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Citi's Chief Economist Recommends a Universal Basic Income (futurism.com)
106 points by ph0rque on Sept 4, 2015 | hide | past | web | favorite | 194 comments



When people on the far left and the far right agree, they're usually onto something. My favorite examples are the NSA spying stuff, and this.

Lefties hate the NSA spying and love a universal basic income because the spying tilts the power away from the people, and the income tilts toward the people.

Righties (well, go far right enough) hate the NSA spying and love a universal income because of government overreach in the first case, and the ability to drastically simplify government welfare--cutting out a ton of means-tested programs and their agencies, and replacing it all with a check each month.

Gotta love it!


>and the ability to drastically simplify government welfare--cutting out a ton of means-tested programs and their agencies, and replacing it all with a check each month.

As someone that leans left, this is one of the big arguments I make in favor of UBI.

Frankly, I'm tired of arguing over the minutia of welfare, unemployment benefits, the minimum wage, social security, etc.

Fine. Scrap most of our social assistance programs outside of healthcare and replace them with a UBI.

The progressive in me likes it because it gives everyone a minimum safety net and the capitalist in me likes it because it opens up entrepreneurism and the ability to pursue potentially innovative businesses -- especially in an economy increasingly geared toward service and information work -- to huge portions of the population that are otherwise locked out. Active, small businesses are good for everyone.


Another overlooked right-leaning perk of UBI: depending on the details, it could allow reducing or even eliminating the minimum wage. This means that labor would be free to seek its true market value, resulting in more total jobs, and reduced incentive/necessity to ship jobs overseas.


You don't need a minimum wage when you have an UBI worth its name (not just around / below the current minimum wage e.g. like discussed in Switzerland £1,500 a month or more).

People will either do the job or you have to pay a reasonable amount for it - one key principle of the UBI - more people get a choice how they use / sell their time and are not prey like today in many regions / countries to the few who dictate how much they will receive for their time.


Not sure any of us will see it, but I foresee a day when "employee" will be all but extinct. The reason? I think technology, taken to its logical extreme, will empower individuals to the point they'll be able to run fortune 500 scale businesses out of their garages (with all the automation-as-a-service that I imagine will exist). And board rooms? Who needs 'em when you've got the full power of sentient AI to help you accomplish what you want to accomplish.


I like the idea of a Universal Basic Income but running the numbers is eye opening:

£1,500 ~= $2,274

$2,274/person/mo * 12 mo/yr * 300,000,000 people = $8,186,400,000,000/yr. $8 trillion a year to provide that level of UBI to all 300,000,000ish Americans.

Not an inconsequential amount of money!


But if you combine that with a progressive tax rate wont the government take large swathes of that back in the form of taxes?


The GDP is something like $14 trillion. We're talking about 60% of the GDP being redistributed. That will work really well... especially when the GDP drops by about a third, which will surely happen.


"We're talking about 60% of the GDP being redistributed."

When assessing the amount being redistributed, much of what's paid in UBI should be netted against what's collected to pay the UBI.

That is, if I am receiving $27k/yr in UBI, but paying $30k/yr in increased taxes toward the UBI, really only $3k/yr is being "redistributed" from me.

This is still going to be a substantial sum, but quite a bit less than "people * UBI amount".

Please don't take this as my asserting that I think $27k/yr would be sustainable in the US - for the record, I don't.


How much would that be? 40%? That still close to $5 trillion.

How will willingly pay $5 trillion of taxes after all the hard work only to watch everybody else living of their work for free?


Subtract 2 - 3 trillion worth of welfare, unemployment benefits, the minimum wage, social security, etc and it suddenly starts looking feasible. Expensive, yes, but feasible.


Please help me understand this. You promise to pay someone $x, but you will only pay $x-90%(say $y)

The person receiving $y is actually getting it from the very taxes they pay. So essentially what you are giving them is a tax discount. Except in cases where a person makes $0, for which you have social security anyway.

So this is basically a tax discount? You could simply say based on their income some a% of tax discount will be offered every year.


And another right-wing perk: if the basic income had a minimum age, it would attenuate the dysgenic incentives of modern welfare systems.


Yup, exactly why I included the minimum wage in the list of things that could be scrapped in favor of UBI.


Whoops, overlooked that in your post! But I think it bears repeating. :)


The problem is, when you scrap all of those programs you immediately create more unemployment. There are a lot of jobs supporting social services, the hard part is going to be finding a way to phase in UBI without wrecking the economy.


I suspect one of the side effects is that UBI would lead to a decrease in full time employment and an increase in part time employment. Basically, having a job would become a matter of making enough to live the lifestyle of your choice rather than a matter of having a roof over your head and the ability to eat.

It's one of the reasons I mentioned scrapping the minimum wage when implementing UBI.

The job market becomes much more of a market where work is paid for what it's worth because it's an actual market and employers don't have the undue leverage of simple survival over employees.


Just for once, I want to hear a truly honest conservative politician: "We need to drastically shrink the government, which is why when I'm elected, one-eighth* of my constituency will be immediately unemployed!"

(Not that there isn't a good case for eliminating federal waste; but the reality I never hear uttered in the conservative bubble is that the largest government expense is federal employees and subcontractors.)


By that measure, the "truly honest" progressive politician would say: "we need to drastically raise social program spending and taxes, which will dramatically increase unemployment!"

(Not that there isn't a good case for improving federal social programs; but the reality I never hear uttered in the progressive bubble is that the largest government expenses are social programs like social security, medicare, and medicaid.)


I don't understand your rebuttal, how does increased spending on social programs lead to higher unemployment? Are you suggesting that increased social spending leads to people tactically becoming unemployed in order to gain benefits while not working?


Romer and Romer showed that higher taxes lead to lower growth and vice-versa; the additional taxes required to finance the social program spending will sooner or later lead to reduced opportunities for employment.[1] Others have shown that a larger "social safety net" leads to higher unemployment for a variety of reasons.[2][3] It is also logical that people's aversion to unemployment is proportional to its cost (to them), and that if it is less costly, they will expend less time and effort in the stressful, taxing, and unpleasant task of looking for work.

[1] http://eml.berkeley.edu/~dromer/papers/RomerandRomerAERJune2...

[2] http://www.newyorkfed.org/research/staff_reports/sr646.pdf

[3] http://time.com/9009/unemployment-is-worse-than-death/ (the point is made more thoroughly in the author's book)


Yes, a lot of people employed to make unemployed people feel guilty. (And make them jump through hoops.) Inefficient and mean-spirited bureaucratic overhead.


Removing jobs is viewed as an upside of a policy like that, not a downside (by economists only, pretty much, but they're right about it).


> There are a lot of jobs supporting social services, the hard part is going to be finding a way to phase in UBI without wrecking the economy.

You phase it in by starting it at a low level without replacing/reducing existing programs, and then as you ramp it up you start eliminating other programs.


That won't be the hard part about phasing in UBI without wrecking the economy. All those people that are now unemployed are now earning the UBI.


Except it won't necessarily match their previous salaries. There are a lot of high 5 digit and low six digit incomes in the social services job hierarchy.


I agree. Markets and businesses are changing so fast that most people are going to have periods of tough career change in their lives.

Allowing people to make those important transitions without completely losing financial stability will help everyone.


I highly doubt scrapping all social assistance is politically possible. Sure, basic income would be better than a patch work welfare state present in most of the developed world, but I am skeptical that it will be any different from other transfer programs already in place.


>Sure, basic income would be better than a patch work welfare state present in most of the developed world

In many countries the government negotiates medicine prices as one entity for the entire country. This gives it a lot of leverage and the ability to provide medicine for all its citizens at a price far lower than what they would each individually be able to buy it at.

Now if everybody had basic income the governments might start getting pressured to stop acting as an intermediate negotiator.


The idealist in me loves it. The political realist in me just doesn't see it.

Government programs have huge constituencies and embedded supporters within and without government who will fight tooth and nail to keep them. There is no way you will actually cut down on them as suggested.


The best part is, the minimum income applies to them, too!

While they're figuring out what to do next with their lives, they won't be left in the lurch, they'll get that sweet, sweet (well, minimal) UBI check just like everyone else.


Not with that attitude you won't!


That is one of the best summaries of why this appeals to both the left and the right. Well said!


Also, less bureaucracy to languish and become inneficient, entrenched, and corrupt.


Not everybody on the left agrees:

http://www.nakedcapitalism.com/2015/01/the-failure-of-a-past...

"The idea of a basic income guarantee is very popular with readers, more so that the notion of a job guarantee. Yet as we have mentioned in passing, this very sort of program was put in place on a large-scale basis in the past. Initially, it was very popular. However, in the long run it proved to be destructive to the recipients while tremendously beneficial to employers, who used the income support to further lower wages, thus increasing costs to the state and further reducing incentives to work. And when the system was dismantled, it was arguably the working poor, as opposed to the ones who had quit working altogether, who were hurt the most."

I've yet to hear a good explanation for why basic income is superior to a job guarantee. We do not live a techno-futurist utopia where robots do all of our work. We do not want to be welfare queens; work gives us dignity. We do not even have world class infrastructure, we have infrastructure that is falling to pieces and direly needs work.

The last time we were in this situation, FDR created jobs. Jobs that built stuff like schools, hospitals... the lincoln tunnel.


The article you cite used a system that is most definitely not a Basic Income, and not Universal, to make its point against a Basic Income.

You want a way in which the Universal Basic Income would be superior to a Job Guarantee? Administration. With a job guarantee, you will need a massive administration. While I agree wholeheartedly that meaningful work supports dignity. Creating jobs and Universal Basic Income are not opposed to each other.


What exactly was wrong with FDR's public works adminisration and works progress administration?

They built a ton of stuff we still use today.


I have no objection to hiring people to build useful stuff.

That prospect differs from a "job guarantee" precisely where that stuff is not sufficiently useful. In the margin there, I object to paying people to take time and effort away from places they may find more value, to do things that are of minimal value, in the name of "dignity." In fact, I think paying for useless work is destructive of precisely that dignity (along with a pile of economic value).


"That prospect differs from a "job guarantee" precisely where that stuff is not sufficiently useful. In the margin there, I object to paying people to take time and effort away from places they may find more value, to do things that are of minimal value, in the name of "dignity." In fact, I think paying for useless work is destructive of precisely that dignity (along with a pile of economic value)."

So you are saying, in essence, that people's art projects, poetry and one person startups and time spent watching daytime TV are, on average, more useful than projects like the lincoln tunnel, schools, hospitals and bridges and you object to resources being taken from one to build the other?


That so mischaracterizes what I am saying that I don't believe you are interested in having a meaningful conversation. I'm done here.


We do not want to be welfare queens; work gives us dignity.

Bourgeois moralist crap. If working gives you dignity, by all means, work. But being forced to work to survive is not dignity, and the result is the bullshit jobs we see everywhere. If people who have free time feel the need for better infrastructure, they'll build it.

"Ne travaillez jamais!"


I don't understand what "bourgeois moralist crap" means, but there is a great deal of scientific literature supporting the parent's claim. One need only 'Google' unemployment and happiness, to find some. Here are a few of the top hits.[1][2][3]

[1] http://www.jil.go.jp/english/JLR/documents/2012/JLR34_ohtake...

[2] http://wol.iza.org/articles/unemployment-and-happiness.pdf

[3] http://onlinelibrary.wiley.com/doi/10.1111/jmcb.12154/abstra...


That involuntarily unemployment leads to unhappiness is completely irrelevant in a discussion about UBI, which would only allow unemployment for those who wanted it - while allowing others to work.

In my second sentence, I implicitly agreed that some people might feel more dignified by working. The bourgeois moralism comes from using that to justify forcing everyone to work, as if dignity had to be imposed on people, those brutish sinful beings who have to be saved by those who know better.

And by the way, this moralist view is probably one of the great culprits for the effect shown in your links - like those people in the Philippines flogging themselves until their flesh is raw and bloody, we can do terrible things to ourselves when we've been convinced that we're lesser human beings.


>That involuntarily unemployment leads to unhappiness is completely irrelevant in a discussion about UBI, which would only allow unemployment for those who wanted it - while allowing others to work.

A) Nobody much really wants voluntary unemployment. Not for extended periods, anyway.

B) Involuntary unemployment still exists with UBI meaning you still get most of that unhappiness.

C) It's not like we're short on useful work even if we are flooded with bullshit jobs and unemployment. We just have a really wasteful allocation of labor.

>The bourgeois moralism comes from using that to justify forcing everyone to work, as if dignity had to be imposed on people

A job guarantee isn't forcing anybody to do anything and it isn't imposed on anybody. It's an offer of a job to anybody who wants one.

>And by the way, this moralist view is probably one of the great culprits for the effect shown in your links - like those people in the Philippines flogging themselves until their flesh is raw and bloody, we can do terrible things to ourselves when we've been convinced that we're lesser human beings.

Economic policies that enforce idleness are only going to contribute to that.


Nobody much really wants voluntary unemployment. Not for extended periods, anyway.

Funny thing to say on a site where so many people chose a more challenging life exactly because they didn't want to be employees.

Few people want to be idle. That doesn't in any way imply they all want to be employed. There are many ways in which people enjoy living besides being employed - volunteering, studying, researching, exploring, creating art, developing a non-commercially-viable craft or skill, traveling, founding startups and other organizations, the list is endless.

B) Involuntary unemployment still exists with UBI meaning you still get most of that unhappiness.

When you don't need to pay anything to offer a job, there's absolutely no reason for most businesses not to accept anyone. Only unpleasant jobs that few people want to do will still have to be well remunerated - as it should be.

It's not like we're short on useful work even if we are flooded with bullshit jobs and unemployment. We just have a really wasteful allocation of labor.

Which is a great practical point in my favor. The State is one of the greatest sources of bullshit jobs; there's no reason to assume the new guaranteed jobs would be better allocated.

A job guarantee isn't forcing anybody to do anything and it isn't imposed on anybody. It's an offer of a job to anybody who wants one.

If people can't survived without a job, they are forced to get one. If society can easily avoid that but chooses not to for BS moralist reasons, the people advocating for that are forcing others to have jobs.

Economic policies that enforce idleness are only going to contribute to that.

The idea that there is only a choice between idleness and employment is one of the BS parts of the moralism I was referring to.


Yeah, no kidding, ask the people working 3 minimum wage jobs how much dignity the scheduling nightmares and that 4 hours daily on the cross-town bus gives them.


If the government instituted a job guarantee with a decent living wage, those 3 minimum wage jobs would magically start paying more and treating their workers better.

Because if they didn't, nobody would do that work.


That is only studying first part of the problem. Minimum wage also means, net expenses to produce things also goes up. Transferring the burden of paying the minimum wages to consumers[Who are being paid the minimum wages]. Thereby going back to square one.

This or, since budgets remain same. You will employ lesser people to do same job. Because that is the all budget you have to pay people.


>Minimum wage also means, net expenses to produce things also goes up. Transferring the burden of paying the minimum wages to consumers

Nope. Shareholders. Minimum wage hikes eat into profits before affecting prices or employment. This is why businesses hate them with such a seething passion.

To look at a more concrete example, compare the minimum wage in Australia vs. the US and the cost of big mac in both countries.


A job guarantee has similar results to heavily unionized labor: inefficiency. People waste their time doing things that don't matter. Basic income is great because it provides everyone a safety net efficiently. With basic income, they don't have to worry about survival, so people take jobs because they think it's beneficial to them. It sets up the right incentive structures for a productive free market.


"A job guarantee has similar results to heavily unionized labor: inefficiency."

Involuntary unemployment is more efficient is it?


A "basic income" is not the same as a "basic income guarantee".


But surely similar things would happen?

Let's say your wage is 30K per year. On Jan 1 a UBI of 12K per year is to be instated. What would happen to your wage in a year? Personally, given that most all businesses want us to be loyal to them with no loyalty returned to us, my guess would be that you are let go and someone would be hired to do your job for 20K per year.


> But surely similar things would happen?

The difference between a UBI and an income guarantee like the Speenhamland system is that the latter is a means-tested program that eliminates the marginal benefit of additional work and requires more administration, while the former, because it is unconditional, providing a fixed benefit regardless of outside income, has less administration and preserves the marginal benefit of additional work.

> Let's say your wage is 30K per year. On Jan 1 a UBI of 12K per year is to be instated. What would happen to your wage in a year? Personally, given that most all businesses want us to be loyal to them with no loyalty returned to us, my guess would be that you are let go and someone would be hired to do your job for 20K per year.

If they could get someone to provide the value you do for $20K now, they would. If you think UBI makes that more possible, you have to believe that it also makes it just as much more possible that you'd be able to get someone else's former 30K job for 20K of job income, which, with a 12K UBI, gives you a 6.67% increase in total income.


Nope, both are completely different.

With BI, for each extra dollar your employer pays you, you get an extra dollar.

With income guarantee, for each extra dollar your employer pays you, you get nothing.


> When people on the far left and the far right agree, they're usually onto something.

A similar observation is the "horseshoe theory": "The horseshoe theory in political science asserts that rather than the far left and the far right being at opposite and opposing ends of a linear political continuum, they in fact closely resemble one another, much like the ends of a horseshoe."[1]

[1] https://en.wikipedia.org/wiki/Horseshoe_theory


The problem comes with narrowing all political variation down to "left" vs "right". More dimensions are needed to tease apart the differences / similarities.

See https://en.wikipedia.org/wiki/Political_spectrum#Other_multi...


A horseshoe could be multi dimensional.


> When people on the far left and the far right agree, they're usually onto something.

In the 1930s the global far left and far right agreed on authoritarianism. While I personally think UBI is a great idea, I think that invoking a principal of that the points on which the far right and far left half similar views are likely to be correct to promote it is probably a substantially less great idea.


If the far left and the far right were forced to agree on the level of BI or accept the status quo I think we'd be back to the status quo though...


I first heard of this idea through HN and have discussed it with several people who I consider far right.

They are all concerned that this will ultimately end up as just another dole and the mother of all doles. They ask questions I don't have good answers to like:

1. This includes healthcare?

2. This includes disability?

When I say...well, I don't know about healthcare, its curtains.


Healthcare costs are a problem because they can often be unpredictable and catastrophic. A UBI wouldn't fix that; you still need either an insurance or a single-payer system of some sort. The short version is that you're going to end up with risk pooling of some description either way.

Where the appeal comes for the right is that a UBI would let you eliminate our patchwork of other social assistance programs and all the headache, cost, and inefficiency of their associated bureaucracy.

The basic pitch isn't actually all that different from the flat tax ideas that are popular in conservative circles with the distinction that a UBI would disproportionately affect the wealthy rather than the poor.


Which is a bit ironic because the infrastructure of basic income will require tracking of US citizens on a scale never before seen in the US. I'm not for or against basic income at this point, but it does make me chuckle a bit about idealists and their inability to see what their ideas will look like in practice.


You could very easily argue a UBI dramatically reduces the amount of information the government has on current welfare dependents. Besides, it can't possibly be any more "tracking" than what the IRS already does


Considering the population involved in taxation is ~48% I feel like 100% is a bit higher. There is certainly additional tracking based upon the listing of dependents ect. but I'm confident it's less then every single US citizen.


Nearly the entire population, at least those of working age, are involved in taxation to some extent.

Everyone pays, directly or indirectly, sales and property taxes. Every employed person ,that isn't paid under the table, pays payroll (ok, a few legal exceptions to this) and income taxes (if they make enough money). Those who don't make enough money to pay income tax are still involved with the IRS because they need to file for refunds or other programs they may qualify for.


That is absolutely correct about "involvement". It was a poor choice of words. I was talking about income taxation.


How would they need to track us differently than, say, with Soc Sec?


My assumption was that Social Security typically only effects most US citizens after 65 and/or working(paying income tax). For example, while debated and likely not highly accurate, ~10% of the US citizen population doesn't have a valid id. Also, the amount of those with identification with the valid current address is even lower. When you are talking about the bottom 1/3rd of the population especially there are a lot of people outside the system who are actually US citizens. One can definitely argue that these people will receive a net benefit for entering back into it, but they will also be back into the system as opposed to now. Like I said before, I'm not against it, I just chuckle about the fact that it creates a larger percentage of the population tracked by the government.


> My assumption was that Social Security typically only effects most US citizens after 65 and/or working(paying income tax).

Social Security, because eligibility is contribution based, effects people (from a tracking perspective) from the time they start working in a Social Security covered job (pretty much all legal jobs other than the subset of non-federal public sector jobs that don't participate in social security.)


Please elaborate. I would think that all the government would need to know is whether each citizen exists, is still alive, and what's their bank account. With no in-depth knowledge of US government, I think it knows on average much more about each citizen.


The government already, in theory, has a means of making payments to nearly every citizen (social security). So drop every welfare system but the Social Security Administration, and expand its payments to everyone, rather than just those currently qualifying (survivors and retirees, primarily). (Easier said than done)


...and keep track of every single one of those US citizens' addresses and/or bank accounts. Every single one.


http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/

The SSA is currently handling some 64 million beneficiaries.

I'm not contending that it'd be easy, but it's a scaling problem at this point. Systems exist to handle it already.


My apologies if my original comment appeared to be about it being unrealistic. It was about expansion of government involvement which personally I'm not particularly against(or for). I was talking about it being larger than it is now as opposed to being practical.


I am very much against the UBI but I don't see the tracking issue you mention. I'd love to know more about it!


Well, the US right wing, maybe, which seems much more State-adverse than right-wing parties here in Europe.


What about the Chinese right-wing? Or the Russian? Or did the context of the article give enough clues that they weren't talking about those, but maybe so for Europe?


Do you have a point?


Hmm, never heard of people on the right wanting a basic income to simplify government welfare.


In the 1980s it was advocated by those on the Right for that reason, albeit with a different name, a negative income tax.

It was one of the reasons advocate by Milton Friedman.


> Righties (well, go far right enough)

Milton Friedman is now "far right"?


I honestly cannot understand that people (left or right) are still discussing basic income. A simple back of the envelope calculation shows that you have to basically double the tax rate to pay for it. Here are the numbers for Germany, but I'd assume that the situation would be similar for many other countries.

Assume we give each of the 80 Mio germans 10000 Euro per year. That's an expense of 800 Billion per year. Contrast this with a total tax income of ca 600 Billion per year [1]. It's not gonna fly...

[1] https://de.wikipedia.org/wiki/Steueraufkommen_(Deutschland)


The argument that is made is that because you can entirely abolish a whole slew of agencies and other programs (welfare etc.) it's not as simple as just looking at current budgets, you need to factor in the savings you get from axing the agencies.

To be clear I'm not saying that it's viable, I'm just saying that your calculation is not the one proponents of the idea are using.


A challenge to anyone who thinks we should have a UBI: do the math. Show how it can work given the current population and output of the United States.

It's not easy.


I've done the math and you can get it to work. You need to make implementation choices that will make some people very unhappy though.

First, you start with non-institutionalized adult citizens that brings you down to a payee base of ~210M (this part will be unpopular as parents will want to get more than other adults). Next you set the basic income at the poverty level for a single person, $11,700. That gives you a total nominal cost of $2.47T. You do not exempt the basic income from the normal taxation rules. That means you get some of it back in taxes. If you figure 20% that gives you a net cost of $1.97T. You then take a buzz saw to all social spending aimed at US citizens, including all parts of social security (this would be very unpopular among the elderly, near elderly and disabled). With all parts of social security adding to more than $800B/year It's fairly easy to find a $1T in savings there. That brings the total to under a trillion dollars. You take a buzz saw to tax expenditures, e.g. exclusion of fringe benefits, preferential rates for capital gains and dividends, mortgage interest deduction, state and local tax deduction, etc. (this is also going to be very unpopular). If you add it up, that's good for another $550B.

That leaves you with another $420B in new non-offset spending. I'm certainly not going to to claim that's a small number, but it seems achievable. It's about 2.3% of GDP. Maybe you can get states to kick in (or force them to through reduced grants in aid) given that some of their social programs can also be largely reduced or eliminated.


Yes, I might quibble with some of your numbers a bit (for example I don't think you'll get 20% back in taxes) but I'll agree that you're in the ballpark. I think this is a good demonstration of how massive the changes we're talking about are. Particularly:

* The hit it will mean to many seniors standard of living due to social security cuts.

* The massive tax increases this will be on the middle class (primarily due to changes in tax deductions)

* The massive tax increase this will be on the upper middle class to rich (primarily due to changes on taxation of capital gains and dividends. Changes, by the way, that most economists oppose.)

* The additional massive tax increase that will come from somewhere to close the 2-3% GDP gap you mention.

I can see how some people might be in favor of this plan. I myself am not.


I agree the what comes back in taxes is a bit of hand-wave, it's hard to find stats on the average marginal tax rate.

I think the non-elderly middle class net effect will be close to if not a wash. They'll lose various tax deductions, but they'll get $11,700 x num_adults_in_household x (1 - marginal_tax_rate). And tax deductions only kick in when they are larger than the standard deduction to begin with. You need to be closer to the "upper middle" side of things to get there or have an unusually large deductions.

I don't think you need to get the gap amount wholly out of new taxes, as I said I think you can get some of it out of reduced aid to states, and/or as suggested by the poster below, military spending cuts.

As to your overall point, I concede that it is a tough sell.


Ya, you and I are definitely within the margin of error in our analysis of the situation. Thanks, by the way, for the very substantive comment. This is exactly what I was hoping for. I think a lot of people just say "UBI!" with close to no understanding of what they are proposing. I think it's very educational for them to take a look at the real tradeoffs involved.


  * The massive tax increases this will be on the middle class (primarily due to changes in tax deductions)
  * The massive tax increase this will be on the upper middle class to rich (primarily due to changes on taxation of capital gains and dividends. Changes, by the way, that most economists oppose.)
Well, UBI isn't supposed to be a tax cut for everyone, surely it'll be revenue neutral for everyone making over, say $50k?


Slashing the defense budget by 75% would help, too.

May as well clip out a few of the DOJ agencies like the DEA while you're at it. If you want to get get really crazy, cut foreign aid. Maybe even increase taxes on non-UBI income. Close a few corporate/personal tax loopholes...

I think it's physically possible. Politically, probably not.


The annual budget of the DEA is approximately 3 billion. The annual US foreign aid budget is around 16 billion.

These amounts are both very very small rounding errors in the context of this discussion.


That's true regarding the DEA and foreign aid, but defense is not a rounding error. National Defense and Overseas Contingency Operations are more than $600B. The next largest military spending is China at $145B (before the cuts just announced yesterday).


Defense is indeed not a rounding error. I myself think the Pax Americana the world has lived in for the past 50 years or so is worth it. But this is certainly something that others would disagree with me on.


You mean the Pax Americana where there are an endless series of proxy wars in the third world? Cause that one sure as shit wasn't worth it, especially considering that most (all?) of the interventions failed despite large scale slaughter.



>... $420B in new non-offset spending. ... It's about 2.3% of GDP.

This assumes GDP doesn't plunge because of disincentives to work and/or skyrocketing hiring costs for low-wage (now medium-to-high wage) workers. We don't have solid evidence of that not happening since no country has instituted basic income on the scale of 300 million citizens.

Your math model shares a common theme I see with many of these back-of-the-envelope calculations: they all assume a static economy where all the other variables that are affected by UBI -- which in turn also feed back into paying for UBI -- are unchanged. I've commented on this aspect elsewhere: https://news.ycombinator.com/item?id=10172421


Yes that's true. It's a very simplified, guaranteed to be wrong, calculation. But it gets us past the first order objections ("it's too expensive we couldn't afford it") to the second order objections ("the reduced incentives to work would crash the economy"). If you have a model for dynamic effects, I'm all ears.

Incidentally, from the linked comment:

The level of "afford" I'm thinking of is a scenario where the USA suffers zero productivity loss and the middle & upper class do not see a decline in the standard of living.

This seems an unreasonable standard to apply to anything. Hardly any policy is a Pareto improvement. Applying such a tough standard amounts to very strong status quo bias.


>This seems an unreasonable standard to apply to anything. Hardly any policy is a Pareto improvement. Applying such a tough standard amounts to very strong status quo bias.

Sorry I wasn't clear. I wasn't making that statement as a "justification" for not implementing UBI. It was about how it's being "sold" politically.

Personally, if I were to push for UBI, I'd tell people that the only realistic way we can afford it is if we all agree to take a hit in standard-of-living. I don't have irrefutable proof but that's what I think will have to happen. However, it doesn't necessarily we shouldn't do it. With the mass effects of citizens avoiding low-wage jobs, maybe it's better for society that Walmart is open 6 days a week 9am to 7pm instead of 24/7 and for Amazon-Prime to scale back to 1-week delivery instead of 2-day, etc, etc. Or Amazon-Prime costs $199/year instead of $99.

If sophisticated dynamic equations show that middle & upper class will have to "suffer" a bit to provide the entire country a UBI... fine. But sell it that way to them and let everyone have open eyes going into it. I'm skeptical that we can fund UBI just by renaming existing govt assistance programs so that it ends up being virtually "free" to taxpayers.


> This assumes GDP doesn't plunge because of disincentives to work

UBI doesn't create a disincentive to work, UBI replacing means-tested programs eliminates a disincentive to work.

> and/or hiring costs for low-wage (now medium-to-high wage) to skyrocket.

Why would hiring costs skyrocket? The elimination of the perverse incentives of means-tested programs should drive down low-end hiring costs.


>UBI doesn't create a disincentive to work, UBI replacing means-tested programs eliminates a disincentive to work.

UBI has complicated secondary effects. Some of them can be contradictory. One who gets welfare would have disincentive to work because of the loss of benefits in today's govt programs. UBI may spur some (not all) of them to join the workforce. However, another scenario is the mass populations of part-time workers earning mininum wage ($7.25) that total less than $11k a year. That's ~1500 hours of lost labor hours for those who are perfectly fine with not making more than UBI's $11k.

It's definitely not as simple as saying, "UBI only creates incentives to work and never any disincentives, and GDP can only go up or stay the same instead of down."


Well, here's the thing, if the level it is set at leads to output-reducing withdrawal from the workforce more than output-increasing effects, then it also leads to inflation which drives price levels up and drives people back into the workforce [0] -- its self-limiting.

The bigger problem is that the economy might not yet be able to sustain a level at which UBI isn't substantially worse for the neediest populations than existing support programs -- increasing capacity through automation will get us there eventually, but its far from clear we're there now.

Which is why, while I think UBI is a great idea to adopt and phase in, I don't think a big-bang short-term conversion is a good idea.

[0] unless it is pegged to inflation, then if its set initially in a bad place, its stuck there. So, if you are going to index it rather than manually adjust it, don't index it to inflation, index it to output/revenue measures, not price levels.


alternative to the CPI is the Billion Prices Project, born out of MIT

http://bpp.mit.edu/


Its not a matter of which price measure you use, using any price measure as a control for UBI means if you set it outside the stable range the economy can support, inflation no longer acts to reduce the real value of the benefit down to the level the economy can support.


"Lost labor hours" in minimum wage fields might very well be spread across a larger labor base of formerly unemployed potentially reducing crime and incarceration rates.

Also, "lost labor hours" in what fields..? Reduced labor hours would not necessarily suggest reduced economic output, or a reduction in construction projects, or small business experiments.


>You do not exempt the basic income from the normal taxation rules

I have a really hard time understanding the logic here... "Let's give everyone 11 dollars, then spend a bunch of money (enforcement does cost) to make sure all those people give 1 dollar back to us before the year is up." What am I missing?


It's treated as income and consequently requires no additional enforcement. Whatever agency pays out this amount would also send some sort of 1099 like document. This information would be available to the IRS (which would also have greatly simplified tax rules with the other things GP is proposing). So if you fail to report your $11k on your tax documents it'd be glaringly obvious. If it's your only income, you pay no taxes (and don't get a refund, no taxes have been taken yet). If you have any other income, you might pay taxes on it at some marginal rate.


Progressive tax brackets. Basically, if you had an income of $80k/yr before UBI, and UBI is $10k/yr, you'd get taxed on $90k/yr worth of income.

Current tax rates on UBI-only levels of income is basically zero.

It's essentially a way to get higher income people to pay more for UBI without having what is easy to interpret as a tax increase.


Or just remove the current terrible tax code and implement a fair flat tax on all new goods and all services at around 7%. Cut the military industrial spending in half ( US would still have a bigger mildick than anyone else ) and presto, we're living in a star trek future.

I'm occasionally asked where the money would come from, but it's not like we don't already just print it anyways. Although a gov. sponsored blockchain type distribution of the universal minimum income would be kinda neat.


Roughly 19% of the US population is on disability or social security retirement benefits. 23% are under the age of 18. 38% are employed full-time.

Disability/SS is a straight-up income replacement. They go off one program and onto another.

People under the age of 18 are much cheaper to support and would get somewhere between "much less" and zero dollars.

Full-time employees basically get an accounting trick - on average, taxes go up by roughly the amount they receive in benefits.

This makes up a combined ~80% of the population, meaning there's a new benefit for roughly 20% of the population. This is about the same size as the current social security program. Difficulty of going from our current regime to UBI is roughly as difficult as setting up social security in the first place, so it's roughly the size of the New Deal. Difficult, but not impossible - something that you'd expect politicians to accomplish once every generation or three.


Importantly, current full-time employees get an accounting trick but also a guaranteed minimum income in the case that they lose their job, go freelance, have a baby, move to a new city looking for work, start their own business etc. All of which happens without any paperwork, as they simply pay less tax when their income falls.

Reading the original questioners other replies, they assume everyone would get the money on top of current wages, tax-free. I'm not sure why they think that though.


Economic proof of concept:

Right now in the United States, 95%+ of people get their basic necessities covered, one way or another. The additional goods produced and services utilized will only require a "relatively" small reallocation of capital resources to their production.

The way I conceptualize UBI is partially an accounting trick, since a large portion of the revenues and outlays would be just changing money that people currently spend directly on goods and services to money that first gets taxed and then goes straight back to people who then spend it on the same goods and services. It's partially changing the incidence of social costs--hospitals that once had to eat the costs of the required treatment of poor people would then not be punished, and instead (depending on how the funding taxes are structured) the holders of income/wealth in society would eat those costs. Some of it is renaming existing programs and more efficiently administrating them (instead of food stamps with complicated bureaucracies, people just get a check). And for the few people actually starving or freezing to death because of lack of funds in the USA, yes, that's genuinely a new cost we'd have to bear, but that's a rarity and I don't feel too bad about new taxes if it's genuinely saving lives.

There are second order incentive effects in both directions that are certainly worthy of consideration, but a naive consideration of the facts on the ground suggests it's not at all impossible or even requiring any real magic, given the political will.


Fewer words, more math.


Number of people in the USA: 3 * 10^8

GDP of USA: 1.5 * 10^13

Basic level of sustenance for a person in USA: 10^4

Number of people we can economically sustain: 1.5 * 10^9

3 * 10^8 < 1.5 * 10^9

QED, math proves the UBI is perfect!


I think your QED is premature.

You're using arithmetic to model your scenario. I contend it requires differential equations.

For example, Mark Zuckerberg owns ~500 million shares of Facebook. If you only use arithmetic (multiplication) of share price, you get ~$40 billion. That's a theoretical number that journalists can calculate but it's not an accurate model of reality. If he was to really liquidate all those shares to 0%, his final sum would be much less than $40 billion. When he sells the first 10 million shares, the market will see that as a "signal" and react which sends the shares down in price. The final 10 million shares could be $1 each if the market was sufficiently spooked about his selloff. To model that requires a differential equation instead of arithmetic.

So to apply that logic to your example:

  GDP of USA: 1.5 * 10^13
This assumes GDP stays the same if millions of people decide to quit working because they have basic income. If we think GDP will drop, we need to model that somehow.

  Basic level of sustenance for a person in USA: 10^4
This assumes that prices will not go up significantly as landlords, grocery stores, etc respond to everyone having basic income. How can there be extra money or "inflation" if we're just shuffling money around? Well, women with children qualify for welfare+foodstamps but single childless men typically don't qualify for anything. Perhaps they live with their moms or sibling. Also, prices will go up because there are less low-paid workers manning the stores. I don't claim to know all the complexities of side effects but to think prices won't change at all doesn't seem reasonable.

Lastly, I do think the USA has enough "wealth" to provide some type of basic income. The question is what the USA can "afford" and that word can have several interpretations.

The level of "afford" I'm thinking of is a scenario where the USA suffers zero productivity loss and the middle & upper class do not see a decline in the standard of living. I'm not convinced that the USA can provide a dignified level of basic income without affecting the goods & services the middle class' enjoy today (points back to claims of a constant GDP instead of a declining one.)

Show some Diffy Qs, explain the assumptions behind each of the variables, and throw them into a Google spreadsheet.


Fewer words, more math.


Cute. But it doesn't apply to me.

I'm not the one trying to quantitatively prove whether it will work or not work. I thought you were. So far, your mathematics model and your assumptions behind it are unconvincing.


LOL. You made me chuckle a bit at least. Thanks for that.


This is a stupid burden to put on people, nobody here knows the national budget well enough to make any sort of reasonable prediction about the actual numbers. Besides, you don't need mathematical notation to make a good argument.


The budget numbers are readily available and not at all hard to understand.

And yes, you do in fact need to discus what something might cost when making a good argument that the expense is worth it. When choosing what sort of home to live in I'm certainly you inquired about the cost. Unless you still live with your mother? You don't live in your parent's basement do you?


Bizarre questions about my living space aside, arguing that the federal budget is "not at all hard to understand" is patently ridiculous.


We're talking about a ~3 trillion dollar proposal here. Understanding the minute details isn't important.


Beyond the problems with the math, people need to take into account the perverse incentives that are created... Let's say you give people enough UBI to pay for all their groceries, guess what: The price of groceries will suddenly shoot up, because grocery stores start having a hard time finding employees willing to do the menial labor required to keep a grocery store running.


>because grocery stores start having a hard time finding employees willing to do the menial labor required to keep a grocery store running.

You are over-estimating the value of the income. People won't be "livin' large" on the basic income. The intention is to keep people out of abject poverty. I'd even argue it would be easier to find people willing to work part-time at places like grocery stores to supplement their income.


"People won't be "livin' large" on the basic income."

Not at first.

I'll tell you one of my big fears about UBI, though: The first vote that comes in Congress about whether to raise it. What happens then? Obviously, you are an asshole of the highest order if you so much as fail to support raising it, let alone arguing that it perhaps needs to be reduced for some reason. It becomes a "race to the top" to compete as to who can promise the biggest increases.

If you don't agree, well, let me get this straight, today's politicians are reckless and stupid for not implementing UBI and having all these separate wasteful programs, but the instant they pass it, they suddenly become responsible caretakers of the common good?

Also: Suppose we become unable to support the UBI for some reason and have to reduce it. How many cities burn as a result? Or do we just not reduce it until society keels?

It makes socio-economic failure states go from "bad" to "catastrophic to the body politic".

(As for observations that the same is true of many social programs today... yes, I fear that too. The only thing that prevents cities from burning when we must inevitably cut SS benefits is that the affected will be too elderly to go out there and burn things. But it's still less of a problem, because the separation of concerns makes it hard for systematic calls to raise benefits to really get going, except maybe SS. Unifying them into one easy phrase changes that.)

I want to see this work at a smaller scale before I would even remotely support recklessly experimenting with the largest economy in the world with such a fundamental change. Yes, I am familiar with the much too small semi-studies that have been done, most of which have bad caveats and ran for nowhere near long enough to matter. Let's at least see a county or something run this for 5 or 10 years, and through at least one reduction.


> Not at first.

Not ever unless the economy gets incredibly more productive.

> Also: Suppose we become unable to support the UBI for some reason and have to reduce it. How many cities burn as a result? Or do we just not reduce it until society keels?

If we can't support it, it will reduce itself -- not in nominal terms, of course, but the fact that we can't support it means that it will will drive inflation, which will reduce the real value of the set level of basic income.

As long as UBI isn't pegged to inflation, setting the level too high is self-limiting.

> I want to see this work at a smaller scale before I would even remotely support recklessly experimenting with the largest economy in the world with such a fundamental change.

The smaller the scale the less well its going to work; it makes more sense to try it at a lower level displacing fewer existing programs than to do it at a smaller scale.


"As long as UBI isn't pegged to inflation, setting the level too high is self-limiting."

Yeah, to my mind it should grow just above targeted inflation. Pegging to measured or expected inflation replaces a stabilizing negative-feedback loop with a potentially explosive positive-feedback loop.


Universal Basic Income isn't creating imaginary money into the existing supply, it's just shuffling tax resources around. Potentially lifting impoverished people out of excessive meager full time busy work, and allowing several workers to live a higher quality of life (reduced hours) yet the sum of their employed paycheck + UBI equating about what they had as a full time employee of BusyWork Inc.

Pegging the UBI to the consumer price index could possibly help as well. Or segregating luxury items outside of UBI credits. Or just taxing luxury goods and services.


"Pegging the UBI to the consumer price index could possibly help as well."

Don't do this! If we set the UBI unsustainably high, that will probably be reflected in a rise in prices. In that case, we want the real value of the UBI to fall, reducing that pressure.

"Or segregating luxury items outside of UBI credits."

Also don't do this. If there are fewer things competing for my UBI-tagged dollars, then we'll be needlessly driving up the prices of acceptable things.


> Or segregating luxury items outside of UBI credits.

What does that mean? Prohibiting using UBI funds on luxury items? So, instead of unconditional basic income, it becomes a prescribed-use benefit like food stamps, but with slightly different prescriptions?

One of the sources of administrative inefficiencies UBI is proposed to eliminate (as well as those associated with means testing) are those associated with managing and enforcing use limitations.

> Or just taxing luxury goods and services.

You could do that, or you could just use a progressive income tax.


Anecdote: A good friend of mine lives with his parents in suburbia. Upper middle class, rich, comfortable massive 2 story home in a nice gated community. He dropped out of art school to work at the grocery store nearby where he's worked full time for the last 10 years or so. Because the store gives him wage increases for every 1000 or so hours he's worked, he's now making about $20/h as a normal cashier/stocker. He spends his free time playing video games, beefing up his home entertainment network, hiking, and hanging out with neighborhood friends. He seemingly has absolutely no financial incentive to continue to work at a grocery store, but ultimately he's been motivated to go back to work for the last decade at a super market.


The challenge with doing the math is the mount of unpredictable aspects of a UBI. We are not good at predicting human behaviors. What happens for those who are struggling to survive when they have enough money for a decent living? Will they spend it in a way that revitalizes the economy? Will they use the time they spent struggling to survive in doing other things that make the pie bigger for everyone?

What happens for those who were already earning a (barely) decent living? How will their spending habits change? Maybe some of them will choose to contribute to society in non-traditional ways. Would that be good? Will any of them stop contributing to society?

We don't know if its a zero-sum change. Its unclear if the pie will get bigger, smaller, or stay the same; if the rich will get richer, poorer, or around the same; if the money we would get from taxation will sustain a UBI in the steady state.

The studies on minimum wage increase is the closest we have, but that is unrelated enough that it misses many of the complexities (and advantages) that a UBI could have.


Sure, predictions are hard. Especially about the future.

But as a first order approximation why not just assume that we remain in a steady state? See how far that gets you.


Not arguing against a calculation. Just the fact that any result should be seen as a first step in a longer series of questions.


Just as a completely rough order-of-magnitude approximation meant to spark discussion of the viability of a universal basic income in the United States:

Wikipedia estimates the total net worth of US households and non-profits at $55 trillion in 2009. Assuming a 1% annual wealth tax on all assets (Norway currently has a 1.1% annual wealth tax, albeit only on fortunes greater than $120,000), we get annual proceeds of $550 billion. Social Security pays out $813 billion in total annual benefits.

Kill off Social Security entirely and institute the tax. Divided by USA's 320 million population, we end up with ~$4250 per citizen per year. So with an annual minimum wage of $15,000, on average no more than every third citizen would have to depend entirely on the basic income. Also, tax revenues or net worth would also not have to decrease once the program was started.

You can tweak the assumptions, add other possible sources of income to the system, approximate the economic surplus of the people who are now supported by UBI, question the viability of living on minimum wage, estimate the economic surplus of getting rid of means-tested welfare programs etc. Plenty of room for discussion!

Sources:

https://en.wikipedia.org/wiki/Wealth_in_the_United_States

http://poverty.ucdavis.edu/faq/what-are-annual-earnings-full...

http://www.heritage.org/research/reports/2014/12/federal-spe...


Looks like the avg. monthly payout of social security in 2015 is 1,332.35. Your proposal would come out to around 350.00 a month. I'm not sure that would go over very well.

http://www.infoplease.com/ipa/A0780010.html


Of course not. I don't think it's politically viable to implement basic income the way I've sketched. Wealth tax of 1% probably wouldn't go over very well either.

If the net worth of the nation doubles twice more, though, it's a different question. It's far from impossible that this, or a similar situation which would benefit greatly from an UBI, occurs over the next 50 years.

We're on the right order of magnitude, which is as close as I feel confident estimating things without detailed knowledge of the tax system and social programs of the US. I could make a better guess for Norway, but even there it's sketchy because a lot of the non-social support programs that would become cheaper with basic income (e.g. student loans, support for artists) aren't part of the official social security numbers. There's also a lot of "number massaging" you can do to greatly increase the number, not least of which being to pay support only for adults.


The per capita GDP of the U.S. is around $50,000.

The median household income is also around $50,000.

The mean household income is around $70,000.

There's enough on one side of the distribution to fill in the other, if we decided as a society that that was the plan.


Less handwaving, more specifics.


Tax the rich


Three words is not doing the math. Show your work!


Hey man, do your own homework.


OK:

~225M Americans 20+ years of age * $12,000 = ~2.7T.

As a point of reference that's around 15-16% of GDP. It's also about 90% of current US gov't income or 80% of US gov't expenditures.

In other words it's really fucking expensive! I'm not saying the math is impossible but the conspicuous absence of details from most people saying it's a good idea is pretty telling.


Over 50% of government expenditure is on social security, medicare, medicaid, welfare, and other social services. A large percentage of that is inefficient and wasted. If you implemented UBI, you could get rid of all of that. Sure, the cost may be 80% of the current spend; but you could eliminate over 50% of it. What's left is a 30% increase in federal taxes.

Right now, I pay close to 50% in taxes living in SF in one of the top tax brackets. I imagine state taxes would go down as a result of UBI too. I despise the fact that 90+% of my taxes go to things I don't believe it. That said,I'd be glad to pay the 50-60% taxes if I knew it went to a basic income. And if I knew that it insured that if I ever lost everything, I'd have enough to survive with some dignity.


> Over 50% of government expenditure is on social security, medicare, medicaid, welfare, and other social services.

This is wrong (unless your definition of social services is broad enough to include things like schools and I doubt you want to dismantle the public education system).

> A large percentage of that is inefficient and wasted.

This is also wrong. Social Security is a direct cash transfer and Medicare and Medicaid are among the most efficient insurance programs in the world.

> I imagine state taxes would go down as a result of UBI too.

Sometimes I like to imagine a world of dragons and unicorns. But then I wake up and resume living in the real world.

Do the math.


He already did, he couldn't find any way to make the numbers work and is challenging you to find a solution.


There was no such analysis in what I responded to, nor anywhere else by him when I typed it. (Not sure there is even now.) Am I supposed to read his mind?


Sure, that obviously works as long as we model the economy as a static entity that never changes in response to stimuli, in which we model "dollars" as being able to buy an infinite amount of goods and services at the pre-change levels.

But that's not how the economy works. The rich can provide "dollars", but we can't raid them for man-hours of child-care, or care for the elderly, nor can they provide professional health care. They've got the same 168 hours a week the rest of us do.

This doesn't say that "BI can't work"... it does say you can't model the economy statically, use the prices and valuations of today, and assume that rewiring the fundamental economic fabric of society will result in no changes. You can't do that at this scale.


Here's how that works...

99% of people agree with you on that, but 75% of those people have no idea they're considered rich.

That how all populist ideas work. Take from the few to give to the many. Then, come to find out, there are too few to take from and too many to give to. So, in the end it becomes take from the many and give to the few.


good luck.


It feels like everything is getting priced exactly at the point where it feels like I'm barely scraping by.

I make a low six figure income and live in a one bedroom apartment. I don't drive a luxury car, or take vacations, or have many indulgences except eating out one or two nights a week. I also don't have much money left over to save or invest. I don't see home ownership in my future, or much improvement in my standard of living. I'm getting older, but the idea of paying for a wedding, or the cost of raising a child, or the cost of sending them to college scares the hell out of me.

This is probably due, mostly, to living in an area with a high cost of living. There are perks to living in a nice city -- my girlfriend shudders at the thought of moving to the suburbs -- but the city bleeds us dry. It's exciting to live in a technology hub, but the higher salary seems to be mostly an illusion.

My point being, I wonder how quickly everything will adjust to swallow up that basic income? Then again, I guess it's not really aimed at present-day me, but rather at someone with a lower income for whom its utility will be much greater.


> It's becoming clear that increased automation as well as the rise of artificial intelligence is threatening ever more jobs.

This sentence is absolute FUD. Every technical revolution over the past 300 years has been made with automation and productivity, and yet people are still employed in new jobs in sectors that did not exist before. Employing people to do menial obsolete jobs serves no purpose other than to delay the next evolution of ideas and products.

With this thinking we would still be handwriting books and riding horses. In the future when driverless cars are prominent, people will ask in astonishment "So you used to DRIVE your own car to work?"


I think the economist is concerned about both pace and kind of disruption taking place. I tend to agree with you all jobs lost due automation have been replaced with other types of jobs. Usually bullshit service sector jobs to cite a common example. Mind you we already have some forms of universal basic income. Social security... child credit... all conditional but nevertheless are tax transfer


When you know something isn't going to happen it's ok to suggest it. This is particularly useful if later it can be used as example of how your company is not actually an abusive parasitic organization but really cares about meeting people's basic needs.


Contrasted with China's shifting to population growth from economic growth, this is definitely going to resonate with Western leaders.

Honestly though, if we are go with UBI, can we ask ourselves what is really necessary in life?

Currently large sections of the population engage in secondary and post-secondary education for the purpose of gainful employment -- to have a job brings social and financial stability.

That will no longer be necessary, so what does that means? Will tuition rates go down? Will universities no longer be in such demand globally?

How will this affect population growth and movement? Large sections of the population across the world utilize visas whose conditions are tied to education or employment, and now they will not have such opportunities.


The Basic Income doesn't address the systemic issues which we usually lump under the category of "inflation," although by that what we're really talking about is power and privilege.

http://ieet.org/index.php/IEET/more/miller20120327


I'd like to see a an article about the potential downsides of Basic Income, written by advocates of Basic Income. Is it all "there are no downsides", "there are only minor downsides for the ultra-rich", "there are no possible implementation issues", etc.. Or has someone written a thoughtful article on what might go wrong?


Inflation? what is the incentive for someone to work? How basic is basic and who determines what basic is? If any one observed Venezuela or for that matter Saudi Arabia with their social welfare paid off by Oil wealth, you would be skeptical of these social programs.


Off topic but I like how that website shows a new article, as you scroll down the page. Even the URL changes to the appropriate link, so it's easy to share. Pretty cool.

Does anyone know what the term for that technology is? I'm referring to a term that's similar to how "responsive HTML" is a term for a website that changes based on view port.


"infinite scroll"


I figured infinite scroll was more a term for twitter and Facebook news feeds, where the content is the same but you're seeing more of it. In those examples, the URL stays the same.

I guess it would be "infinite scroll of articles where the URL reflects the content" but that still seems like a mouth full. There should be a better term for that.


Infinite scroll with stateful routing?


This is one of my favorite ideas. It sounds great in theory, and I'd love for it to be tried somewhere.

Just as a note, I'm pretty libertarian leaning, but that idea is, I think, the best compromise between pure libertarianism and the bureaucracy mess we currently have in the world.


Its been tried in Oil rich countries like Saudi Arabia, but given the massive growth in population and mostly relying on immigrant workers for long time, they are now trying to balance things and once you take away some welfare from people they do get angry and so, the royalty of Saudi Arabia are facing many challenges.


It's been done in Canada and it was a big success: https://en.wikipedia.org/wiki/MINCOME


The Dutch are currently running active experiments with UBI in a few cities. They've only launched in the last few months, though, so it's too soon to say what the long-term impact will be.


Well this will not work until 90% of the jobs are automated and we actually don't need this many people to work anymore to produce all the wealth and food needed or in demand.

And this will take a long while.


I think it's already the case, the 90% you're talking about is debatable, we already live in an age where producing food and shelter requires so few people that you can consider those jobs are already automated in some way.

The result is that only the educated and the owners can work and be included in the economy, and unless higher education can include everyone, well you will always have uneducated people who will have no other opportunity jobs than fast food and cleaning houses, which is a problem, in my opinion, for a nation.

The UBI is just a minimum people will get no matter what, so if they get a job it's an added income. Depending on its amount, it's a compromise between inflation and stimulating the economy without having parts of the US not develop. Consumer spending always has been the basis of a healthy capitalism, and the UBI follows that logic.


I'm curious what HN readers think the yearly UBI would be (in US dollars) if it were actually implemented?


I'd guess about $10400, paid at $200 per week to the head of a household, plus an additional $75 per full dependent.

That works out as follows:

  Household Size | Annual UBI | 2014 Poverty
  ---------------+------------+-------------
               1 |    $10,400 |     $11,670
               2 |    $14,300 |     $15,730
               3 |    $18,200 |     $19,790
               4 |    $22,100 |     $23,850
               5 |    $26,000 |     $27,910
               6 |    $29,900 |     $31,970
               7 |    $33,800 |     $36,030
               8 |    $37,700 |     $40,090
That's a compromise. The UBI is less than poverty level, so that the conservatives can say that no one is getting a free ride, and people will still need to work to get by. But it's still around 90% of poverty line, so that the liberals can say that the government is still providing a great safety net.

There are 123M households in the US, for a population of 319M, so the total cost would be $200 * 123M + $75 * ( 319M - 123M ) per week, which is $39.3G, or $2.1 trillion per year.

The U.S. had official income of $3 trillion in 2014, so UBI would cost about 68% of the federal budget.


Like $3000 a month? Not enough to live in a major city, but you should be comfortable living somewhere in the US. Major city livin' is in short supply and is thus a luxury--- we'll never be able to have a high enough UBI for us all to live in NYC.


I've been in favor of this for a long time, but I do have a more nuanced opinion in that I'm not sure if it's "time" yet.

IMHO we're getting there, and when the (very likely) big wave of automation hits it will be time. The true automation wave has not happened yet, and when it hits it will make the outsourcing wave look like a minor disruption to the employment market. I fully expect that by the year 2100 most non-skilled labor will be obsolete.

--

Edit:

There's one more "elephant in the living room" that I'd like to bring up in this thread before I'm outta here. I'll leave it here at the root since it's part of the core point I was making. Few bring up this fact since it leads to areas that many consider non-PC or impolite to discuss.

The average IQ is 100, and intelligence and other abilities are normally distributed within the population.

This is pretty much fixed on short-term human timescales unless we can widely deploy genetic engineering and brain-augmentation. Not only are these things massively hard -- probably harder than any of the crazy automation anyone is predicting -- but they're also going to face intense opposition on both religious and secular-ideological grounds. If you think the furor over GMO foods is excessive and irrational, imagine the furor over GMO humans.

It's also likely that those with the strongest opposition to genetic enhancement (on largely superstitious grounds) would be precisely those for whom it would be most beneficial. Conversely, those most enthusiastic to adopt it would be those who don't need it. As a result it would probably accelerate the trend I'm discussing here.

This means that if automation and other factors are constantly conspiring to increase the median skill level requirements of labor, eventually significant portions of humanity are simply going to fall off a cliff where the economic value of their labor becomes zero. From a purely economic point of view these are now worthless human beings. It doesn't matter if labor supply exceeds demand if the labor available to fill that demand can't do the work.

As automation gets better, this cliff will move up the bell curve. As it does, then due to the shape of a bell curve the number of people thus affected will increase exponentially. This is a recipe for blood in the streets -- and for totalitarianism as a response.

So we have a choice.

Option #1: consign those who fall off the edge to poverty and wall them off in ghettoes, and implement a totalitarian political regime with total surveillance of the entire population to deal with the perpetual undercurrent of crime and terrorism that this will create. The result basically looks like a B-grade cyberpunk film.

Option #2: admit to ourselves that we are entering a post-capitalist early-post-scarcity phase of development and implement some level of basic income.

I'd go with option #2. Not only is it better for humanity at large, it's also better for me as I don't fancy living world #1 even if I did get to live in one of the posh totalitarian enclaves.


If you look at what most people were doing in 1930 most of those jobs are obsolete. And yet most people are still working. I'd be pretty surprised if 2015-2100 turns out to be much different from 1930 - 2015.


That assumes that the automation trends of the next 100 years are going to look anything at all like the automation trends of the last 100 years. I don't think that's likely due to pretty obvious technological multipliers. Progress isn't linear.

Additionally, I think if you spend much time around the working classes, even today, you'll find that they're living in a world that's leaving them behind in a way that simply wasn't true even 30 years ago.


Also, "most people are still working" is increasingly less true:

* http://www.forbes.com/sites/toddganos/2012/11/03/what-is-rea...


A significantly greater percentage of the working age population is working at a job today than 85 years ago.


Yes, that's true, but that's almost certainly because more women work now than ever did before. That's a one-time (enormous) increase, but there's no reason to believe it's an indication of a longer-term trend. In fact, the data show otherwise.

You can play around with the data here:

* http://data.bls.gov/timeseries/LNS12300000


I am unmoved by the relatively tiny short term movements you are referring to. Basically all you have shown is that we had a relatively large recession in 2007-08.


The past doesn't necessarily predict the future. I really suspect that it might end up being different this time.

My working hypothesis is that software-defined Turing-complete automation is qualitatively different from special-case automation. It permits the rapid reconfiguration of general purpose machines with software, which is cheap and fast to produce in comparison with pretty much any physical system. Combined with simulation it allows for very rapid iteration.

You can in many cases effectively design something and then just hit 'print.' Some human intervention and assembly and some custom work is usually required, but the quantity is far lower and the skill level far higher than in the past. In the end you need a small number of highly skilled employees, not a large number of low-skill ones. The conventional 'worker' is obsolete.

Compare one-off factory tooling set for stamping out one part with a 3d printer, for example. The 3d printer is what the future looks like.

The alternative to a universal basic income here would be something like the world depicted in The Hunger Games series -- tiny super-rich walled totalitarian city-states presiding over a majority that has regressed to 19th century or prior standards of living. I'd personally consider this to be a new dark age.


Yes, perhaps THIS TIME IT'S DIFFERENT. Perhaps.

I'm just saying I'd be surprised.

¯\_(ツ)_/¯


If it were possible to predict the future on the basis of the past, everyone would always make money in the stock market.


Over the long run most people have always made money in the stock market.


Are you making the simple claim that, over say a 30 year period, certain broad stock market indexes ended higher than they started? Or are you making a much more interesting claim? I'd like to see the data set for that if you can point me in the right direction.


I'm making the simple claim.


This ain't your grand-daddy's automation.


What I think what most people count on is the inanely fast ACCELERATION of technological progress. The amount of advancement between 1930 and 2015 will be orders of magnitude less than 2015-2100.


Why do you say that? I think the technological progress will continue to grow exponentially. There are more researchers now than at any point in human history. The economic incentives are still at least as big (relatively speaking).

At the moment there are many industries with great potential for applying machine learning and various other automation techniques.

And considering that many leading AI scientists are expecting smarter-than-human AI within this century (or the start of the next one), I certainly fail to see your point.

Anyway, there is still a lot of room for exponential growth of human knowledge, in a lot of fields.


I think you misread what he said.


As interesting as it would be to have this in the near future, I'd agree with you.

We would need a semi-permanent 16%+ U6 unemployment before its likely tho. As long as ~90% of the people who want full time jobs can find full time jobs, there simply isn't going to be enough momentum for it.

When automation cuts out the bottom 10% or so of the employment market is when it'd happen.


I'd like to mention that disability rates are another good measure for what you're looking for, since things like "local lumber mill closes, former employees aren't educated enough to get a job afterwards" cause people to go on disability benefits.


And likely most skilled labor as well: https://www.youtube.com/watch?v=7Pq-S557XQU (Humans Need Not Apply)


Personally I think the first "white collar" casualty of automation will be law.

90+% of law involves things like contract law and analysis of legal documents. All of that can be replaced by natural language processing, machine learning, etc. I envision "contract compilers" that produce contracts based on compact specs and other things in the near term (5-10 years out) followed by total replacement of most lower-level legal work with AI/ML in the 15-30 year time frame.

In the end you will still have lawyers, but only to appear in courtrooms and do very high skill specialized legal analysis that involves a lot of conceptual thought. That will be a much smaller number of people than are employed in law today.

That's a lot of well-paying jobs that are going to vaporize.


>and when the (very likely) big wave of automation hits it will be time.

No it will be late. Now is a good time.


counting his sheep in his sleep, no doubt. Can't wait until humanity graduates from the clutches of these usurers.




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