
The Indian government is set to endorse Universal Basic Income - guildwriter
http://www.businessinsider.in/the-indian-government-is-about-to-endorse-giving-all-its-citizens-free-money/articleshow/56317597.cms
======
gyey
I don't see how they would afford this. Rough approximations show that even
giving $20 a month to India's 900 million adult population would mean an
annual expenditure of 216 billion dollars, more than 4 times the country's
annual defence budget. Where does all this money come from? Increased taxes
from the middle class (so that they pay $40 to get $20)?

~~~
chiph
This is what I point out whenever BI is brought up as a possibility in the US.
With 1/4 the population of India, higher GDP, and allowing for all the
existing entitlement programs being retired, we can't afford it either. The
math just doesn't work out.

Edit: Some grossly simplified numbers.

Assumptions: BI matches poverty level. Everyone gets BI (parents receive their
children's payments until they reach majority). Family size is 3 (average
household size is really 2.54 persons in the US)

US Population: 312 million, which is 104 million families (households). The
Census dept. says poverty level for a family of 3 is $20,000, so that's what
BI must match. This gives us annual BI payments of $2.08 trillion.

Savings from shuttered entitlement programs: Medicare, Medicaid, CHIP, ACA
subsidies: $938 billion. EITC & CTC: $362 billion. Total savings is $1.3
trillion annually.

But what about Social Security (OASI/DI) with $888 billion in payments? Since
that's a pay-it-forward program we can't end it suddenly (it'd be political
suicide, in any case). It'd have to be tapered off in some fashion. The trust
fund (Al Gore's "Lock Box") doesn't exist as a big pile of money to be tapped,
as that has been turned into US-issued Treasury Bonds.

So there's a shortfall of about $810 billion each year. Could we tap into the
money sent to the Pentagon? Yes, but that's "only" $610 billion and we'd have
a military that isn't being paid and with increasingly obsolete equipment. Not
a good situation.

~~~
Jweb_Guru
Raise taxes on the wealthy (yes, including Silicon Valley programmers). It's
really that simple. People just don't want it to be.

~~~
gumby
> Raise taxes on the wealthy. It's really that simple.

I'm a big fan of aggressively progressive tax systems but it isn't as simple
as you think.

California has a very progressive tax system, with most people paying some but
most of the money coming from a small number of taxpayers. Sounds great, and
basically most people like it. The problem is that when the economy tanks,
California takes a huge hit in income since wealthy taxpayers' capital gains
drop precipitously.

Yes, there's a simple-to-describe fix: build a surplus in good times and
borrow in downtimes. But this is very hard to implement.

------
madmax108
After the recent Demonetization brouhaha, which led to over a 100 deaths[1],
most of them from the lower strata of society, it makes sense for the current
government to start off UBI whole heartedly, especially since they can tie in
the entire demonetization/cashless economy/jan dhan etc. stories together.
However, I sincerely hope that the execution is well planned, rather than
hasty.

This article though seems to be a marketing report for BIEN. Remember that
with a country as large as India, Government reports are many in number but
very few schemes having national level adoption. I can think of numerous
states that would support doling out sops for the poor instead of UBI.

Interesting times these are for the country. Let's hope sense prevails.

[1] [http://www.dnaindia.com/india/report-demonetization-
governme...](http://www.dnaindia.com/india/report-demonetization-government-
not-mourning-over-100-deaths-due-to-cash-crunch-says-opposition-2280902)

~~~
shripadk
I'll take liberty to correct your perspective: A demonetization move that
directly affected livelihood of billion Indians, with a possibility of large-
scale riots, but ended with only 100 deaths. I don't see how it cannot be
termed a success. Can you think of any major move that directly affected the
entire country but did not end in large scale riots? If you need to understand
what a "hasty decision" means take a look at the Partition of India, where
only a small fraction of the entire populace was displaced but ended up
causing up almost 2 million deaths by some estimates.

~~~
RealGeek
> a possibility of large-scale riots, but ended with only 100 deaths. I don't
> see how it cannot be termed a success.

What is the upside we got with demonetization that we can call success?

Did it end black money? No.

Will it end counterfeit currency? No.

Does it help citizens in any way? No.

Then what exactly is the success we achieved here?

Modi have blood of 100 citizens on his hands this time instead of thousands
like it was in Gujarat riots under his leadership. Is that the benchmark of
success?

~~~
lenkite
It has reduced black money _significantly_. Especially for terrorist and
militant groups - both Pakistan sponsored and home grown Naxalites. They are
now being forced to raid banks for new cash. The new notes are also much more
difficult to counterfeit. That's two points crossed in your list.

~~~
RealGeek
They have been able to convert their cash to new Rs. 2,000 notes through the
underhand deals with corrupt Government and Banking officials.

------
nashashmi
Have there been any studies on the impact to prices on staple foods?

Because if everyone can afford food and basic items for living, does that mean
the prices for these items will go sky high? Especially as supply will be
short of demand?

~~~
perfunctory
"Because if everyone can afford food and basic items for living", the economic
collapse is unavoidable. How did we develop this notion that the economy can
function well only when a portion of the population balances on the edge of
starvation.

~~~
eli_gottlieb
>How did we develop this notion that the economy can function well only when a
portion of the population balances on the edge of starvation.

"Pure ideology", a belief that's more moral than factual. You see, we have to
discipline the lower classes into working hard, therefore they _must_ live on
the edge of starvation, therefore _not_ attaining this disciplined state will
inevitably collapse the economy. The causal connection is conjured from air to
support the desired policy.

------
danharaj
Every time UBI is brought up, vague arguments about inflation come up.
However, I've never seen anyone cite economic literature that actually
quantifies such an effect. It's just a claim justified by an understanding of
economics 101. However: there's a reason why a study of economics doesn't end
at the 101 level. Economics 101 is a grossly simplified toy facsimile of the
actual capitalist economy.

There are professional economists who support UBI or at least experimenting
with it. Am I supposed to believe that they never considered the vague and
simplistic argument that can be posed with minimal effort in an Internet
comment?

~~~
snrplfth
Because claiming that UBI will cause inflation is _not_ justified by an
understanding of Economics 101. Most basic economic theory will state that
inflation is basically a monetary phenomenon. (Now, if you use monetary
expansion to pay for the UBI, as the occasional person has suggested, then
Econ 101 would suggest inflation, but that's true for any expenditure funded
that way.)

~~~
chimeracoder
> Most basic economic theory will state that inflation is basically a monetary
> phenomenon.

Uh, no, that's not true at all. Monetary policy is only one of many factors
that can drive inflation.

> Because claiming that UBI will cause inflation is not justified by an
> understanding of Economics 101

Uh, yes it is. MV = PQ is literally in introductory economics textbooks.
_Advocates_ of UBI talk about how it would encourage growth by "stimulating
spending". Well, that's literally saying that it would increase both V and Q.
And mathematically, we know that a redistributive policy cannot increase Q as
fast as it increases V, which means that P increases. Hence, inflation.

You can make an argument that increasing the monetary supply at the correct
rate would offset the increase in prices, or that the impact on unemployment
rates would factor in, but at that point you're moving _way_ beyond Economics
101 and far off into the realm of contested and unproven research conjectures.

~~~
snrplfth
Well, I think advocates of UBI arguing that it would encourage growth by
stimulating spending are ignoring the fact that a tax-funded UBI would take
money from elsewhere. It doesn't necessarily matter what advocates of UBI say
about its suppose growth-boosting effects or what have you - the parent post
was saying that Econ 101 understanding affirms that redistributive policies
increase inflation, and I disagree. I should definitely qualify that with the
caveat that I'm talking about _Monetarist_ Econ 101, where V is stable in the
long run, and Q is determined by overall productivity. Therefore P is roughly
proportional to M. Sure, there's short-term effects, but over the long run, by
Monetarist Econ 101, a UBI, if funded out of tax revenues, shouldn't cause
inflation.

------
sharemywin
I just don't see how it won't cause massive inflation. basically to the point
that the payout is practically worthless.

~~~
aninhumer
Because no money is being created, it's being reallocated from other people,
so it doesn't directly affect the money supply.

The recipients are more likely to spend it, which creates some demand (and
thus inflation), but it should still be less than the increase in spending
power it provides them.

~~~
neilwilson
"Because no money is being created, it's being reallocated from other people,
so it doesn't directly affect the money supply."

And unfortunately that is bunkum. Money isn't stuff. If you take what is
currently savings and put it into flow then you will get an increase in
production - that is then effectively taken away and given to people who
haven't earned it.

The result is, over time, an increase in political pressure to get rid of the
hand out from those doing all the work and getting nothing for it in return.

And that's how an income guarantee scheme ends. Just like every other
'experiment' in history.

People want the ability to exchange their labour for goods and services, not
be the recipients of handouts and resented for it by those doing the work.

~~~
mljoe
Governments have found one neat trick to hide what are exactly handouts from
scrutiny like that. They call them "tax credits". A "tax credit" is literally
just a handout, a $1000 tax credit means you get a $1000 check. You don't even
have to pay any taxes to get a tax credit. It's a pure handout. But the phase
"tax credit" implies that it is somehow connected to taxes that you've paid
some time in the past, so in people's minds it's not a handout anymore. Even
hardcore conservatives can get behind "tax credits"!

All you go to do is call the handout a tax credit and give it to almost
everyone, and you implemented UBI. In the USA, you wouldn't even need a new
system to implement. We have various proto-UBIs written in our tax code, the
most notable being the Earned Income Credit, we would just need to "enhance"
it.

------
plinkplonk
This thread is political, just that it is Indian politics instead of American
politics being discussed. An opportunity for American readers to get a first
hand idea of what it feels like to have long threads of inane politically
motivated discussion which doesnt' make much sense to readers from other
countries ;-)

------
dovdovdov
What is happening?

I guess shadow powers don't want global riot in 10-20 years.

~~~
gravypod
Most of my friends who are communists are calling this "class control" and I'm
laughing at them because they are getting what they wanted just without mass
riots and murders of the rich.

~~~
tornadoboy55
How are they getting what they want? What communists (and in a lesser sense,
socialist countries) want is less of a chasm between the lower and upper
echelons of society. Just this day it was posted on Reddit that a top London
banking boss will already have made more since the start of the year than an
average worker will the entire year (!!). All UBI does is make sure everyone
has a baseline to live from. That's great, but its just a sedative for the
masses. You're a lot more likely to riot if your kids are starving. I wonder
what will lie beyond UBI. 3D-printers for everyone? Everyone can print a fancy
car, a lobster, a new arm, etc.. which would basically make everyone
completely equal.

~~~
macspoofing
>That's great, but its just a sedative for the masses.

As opposed to the great energy drink of communism?

~~~
tornadoboy55
No, and some difference will always be there. That's healthy - it aspires
people to be more. But I'd like it to be more like Star-Trek: people work hard
and achieve things for the prestige. If you become captain of a star ship,
you're admired, and you (for example) still get more pretty ladies fawning
after you than the helm officer. And he does so more than a dude who wants to
do nothing but play GTA:XXIV on the Holodeck. But that dude can get the same
food, education and modes of transport as the captain, if he so desires.

~~~
RodericDay
Most importantly, the kids of the holodeck videogame player are not condemned
by the sins of the father, and the kids of the starship fleet captain don't
get to ride the coattails of their father either.

Hardass "realists" love modeling the market as anarchic self-interested atomic
agents until it comes to giving their own kids a leg-up even if they don't
deserve it. Then it's all biology and social psychology.

~~~
gravypod
> sins of the father, and the kids of the starship fleet captain don't get to
> ride the coattails of their father either.

You need to watch more DS9, Voyager, and TNG.

------
djschnei
Negative income tax or there is no shot it will work. You can't disregard
human nature for the sake of humanity...

------
known
Feudal society should have Wealth tax, not Income tax
[https://en.wikipedia.org/wiki/Caste_system_in_india](https://en.wikipedia.org/wiki/Caste_system_in_india)

------
known
UBI will provide impetus to
[https://en.wikipedia.org/wiki/Social_mobility](https://en.wikipedia.org/wiki/Social_mobility)
due to
[https://en.wikipedia.org/wiki/Caste_politics_in_India](https://en.wikipedia.org/wiki/Caste_politics_in_India)

------
grondilu
That's insane.

------
azizsaya
This is constructed/inferred/derived/fabricated i.e. "fake" news.

