
$1,000 per month cash handout would grow US economy by $2.5 trillion, study says - arangelov
https://www.cnbc.com/2017/08/31/1000-per-month-cash-handout-would-grow-the-economy-by-2-point-5-trillion.html
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jchmbrln
Halfway through:

> _These estimates are based on a universal basic income paid for by
> increasing the federal deficit. As part of the study, the researchers also
> calculated the effect to the economy of paying for the cash handouts by
> increasing taxes. In that case, there would be no net benefit to the
> economy, the report finds._

> _" When paying for the policy by increasing taxes on households rather than
> paying for the policy with debt, the policy is not expansionary," the report
> says. "In effect, it is giving to households with one hand what it is taking
> away with the other. There is no net effect."_

TL;DR: If we create money, there's more money in the economy. If we don't
create money, there's not.

~~~
pitaj
I'm a libertarian. I think that the UBI could allow for economic growth based
solely on the power it as to eliminate the welfare trap. However, this would
only work as a replacement for all welfare, though. It would have to replace
welfare, food stamps, social security, etc, with the exception of medicaid and
medicare.

I support UBI _only_ as a replacement for existing (bad) welfare systems. I
think UBI in conjunction with simplified tax code could inject life into the
inner cities. Add onto that decriminalization of all controlled substances,
and you've got a huge boon.

~~~
paulddraper
Hello fellow libertarian.

The problem is that very many welfare recipients get more than $1,000/month
per adult. Disabled? Single mother with children? You'll easily get 2x that
(including check, food stamps, subsidized housing).

And no one is going to want to take away from the poor.

$1,000/adult/month replacing welfare is an impossibility. We'd have to use
_much_ larger numbers.

~~~
pitaj
If two checks are necessary, that's just more incentive for parents to stay
together, or if that isn't possible, the child support can be taken out of the
check. Also, with a guaranteed income, a family could much more easily move to
a cheaper area with more opportunities.

People also don't tend to consider the harms that means-tested programs do to
the poor. Subsidized housing is one huge per peeve of mine because it's
essentially creating ghettos.

~~~
paulddraper
> People also don't tend to consider the harms that means-tested programs do
> to the poor.

True. Still, there will be many who are worse off with $1 UBI.

I agree with your views. But if UBI is ever created it has 0% chance of
replacing welfare.

~~~
uoaei
It would certainly replace unemployment benefits but certainly not health- and
family-based welfare.

Though the children could receive something like $800/month for the first,
$600/month for the second, and so on up to the fourth which is compensated for
$200/month. Anything above that will not be compensated. The diminishing
returns will discourage people from having more kids just to have more money,
and also will appease those who are afraid of "welfare queens" who only have
kids to get money from the state. We know that the contingency of people
actually doing that is practically nonexistent but it will assuage those who
are still concerned about it.

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nimos
I think it is really dangerous to hand over an amount of money that lets
people completely check out of contributing to society. Alone maybe that is a
sketchy amount to live off of but with roommates in an inexpensive area
without a car it seems very doable.

If you look at the amount of entertainment you can get from a used cheap
desktop computer and internet connection along with the low cost of at home
production of marijuana/alcohol I think it would be disastrous socially and
economically.

Maybe that is overly pessimistic but I'm far more in favor of minimum wage
elimination with government wage substitution up to some higher livable
minimum and in the case that someone can't find a job the government acts as
an employer of last resort creating some sort of busywork that has some social
benefit.

~~~
uoaei
Maybe it's just me, but

>some sort of busywork that has some social benefit

sounds like so much more of a trap and a hellhole than hanging out at home
with the potential to produce the things you love. There will be some who
simply don't contribute at all, but think of all the artists who could
contribute to social good through culture enrichment who are stuck in the
stereotypical barista/retail/waiter job who have no time to contribute to
their community outside of their two jobs. You think they are already
contributing maximally? They will be climbing out of a local optimum (making
money to scrape by( to pursue their global optimum (producing art that
enriches others' lives and gives them a sense of meaning, and possible a path
out of crippling depression).

Edit: I should also include that "some social benefit" can be twisted to mean
anything. One person handing out tickets, another stamping a wrist, and a
third saying "enjoy the show" arguably provides social benefit but there is a
significant opportunity cost involved with railroading people into these sorts
of jobs.

~~~
ThrowawayR2
> _...think of all the artists who could contribute to social good through
> culture enrichment who are stuck in the stereotypical barista /retail/waiter
> job who have no time to contribute to their community outside of their two
> jobs._

Is there any evidence that there's an explosion of artistic and other
innovation happening in any of the economically depressed areas of the US
where a significant percentage of the public were/are already on public
assistance? Has Appalachia or Detroit or similar places experienced an
artistic renaissance? I certainly see no indications of any such thing
happening.

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AnimalMuppet
Wait a minute, though: Every adult gets $1,000/month. That's $12,000/year. How
many adults do we have? Well, the US population is 326,000,000. Median age is
37, so I'll guess that 3/4 of the population is "adult" (age >= 18). That
means that paying this handout will cost $12,000/person * 244,500,000 people =
$2.934 trillion. That's... not a net win.

~~~
gremlinsinc
How many make > 200k and will be paying 100% of that 1k back as a tax? maybe
30%? So you can cut that by 30%.

~~~
ZoeZoeBee
Do you honestly believe 30% of the US earn 200k a year? Where do you figure?

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sintaxi
Do people actually believe this universal basic income nonsense? If money
isn't scarce but goods are the goods become proportionally more expensive.
Inflation is a thing.

~~~
delbel
Yup, inflation is a thing. Alaskans get Dividend checks every year -- almost
$2k. Right after they get their checks, the price of everything skyrockets, on
top of already extremely high prices for everything up there. The best time to
spend the check is to wait until next year right before the checks are sent
out to increase your buying power. If UBI made sense, Alaska would be a
utopia. Not seeing it..

~~~
BoiledCabbage
Compare Alaska with dividend checks to the Alaska without. Do they make Alaska
better or worse

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Mz
It would _not_ grow the economy. You _grow the economy_ by creating more goods
and services. When you inject money without adding goods and services, the
result is inflation.

~~~
benlorenzetti
I agree it would cause inflation. What is not clear (and I probably won't
believe any study claiming clarity) is what % of said inflation would be
caused by economic growth vs monetary manipulation. There are lots of studies
that show disbursing money to relatively poorer people results in more
immediate demand for goods than the investments & spending of those it was
taken from. Whether this is a net positive for the economy is unclear, but the
GDP metric would likely record growth.

If the money for UBI is obtained through debt, then I 100% agree with you
because then gov. is basically taking money from the working class through
inflation and also giving it back to them with an awkward couple year delay +
corruption leakage in the giving and taking cycle. Ironically this would
probably increase wealth and power inequality in the long term.

Edit/PS:

What is worrisome about proposals like this is the delay in the giving-taking
cycle. If party A enacted such a policy they would probably enjoy a big
economic boom for the duration of their term and then 8 years later party B
would suffer from a massive increase in inequality and possibly financial
crises.

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Gys
Nothing about inflation ? That is likely to increase ? So what are the long
term effects when corrected for inflation ?

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everheardofc
It will cause inflation at the bottom of the economc and reduce it at the top.
We call the difference between the top and the bottom inequality. Imagine you
earn 24k in a very cheap part of the US. You now have 36k. Most of the cost
gets absorbed and you need 36k for the same quality of life. However that CEO
with 1000k per year also only gets 12k which means he gets 1012k. Before UBI
the CEO had 42 times the income. After UBI the CEO has only 28 times the
income.

~~~
Gys
> Most of the cost gets absorbed and you need 36k for the same quality of
> life.

In that case the handout does not make any sense ?

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dfps
... While costing roughly exactly the same amount? :)

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bebop22
But, inflation.

~~~
freefm
It's not inflationary because you're not creating new money you're just
redistributing it.

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basicplus2
It would work if you take it from the 1%

~~~
sintaxi
No it wouldn't. It would ruin the buying power of the dollar which is
effectively the same as giving every working person a pay cut. Those who own
companies and assets would be who benefits.

~~~
basicplus2
Your logic is flawed.. if it is taken from the richest 1% it is not creating
money from nothing it is simply moving money from A to B, therefore still the
same amount of money in the system therefore it does not devalue buying power.

The rich might put the prices up to steal it back but that is another argument

~~~
TomMarius
How can you "steal back" something that was stolen from you?

