
The latest experiment in basic income will be coming to Stockton, California - weston
https://www.theatlantic.com/technology/archive/2017/10/stockton_ubi_basic_income/543036/?single_page=true
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rothbardrand
One of the things about UBI is that these pilot programs aren't UBI, because
they aren't universal. Giving a segment of the population free money is going
to benefit that segment, no question. Welfare and Quantitative Easing are both
examples of that. But when you make it universal, my economics intuition says
that the effect will be washed out by a commensurate rise in prices.

Or put another way, you can subsidize the few at the expense of the many, but
you can't subsidize the many at their own expense and have it result in a
positive effect.

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yellowstuff
Sure, if you simply gave everyone $1 for every dollar they already have, all
you do is double prices and change nothing of substance.

But I think the pro-UBI argument would be that you don't need to increase the
money supply to do it. About 60% of Federal spending is on Social Security,
Medicare and Medicaid. Reducing the spending on these programs, and other
inefficient transfers such as welfare and disability will pay for much of UBI,
and the rest is paid for by raising taxes. The net outcome is that rich people
will pay a bit more to the government than they do now, poor people get a bit
more than they do now, but the major effects are 1) inefficient bureaucracy is
eliminated, 2) bad incentives are eliminated (such as disability payments
forbidding any gainful employment, and 3) the stigma of welfare payments is
removed when everyone gets them.

I don't think this will work in the US because 1) there's no political will to
reduce existing entitlement programs and 2) there's a lot of resentment in the
working class against recipients of entitlements, and 3) racism. However, the
argument that UBI will fail because it requires printing money is probably
wrong.

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mechagodzilla
I disagree with your premise that doubling the number of dollars everyone has
would simply double prices. If you take someone that has $1 million in the
bank, and magically make that $2 million, they almost certainly won't double
all of their expenditures (they probably wouldn't change what they spend at
all on a wide variety of categories - food or clothing, for instance). Rising
inequality means that lack of demand is actually a big issue, since we're
transferring income from people that would readily increase consumption, given
more income, to people that will largely sit on that money. Globally speaking,
our factories could easily produce more goods without raising prices much, if
any. I believe a UBI would effectively be a transfer of wealth from people
that have lots of money (but don't spend it) to people that don't have lots of
money (but would readily spend more if they had it), but it wouldn't be the
zero-sum game that people often assume it would, just by virtue of our
productive capacity not being nearly maxed out.

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jonreem
While the now $2 millionaire would not be likely to spend that extra million
on food and clothing they would be extremely likely to invest that money in a
variety of financial instruments, making that capital available in the market
so it can be put to good use. Investing does help inject value into the
economy and drive growth - "sitting on it" would require literally keeping it
in cash in a bank, which no sane person would do due to inflation.

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milcron
> they would be extremely likely to invest that money in a variety of
> financial instruments, making that capital available in the market so it can
> be put to good use

This improves the supply-side of the economy, but doesn't do anything to
stimulate demand for products. Today, lack of demand is a larger problem than
increased output. The labor share of GDP has been decreasing since the 70s,
and its starting to hit levels where people are having trouble affording as
many goods. Although investing is a good use of funds, arguably redistribution
(a type of demand-side stimulus) would be more helpful today.

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slifin
I wish there was less focus on distributing money and more focus on free
water, food and shelter for everyone

It's crazy to me in the UK that we have free healthcare, where you can get
free water food and shelter if you're ill but if you're healthy you can go
back on the street with potentially no food water shelter

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jtolmar
A network of free services will always have gaps. Food, water, shelter... what
about power, internet, clothes? Something equally important that not everyone
needs?

Basic income guarantees that the gaps are filled. It even makes markets more
likely to try to fill them. But basic income can't get basic services to
people who can't control their own money. Getting food to children of
alcoholics requires that the system doesn't pass through an intermediate step
that can be exchanged for alcohol.

So both a thorough network of social services and basic income are required
for a society that aims to raise the standard of living for everyone. Both
individually have blind spots.

Basic income can serve as a substitution for other services though, so if
you're going to add things one at a time instead of magically willing it all
into existence, it makes sense to start there.

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Density
Socialized healthcare should ideally capture the edge cases and provide
psychiatric help to the helpless.

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dredmorbius
Increasingly my thought is that UBI or a minimum living wage (enforced perhaps
through an employer of last resort who sets an effective wage floor) _must_ be
balanced by a tax on economic rents, else the gains simply flow to rentiers.

This is a "land tax", but writ large and applying across all (or most) rent-
seeking goods, including especially productive (as distinguished from strictly
financial) asset classes.

In the case of Stockton, and most other West Coast cities, this would mean
land taxes to incentivise further development and housing supply, as well as
updating zoning and building codes to allow denser and mixed-use development.

The wildfire situation in the _already_ housing-constrained SF North Bay
strikes me as a tremendous opportunity to reconsider housing, rents, asset
taxes, and zoning.

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djrogers
Such a tax would only increase rent - most landlords don’t run on huge
margins, and those that do aren’t going to just give them up.

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dredmorbius
See my response elsewhere in this thread, or read on the economics of land
taxes.

That understanding is incorrect.

Most particularly, _landlords themselves_ are paying rent in the form of
interest. Property values would tend to fall.

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truxus
The problem with UBI is that it doesn't promote social behavior. In fact it
promotes anti-social behavior, since a UBI recipient need not provide any
value to his community as a condition of this benefit.

Charity is not a legitimate role for government.

~~~
krapp
> a UBI recipient need not provide any value to his community as a condition
> of this benefit

A person working for a paycheck doesn't provide value to a community, only to
their employer. Chronic unemployment, however, _does_ harm a community. The
explicit physical need for food, shelter and access to medical care outweighs
the implicit value in the dignity of labor.

> Charity is not a legitimate role for government.

Don't consider it charity, then, consider it insurance, or just another public
service like the police or fire department.

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truxus
Police, insurance, and fire department are paid services to protect property.
UBI is a scheme intended to increase consumption, that is, destroy property.

~~~
krapp
>UBI is a scheme intended to increase consumption, that is, destroy property.

What property does UBI destroy, and why don't increases in consumption through
other means also destroy property?

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truxus
A simple example:

10 people make widgets. Annual production is 10 widgets. Mean annual standard
of living is 1 widget.

9 people make widgets, 1 person is on UBI. Annual production is 9 widgets.
Mean annual standard of living is 0.9 widgets.

In the second example one widget was destroyed, and everyone was affected.

We are all counting on one another to to create value. At my business, in my
community, and our country as a whole, I'm counting on you to take a job and
work, because if you don't we will both have a lower standard of living.

~~~
krapp
That example seems so contrived that it's difficult for me to see it
representing reality in a meaningful way. It may be too simple to be useful.

In reality, that tenth widget still gets produced. They hire someone else to
replace the "UBI recipient" or else run the production line slightly faster so
nine people make ten widgets, or else automate and fire all ten employees, and
make twenty widgets a year. Nothing in a real economy is that zero-sum. Value
which only exists in potentia and which may as well be created by other means
cannot reasonably be said to be "destroyed." Something which never existed
can't be destroyed.

UBI just decouples a person's ability to work with their ability to live at a
subsistence level, it doesn't prevent them from working.

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atomical
If everyone is getting $500 why wouldn't the landlords raise rents by $500?

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krapp
Why don't landlords ask you for your salary now and charge that amount for
your rent?

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atomical
They charge what they assume people can pay. So at some point they would know
you can pay $500 more.

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at-fates-hands
As a city who has been on the verge of bankruptcy, I'd say this is a welcome
life line to some of its residents.

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nfriedly
When residents don't want to move away, they'll call it "Stockton Syndrome" :P

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drharby
>tech boom

Loaded language is loaded!

