Universal Based Income

[notagain]

automation has consequences

 

[ironchef]

For the record, I'm still torn on UBI but as you'll see below I can see the benefits.

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Socialist? I don't think it's very socialist in the context it is in. $1,000 is hardly enough to buy anything but possibly enough to make the difference between not being able to live and being able to live.

There is no logical reason to stop UBI at $1000, is there?

 

[ironchef]

Pros:
1. Many people in poverty try to keep their income low enough that they don't lose benefits. This leads to people staying in poverty their entire lives. A UBI would remove this dis-incentive to advance because it wouldn't disappear with increased income.
2. The federal government is incredibly inefficient. A UBI would allow them to eliminate some welfare programs and streamline the process of deciding who receives benefits.

Cons:
1. The math doesn't work. There are approximately 250 million adults in the US, and it would cost $3 trillion to give them all a $12K per year in UBI. (We collected $3.33 trillion last year in taxes.) The only way it works is if it's funded by a VAT.
2. Between the implementation of a VAT and increased household income, inflation would be inevitable. No one knows how much it would increase, but there's no doubt the value of the dollar would be diminished.
3. Many people on welfare receive significantly more than $12K per year in benefits. If we eliminated all of these programs, the impoverished would end up being worse off.
4. By giving a UBI to people that don't need it, you're solving a problem that doesn't exist.
5. The implementation of a UBI and a VAT would be a significant undertaking. This would create significant inefficiencies in our federal government.

IMO, the cons far outweigh the pros. A VAT funded UBI doesn't really solve many problems. It's primary mechanism would be mass redistribution of wealth. I would much rather see us reform the current entitlement programs to make them more efficient. Maybe look at a basic income for the impoverished that slowly phases out as they approach lower middle class.

None of the cons are real according to MMT, Gov can just print money as long as the economy supports it.

 

[gaussian]

There is no logical reason to stop UBI at $1000, is there?

I feel like you are hinting at a UBI that increases to infinity over time. If so, I really don't think that is a point worth arguing. I really only mentioned $1000 as a talking point and if you read the rest of what I wrote I didn't lean on it heavily. It was just a useful fixture for the argument given Yang proposed it.

I don't really have the qualifications to put a number on it. Much like $15/hr. might be too much for federal minimum wage, $1000 might be the wrong number for a UBI. I'm less interested in hard numbers and more interested in the philosophy of it. Personally, I would defer that to the people who know how to calculate that number. Given the discussion I'd rather not speculate. Perhaps it could be region based given CPI per state? Who knows.

 

[wave]

https://www.vox.com/future-perfect/2019/9/5/20849020/alaska-permanent-fund-universal-basic-income

 

[ironchef]

I feel like you are hinting at a UBI that increases to infinity over time. If so, I really don't think that is a point worth arguing. I really only mentioned $1000 as a talking point and if you read the rest of what I wrote I didn't lean on it heavily. It was just a useful fixture for the argument given Yang proposed it.

I don't really have the qualifications to put a number on it. Much like $15/hr. might be too much for federal minimum wage, $1000 might be the wrong number for a UBI. I'm less interested in hard numbers and more interested in the philosophy of it. Personally, I would defer that to the people who know how to calculate that number. Given the discussion I'd rather not speculate. Perhaps it could be region based given CPI per state? Who knows.

Not trying to give you a hard time, I was just asking a question. Seems to me if we want to implement UBI, at least start it at minimum annual income equal to minimum wage of say $15 an hour, or ~$2,500 a month. Otherwise, it is really not UBI.

 

[mt2rules]

Lots of good discussion in this thread. I think the biggest problem with UBI is two fold: 1) Once it is put in place for $1,000, what stops the lower class from wanting it to be increased? 2) Many people say that the rich shouldn't receive it, but once you start choosing groups that don't receive it when does that stop? It seems way too likely to become an identity politics issue which would spiral downward quickly.

 

[piezoe]

these are forms of "wealth redistribution" yet everyone on both sides of the aisle seems to support them - so perhaps we can let go of the "socialist demon" and accept we aren't stepping into marxist communism by helping people out with some tax money.

There is "wealth redistribution" in the opposite direction as well. It is indirect, and most people don't consider it when they mention wealth redistribution. It's presence is easy to identify, but it's cause is not as obvious. You will see it when you look at wealth distribution in the U.S. as a function of time. I maintain that the collapse of income tax brackets begun in the 1980s and only partially undone since is the major factor behind the redistribution of wealth upward; quite a few disagree with me however. Piketty says the fundamental reason is that the return on capital is greater than the aggregate, economic growth rate for a capitalist society. I certainly don't disagree with this, but I would point out that there is an acceleration of the upward redistribution in the U.S. identifiable as beginning sometime after 1971. I attribute this mainly to two causes. One is the compounded effect of slight increases in inflation associated with going off of the gold standard -- inflation does not affect all income quartiles equally -- and the other is a rather drastic collapse of income tax brackets in the 1980s that is still with us.

As far as UBI goes, I think there may be something better, and that is the proposal of government as an employer of last resort put forth by some MMT economists. Among the benefits they propose are the elimination of unemployment and unemployment compensation. The minimum wage then becomes the minimum government wage, which is a living wage above the poverty level that the private sector would compete with. This is a decades old concept first broached after the Nixon Shock in 1971 when we transitioned from a currency gold standard to what became ,effectively, a labor standard, because labor and productivity were, at that time, closely linked. However now, in the age of automation, we are effectively on a productivity standard and it is unclear how the feasibility of the 'government as the employer of last resort' proposal might be effected by automation, which increases productivity at the same time it reduces employment.

 

[gaussian]

There is "wealth redistribution" in the opposite direction as well. It is indirect, and most people don't consider it when they mention wealth redistribution. It's presence is easy to identify, but it's cause is not as obvious. You will see it when you look at wealth distribution in the U.S. as a function of time. I maintain that the collapse of income tax brackets begun in the 1980s and only partially undone since is the major factor behind the redistribution of wealth upward; quite a few disagree with me however. Piketty says the fundamental reason is that the return on capital is greater than the aggregate, economic growth rate for a capitalist society. I certainly don't disagree with this, but I would point out that there is an acceleration of the upward redistribution in the U.S. identifiable as beginning sometime after 1971. I attribute this mainly to two causes. One is the compounded effect of slight increases in inflation associated with going off of the gold standard -- inflation does not affect all income quartiles equally -- and the other is a rather drastic collapse of income tax brackets in the 1980s that is still with us.

I agree, when people talk about "wealth distribution" they always refer to giving money to the poor. They never consider corporate welfare (2008, 1991, 1980), nor do they consider massive tax breaks to the rich, etc. The ultra wealthy are as much welfare queens as the rest of us. It just feels nice to punch down.

 

[piezoe]

I agree, when people talk about "wealth distribution" they always refer to giving money to the poor. They never consider corporate welfare (2008, 1991, 1980), nor do they consider massive tax breaks to the rich, etc. The ultra wealthy are as much welfare queens as the rest of us. It just feels nice to punch down.

Indeed. I didn't mention corporate welfare, but that is significant!