
Free Cash to Fight Income Inequality? Stockton, CA Is First in US to Try - watchdogtimer
https://www.nytimes.com/2018/05/30/business/stockton-basic-income.html
======
pmiller2
I still haven't seen a good explanation for how UBI on a truly universal scale
isn't going to just raise housing prices to capture the surplus. I mean, if my
landlord knew I (and anybody else who could theoretically live in my
apartment) had a spare $2000/month, forever, I'm pretty sure he'd want it.

~~~
rarec
That's always been what I wondered as well. UBI solves everything, except for
the part where an actor who knows explicitly that all of his tenants will be
getting a flat amount per month, then why not raise prices to capture some of
that as well? Why wouldn't everything just increase in price slightly,
everyone can afford a little bit more now.

~~~
stouset
These are really excellent points I hadn’t considered.

On the other hand, let’s run the experiment the other way. We currently have
significant numbers of people working with no hope of financial stability in
their future. Will taxing them to fill the coffers of the rich improve their
situation? Given the current situation of increasing wealth inequality
seemingly exacerbating existing problems, I can’t imagine that this is a
promising approach.

Since UBI is essentially the most generalized form of a benefits program, I
really have to hope that it works. If it doesn’t, that seems damning to other
benefits programs which are inefficiently (and IMO ineffectively, due to
perverse incentives) means-tested. If it doesn’t, and if anti-UBI is virtually
axiomatically a bad idea, then I’m not sure what’s left.

~~~
ddingus
Public Works, using the post office as a model.

We really do need to be building a lot of stuff, and or fixing stuff we have
already done. That work is a direct stimulus, can pay pretty well, and
benefits everyone public and private alike. Additionally, the returns from it
can pay down all of the expensive bombs and non returned items that we
currently spend or have spent on. An example is the interstate highway
project. Our current president once the toll that, which is really stupid, but
similar kinds of projects will deliver similar kinds of returns. The
interstate highway project is still paying us great dividends years and years
after it was created. Last figure I knew was 6/8 maybe 10 times the dollar
spent.

The post office still getting a lot of bad press right now, is actually
exemplary and its performance in return to the public. It is entirely self-
funded, doesn't take any tax dollars at all, pays good wages, has a lot of
value to the public, and the benefits are worth working there.

Other self-funded public works could work the very same way. Those that use it
pay for it, and we all will benefit from the economic development. An example
might beat networks, another example might be first line Healthcare, there are
many to choose from.

One that I've been thinking about lately is energy. Well distributed public
investments in energy of all forms, managed on a higher level through
something like a post office, might really pay us off, and deliver a lot of
options making energy competitive and well distributed.

The key thing to understanding all of this is government has agency, it's for
us, by us, and we need to employ it to our mutual good. Yes, this will compete
with Private Industry, but they should be competed with, otherwise they'll
accumulate wealth stuff in the bank, and complain about the lack of
opportunities to invest and make returns. There's nothing wrong with any of
that, but it's a stalemate. One we don't need.

I knocked this out really quick on Google Voice. I apologize in advance if
this is a bit of a mess. Hopefully the gist comes through.

~~~
pmiller2
Are you saying that every $1 spent on UBI is expected to return $X > 1 and
that $X > $Y (where $Y is the return on current social service programs)? If
so, I would say [citation needed], but, if proven, that would be a great
argument for UBI.

~~~
ddingus
I don't think UBI delivers much of a return at all, when compared to public
works and more direct investment in the people.

I do not mean the current social service programs. I mean new, improved ones,
along with Public Works people building things of real value that will deliver
real returns for very long periods of time.

A very large UBI could. But there's no way that's ever going to happen.

------
jpao79
Honestly asking - would it be a good thing or a bad thing if the major high
cost of living areas like cities in the CA such San Francisco, Orange County,
etc., were actually significantly funding UBI to people with a permanent
address in a lower cost of living Central California city long term?

~~~
zach
Interesting. It would be similar to this concept in American sports, where a
team like the New York Yankees (the San Francisco housing market of baseball)
can keep their economic advantage but has to pay a tax on it, the proceeds
going to less-profligate teams so they can remain somewhat competitive:

[https://en.wikipedia.org/wiki/Luxury_tax_(sports)](https://en.wikipedia.org/wiki/Luxury_tax_\(sports\))

I guess the real difficulty would be measuring how high San Francisco's
housing-supply border wall is.

------
peterwwillis
I think removing red tape and allowing people to pay for things they need
right now is an excellent way to speed people's recovery from poverty, but it
needs nudges, and those nudges need to be informed by data and empirical
evidence. We need to know what people are spending the money on so we know how
to target the biggest problems as well as the corner cases.

If you know what the actual problems are and where the money _needs_ to be
spent, you don't need to give everyone $10,000. You may only need to give this
person $2,000 for this thing, and this person $7,000 for that thing. Giving
them all a lump sum is just inefficient, and does not address the myriad edge
cases. Collecting data on spending could help provide efficiency.

------
Ancalagon
I feel like UBI is just a band-aid fix for all the real issues (in the US at
least) that already have proven solutions in other parts of the world. Rather
than giving people money, I'd prefer a higher tax rate for a single payer
healthcare system. Reign in healthcare, pharma, and insurance companies. Put a
cap on tuition increases, and fund education again. Slash the military budget.
Cut down the red tape permitting insane zoning laws, and allow higher density
housing where it is needed. Placing the onus of how to spend all this money on
individuals might seem like a good idea, but if we instead invested that money
in real, lasting, scalable solutions we'll be a lot better in the long run.

------
LinuxBender
Another interesting theory was to create a resource based economy. One
iteration of this idea was The Venus Project created by Jacque Fresco [0]
whereby society would remove the need for a monetary system, as everything can
be engineered in abundance.

Have any countries attempted such a big fundamental change?

[0] -
[https://en.wikipedia.org/wiki/Jacque_Fresco](https://en.wikipedia.org/wiki/Jacque_Fresco)

------
scarmig
> “The trolls I’ve been dealing with on social media and in real life have
> very racialized views of how this is going to work,” Mr. Tubbs said. “As the
> first black mayor of this city, it would be very dangerous if the only
> people to get this were black.”

> He wants to select participants who are most likely to spend their money
> wisely, generating stories of working poor people lifted by extra cash.

Well, that's pretty worthless.

~~~
dahdum
It wouldn't really be UBI, but still worthwhile data for programs with work
requirements.

I'm rather fond of the idea of work based programs. For example, for every $1
of W2 income you earn you receive $1 bonus, up to a cap of say $7,500.

This boosts wages on the low end and strongly encourages employment. Funding
this through income taxes and you won't have to kill off risky / low profit
small business with local living wage requirements.

~~~
lalos
How would you structure that bonus if you get a promotion that takes you to
7,501? You would get an impressive pay cut. If you structure it like taxes
where only the first 7.5k get doubled then a bunch of people that don't need
it will also get free money making the program cost more.

~~~
Kalium
You're right! That would be a _major_ concern and an incredibly serious flaw
in such a program.

Maybe the description could be parsed slightly differently? Some might read
parent's description to be proposing a bonus on W2 income the a limit on _the
bonus only_ of $7,500. Thus an income greater than that receives the full
bonus. The structural problem you have correctly identified thus does not
arise!

~~~
PurpleBoxDragon
So everyone is getting an extra $7,500, assuming they make at least that much?
How isn't that just a tax credit on W2 taxes?

It would make sense to assume there is some cut off, and given how government
cut offs work in the past, it would be reasonable to assume the cut off will
be implemented in a fashion that creates a graph where sometimes raises will
result in less pay, at least when combined with existing government aid
programs.

~~~
Kalium
> So everyone is getting an extra $7,500, assuming they make at least that
> much? How isn't that just a tax credit on W2 taxes?

Depends how it's implemented, probably. People react differently to larger
paychecks and tax refunds, for example. And certainly people react differently
if you call it a bonus, even if it is just a negative income tax that would
please Friedman.

> It would make sense to assume there is some cut off, and given how
> government cut offs work in the past, it would be reasonable to assume the
> cut off will be implemented in a fashion that creates a graph where
> sometimes raises will result in less pay, at least when combined with
> existing government aid programs.

That's a completely, fully, absolutely 100% reasonable comment on how poorly
implemented current government aid programs are far too often implemented.

It might be a slightly less reasonable comment on the details as written of
the proposition above.

~~~
PurpleBoxDragon
>It might be a slightly less reasonable comment on the details as written of
the proposition above.

The more I think about it, the harder I think it is to create a program which
doesn't result in this once combined with other programs. Any cutback, no
matter how small, will be combined with all other cutbacks of all other
programs, existing and future. As long as these benefits are independent,
there is a that the sum of all the cutbacks will outweigh the raise that
caused the cutbacks. Even if the max cutback was 10%, meaning it would take a
75k raise to remove all benefits, when combined with 9 other equally generous
benefit programs and income tax you still end up with a loss.

When adjusting for the phase out being for optics limiting how the phase out
works (as all phase outs for optics would tend to look similar to meet similar
expectations), the risk of a raise resulting in lost total income isn't easily
dismissed.

~~~
Kalium
You're right! That's a very real risk that should not be readily dismissed.

This is why a program that at no point has any way, shape, form, or manner of
phase-out is desirable. It fully and completely avoids any kind of problem
stemming from colliding cutbacks. This is such a good idea and so wise, that
it was baked in to the approach proposed above!

~~~
PurpleBoxDragon
In a sibling comment chain the one who purposed the idea mentioned that a
phase out might be needed for optics.

But if it doesn't ever phase out, it is really just a tax cut, and to be exact
a tax cut. I'll take having to pay 7.5k less taxes (or getting an untaxed
check for 7.5k from the same people I have to write my tax check to).

~~~
Kalium
You're absolutely right. It really is just a tax cut.

However, what you call something and how you structure impacts how people
react to it. Call it wages and spread it over time and people react one way.
Call it a bonus and hand it out once a year and people behave differently. So
while it may be more correct to call it a negative income tax, this may work
against the intended economic effects.

------
noddingham
As a data point, Finland is ending their basic income program:
[http://www.bbc.com/news/world-europe-43866700](http://www.bbc.com/news/world-
europe-43866700)

I wish they'd release as much data as possible regarding the experiment so
other cities and countries could have actual data to look at instead of
hypotheses.

------
blang
NPR did a good piece about the non-profit mentioned in the article:
[https://www.npr.org/sections/goatsandsoda/2017/08/07/5416096...](https://www.npr.org/sections/goatsandsoda/2017/08/07/541609649/how-
to-fix-poverty-why-not-just-give-people-money)

------
codebook
I thought it is talking "California City" but Stockton.
[https://goo.gl/maps/o8fp1f18Hf32](https://goo.gl/maps/o8fp1f18Hf32)

------
RickJWagner
My inclination is that money without work is a bad idea, but I'm happy to
admit I might be wrong.

I hope the results are described fairly and often, it'll be interesting to see
how it turns out.

------
sonoffett
As related material that folks here might appreciate: Andrew Yang’s (founder
of Venture for America) recent book “The War on Normal People: The Truth About
America's Disappearing Jobs and Why Universal Basic Income Is Our Future” lays
out a compelling argument for UBI, given the rise of automation and AI, as
well as current economic and cultural shifts.

Yang is also running for president 2020 on a UBI platform, dubbed the freedom
dividend.

~~~
tomschlick
He also did a Reddit AMA where he only answered the softball questions about
UBI instead of how he would actually make it work. IMO, the guy is only
running so he can sell more of his books.

[https://www.reddit.com/r/IAmA/comments/87aa2z/iama_andrew_ya...](https://www.reddit.com/r/IAmA/comments/87aa2z/iama_andrew_yang_candidate_for_president_of_the/)

------
prewett
This is first-order thinking. The problem with the poor is not that they have
no money, it's that they have no _ability_ to make money. So giving out money
isn't going to fix things, you need to fix the lack of ability. In fact,
giving out money is harmful, because it enslaves both the recipients and the
givers. If everyone gets $100, prices will simply rise (as mentioned in other
threads). But now you can't stop giving them the money, because they need it
worse than before.

The people doing this justify it that they will get "valid scientific data,"
but they won't get any valid scientific data on how UBI performs, because they
aren't doing UBI. There's a big difference between giving 100 poor people
money and giving all the poor people (or even everyone) money.

A bit unrelated, but the article mentions that these ideas have been around a
long time, citing Thomas More's "Utopia." However, they fail to follow up with
the modern connation of the word, that utopia is unachievable. We've tried
these ideas again and again, in American utopian societies of the 1800s, in
communes, in Communism, and it doesn't work. Maybe it's time we stopped trying
to do the same thing over and over again expecting different results the next
time.

~~~
peterwwillis
"The problem with the poor" is definitely multifaceted. You need to fix
transportation, health care, availability of jobs, cost of housing,
availability of essentials such as groceries/laundry, cost of utilities,
availability and quality of public services such as schools and job training
programs, and stem systemic incarceration of minorities, in addition to
providing special services such as child care/day care, family planning,
counseling, and so on.

Imagining that $10k is going to solve these things is insane. Even if you took
all the money you gave to each of the people in an area and added it all up,
it still couldn't even pay for a fraction of the services mentioned above.

This isn't to say UBI wouldn't be helpful. But let's face it, UBI is just some
academic's moon-shot that they _hope_ will magically improve everything,
without thinking through all the complex logistical issues that require more
than a bigger paycheck to solve. Sure, give people money, but don't imagine
for a second that it will end poverty. It may make poverty more tolerable,
possibly extending it.

------
JaceLightning
I'm not sure this is "universal" basic income if it's only for 100 people...

~~~
privacypoller
I'm more concerned that the elected mayor, who has an obvious vested interest
in the project being a success, wants to target "those most likely to make
good decisions" \- how is that universal?

The whole pretext of these plans is that there is no qualifying conditions or
criteria for participation. If you only give money to a group filtered for a
target outcome it's (a) just another social assistance program and (b) not an
experiment

