
Stockton extends its monthly $500 UBI payment experiment - SamWhited
https://www.citylab.com/equity/2020/06/ubi-stockton-universal-basic-income-coronavirus-economy/611191/
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admin_account
What is the point of UBI studies this small? Giving a few hundred people extra
money each month will improve the well being, no question about it.

The issues with UBI only arise when it's done at scale. For example let's say
you give every US citizen over 18 a monthly UBI check for $1000. What's
stopping prices from rising accordingly? How will the ~$3T yearly UBI bill be
paid for?

The question of how is this paid for is my biggest issue with UBI. If someone
can give a reasonable answer that doesn't require national price fixing,
taxing tech companies on their data, or some version of reshuffling the
current budget around, I'll happily change my mind. Until then, for me, UBI is
nothing more than an economists wet dream.

~~~
fny
You should read into Modern Monetary Theory. The government can print the
money by issuing treasuries: there's no need for the money to come from
anywhere. Social security can easily be paid for. Interest on debt is never a
problem.

The base argument is that any government that issues its own currency can
never default, so it can incur large deficit spending that creates a surplus
in the private economy.

The difficulty is whether that surplus is put to produce growth which would
offset the inflation that conjuring money creates. If everyone sits at home
doing nothing, you bet inflation will happen. If it's used as a cushion,
perhaps not.

~~~
grandmczeb
It’s important to note “Modern Monetary Theory” (aka MMT) is almost
unanimously rejected by mainstream academics[1]. Its largest proponents are
political leaders rather than economists.

[1] [http://www.igmchicago.org/surveys/modern-monetary-
theory/](http://www.igmchicago.org/surveys/modern-monetary-theory/)

~~~
jpxw
MMT is an absolute joke, I’m glad at least someone has called it out here.

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fastball
It's not really UBI if you're selecting some subset of the population and
paying them. You need to be paying everyone in that area otherwise you're
gonna have side-affects you can't control.

~~~
whalesalad
It’s an experiment.

~~~
ethanbond
Experiments are very carefully designed so that you can learn something from
them.

There is not much that can be learned from an experiment like this. The
biggest questions of UBI are not made more answerable by it.

Namely, why wouldn't prices/cost of living/rent rise to eat all the stipend,
and how will we pay for it at massive scale?

Virtually no one disputes that an extra $500-1k/month given to a subset of
people is a benefit to the people who receive it.

~~~
SamWhited
You're ignoring part of the experiment. It's important to figure out what
people spend it on and how their spending habits change (which appears to be
what this is measuring just judging by the summary of the initial results),
the question isn't just "is it nicer for the people who have it?".

~~~
labcomputer
> It's important to figure out what people spend it on and how their spending
> habits change

But why does that matter? That's their own business. People will spend it on
whatever makes them happiest--that's the whole point.

It doesn't answer the questions that most people have, such as the question in
the post you replied to:

"Namely, why wouldn't prices/cost of living/rent rise to eat all the stipend,
and how will we pay for it at massive scale?"

~~~
SamWhited
> But why does that matter?

Because if people by and large hoard it it has a different impact than if they
go spread it around in the local community and keep money flowing throughout
the system. It's also good to know if they spend it on luxuries,
entertainment, or basic necessities. Do they invest it and does it help them
build a better future for their children, or does it just help them pay the
bills immediately but doesn't necessarily lift them out of poverty, etc.
Otherwise we can't tell if it helps solve the problems people are trying to
solve with it (whatever those may be, I am not one of these researchers and am
not qualified to speak on the economic specifics, I can just talk to general
methodology and what not).

> People will spend it on whatever makes them happiest--that's the whole
> point.

Just specifically I want to point out the flaw in this reasoning: for a lot of
people a $500 night out with their friends might make them happiest, or a new
video game system or whatever it is that they like to do, but they may spend
it on groceries or to help pay the rent or to invest a little bit instead. Or
maybe not. You can't just assume what people will do with it, or what the
whole point is, you have to experiment and prove it. Maybe something entirely
different that you haven't thought of happens. Again, that's just how science
works.

TL;DR this _is_ an important thing to find out. Then we repeat the study in a
few communities and see if the results are similar, maybe try it at different
wealth levels to compare, etc. this is how science works.

> It doesn't answer the questions that most people have, such as the question
> in the post you replied to:

There can be more than one question, and more than one answer. Economists are
researching this too and have written a lot about it. Just because you have a
question, doesn't mean the science has to answer it right away and every
single experiment has to be focused on it. There are lots of questions that
will have to be answered before this could be tried more widely, these are
just two of them.

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ngold
Of all places in the United States, Stockton California. Well if any city
could use some love, Stockton is one. It may infect the capital next door in
Sacramento. Which would infect the 9th largest economy in the world. That
would be great. Trickle up economics for the win.

~~~
VMisTheWay
Today Candy, tomorrow stomach ache.

~~~
r00fus
Now what does that mean? $500 is candy? For some it's a lifeline.

~~~
thaumasiotes
It means that getting something you want will not necessarily benefit you.

~~~
josefresco
Which is insane, because it's "need" not "want".

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eloff
I think Canada is going to be an interesting case study in UBI in the near
future as 1/4 of the population has been receiving $2000/month CERB payments
for up to 7 months.

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umvi
Any studies involving UBI need to have malicious actors as a part of the
study.

UBI, if it is ever realized, will be a scammer's paradise. Every possible
method for getting a slice of people's UBIs will be tried. From fake
government calls, to identity theft, to greedy landlords, to you name it. And
whose UBI will be most vulnerable to these types of attacks? The poor.

~~~
mrlala
>Any studies involving UBI need to have malicious actors as a part of the
study.

Yes, and no.

Of course there will be some low form of abuse and whatever.. that is just a
given with anything in the entire world. It should NOT be a main reason of any
form to be against it.

We are trying to help people, so what if it's getting a little bit abused? We
as a whole are still better off.

It's like a universal healthcare argument.. people might say "well what if
someone from mexico sneaks in and get care for free?? I'm paying for that!" If
the _worst case_ is that someone gets health treatment... then it's a pretty
silly argument in my book.

~~~
umvi
What if the worst case for UBI is that it, counter-intuitively, _increases_
the income gap between low and middle classes? Is it still worth it then?

~~~
Dylan16807
That's a tricky one. It depends on how it affects the relationship with the
upper class too.

Completely unreal example numbers: If the distribution of lower:middle:upper
was 2:5:40 and changes to 4:8:25 then that's a big improvement, even though
the gap between lower and middle increased from 3 to 4.

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ghostwriter
How about universally abolished income tax, instead? Let's save on IRS
expenses too.

~~~
chillacy
In case you're serious, the point is redistribution. Abolishing the income tax
probably just makes income inequality worse.

If you're against redistribution in general then that's a different
discussion, but at a minimum, in societies with great inequality, even the
winners don't win if it all goes the route of the French Revolution.

~~~
ghostwriter
> In case you're serious, the point is redistribution.

That's the statement I'd like to see highlighted bold on every UBI proposal,
so that everyone knows exactly what it is about.

Isn't it remarkable that at a time of the French Revolution (which one them by
the way?) the society was significantly more equal in terms of their income
than it is today? Maybe revolutions are caused by other reasons, like the lack
of freedom and not being in control of your own life, for example? Especially
when more than half of one's productive life is taken away and redistributed
by a taxman.

~~~
chillacy
I think you'll find that to be true in most discussions about UBI, even those
backed by conservative economists like Charles Murray.

As for economically conservative discussion about redistribution, I think Greg
Mankiw had one of the best summaries of the matter in 2013 "Defending the One
Percent"

[https://scholar.harvard.edu/files/mankiw/files/defending_the...](https://scholar.harvard.edu/files/mankiw/files/defending_the_one_percent.pdf)

Ultimately the question of whether to redistribute or not is as normative,
just like considering taxes to be inherently immoral. So far societies have
enjoyed the former more than the latter, but individuals fall on both sides.

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ghufran_syed
I work in Stockton, and am glad that some people are better off with this. My
real worry about UBI 'at scale' is what would prevent the majority voting for
massive increases in the amount every election? If every employee could vote
to increase "everybody's" pay equally, why wouldn't they? - right up until the
company runs out of money and all the jobs disappear. If you think that high
income people generally don't produce enough value to justify their income,
then you would probably consider this a feature, not a bug. Otherwise, I worry
that it would just lead to highly productive people moving to other parts of
the world, as happened with [British musicians in the
60's]([https://ultimateclassicrock.com/rock-bands-
taxes/](https://ultimateclassicrock.com/rock-bands-taxes/)). Again, if you
think those people don't produce enough value, it's not a problem. But we
_might_ want to consider trying it successfully in a single state first before
rolling it out more widely.

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angmarsbane
Why don’t we just pay people more for the jobs they’re doing (be a little less
greedy on top, and value the work of others more) and implement policies that
reduce the cost of living?

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11235813213455
I think it'd be more interesting to provide free housing, free local organic
food and free bikes, than providing money.

It'll help people move away from unhealthy consumerist habits, and solve
environmental problems, double-win

~~~
chillacy
That sounds like you want to provide everyone with stuff you like. Someone
else probably wants free fast food and guns. How do we settle the difference?
A bunch of lobbying and political action? Or just give everyone cash and let
people make their own choices.

~~~
11235813213455
Sustainable stuff more importantly, for a less consumerist, egoistic human-
world, less pollution pressure, more environment-friendly

