people can choose not to work.
There’s not enough billionaires (yet) to tax at 90% to cover this.
I think a more reasonable approach to UBI is to reduce costs for staple goods to such a low rate that it doesn’t cost as much and the need to work is reduced without raising taxes or introducing a freeloader problem. This is positive outcome of AI and cheap energy (think Star Trek).
I personally know several 1000+ GitHub projects where the author is a hugee stoner. A non trivial amount of code from WFH engineers is written while they are blazed.
If you spend your time around artists and engineers you might think that freeing people from their jobs will lead to a modern-day Italian Renaissance but if you knew the people I knew growing up you’d realize that the need to go to work is the only thing keeping them from being even more violently alcoholic than they already are.
Brave New World addressed this by classifying members of society into “alpha,” “beta,” “gamma,” etc.
The lower classes just worked and took drugs (soma) so they could withstand working.
Of course Huxley was writing sci-fi but it does fit into human nature of kind or messing around if possible. Look at chimps… they basically just gather food, sex, and lounge about. We aren’t too far evolved from chimps.
Huxley's Island is his counter-point to the world of BNW. In it they take drugs for enlightenment. He creates a society inspired by Confucian meditation as well as through the economic lens of Henry George. Henry George advocated for a UBI(what he called citizen's dividend) funded through the taxation of land values.
I think this alpha and beta framing is a useful one. I just watched the John Carmack keynote where he is talking about the Oculus operating system, and in it he is seething that the team around him is not valuing simple and piling complexity and its resulting slowness. In a world where only the people who were truly interested in innovation were working with him, I expect that the accidental complexity would be minimized, and the efficiency of his work would go through the roof even more than it has. Trying to make everyone as productive as possible turns out to have large negative effects on those who are as driven for innovation and those people are so productive that this is a net loss long term.
If you gave the average person additional time or money, it's most likely that they'd piss it all away on some form of recreation
> (And all the while complaining about "the billionaires" and how unfair the system was.)
It is an unfair system. That's valid criticism. The solution isn't throwing money at people indiscriminately. We have a broken healthcare system. Why not fix that first? Why not fix the water supplies in places like Flint? Why not create and administer more national parks, or feed the people in this country who are starving? Why not give the money in a targeted way, to solve the poverty issues UBI advocates claim to address? If you give money with no strings attached, how do you know it won't be squandered?
The problem is that the UBI advocates have the same mindset as the deadbeats, they'd rather take the money and burn it. They don't care about development, they'd rather buy votes. UBI is just nihilism politically manifested
edit:
there's two kinds of people who advocate for UBI: rich people who are completely out of touch with average joe, and regular people who want free money
As an opposite view:
If you look at Maslow's hierarchy of needs[1] , you'll see that there are a lot of rungs up the ladder past the bottom one. The average person doesn't need to know who Maslow is, they have the needs just the same.
The bottom 1 or 2 rungs are the hardest to reach. If you help people up, they'll be able to climb the rest of the way themselves. Equality of opportunity and all that.
Sure, some people choose to rot at the level they're at, but most people want to have ALL their needs met, and will keep climbing.
This is borne out by UBI trials. People do in fact do slightly less commercial work, but instead of lazing around, they'll typically go to school, or take care of children.
The overall short term loss of productivity is fairly low. Longer term we don't know for sure since we've never run long enough experiments. I'd predict that those people who went to school would be more productive in the work force later, and the children who got more time invested in them by their parents also do better later in life.
You are absolutely right that the free-rider effect exists. But based on my own life experiences at least, I think the free riders would be outnumbered by the climbers by quite a margin. What's your experience here?
As a disclaimer I'll say I'm not familiar with Maslow aside from the article you attached.
> The bottom 1 or 2 rungs are the hardest to reach.
I'm all for helping people reach the bottom two rungs through targeted spending. UBI is indiscriminate, if our goal is the bottom two rungs specifically why not target the spending for those instead of just giving free money?
> Sure, some people choose to rot at the level they're at, but most people want to have ALL their needs met, and will keep climbing.
I don't agree with this. Apparently (according to the article) Maslow based his theory off of people like Einstein or Spinoza. People like this are the exception, not the rule. The goal is to find these people and give them the opportunity to grow. Throwing money at people indiscriminately is an inefficient way of solving this problem
> You are absolutely right that the free-rider effect exists. But based on my own life experiences at least, I think the free riders would be outnumbered by the climbers by quite a margin. What's your experience here?
My experience is that most people aren't climbers. If you're fortunate enough to be surrounded only by climbers and no one else, you're a lucky person.
From the standpoint of personal development, the world can only have so many people like Einstein or Spinoza. The solution to this isn't throwing money at everyone, the solution (imo) is building up a more effective public education system* so that exceptional people are given the opportunity to grow to their fullest potential regardless of socioeconomic status.
*edit: I'll add that there's a lot of unexplored territory here and not enough experimentation. I think that something like online education (think khan academy) offers an inexpensive and scalable method of disseminating knowledge. The Internet has helped here. But only so many people will take advantage of the opportunities given. Instead of throwing money at people indiscriminately, why not pay people to take online classes and get certifications (and have a way of testing in person that prevents cheating)? This way the money has strings attached and we know that the spending will lead to a more educated populace
> I'm all for helping people reach the bottom two rungs through targeted spending. UBI is indiscriminate, if our goal is the bottom two rungs specifically why not target the spending for those instead of just giving free money?
That does sound like conventional common sense, but this is a situation where common sense actually isn't. It turns out that attempting to target too specifically can quickly turn into a logistic nightmare.
(Next part YMMV, this is very high level, see your local laws/systems for details)
Many welfare systems already just give people money directly, because the assumption in western countries is pretty much that most people over 18 are quite capable of managing their own money as is, and can do so better than any centralized socialist committee.
Those who cannot might be placed under adult guardianship/ward of the court (depending on where you this system has many different names), at which point in time the guardian/ward can (assist in) mak(ing) fine grained decisions.
Some systems do have some amount of limited targeting, and most of them are means tested. Most modern welfare is a kind of Conditional basic income.
One path to understanding why people propose an UNconditional basic income is the discovery of the welfare trap: The means testing that your common sense tells you is supposed to ensure that only people who need it temporarily get welfare, actually traps them in welfare semi-permanently.
If you're not working, your expenditure is lower as well, since you don't need a car or tools, and things don't wear out as much. This can easily be a swing of something like €500-€1000 or more. Say you are a rational actor, you have €1000/mo welfare [1], and you can get a job for €1500/mo [2], should you take it?
Answer: No. You will have less net remaining at the end of the month, or might even run out of cash entirely. And... unfortunately many welfare systems take savings into account wrt means testing as well, so you don't have a runway. Thus, the trap is complete. [3]
If you drop the conditionality of the payments, the trap evaporates. So the outcome of giving people money unconditionally is ironically that more rational actors will actually get a job and not need it anymore. [4] [5]
Ok, that's answer one, and it's getting pretty long. I'll put other answers in another comment, if I get to it.
[1] Typical amount for a single adult in .nl
[2] This is presumably one reason why EU nation minimum wages are often a bit over Eur 1500. This does help mitigate somewhat, but it's still a dicey proposition.
[3] This is obviously something of a toy problem. IRL means testing and subsidies can be a bit more intelligent, but when researching you'll find that the underlying issue definitely there.
[4] This is somewhat borne out in real world tests. However, the tests I give most credibility to -while some people do start working- also see some people dropping out of the commercial working population to put more effort into childcare and/or go back to school, as well as free riders (because there are always free riders). The net result is that roughly the same amount of people keep working. One can argue over exact definition of working population, quality of working population, effect on crime rate... etc. But if you'd expect the amount of workers to drop precipitously, that doesn't tend to happen.
[5] This -then- also explains how you pay for UBI. You can tax people post-hoc once they're working again. This is how a similar proposal [6] by the Nixon Administration would have actually ended up working, sadly that proposal didn't pass.
>> > Sure, some people choose to rot at the level they're at, but most people want to have ALL their needs met, and will keep climbing.
> I don't agree with this.
You don't? Interesting, can you provide examples?
Myself, I don't know many (sane/rational) people who...
1) Don't want to eat, have shelter, or sleep.
2) Don't want to be secure in their persons, be employed, have money and be healthy
3) Don't want any friends/lovers/family.
4) Don't care about themselves, don't want to be respected, and hate freedom.
5) Have never studied or practiced or otherwise put effort into improving themselves or learning anything new in their entire life.
On the other hand, I have seen people of many different professions all fill in this hierarchy in their own way : eg. Farmers, programmers, truck drivers, airline pilots, industrial machine operators, mechanics, driving instructors, used car salesmen, bankers, managers, professors, train conductors... etc. Though every person is a bit different and thus their needs, wants, and ambitions, and their means of achieving them will differ too.
All these professions pretty much demand that you are constantly working up to the self-actualization level. (If only to keep up with the continuous march of progress.)
Perhaps you know people in some of these professions (or others) too?
> how many of my friends intentionally lost their (cushy, white collar, work 4 hours a day from home) jobs and went on unemployment, spent the summer watching sports, smoking weed, and playing games
I'm not being facetious here - isn't that entirely the point of UBI? That nobody works unless they genuinely want to work?
You make (3) sound like a bad thing but it's probably the most rational of the options, $1200 is enough to buy yourself some temporary escapism, not make rent.
Anything less than "UBI is a guaranteed for life amount that will cover rent, medical care, food, water, electricity, heat/ac, and internet" is going to skew the incentives to the point of uselessness.
Once you reach a point where you can simply exist for the rest of your life worry free is when you reap the benefits.
Kind of. The vast majority of covid assistance was given to rich people (via the PPP). As for the stimulus checks, well those were designed to be spent to keep the economy chugging and were pretty small in total.
I’m conflicted, on one hand the lack of any income provides an urgency to work, giving the money could maybe hinder this and encouraging kicking the can down the road.
Alternatively, many times even to just pull your self up by the bootstraps, something is needed for day to day necessity. Even if you get into college, does the pell grant for instance cover enough? Maybe for ramen and some clothes, basic supplies, really cheap rent if you can find it, but beyond that, hard to fathom getting far and every penny helps.
You need to earn above a certain threshold before you actually can manage to hold on to more money, plan for the future, and build your reserves. [1]
Having an income below the threshold may make people feel like they need work more urgently than ever, but unfortunately they won't have sufficient means to turn that will into action.
If -on the other hand- you pay people UBI up to that point (or a little over, to be safe) , you basically ensure equality of opportunity for everyone, and make sure they actually CAN go to work every day and build their fortune.
(Paying for UBI needn't be hard. In one model you can effectively tax back most of the UBI from people who didn't need it. This can be achieved by adjusting tax brackets. )
[1] To hold on to most jobs, you need at least: a roof, a bed, clothes, shower, some amount of study material, transportation, and tools of your trade.
"The Los Angeles County Department of Public Social Services introduced the pilot program, which will provide a three-year guaranteed income for about 300 people ages 18 to 24, the agency said."
This is what I don't quite get. Surely to trial this properly people should get the guaranteed income for life. I don't quite see how one can draw many conclusions from such a short timeframe when people know it is going to end.
The problem is not the medium, but the payment mechanism -- if disbursing those bonds can be stopped by an Act of Congress, then there remains a chance (maybe a small one) that any UBI program will not be a true UBI program. And that affects how the recipients of UBI treat their money.
If your UBI is guaranteed to last 30 years then people would treat it very similar to if it were to go on for their whole life at least for the majority of that 30 years.
> Can you consider any government provided income guaranteed for life?
Congress is sovereign. But states can strike binding contracts under federal law. (They have to lawfully cede their own, limited sovereign immunity, though.)
> Surely to trial this properly people should get the guaranteed income for life.
If you read the article, you will see it states that to be the eligible, one "must currently be enrolled in the General Relief Opportunities for Work, or GROW, program, which provides employment and training services for young adults".
It's not intended to be a lifelong income, so why would they test that with people?
Right, that is very much fair enough then. I was thinking of Universal Basic Income. For which trials are done on a similar timeframe if I'm not mistaken.
Yes. There also seems to be a disconnect from this article and the press release it links. While they both contain the words, "Universal Basic Income," this UBI seems time-bound and purpose driven like an old-fashioned grant that is spread over time.
I think a better approach would be to make an experiment and set people at different times (say 3, 5, 10, 30 years) and see how they compare. Maybe a 3 year trial is enough to draw certain types of conclusions but not others.
In any case, maybe 3 years trial might be enough to justify in the future a longer and bigger experiment which might be the point of these experiments.
There's a difference between giving _some_ people UBI and giving _all_ people UBI.
A simpler example: tell 300 people to drive on the other side of the road to everyone else. This will surely give us meaningful safety data.
When everyone has UBI the only people who benefit are the landlords. We might as well just write another zero to all banknotes and say we solved poverty.
I don't think UBI is a good idea, and I don't think they should call this UBI. But I do think this plan could be the right help at the right time. They're still younger and have a chance.
> Those eligible must currently be enrolled in the General Relief Opportunities for Work, or GROW, program, which provides employment and training services for young adults who face employment and educational barriers and often come from vulnerable backgrounds, including being unhoused or unsheltered.
Ideally the plan would be to expand this out to the whole city, not just the 11 million dollar trial. And frankly, dumping $11 million into the purchasing side of low income housing in LA very well could cause inflation in their local housing supply
I’m not against a UBI but with interest rates rising the interest alone on our national debt is expected to be more than GDP and military spending combined. This is the elephant in the room that no politician seems to want to deal with because “votes.”
The bill for years of unbalanced budgets and qualitative easing will come due soon. It it will likely be in the form of cutting spending, rising taxes, or both.
You'd think that basic income was a no-brainer on both sides of the aisle.
* On the left hand, you don't just get some level of control over maximum income, but also can just directly set an income-floor. What more do you want?
* On the right hand, for one you're basically giving every entrepreneur a "free" ramen budget for their startup to build on top of. At the same time you can also abolish quite a number of subsidies, reducing the costs of bureaucratic administration.
It sounds good on paper, and I used to be in favor of it pre-COVID, but now that a bunch of places basically did it, it's become clear that it leads to way too many people choosing not to work.
I think a number of places gave some one-off subsidies , or even two off (possibly on condition of repay-if-you-can).
I'm not sure many places actually initiated a program of unconditional monthly payments under conditions where people were permitted and encouraged to work.
(With covid, a lot of the payments were as compensation because people couldn't go to work, so you wouldn't see the effect of encouraging work :-/ )
I had friends who got $2-3k per month in unemployment for over a year. This replaced their pre-COVID income $1-2k/month.
It wasn’t perpetual. But they got a raise to not work. And they not only maxed out the benefit but some of them moved back home with family to minimize their costs and banked their unemployment and still aren’t working. They spent their time smoking and playing games.
This was unprecedented. I would like to see a study into how frequently this actually happened as I don’t know how common my anecdote is.
On the other hand, both sides of the aisle can dislike it too:
> * On the left hand, you don't just get some level of control over maximum income, but also can just directly set an income-floor. What more do you want?
"UBI gives people dollars but takes away their free education and food assistance, so they have to choose how to spend the money. We should explicitly guarantee basic rights, not make people purchase them."
> * On the right hand, for one you're basically giving every entrepreneur a "free" ramen budget for their startup to build on top of. At the same time you can also abolish quite a number of subsidies, reducing the costs of bureaucratic administration.
"UBI is additional public spending. Giving people UBI doesn't mean they _don't_ get other benefits too. Also, assistance from the state should be limited to things people in unexpected situations desperately need (like food assistance): it's not a good use of taxpayer money to fund Kim_Bruning's next iPhone."
On either side of the aisle it should be clear that you're giving politicians an extra lever they can use to manage the economy and prevent undesirable outcomes.
Obviously we want to stimulate people's self determination and hard work. On the other hand we don't want people to fall out of the bottom of the system.
With UBI in place as an extra tool, this can be tuned much better than without it.
Later both sides can argue over how much it should be, and what kinds of thing still needs separate subsidies versus where government spending can be reduced. But now they have an extra policy tool to implement their wishes, whichever side of the aisle they're on. Why wouldn't one pick it up?
> On the right hand, for one you're basically giving every entrepreneur a "free" ramen budget for their startup to build on top of. At the same time you can also abolish quite a number of subsidies, reducing the costs of bureaucratic administration.
Too many people here conflate right wing for libertarian.
Can someone edit the title to say it is a trial run for 3 yr duration and 300 people. The title sounds like every Young Adult in LA can enroll into this program which is way more ambitious than what is happening here.
HN hews to using the source title, which I think the submitter did here (based on the URL, 'l-a-basic-income-program-to-give-young-adults-1-000-a-month'). See https://news.ycombinator.com/newsguidelines.html for more.
To those who have issue with editorializing in violation of HN rules, the original source[1] used the title "Three-Year Guaranteed Income Pilot Program for 300 Youth Launches"
It will be a resounding success and the guaranteed income and MMT crowds will point to this study as "proof" that guaranteed income does not cause economy-destroying inflation, always ignoring that it only gave money to 300 people in a city of nearly 4 million.
There, I just saved the city of LA $10,800,000 plus several more millions in bureaucrats.
I don't have sources on hand but iirc, previous trials of the sort have actually been failures. And I'm not talking about the inflation it would obviously cause, but just the social impact.
Basically there is usually no improvement in the situation of anyone, and just more people that decide to do nothing.
If you measure "amount of paid work done" then most (not sure if all) experiments were failures. If you also count unpaid work, education and health benefits[1] then things get interesting.
You mean from a war, an energy crisis, a food crisis, ammonia shortage, neon shortage and post-covid global tension on supply chains around the globe right?
Good! Because the dates match perfectly and the inflation is global, not US centric.
inflation was way overshooting the historic trend line before the war
>an energy crisis, a food crisis, ammonia shortage, neon shortage
Aren't all these just downstream from the war?
>post-covid global tension on supply chains
If that was caused by covid, why was inflation muted during the initial outbreak? Why did inflation only spike starting around mid 2021? It seems more plausible that supply chain tensions were caused by too much money chasing too few goods, not that inflation was caused by "global tension on supply chains".
Have there been any UBI plans designed to avoid warping politics? It seems politically impossible to lower (see Alaska’s challenges [1]) and too attractive for politicians to increase in order to easily win votes.
UBI without LVT is probably inflationary, but LVT would provide a pretty natural mechanism for funding such a thing, and is the natural policy for preventing it from causing inflation, particularly in the housing sector.
Typical UBI trial run. Not universal. Not basic income, unless you consider $12k/yr in LA a livable income. Ends in three years, so no one can retire early or buy a bigger home.
The program will conclude that people are quite happy to receive a $1000 check in the mail each month without measuring the economic impact such a program would make if it were applied to every American long-term.
The “lost” tax revenue would be recouped via increased marginal income/sales taxes. But it is politically impossible because an important voting bloc is already getting disproportionate benefits and reducing their disproportion Jan of a way to win elections.
Same thing that is going to happen to all defined benefits, including mine. They will get inflated away.
That is the beauty of benefits defined in currency. You can have the nominal amount, and you can even adjust it per a CPI, but whether or not it retains the same purchasing power is pretty much always a no.
The feds have the power to issue money. It does not really matter what they get rolled into as long as sufficiently high marginal income/sales tax rates and estate tax rates exist so as to keep the income/wealth gap within a certain range.
So maybe it's not as unreasonable as it sounds. The next question would be - are we doubling what was spent in 2021 or just swapping out the old system with the new one.
Experimenting with the entire country's population and a significant fraction of its economic output seems infeasible and irresponsible. I think the ball is in team UBIs court to devise a reproducible small scale experiment with a decent hypothesis to test before a country wide rollout.
> I think the ball is in team UBIs court to devise a reproducible small scale experiment with a decent hypothesis to test before a country wide rollout.
This is impossible. The “universal” part of UBI is essential. Also, being able to tax it back in order to reduce income/wealth gap is essential, putting it in federal government territory. And, of course, immigration control, which is also federal government territory.
Is this what people mean when they say “UBI is impossible?”
I think we will need some realistic experiments to gather evidence as, obviously I think, UBI can’t be rolled out in a country of hundreds of millions without evidence of success. Or at least evidence of no or minimal harm.
Really, any broad based wealth redistribution that is not able to disproportionately benefit certain voting blocs is politically impossible. UBI lays bare all the subsidies various tribes get in an easily comparable number, which will not be sufficiently popular among active voters.
UBI is not so much impossible as unfalsifiable: the only obvious way to test it makes it not UBI.
UBI looks a lot like a minor rebranding of communist economic policy and has the same no-true-Scotsman problem in which failures are brushed off with "that's not real {UBI/communism}".
I'm reminded of optimization methods, but with money instead of with RAM or CPU. You get the effect of spending all of the money, but you can do most of the work on paper. Whether the remaining cost is worth it is then a political decision, but not unworkable.
Why is there not a non-typical UBI trial run by those who believe in UBI? It doesn't have to be tax funded and it doesn't have to pay out in a low purchasing power country.
For sure there is a 'living on one dollar a day' community that is willing to receive a UBI. That would be $400 per year. With a $4000 pledge per year, it takes 1000 people to finance a 10000 community. Add some technology transfer, and if UBI works, then the community should be able to finance its UBI by themselves after some years.
Seems like a good time to remind everyone CA is one of the richest states, generally has the most progressive homeless policies, and has the highest rate of poverty in the US (sometimes second to Hawaii). People have also been trying universal basic income program trials for decades and there's a reason they're never implemented, or if they are they're quickly repealed
While I think the experiment is likely dumb, criticizing authors for not mixing science with charity is not productive.
For experiment like that it's already virtually impossible to produce valuable results. If you throw charity in the mix you're going to get less science. If one goal is already too hard, why would you make two goals? Unless you already believe there's no science here.
a) it's not any kind of science in the first place
b) it is in fact charity and
c) it's poorly and unfairly directed charity
I'm not critiquing the authors. I'm critiquing the dumb social program.
The article said it was a "pilot" program and talks about unlocking their full potential. I'd certainly hope that was the point to just about any charitable program - so why pick this demographic over that one?
Given the immense vitriol in the comments that from what I can see comes mostly from US folks, what kind of person does want this in the US? Where is the push for this coming from, given that it has to be rich people or otherwise politics wouldn't move an inch? The group that wants this must exist, or it wouldn't happen at all.
I’m not sure how these lottery programs help to test anything.
I think people understand that giving people $1k has benefits to them. The question is about whether the cost is sustainable across a large population (LA has $4M people so finding $4B/month will be tricky) and the effects on labor and inflation.
These projects don’t seem to have a clear hypothesis and basically amount to “do people like cake? Let’s see”
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[ 2.8 ms ] story [ 243 ms ] thread1) Consumer debt: https://fred.stlouisfed.org/series/CCLACBW027SBOG
2) Labor participation: https://fred.stlouisfed.org/series/CIVPART
3) Inflation rate (look at 5 year): https://tradingeconomics.com/united-states/inflation-cpi
Yeah... "just an extra couple thousands dollars". The government pumped in excess of 4 trillion dollars into the market going directly to people [0]. Only 20% of these people spent their second and third check on necessary expenses [1]. So by grade school mathematics 80% of the money was spent on non-necessities.
You don't honestly believe this didn't contribute to inflation? YOLOing money via robinhood, buying electronics, car payments (0% APR loans were everywhere and flying off the shelves), trips, etc. This all contributes to inflation by pumping more money into the system. These people didn't save their money. They spent it like it was going out of style. The result of an overheated economy is...inflation.
Then you pair this with supply constraints induced by government incompetence, large amounts of money printed to buy back treasuries and bail out banks, etc. In total, there is so much extra money in the system we are probably going to see inflation for a while.
I live in a low COL area and my grocery bill has gone up almost 100%. My friends in California have seen that much or more. Gas prices have just tripled in my area. "bogus right wing propaganda" is the ultimate cop-out to such an important issue. Burying your head in the sand and blaming your favorite boogeyman isn't going to make your grocery bill cheaper.
Sources added because LMGTFY:
[0] https://www.nytimes.com/2021/11/24/magazine/pandemic-aid.htm...
[1] https://www.forbes.com/sites/zackfriedman/2021/06/01/heres-h...
3) spent the money on toys, crypto, stocks, and other assets that have now cratered.
I do wonder if asset bubbles will be a significant unintended consequence of basic income. Would it stabilize over time?
Speculative assets differ from most forms of gambling in very important ways:
1: they lack expiration dates (last year's lottery ticket is not gonna become a winner tomorrow night)
2: even if their value diminishes they still maintain a miniscule probability of 'going to the moon.'
Mix in real stories of folks becoming overnight millionaires along with a guaranteed future check that you can use to cover needs while you are flexing your diamond hodl hands and you've got an addictive recipe to destroy any functioning marketplace.
Trying to stop it thru regulations is going to net you another metric ton of complexity and unintended consequences.
We live in a world of limited resources. Those resources have dynamic & personalized value depending on an arbitrary context at a moment in time. Money is the best worst abstraction we have to quantify and reason about those values. Printing more money doesn't make assigning values to things any easier, it actually complicates it by destroying the unit of account.
When you do cash relief in lump sums and without any long term reliability, the above effects are diminished.
So, it might be the case that these are exactly the people who are motivated and can realize huge benefits from a little extra cash as they're trying to start their career. The obvious negative alternative is that they're coming from vulnerable backgrounds, and having easy cash in their pocket might lead them back to the same troubles that they are trying to escape from. Well, I guess that's the reason for the pilot program!
UBI is not only more humane but also creates less overhead than the alternative of the government having to figure out not only how to allocate the funds, but how to actually distribute it to people that need it. Welfare is a complex system and there's a lot of available funding to different "targeted programs" but the burden of knowledge is placed on the people who need the assistance to seek those out. I find that burden unreasonable.
> There is of course some concern about how you'd implement a negative income tax
The machinery for this already exists due to the EITC. Expanding it to people without employment is a valid concern, but tax rebates based on income are not a totally foreign idea.
So this may be true, but I think there's good reason to think UBI is more efficient than most aid programs for much the same reason free markets are usually more efficient than planned economies. Targeted systems tend to suffer from a few inefficiencies:
1. The bureaucracy consumes a large amount of money employing people and maintaining infrastructure
2. The burden placed on recipients of the money to ensure they meet the requirements lowers the efficiency of the aid. Even a few hours of appointments a month can end up being very costly in practical terms when you're poor.
3. The more the aid is constrained (e.g. a special card etc.) the higher the likelihood that it doesn't meet the need of the recipient as well as cash would.
The attentive reader may not all three of these inefficiencies are coming from the state's desire to more information about people's needs and wants. I can speak from firsthand experience that each of this issues can drop efficiency substantially.
We must also consider that many targeted programs are... not well considered, shall we say. We've known for decades that putting hard cliffs on benefit based on eligibility criteria is disastrous and yet it keeps happening. I have more than one disabled friends stuck in poverty wage they'll lose medicaid and instantly go bankrupt. This is wildly inefficient.
This is even assuming the eligibility criteria make sense in the first place, which is not a given. All that said, you could still be right, but I think there's enough possible upside it's still worth looking at very seriously.
Giving a person money and then telling them to invest it wisely is not necessarily the worst idea ever.
The risky part is that you're giving the money to random people; as opposed to smart, promising entrepreneurs.
The question becomes what's the risk of free riding & unwise investment, versus indifferent investment, versus people who indeed invest wisely.
Personally I think that -in most of the OECD- the average/net risk already lies somewhat on the wise investment side. (slightly out on a limb: else how could the economy grow to begin with?)
Just 1 link of many stories if you google it.. https://www.clickondetroit.com/consumer/help-me-hank/2022/07...
I'll say at least that from where we are now we just had by far the greatest natural experiment we could ever hope for and UBI stands invalidated. Those who still want to push it have a much greater burden of proof, and I'm a bit nervous about UBI programs getting rolled out without proper validation and where that will take us.
[1]: https://en.wikipedia.org/wiki/Alaska_Permanent_Fund
Originally this was a strategy devised by Otto von Bismark, a Prussian conservative who thought providing concessions to workers might help keep the communists out of Germany. He succeeded.
Over time, it turned out that social benefits can actually be quite effective for other reasons too.
Today, many OECD countries are explicitly social-democratic. Some countries claim to not be socialist at all, but still do have some (possibly more limited) social programs (eg in education and health care).
Why do people keep misusing the definition of socialism. Do workers own the means of production? If not, it's not socialism. Now I'm not a socialist but I'd like the words we use to have meaning so that we all know what we're collectively talking about.
Social benefits and social democracy != socialism, people should just use that term instead.
For so many instances of the word "social", it's difficult to see how we can't just tack -ism at the end and be happy.
A negative income tax is most definitely not UBI. You still have to work to get it, therefore it's not universal. It's a pure wage subsidy program.
UBI keeps the means of production in the hands of those who already hold them.
In particular it was as close as you're ever going to get to being "universal". For obvious reasons, every other experiment I've ever seen made or proposed was not, and I think that's a pretty significant aspect to the idea.
Tack that onto a snarled global supply chain, and it's very difficult to pull meaningful outcomes from the noise: did people increase luxury and discretionary purchases just because they could, or were they influenced by an early glut of staple food purchases? Did people increase discretionary spending to entertain children and compensate for a lack of time spent outdoors and socializing? Did they purchase more expensive foodgoods for similar reasons?
I am not a particular proponent of UBI. But I don't think we (meaning us laypeople on HN) are going to be able, from our vantage point, to draw a useful conclusion from the last 30 months' economic activity. It's simply too weird.
I'm not aware of anybody who claims that people won't quit their jobs if you (1) make them stay indoors and (2) give them money, and (3) invert the economy (justifiably!) for 6 months.
The claim that UBI advocates make is that UBI, when actually applied, is just a negative income tax. Alaska has one, and it doesn't make people quit their jobs.
What about the hoards of people who took the opportunity to stop working at soul crushing jobs and who went and learned a new skill that lead to an actual career?
What about the armies of new artists and creators? The pandemic brought about a slew of new, successful, medium sized educational channels on YouTube.
Restaurants can't find employees because a lot of their previous employees took a year or two off and improved themselves and are now making better money at better jobs.
Did some people piss the money away? Sure. But the explosion of artists, creativity, and self improvement, says that the experiment was a success, and it was only a handful of payments.
Likewise, research is needed to determine under what circumstances people best benefit from UBI and UBI like programs.
We already know that hope is one of the most important factors when it comes to the success of UBI programs. People who have hope for the future, who believe they can improve their lot in life, do great with UBI programs. They go to school, get new jobs, save to buy a house, they plan for the future.
People without hope will spend money on short term indulgences.[1]
One interesting thing is that UBI tends to increase hope, it gives people a stable foundation to fall back on while making improvements in their life. Think about how founders from wealthy families are willing to take risks to make money, until they find something that sticks. Having a real life financial cushion means people can pivot until they find something that works for them.
UBI isn't going to be perfect, some people will leech off the system and do nothing. Some people just aren't motivated. But those people are likely already not doing anything with life, and paying someone enough $ to keep them housed and fed so they aren't living on the street or stealing food is a net financial savings for society anyway.
[1] The most striking examples are people who grew up in neighborhoods that have extremely short life expectancies. If most everyone you know died before they got to 30, why would you ever save up money to buy a house on a 30 year mortgage? If someone's world view is that they are probably going to die in the next few years, of course they are going to spend all their money on indulgences, that is in fact a very rational thing to do! The solution is to show people an out, a way to escape that world view, yelling at people "you are wrong, open a savings account!" doesn't work, especially if friends and family are dying at a steady rate all around.
Laziness has always been a capitalist codeword for "noncompliant worker."
Also, you have to look at the bigger picture here. We can't just put our blinders on and ignore the conditions of this natural UBI experiment, as you are putting it. There was no sense that with this UBI--it wasn't--they were going to be productive members of some socialist society. No, it was a moment where people felt like it was their turn to exploit a system that has been exploiting them since they were children.
I agree with the sentiment that in this context, under the current conditions created by corporate capitalism, UBI would be a horrible idea. It would be better for the people in the long run if they --we--we're out in the streets than packed away in some small rat hole of an apartment, suckling on the corporate dole.
Not coming out for or against UBI, but... isn't that the whole point of universal basic income? That there's no means testing, and everyone qualifies, even grifters?
I feel like your underlying assumption is that "if UBI leads people to leave their jobs, UBI has obviously failed", whereas it's literally the very goal of UBI to reduce (or even eliminate, in the case of "full" basic income) the need to hold a job just to have enough income to merely survive. You can argue that's a bad goal if you want, but expecting everyone to continue working despite receiving free money is kind of missing the entire point of handing out that money.
Btw, just because people act a certain way in a short period of time (especially during a time that was so out of the ordinary) that doesn't mean they'd act the same way for ~half a century. Sure some fraction of them might, but lots of people would get bored and try new things. Having nothing to do for months or even a year or two can be fun and exciting for some, but that doesn't mean they'd love the idea of having nothing to do for the rest of their lives. People get bored, people want luxury, people want variety, people want fulfilment, people have kids to raise, etc.
Without significantly raising taxes on the people who decide to continue to work, how can this be paid for? Genuine question.
And if it’s that hard to find employees, companies will just have to pay a LOT for labor, most of which still goes to taxes, but also causes prices to go up because the company’s costs are so high. Which causes COL to increase because all products have higher costs. Which means “basic” income needs increases, driving up costs, etc etc.
It's not obvious at all; in fact the tax percentage is meaningless on its own. People get too hung up on tax rates instead of focusing on purchasing power and quality of life. It's almost like adding zeros to the currency. The only thing that matters is your purchasing power (which comes from your net income), not your gross income or what percentage tax that corresponded to. Like if (in today's economy) you pay me $10M/year and I have to pay 90% of that in taxes, I would happily work for you. If you pay me $10k/year, I wouldn't even work for you if my "tax" rate was -100%.
Is there a way to make the math work out? Honestly, I don't know. Maybe it's impossible, maybe it's practical, or maybe it would come with so much baggage that we'll prefer the status quo. What I do know is that the people who declare the answer is obvious consistently arrive at that conclusion by artificially constraining the problem in some way that is not implied by the premises, like "you can't raise taxes significantly", or "you can't touch defense spending", or "we won't decrease healthcare costs", or numerous other things.
1. in an economy where 30% (or whatever) of people aren't working and the remaining are getting taxed higher % of their income to fund the people who are not working, how is the living standard of the people who are working go up?
2. A sense of "fairness" factors into this as well. People are known to reject "unfair" deals, even though the said unfair deal would still give them strictly positive values.
2. The "fairness" that's relevant here is a function of (say) "net income/expended effort", not "tax rate". People get mad that others who put similar effort earn a lot more net income than them, not a lot more gross income.
For example, if before UBI a worker on average was producing one car, and assuming that after UBI half the working population quits their job, that worker now needs to produce two cars for everyone to maintain their standard of living. Except since that additional car must go to the UBI recipient, in other words his income was taxed, his quality of life does not go up despite becoming more productive. So either he needs to become more productive through than one more car so that he can raise his own standard of living, or he just won’t do it.
Given any amount of UBI people will be able to fix their costs below that and put the rest toward speculation.
I don’t know of a way to fix UBI right at cost because there is so much variability for a person’s costs.
Presumably, UBI would be a single number nationwide. For example, a politically acceptable minimum quality of life in the middle of Mississippi or whatever is cheapest. There is no worrying about people’s variable costs. If they want to live somewhere more expensive, they work for it.
Where will these higher paying jobs come from? Are they coming from automation or by virtue of UBI being implemented? If it's the former, if I'm 2x more productive, why should I have to give up 0.8x of that productivity to non-workers? Moreover, why should I stay in a jurisdiction that taxes me the productivity gains, as opposed to another jurisdiction that lets me keep all the gains?
>2. The "fairness" that's relevant here is a function of (say) "net income/expended effort", not "tax rate". People get mad that others who put similar effort earn a lot more net income than them, not a lot more gross income.
Is there any research to suggest that people only care about net income/effort rather than gross? It seems pretty obvious in this thread that at least some people are care about the gross income/effort, as evidenced by the disdain of people on UBI as lazy weed smokers.
How is this any different from other social programs like Social Security or Welfare?
There's no reason the tax rate would have to hit that number, or anywhere close to that number. I'd like to see math that supports it. Most math I've seen suggests a far more modest increase in taxes.
I don’t see a situation where people would be comfortable where workers pay more taxes so people can choose not to work.
There’s not enough billionaires (yet) to tax at 90% to cover this.
I think a more reasonable approach to UBI is to reduce costs for staple goods to such a low rate that it doesn’t cost as much and the need to work is reduced without raising taxes or introducing a freeloader problem. This is positive outcome of AI and cheap energy (think Star Trek).
The lower classes just worked and took drugs (soma) so they could withstand working.
Of course Huxley was writing sci-fi but it does fit into human nature of kind or messing around if possible. Look at chimps… they basically just gather food, sex, and lounge about. We aren’t too far evolved from chimps.
I think this alpha and beta framing is a useful one. I just watched the John Carmack keynote where he is talking about the Oculus operating system, and in it he is seething that the team around him is not valuing simple and piling complexity and its resulting slowness. In a world where only the people who were truly interested in innovation were working with him, I expect that the accidental complexity would be minimized, and the efficiency of his work would go through the roof even more than it has. Trying to make everyone as productive as possible turns out to have large negative effects on those who are as driven for innovation and those people are so productive that this is a net loss long term.
> (And all the while complaining about "the billionaires" and how unfair the system was.)
It is an unfair system. That's valid criticism. The solution isn't throwing money at people indiscriminately. We have a broken healthcare system. Why not fix that first? Why not fix the water supplies in places like Flint? Why not create and administer more national parks, or feed the people in this country who are starving? Why not give the money in a targeted way, to solve the poverty issues UBI advocates claim to address? If you give money with no strings attached, how do you know it won't be squandered?
The problem is that the UBI advocates have the same mindset as the deadbeats, they'd rather take the money and burn it. They don't care about development, they'd rather buy votes. UBI is just nihilism politically manifested
edit: there's two kinds of people who advocate for UBI: rich people who are completely out of touch with average joe, and regular people who want free money
As an opposite view: If you look at Maslow's hierarchy of needs[1] , you'll see that there are a lot of rungs up the ladder past the bottom one. The average person doesn't need to know who Maslow is, they have the needs just the same.
The bottom 1 or 2 rungs are the hardest to reach. If you help people up, they'll be able to climb the rest of the way themselves. Equality of opportunity and all that.
Sure, some people choose to rot at the level they're at, but most people want to have ALL their needs met, and will keep climbing.
This is borne out by UBI trials. People do in fact do slightly less commercial work, but instead of lazing around, they'll typically go to school, or take care of children.
The overall short term loss of productivity is fairly low. Longer term we don't know for sure since we've never run long enough experiments. I'd predict that those people who went to school would be more productive in the work force later, and the children who got more time invested in them by their parents also do better later in life.
You are absolutely right that the free-rider effect exists. But based on my own life experiences at least, I think the free riders would be outnumbered by the climbers by quite a margin. What's your experience here?
[1] https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs
> The bottom 1 or 2 rungs are the hardest to reach.
I'm all for helping people reach the bottom two rungs through targeted spending. UBI is indiscriminate, if our goal is the bottom two rungs specifically why not target the spending for those instead of just giving free money?
> Sure, some people choose to rot at the level they're at, but most people want to have ALL their needs met, and will keep climbing.
I don't agree with this. Apparently (according to the article) Maslow based his theory off of people like Einstein or Spinoza. People like this are the exception, not the rule. The goal is to find these people and give them the opportunity to grow. Throwing money at people indiscriminately is an inefficient way of solving this problem
> You are absolutely right that the free-rider effect exists. But based on my own life experiences at least, I think the free riders would be outnumbered by the climbers by quite a margin. What's your experience here?
My experience is that most people aren't climbers. If you're fortunate enough to be surrounded only by climbers and no one else, you're a lucky person.
From the standpoint of personal development, the world can only have so many people like Einstein or Spinoza. The solution to this isn't throwing money at everyone, the solution (imo) is building up a more effective public education system* so that exceptional people are given the opportunity to grow to their fullest potential regardless of socioeconomic status.
*edit: I'll add that there's a lot of unexplored territory here and not enough experimentation. I think that something like online education (think khan academy) offers an inexpensive and scalable method of disseminating knowledge. The Internet has helped here. But only so many people will take advantage of the opportunities given. Instead of throwing money at people indiscriminately, why not pay people to take online classes and get certifications (and have a way of testing in person that prevents cheating)? This way the money has strings attached and we know that the spending will lead to a more educated populace
That does sound like conventional common sense, but this is a situation where common sense actually isn't. It turns out that attempting to target too specifically can quickly turn into a logistic nightmare.
(Next part YMMV, this is very high level, see your local laws/systems for details)
Many welfare systems already just give people money directly, because the assumption in western countries is pretty much that most people over 18 are quite capable of managing their own money as is, and can do so better than any centralized socialist committee.
Those who cannot might be placed under adult guardianship/ward of the court (depending on where you this system has many different names), at which point in time the guardian/ward can (assist in) mak(ing) fine grained decisions.
Some systems do have some amount of limited targeting, and most of them are means tested. Most modern welfare is a kind of Conditional basic income.
One path to understanding why people propose an UNconditional basic income is the discovery of the welfare trap: The means testing that your common sense tells you is supposed to ensure that only people who need it temporarily get welfare, actually traps them in welfare semi-permanently.
If you're not working, your expenditure is lower as well, since you don't need a car or tools, and things don't wear out as much. This can easily be a swing of something like €500-€1000 or more. Say you are a rational actor, you have €1000/mo welfare [1], and you can get a job for €1500/mo [2], should you take it?
Answer: No. You will have less net remaining at the end of the month, or might even run out of cash entirely. And... unfortunately many welfare systems take savings into account wrt means testing as well, so you don't have a runway. Thus, the trap is complete. [3]
If you drop the conditionality of the payments, the trap evaporates. So the outcome of giving people money unconditionally is ironically that more rational actors will actually get a job and not need it anymore. [4] [5]
Ok, that's answer one, and it's getting pretty long. I'll put other answers in another comment, if I get to it.
[1] Typical amount for a single adult in .nl
[2] This is presumably one reason why EU nation minimum wages are often a bit over Eur 1500. This does help mitigate somewhat, but it's still a dicey proposition.
[3] This is obviously something of a toy problem. IRL means testing and subsidies can be a bit more intelligent, but when researching you'll find that the underlying issue definitely there.
[4] This is somewhat borne out in real world tests. However, the tests I give most credibility to -while some people do start working- also see some people dropping out of the commercial working population to put more effort into childcare and/or go back to school, as well as free riders (because there are always free riders). The net result is that roughly the same amount of people keep working. One can argue over exact definition of working population, quality of working population, effect on crime rate... etc. But if you'd expect the amount of workers to drop precipitously, that doesn't tend to happen.
[5] This -then- also explains how you pay for UBI. You can tax people post-hoc once they're working again. This is how a similar proposal [6] by the Nixon Administration would have actually ended up working, sadly that proposal didn't pass.
[6] https://en.wikipedia.org/wiki/Negative_income_tax
> I don't agree with this.
You don't? Interesting, can you provide examples?
Myself, I don't know many (sane/rational) people who...
1) Don't want to eat, have shelter, or sleep.
2) Don't want to be secure in their persons, be employed, have money and be healthy
3) Don't want any friends/lovers/family.
4) Don't care about themselves, don't want to be respected, and hate freedom.
5) Have never studied or practiced or otherwise put effort into improving themselves or learning anything new in their entire life.
On the other hand, I have seen people of many different professions all fill in this hierarchy in their own way : eg. Farmers, programmers, truck drivers, airline pilots, industrial machine operators, mechanics, driving instructors, used car salesmen, bankers, managers, professors, train conductors... etc. Though every person is a bit different and thus their needs, wants, and ambitions, and their means of achieving them will differ too.
All these professions pretty much demand that you are constantly working up to the self-actualization level. (If only to keep up with the continuous march of progress.)
Perhaps you know people in some of these professions (or others) too?
I'm not being facetious here - isn't that entirely the point of UBI? That nobody works unless they genuinely want to work?
Anything less than "UBI is a guaranteed for life amount that will cover rent, medical care, food, water, electricity, heat/ac, and internet" is going to skew the incentives to the point of uselessness.
Once you reach a point where you can simply exist for the rest of your life worry free is when you reap the benefits.
- Substance abuse is an area of concern
- Why do we have 'free money' campaigns in times of raging inflation?
I’m conflicted, on one hand the lack of any income provides an urgency to work, giving the money could maybe hinder this and encouraging kicking the can down the road.
Alternatively, many times even to just pull your self up by the bootstraps, something is needed for day to day necessity. Even if you get into college, does the pell grant for instance cover enough? Maybe for ramen and some clothes, basic supplies, really cheap rent if you can find it, but beyond that, hard to fathom getting far and every penny helps.
Having an income below the threshold may make people feel like they need work more urgently than ever, but unfortunately they won't have sufficient means to turn that will into action.
If -on the other hand- you pay people UBI up to that point (or a little over, to be safe) , you basically ensure equality of opportunity for everyone, and make sure they actually CAN go to work every day and build their fortune.
(Paying for UBI needn't be hard. In one model you can effectively tax back most of the UBI from people who didn't need it. This can be achieved by adjusting tax brackets. )
[1] To hold on to most jobs, you need at least: a roof, a bed, clothes, shower, some amount of study material, transportation, and tools of your trade.
"The Los Angeles County Department of Public Social Services introduced the pilot program, which will provide a three-year guaranteed income for about 300 people ages 18 to 24, the agency said."
Congress is sovereign. But states can strike binding contracts under federal law. (They have to lawfully cede their own, limited sovereign immunity, though.)
If you read the article, you will see it states that to be the eligible, one "must currently be enrolled in the General Relief Opportunities for Work, or GROW, program, which provides employment and training services for young adults".
It's not intended to be a lifelong income, so why would they test that with people?
In any case, maybe 3 years trial might be enough to justify in the future a longer and bigger experiment which might be the point of these experiments.
A simpler example: tell 300 people to drive on the other side of the road to everyone else. This will surely give us meaningful safety data.
When everyone has UBI the only people who benefit are the landlords. We might as well just write another zero to all banknotes and say we solved poverty.
> Those eligible must currently be enrolled in the General Relief Opportunities for Work, or GROW, program, which provides employment and training services for young adults who face employment and educational barriers and often come from vulnerable backgrounds, including being unhoused or unsheltered.
What a gap.
The bill for years of unbalanced budgets and qualitative easing will come due soon. It it will likely be in the form of cutting spending, rising taxes, or both.
* On the left hand, you don't just get some level of control over maximum income, but also can just directly set an income-floor. What more do you want?
* On the right hand, for one you're basically giving every entrepreneur a "free" ramen budget for their startup to build on top of. At the same time you can also abolish quite a number of subsidies, reducing the costs of bureaucratic administration.
I'm not sure many places actually initiated a program of unconditional monthly payments under conditions where people were permitted and encouraged to work.
(With covid, a lot of the payments were as compensation because people couldn't go to work, so you wouldn't see the effect of encouraging work :-/ )
It wasn’t perpetual. But they got a raise to not work. And they not only maxed out the benefit but some of them moved back home with family to minimize their costs and banked their unemployment and still aren’t working. They spent their time smoking and playing games.
This was unprecedented. I would like to see a study into how frequently this actually happened as I don’t know how common my anecdote is.
https://en.wikipedia.org/wiki/Universal_basic_income_pilots
> * On the left hand, you don't just get some level of control over maximum income, but also can just directly set an income-floor. What more do you want?
"UBI gives people dollars but takes away their free education and food assistance, so they have to choose how to spend the money. We should explicitly guarantee basic rights, not make people purchase them."
> * On the right hand, for one you're basically giving every entrepreneur a "free" ramen budget for their startup to build on top of. At the same time you can also abolish quite a number of subsidies, reducing the costs of bureaucratic administration.
"UBI is additional public spending. Giving people UBI doesn't mean they _don't_ get other benefits too. Also, assistance from the state should be limited to things people in unexpected situations desperately need (like food assistance): it's not a good use of taxpayer money to fund Kim_Bruning's next iPhone."
Obviously we want to stimulate people's self determination and hard work. On the other hand we don't want people to fall out of the bottom of the system.
With UBI in place as an extra tool, this can be tuned much better than without it.
Later both sides can argue over how much it should be, and what kinds of thing still needs separate subsidies versus where government spending can be reduced. But now they have an extra policy tool to implement their wishes, whichever side of the aisle they're on. Why wouldn't one pick it up?
Too many people here conflate right wing for libertarian.
<title>L.A. basic income program to give young adults $1,000 a month - Los Angeles Times</title>
https://news.ycombinator.com/newsguidelines.html
[1] https://hildalsolis.org/three-year-guaranteed-income-pilot-p...
It will be a resounding success and the guaranteed income and MMT crowds will point to this study as "proof" that guaranteed income does not cause economy-destroying inflation, always ignoring that it only gave money to 300 people in a city of nearly 4 million.
There, I just saved the city of LA $10,800,000 plus several more millions in bureaucrats.
Basically there is usually no improvement in the situation of anyone, and just more people that decide to do nothing.
[1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7208547/
Good! Because the dates match perfectly and the inflation is global, not US centric.
inflation was way overshooting the historic trend line before the war
>an energy crisis, a food crisis, ammonia shortage, neon shortage
Aren't all these just downstream from the war?
>post-covid global tension on supply chains
If that was caused by covid, why was inflation muted during the initial outbreak? Why did inflation only spike starting around mid 2021? It seems more plausible that supply chain tensions were caused by too much money chasing too few goods, not that inflation was caused by "global tension on supply chains".
[1] https://www.vox.com/platform/amp/future-perfect/2019/9/5/208...
UBI without LVT is probably inflationary, but LVT would provide a pretty natural mechanism for funding such a thing, and is the natural policy for preventing it from causing inflation, particularly in the housing sector.
The program will conclude that people are quite happy to receive a $1000 check in the mail each month without measuring the economic impact such a program would make if it were applied to every American long-term.
This sounds like a disaster. Assuming just 100,000,000 eligible adults, you’re talking about $1.2 trillion per year.
Which is less than Social Security and the federal portion of unemployment insurance. By hundreds of billions.
That is the beauty of benefits defined in currency. You can have the nominal amount, and you can even adjust it per a CPI, but whether or not it retains the same purchasing power is pretty much always a no.
So maybe it's not as unreasonable as it sounds. The next question would be - are we doubling what was spent in 2021 or just swapping out the old system with the new one.
Experimenting with the entire country's population and a significant fraction of its economic output seems infeasible and irresponsible. I think the ball is in team UBIs court to devise a reproducible small scale experiment with a decent hypothesis to test before a country wide rollout.
This is impossible. The “universal” part of UBI is essential. Also, being able to tax it back in order to reduce income/wealth gap is essential, putting it in federal government territory. And, of course, immigration control, which is also federal government territory.
I think we will need some realistic experiments to gather evidence as, obviously I think, UBI can’t be rolled out in a country of hundreds of millions without evidence of success. Or at least evidence of no or minimal harm.
UBI looks a lot like a minor rebranding of communist economic policy and has the same no-true-Scotsman problem in which failures are brushed off with "that's not real {UBI/communism}".
One of the most practical: Negative Income Tax (NIT) is mathematically very similar to UBI (and should have similar effects)
https://en.wikipedia.org/wiki/Negative_income_tax
I'm reminded of optimization methods, but with money instead of with RAM or CPU. You get the effect of spending all of the money, but you can do most of the work on paper. Whether the remaining cost is worth it is then a political decision, but not unworkable.
For sure there is a 'living on one dollar a day' community that is willing to receive a UBI. That would be $400 per year. With a $4000 pledge per year, it takes 1000 people to finance a 10000 community. Add some technology transfer, and if UBI works, then the community should be able to finance its UBI by themselves after some years.
https://www.givedirectly.org/ubi-study/
if you are an able-bodied young adult, you should be last in line for UBI, not first.
and yes, it said homeless, but there's a lot of disabled, vets, and/or seniors that are homeless too. why not them?
Or does that attract downvotes too because disabled, needy, or old means you don't have potential?
While I think the experiment is likely dumb, criticizing authors for not mixing science with charity is not productive.
For experiment like that it's already virtually impossible to produce valuable results. If you throw charity in the mix you're going to get less science. If one goal is already too hard, why would you make two goals? Unless you already believe there's no science here.
a) it's not any kind of science in the first place
b) it is in fact charity and
c) it's poorly and unfairly directed charity
I'm not critiquing the authors. I'm critiquing the dumb social program.
The article said it was a "pilot" program and talks about unlocking their full potential. I'd certainly hope that was the point to just about any charitable program - so why pick this demographic over that one?
I think people understand that giving people $1k has benefits to them. The question is about whether the cost is sustainable across a large population (LA has $4M people so finding $4B/month will be tricky) and the effects on labor and inflation.
These projects don’t seem to have a clear hypothesis and basically amount to “do people like cake? Let’s see”