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A Basic Income Should Be the Next Big Thing (bloombergview.com)
641 points by warrenmar on May 3, 2016 | hide | past | web | favorite | 809 comments



This article says it's talking about a universal basic income, and makes the usual point that a completely universal, no-strings-attached income is simple to administer, doesn't have poverty traps, etc.

And then, towards the end where it starts looking at numbers, it starts saying things like

> But by excluding 45 million retirees who already receive a basic income through Social Security, the cost falls to $2.7 trillion. And if the benefit is phased out for households earning more than $100,000 (that would be 20 percent of the U.S.'s 115 million households, or about 70 million people, assuming three to a household), the cost declines to about $2 trillion. You could confine the program to adults and shrink the price tag even more, possibly to as low as $1.5 trillion.

Yes, you can reduce the amount paid out by making it not a universal basic income scheme any more. But that rather misses the point.

(The correct thing to say here is: Yes, a universal basic income sufficient to keep everyone out of poverty would be really expensive. Taxes would need to go up a lot, which would leave wealthier people less well off than they are now. If you don't want a large-scale redistribution of wealth, then you don't want a BI scheme sufficient to keep everyone out of poverty. But you might still want to consider a BI scheme that's not sufficient to keep everyone out of poverty, to simplify and to reduce poverty traps. No one would have to be much worse off then. But it wouldn't be enough for anyone to live on, and would still need supplementing by other safety nets.)


To make it work you'd have to take whatever the amount is and extract it from all other government benefit programs.

You get $700 / month from the government for basic income. Your social security, welfare, unemployment, disability, etc is reduced by $700 / month. Reducing all of those programs by the first $700 would effectively gut each of them enough to finally make some reforms without inducing panic in everyone who uses them.

If you were to implement the Fair Tax, which includes a stipend for basic needs, you'd get bipartisan support as well. The only difference is that you increase the stipend to the level of the BI.

For kids, you give the parents their basic income until they hit school age and then the BI goes towards funding their school. This would also enable people who wanted to utilize private schools a much easier choice by essentially becoming a voucher.

No loan could utilize the BI as security...except for student loans. That would allow driving down of interest rates as well as default aversion too. Payments could be automatically extract from the BI since student loans would finally be secured against something other that expected future earnings.


Why would you get bipartisan support for the FairTax? Redesigning the tax structure to favour millionaires (massive net beneficiaries because their US consumption expenditure is usually a tiny fraction of their capital gains tax and/or income tax bills) over the middle classes (no matter how high the stipend is someone has to pay for the millionaires' tax cut) isn't exactly a popular proposal even on the right

That said, agree with your main point that making BI deductible from [mostly] retained existing benefit entitlements is the least messy way of introducing it, but it also makes it more politically difficult since it's paid for purely by tax increases.


Poster is crazy to think liberals will EVER support a hugely regressive tax scheme. Consumption taxes destroy the middle class by acting as vehicle to transport wealth from the middle to the ultrawealthy, which makes it surprising that people continue to suggest it.

Now perhaps a consumption tax combined with a large capital gains tax and inheritance tax -- to keep taxes going in the oligarchs economy AND the regular economy, and prevent capital from being tied up between generations in the least productive way possible, then you might get some of them on board.


What about the consumption taxes we have on the books? Gas tax? Hugely regressive. Wouldn't liberals support additional carbon taxes? Value-added tax? Wouldn't those continue to "destroy the middle class"?

What about the tax of inflation that serves to redistribute wealth from savers to debtors? (middle class -> government)

Also interesting how you know better than others how they should arrange their financial lives. Would like to hear your thoughts on the "productive ways" the "oligarchs" could better deploy their capital.


> What about the consumption taxes we have on the books?

The broader they are, the more likely liberals are to oppose them, and oppose expanding them. Replacing the progressive income tax system with something regressive isn't something that's going to get support on the left.

> Gas tax? Hugely regressive.

But very narrow.

> Wouldn't liberals support additional carbon taxes?

Many liberals support the concept of carbon taxes as a behavior control mechanism, but not as the main way of funding government, and many raise concerns about the regressive impact. But, with them, the goal is to limit the thing being taxed and fund efforts to improve our ability to avoid it, not be the primary funding method for government.

> Value-added tax?

Virtually all the support I've seen on this in the US is on the right (often competing against flat tax proposals.)

> What about the tax of inflation that serves to redistribute wealth from savers to debtors? (middle class -> government)

While the classical middle class (e.g., Marx's petit bourgeoisie) are net holders of assets, the "middle class" as the term is used in modern discussions in the US (which is largely the middle income segment of wage laborers) aren't really net savers.


Having studied the fair tax in a fair bit of depth I can say that it probably would not penalize net spenders. In fact, they would probably be better off. Not only would you have more money to spend, but goods and services would likely cost less. There are numerous reasons for this given in easily accessible sources on the fair tax proposal.


> Wouldn't liberals support additional carbon taxes?

With the goal of eliminating carbon use (and through this, eliminating the carbon tax), yes. The key understanding is that destroying the environment is a significantly worse problem than a regressive tax.

And destroying the environment also has a highly regressive impact; The impact on livability is not uniform, and people that can afford to relocate will have a much better time of it.


It depends. If the proceeds from the carbon tax get paid out equally to all citizens (similar to basic income) then it's not regressive.


Or cigarettes? Or lottery tickets? Or the AMA penalty?


If you followed recent headlines, tax on sugary drinks has been a subject in Democratic primaries. Even though high-fructose corn syrup has been linked to obesity, diabetes and myriad of other problems related to that, some members of liberal community oppose a consumption tax on sugary drinks on the basis that it hits lower-income families disproportionally http://www.csmonitor.com/Business/Tax-VOX/2016/0430/Bernie-s...

Apparently obesity and diabetes hit lower-income families disproportionally as well http://www.livescience.com/37923-type-2-diabetes-low-income-... (who would have thunk), but we can always create a government program to conduct more research on causes.


Why is the new tax needed? What are we trying to fund that other taxes don't already cover? Don't we (the government) subsidize HFCS? Wouldn't not doing that raise the prices and not require a tax then?

I will oppose a 'sugar' tax because I don't think the government should be deciding what foods I consume, especially when I think taxes should be for raising money.

I am aware it's not the full picture and I haven't explained it well but I hope I got a little bit of my view across.


Maybe we should stop subsidizing unhealthy sugar (because it is in -everything- cheep as a result).


I agree with this. Then there would be no need for a new tax right?


From the tax simplification point of view you're right. But removing the subsidy would still raise the prices on soft drinks, and affect lower income households disproportionally, so it's a regressive measure as well.


Depends on the scope. If you can reduce obesity and obesity-induced diseases, that could affect the average budget of a low-income family very positively. Of course, I don't have numbers on how the two effects weigh against each other.


European countries, which are quite to the left of the US, have much higher consumption taxes than the US. So I don't think it's fair to say it's "crazy to think liberals will EVER support" consumption taxes. They already do.


European countries that are quite to the left of the US also tend to have higher (both nominal and effective) income taxes and more sharply progressive income taxes than the US (especially when all taxes on income, including social security taxes, are considered); supporting a consumption tax in such a regime can still leave the aggregate more progressive than the US.

What liberals aren't likely to support is replacing the current federal tax system with a consumption tax. Making it much more progressive and including a consumption tax alongside, they might, but probably not (just because that might look like what exists in some more leftish European states, there are path dependencies.)


> Poster is crazy to think liberals will EVER support a hugely regressive tax scheme. Consumption taxes destroy the middle class by acting as vehicle to transport wealth from the middle to the ultrawealthy, which makes it surprising that people continue to suggest it.

So the proposal is to combine something like VAT with a basic income.

Doing that would cause low income people to have a negative effective tax rate (basic income exceeds taxes), low-middle income people to have a near-zero tax rate (basic income equals taxes), high-middle income people to have a moderate tax rate (taxes exceed basic income by a little) and high income people to have a higher tax rate (taxes exceed basic income by a lot).

In what sense is that regressive? It's the purest form of a progressive tax system. It even has a built in social welfare system for low income people.

The fallacy which is usually put up against this is that the super rich don't spend as much as they earn. The problem is, that's not how income tax works either. Bill Gates doesn't have to pay tax on the appreciation of Microsoft stock until he sells the shares and he doesn't have to sell the shares until he wants to spend the money. "Super-rich don't pay tax on money they don't spend" is the status quo.

And consumption taxes benefit debtors at the expense of creditors. Income tax makes the debtor pay back the debt with after-tax dollars. Consumption tax causes the creditor to be paid in pre-tax dollars.


> "Super-rich don't pay tax on money they don't spend" is the status quo.

Only if you ignore estate taxes...which FairTax eliminates.

For the rich (defined here as anyone with enough wealth that, if they don't spend it down, they will face estate taxes) they either have to realize the gains (and be taxed) and spend down or leave an estate which will be subject to estate taxes, giving them a maximum time window on taxation equal to their lifespan.

With "FairTax", which eliminates estate tax and goes to a strict consumption tax, there is no such maximum window.

> And consumption taxes benefit debtors at the expense of creditors. Income tax makes the debtor pay back the debt with after-tax dollars. Consumption tax causes the creditor to be paid in pre-tax dollars.

Because it also changes the cost structures on which debt is occurred, this only is meaningful as a one-time effect on debts that exist at the time of the transition to a predominantly-consumption-tax system, not as durable feature.


> For the rich (defined here as anyone with enough wealth that, if they don't spend it down, they will face estate taxes) they either have to realize the gains (and be taxed) and spend down or leave an estate which will be subject to estate taxes, giving them a maximum time window on taxation equal to their lifespan.

It would be if not for the "estate tax holiday" we have periodically which together with a bunch of other ways of avoiding the estate tax is why it only constitutes a negligible amount (0.6%) of federal revenue.

The fundamental problem with the estate tax is that it's a huge tax that happens with semi-unpredictable timing, which induces rich families to do estate tax planning to avoid having liquidity problems when it happens. But "estate tax planning" means paying fifty million dollars to tax lawyers and lobbyists to avoid paying a billion dollars in estate taxes.

In practice what it means is that rich families will do much more to avoid and lobby against the estate tax than they would against a tax that collected the same amount of money from them but more predictably over a longer period of time. Which makes it a losing proposition if your goal is to get the rich to pay taxes.

> Because it also changes the cost structures on which debt is occurred, this only is meaningful as a one-time effect on debts that exist at the time of the transition to a predominantly-consumption-tax system, not as durable feature.

It applies equally to the interest paid on the existing debt. And given that the total interest generally exceeds the principal (and exceeds it moreso for poorer people paying higher interest rates), the "one time effect" would be with us for a generation or more.


> The fundamental problem with the estate tax is that it's a huge tax that happens with semi-unpredictable timing, which induces rich families to do estate tax planning to avoid having liquidity problems when it happens.

Well, yeah, it would be much simpler and more effective if inheritances were just taxed as income to the recipient with provisions allowing them to be split and recognized over several subsequent tax years (e.g., if the total inheritance received in any year is greater than 1/10 the pre-inheritance AGI, the excess can be recognized for tax purposes in subsequent years, with a minimum per year amount equal to the lesser of 1/10 the pre-inheritance AGI in the year received or 1/20 the total amount of the inheritance.)


>Poster is crazy to think liberals will EVER support a hugely regressive tax scheme.

I just want to make one glib comment here about liberals and regressive taxes.

The Northeast is generally thought of as the most liberal part of America (aside from coastal California maybe). So why is it that I've seen far more toll roads and bridges there than in any "red state"?

I think some liberals make some good points about regressive taxes, but in practice, it seems like the liberals who actually get to power just love them.


>The Northeast is generally thought of as the most liberal part of America (aside from coastal California maybe).

I sure don't think of the northeast that way. I see it as fairly conservative both in politics and business. One data point is that it wasn't anywhere in the northeast that first legalized weed. It was Colorado and Washington, followed by Oregon and Alaska. Another data point is that people wear jeans or shorts at work in Silicon Valley (or Socal, Oregon, Colorado, etc) whereas they're far more likely to be required to wear suits in the north east.

The northeast is very urban, which has some overlapping effects with but is still very different from actually being liberal. Change is mostly driven by the west. It's just that the change reaches the dense cities of the northeast more quickly than the rural areas in between.


Excellent point, but good luck convincing all the Hillary-voting, suit-wearing Democrats in the northeast that they're not "liberal". Just look at the other responses to my post here even.

But agreed, there's absolutely a huge difference between west coast liberals and east coast "liberals".

The marijuana issue is an interesting thing to look at too, when you compare to red-vs-blue state maps. The "liberal" northeast still hasn't legalized weed (not even Vermont), whereas Colorado was one of the first two, and CO is a rather purple state (CO Springs is a ridiculously conservative place), and Alaska is very much a red state, being the place that elected Palin governor. It really seems to come down to social libertarianism versus authoritarianism. The "liberals" in the northeast want to ban sodas for your health, whereas the liberals in the west want to legalize drugs.


That just gets to how silly the idea is that you can map policy opinions onto a single principal component and get good separation.


Exactly; we try to distill everything political in this country into two "teams", but the problem is that the teams are not even remotely homogeneous or agreed on policies. Trump vs. establishment GOP and Bernie vs. establishment DNC show this.


> The Northeast is generally thought of as the most liberal part of America (aside from coastal California maybe). So why is it that I've seen far more toll roads and bridges there than in any "red state"?

Because the Northeast was also the most heavily developed area of the country before the Interstate Highway System came about with a funding system that made non-toll roads the norm for new limited-access highways (funding rules which have since changed, weakening the financial incentive against new toll roads.) Modern political orientation has little to do with it: outside the Northeast, the people trying to introduce toll roads where they haven't been in the past are conservatives, the people opposing them are liberals.


Ok, but that was well over a half century ago. The liberals have had more than enough time to eliminate these horribly regressive tolls which only hurt working class people, so why haven't they? Why are we still paying ridiculously-high tolls on bridges that are falling apart because they're so old?


Could you compare Toll Roads and Population Density?

Then, when you realize that toll roads are correlated with population density, perhaps you could realize that toll roads are then only also correlated with politics of state, not caused by them.

For example: If liberals loved toll roads, then California, Oregon and Washington would be full of them. But only the NorthEast is, right?

So your hypothesis falls apart here anyway.


No, my hypothesis is correct. West coast liberals are nothing like east coast liberals. East coast liberals are authoritarians; west coast liberals are not. There's a reason all the states which have legalized marijuana are west coast states, and not northeast ones. This also happens to correlate with toll roads, and it's not a coincidence.

BTW, the population density of metro areas in California is higher than most places in the northeast.


I perceive the income tax as helping the rich roll rocks on the upper-middle labor class while getting the poor to cheer them on. Most rich don't want competition or independent power bases to develop from bourgeois power bases.

Also how is taxing labor in any way liberal?


What specifically makes you perceive that?

And for your last question:

1. What is your working definition of liberal(positive vs. Negative freedoms)? 2. Income tax taxes... Income. Not labour. Ideally not discriminating between capital and labour income.


>What specifically makes you perceive that?

The rates for long-run capital returns and dividends are such that they are very beneficial to owners of capital, and they like to keep it that way. The upper-middle class folks who are working have their labor and ordinary income taxed at increasingly higher marginal rates. The rich often fund demagogues who talk about handouts for the poor while ensuring that "progressive" tax rates remain high on their potential rivals who pay high labor taxes.

>1. What is your working definition of liberal(positive vs. Negative freedoms)?

Today, I think the word "liberal" means "someone who thinks that the poor should benefit at the expense of the rich, through government coercion"

>2. Income tax taxes... Income. Not labour. Ideally not discriminating between capital and labour income

Why tax income? Why not your bodyweight? Or height? Why not tax consumption? If the answer is "to punish those with high _incomes_" you are in violent agreement with the ultra-rich.


By bipartisan support, I mean that if you want to get a basic income to appeal to people on the right you can appeal to existing branding. FairTax is just a basic income with a smaller stipend. Brand it that way. When you co-brand it with the ability to gut a lot of existing federal programs so that they can be reformed without inducing panic that will also garner support.

Consumption tax paired with a BI would significantly raise the offset at which it starts to affect people.

Things that hurt the middle class much worse than a consumption tax are an income tax that is a percentage and continually increases in that percentage until the percentage caps at the point that most people would call "incredibly wealthy" (IMO).

The perk to something like a Fair Tax is that it's also an economic solution to illegal immigration. If you're in the country, you're paying taxes. If you're legal, you're getting the BI/stipend. If you're illegal you are basically paying to be here. It guts a big portion of the cost argument.

A FairTax + Basic Income hybrid solution could solve a vast majority of hotly debated issues in this country.


"if you want to get a basic income to appeal to people on the right you"

Basic income is a conservative proposal (now gaining support among us liberals). My trog relatives are pimping the idea to me, a screaming pinko socialist hippie.

The conservation appeal, rationalization of BI is fairness. It lifts the floor for everyone, doesn't reward cheating, doesn't thwart personal initiative, etc. Being easier to admin is a bonus.


> Basic income is a conservative proposal

Uh, what? In general conservatives consider basic income as welfare/wealth redistribution and hate the very notion of it. Just because some of your conservative relatives like it doesn't make it a conservative thing, it's very much a liberal policy, not a conservative one.


The Conservative Case for a Guaranteed Basic Income

http://theatln.tc/1yydmC9

"The idea isn’t new. As Frum notes, Friederich Hayek endorsed it. In 1962, the libertarian economist Milton Friedman advocated a minimum guaranteed income via a “negative income tax.” In 1967, Martin Luther King Jr. said, “The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” Richard Nixon unsuccessfully tried to pass a version of Friedman’s plan a few years later, and his Democratic opponent in the 1972 presidential election, George McGovern, also suggested a guaranteed annual income."


Just because a prominent conservative supported the idea doesn't make it a conservative ideal. If you were to poll conservatives on the idea of basic income you will not find wide support for it, you'll hear it called welfare and income redistribution. What the conservative party is now bears little resemblance to what it was in the 60's and a negative income tax is not the same thing as a basic income anyway. You've confused support for an idea among intellectuals for support for the idea of the party. The conservative party in no way supports the notion of a basic income, it is opposed to their very core of what the party is today.

Lincoln for example was a republican, but by today's standards he's a liberal. Basic income is a liberal policy in today's world, not a conservative one by any means. It is very much a liberal policy.


> A FairTax + Basic Income hybrid solution could solve a vast majority of hotly debated issues in this country.

Completely aside from the other response, this point is just...wrong. The vast majority of hotly debated issues in this country are not hotly debated because people share a concern but are divided on the best way to address it, such that there is some policy solution that exists which could "solve" the issue. They are hotly debated because people disagree on the first principles of what goals we should seek, not the mechanics of how to address them.

As well as the obvious culture-war issues where this is the case, this is true of much of the immigration debate, many economic debates (where fundamentally clashing ideas of what constitutes "fairness" that should be sought exist), and so on.


> By bipartisan support, I mean that if you want to get a basic income to appeal to people on the right you can appeal to existing branding. FairTax is just a basic income with a smaller stipend. Brand it that way. When you co-brand it with the ability to gut a lot of existing federal programs so that they can be reformed without inducing panic that will also garner support.

That's not rebranding basic income to appeal to people on the right. That's rebranding "FairTax", a right-wing proposal, with fairly niche support on the right, despite a small group spending lots of effort trying to promote it, as basic income. Presumably, to gain some support on the left for FairTax. But Basic Income is also a fairly niche idea, and the people that do support it tend to have a fairly specific idea of the features they support and why, and not just be attached to the BI brand, so rebranding FairTax as BI probably won't get you support from left-wing UBI fans, for whom the tie to a progressive income tax is pretty central to their support (though there's probably some on the left who support UBI who would prefer moving to a Georgist Land Value Tax.)

There's nothing there getting you bipartisan support.

> Things that hurt the middle class much worse than a consumption tax are an income tax that is a percentage and continually increases in that percentage until the percentage caps at the point that most people would call "incredibly wealthy" (IMO).

How does that hurt the middle class? (And, incidentally, are we using middle class in the common modern media sense of middle income workers or are we using it in the classical sense of the petit bourgeoisie? Because it makes a pretty big difference in evaluating claims about what hurts them, and to how important that is -- how it affects the latter will, of course, vary from person to person.)

> The perk to something like a Fair Tax is that it's also an economic solution to illegal immigration.

No, its not. (OTOH, the 2001 and 2009 recessions, and the poor distribution of the gains between and after them, was an economic solution to illegal immigration. But a solution worse than the problem...)

> If you're in the country, you're paying taxes.

True without the hilariously misnamed "FairTax".

> If you're legal, you're getting the BI/stipend.

Without the "FairTax", if you can establish that you are legally present (and, for some of these, legally eligible to work, which aren't the same thing) you have access to a variety of public benefits, perks, and, well, the right to work that aren't available if you can't establish that.


> Redesigning the tax structure to favour millionaires (massive net beneficiaries because their US consumption expenditure is usually a tiny fraction of their capital gains tax and/or income tax bills)

This hasn't been true in decades. The people ("millionaires") who make ~150K/year pretty much spend all of it. It's the multi-millionaires and billionaires who make millions a year and don't spend that much, but those are the same people whose "income" is mostly unrealized capital gains. Switching to a consumption tax wouldn't materially reduce their taxes because they're not paying hardly any taxes as it is. (And getting rid of capital gains tax would increase economic efficiency because it currently prevents people from selling shares in order to buy better shares unless the advantage of the new shares can overcome the taxes due from selling the existing ones. Which would grow the economy and increase government revenue.) It's conceivable that a consumption tax would cause the super-rich to pay more taxes, because if you want the yacht you have to pay the tax, but there are currently a lot of tricks you can play to convert stock into stuff without paying tax, like selling only the shares that have decreased in value.

The best way to think of a basic income is as a fixed tax refund. A middle class person who pays $10,000/year more in taxes to fund a basic income and then gets the $10,000/year basic income it isn't actually any better or worse off than before.


> And getting rid of capital gains tax would increase economic efficiency because it currently prevents people from selling shares in order to buy better shares unless the advantage of the new shares can overcome the taxes due from selling the existing ones.

Getting rid of capital gains tax to encourage reinvestment is kind of silly. Heck, you could tax capital gains as regular income, and still eliminate any drag on reinvestment by allowing deductions for investment so long as the investments for which such deductions were taken were treated as having a zero basis value.

> It's conceivable that a consumption tax would cause the super-rich to pay more taxes, because if you want the yacht you have to pay the tax

Not really. You just structure the transactions to avoid what is taxable, e.g., you buy the yacht at a low nominal price and simultaneously (and completely coincidentally) by some financial investment not subject to consumption tax from the same party at an inflated price.

Anyone who can avoid paying taxes on their income in an income tax system can avoid paying taxes on it in a consumption tax system. (If you have an "unconditionally tax every transfer of money between two parties" system, it gets harder, but that has all kinds of downsides.)

> but there are currently a lot of tricks you can play to convert stock into stuff without paying tax, like selling only the shares that have decreased in value.

Sure, if you only ever sell shares that have lost value, you can avoid paying the (low) capital gains tax, at the expense of always losing money.

That's not a way to maximize your net, after taxes, utility, but if you want to lose money just to avoid paying a small portion of the gain in taxes...

> The best way to think of a basic income is as a fixed tax refund.

I think you mean "fixed refundable credit" rather than a "fixed refund".


> Heck, you could tax capital gains as regular income, and still eliminate any drag on reinvestment by allowing deductions for investment so long as the investments for which such deductions were taken were treated as having a zero basis value.

Which is a de facto consumption tax because it means you only pay tax when you sell securities without buying other securities, which you only do when you want to spend the money.

> Not really. You just structure the transactions to avoid what is taxable, e.g., you buy the yacht at a low nominal price and simultaneously (and completely coincidentally) by some financial investment not subject to consumption tax from the same party at an inflated price.

As opposed to the current system where you work for somebody for a low nominal wage and simultaneously (and completely coincidentally) they "sell" you a car for one dollar. Which in either case will get you prosecuted for tax fraud.

> Anyone who can avoid paying taxes on their income in an income tax system can avoid paying taxes on it in a consumption tax system. (If you have an "unconditionally tax every transfer of money between two parties" system, it gets harder, but that has all kinds of downsides.)

This is not actually that hard. You make the amount of the consumption tax based on the market value of the purchased item rather than the amount you nominally paid for it, with a presumption that the amount you paid is the market value, which the IRS can easily rebut when you're claiming the market value of a yacht is $20.

> Sure, if you only ever sell shares that have lost value, you can avoid paying the (low) capital gains tax, at the expense of always losing money.

It's not actually losing money. You invest in a diverse portfolio of stocks, some go up, some go down, some stay the same. When you want to spend some money you sell the stocks that have underperformed rather than the stocks that have performed well, which (at the risk of selling low) is plausibly what you want to do anyway, and then you pay no taxes because you realized no gains.

Even if all your stocks went up and by the same amount, if you want to spend 1% of the total assets then you still only pay tax on 1% of the gains because the rest of the gains are still unrealized. So it's already effectively a consumption tax as long as you can avoid changing what you're invested in.

Except that it's a consumption tax that taxes only the spending of interest (and earned income) but not principal, which seems to be to the benefit of people with more wealth.


They do need to make a higher tax bracket to distinguish the 150-300k a year people from the 500k+ a year households.


Apples and oranges: millionaires would pay no tax on income, but would pay the full tax the moment the income is applied to consumption -- so sure, they could accumulate wealth untaxed, but in order to enjoy it rather than just stare at it (in theory -- see below), they'd have to pay the full rate. It doesn't seem very relevant to compare progressivity of income in preference to consumption.

With that said, the FairTax is bad for other reasons -- by concentrating all your taxation on something that's relatively easy to hide, you massively increase regulatory and compliance costs. Imagine the blooming industry in recharacterizing consumption purchases as investment purchases! (For the rich, "sufficiently advanced investment is indistinguishable from consumption".)


> If you were to implement the Fair Tax, which includes a stipend for basic needs, you'd get bipartisan support as well.

No, you wouldn't. Flat tax proposals and national sales tax proposals like the "FairTax", have support almost exclusively on the right (and each particular such proposal has minority support on the right.) You won't get bipartisan support for any of them.


Both flat tax and sales tax disproportionately tax the poor.

The very rich spend less money relative to how much they make, which puts higher burden on the poor than with our progressive tax.

Flat fax is bad, because 40% of the guy making 20k per year is going to severely change quality of like. 40% from the guy making $40 million has much less impact on his quality of life. This is the whole reason for having a progressive tax... Impact of money on quality of life doesn't work on a linear scale, so neither should our taxes.


If the rich paid taxes...

That's the missing element, not paying. As much as IN THEORY I agree with these ideas, in practice, rich people find all sorts of ways to not pay tax.


I've noticed an increasing number of friends who are very left leaning, promoting the Fair Tax lately.

Most of the issue with support for Fair Tax is that it's enough of an overhaul that people believe it to be an unrealistic pipe dream, which is may well be.

One of the big perks of the Fair Tax is that it makes it easier for people to pay off debt and would actually encourage it. That gets a lot of support from many different angles.


Just to be clear however, the Fair Tax and a Flat tax are very different things that would have wildly different consequences to different people.


IMO social security is too much of a hot button issue to touch. I'd market UBI as "social security for everyone" - that sets both the level that people get, and neatly removes the issue of giving both UBI and social security to retirees.


>I'd market UBI as "social security for everyone" - that sets both the level that people get

No, it doesn't. Social security isn't a fixed amount, its based on prior earnings, adjusted by a wage index since the time they were earned, put through formula to get a base benefit amount in the year you start drawing them, and then inflation adjusted after retirement.

So calling a UBI "Social Security for everyone" does not, in fact, tell you what the benefit amount would be -- if the benefit amount is calculated anything like Social Security, the program is nothing like a UBI.


Sorry, I wasn't as clear about the plan as I could have been.

To be more specific, I'd set UBI at a level that everyone who is currently getting Social Security based on age would rather switch to getting UBI instead. Then I'd discontinue SS and call the UBI program "Social Security", and pretend that I didn't get rid of the entire SS program. Wrap that change up as a package deal along with taxes to fund it, and call it "Social Security for Everyone".


im not sure people are happy enough with the implementation of social security to be sold with that premise. id sell it as a solution to social security, rather than an expansion of it


"fair tax" is the stupidest thing ever. How do you implement a progressive tax on consumption? You'd have to keep track of every purchase a person makes to know how much they've spent. It's worse than keeping track of income, and it's also a massive surveillance tool. Then there's the whole problem that people who have lower income will pay a higher percentage of it in tax. There is nothing good about that scheme.


How come it has to be progressive? Wealthier folks consume more and therefore pay more.


Wealthier folks consume less as a percentage of their income than poor people do. If you add a 10% sales tax on food, the poor are hit harder, as a percentage of their income.


This is such an important point that so many seem to miss. The more income you have, the higher your disposable income. A person who earns $20k per year probably spends $20k per year. A person who earns $50 million a year isn't going to spend $50 million every year. Even if their income skyrockets to $150 million, they likely aren't going to spend $50 million in a year. It's just not feasible. Therefore, any sort of FairTax or FlatTax is hitting the poor a lot more than the rich and is regressive by definition.


Its a basic fallacy of the fairtax/nonprogressive tax movements that consumption equal to income. It is true, until you have your basic needs met. Go around to your local rich neighborhood - not everyone has the latest Maserati, because their transportation needs are fully met by a cheaper vehicle. If you're well off much more of your income is going to go to investments and savings.


> You get $700 / month from the government for basic income.

I thought the idea was that it be enough to live on.


Doesn't have to be. You could start it out any level. That might be better, giving the system time to adjust.


Depending where you live 'enough to live on' will vary. I lived on about $700 / month pretty happily for 4 years in college. Doesn't need to be a desirable long term amount but it does need to solve the problem of the unemployment trade off, namely that if you're getting unemployment and you get a job you lose it. A BI needs to simply ensure that you have a base level and if you get some work, you make more money...period.


> You get $700 / month from the government for basic income. Your social security, welfare, unemployment, disability, etc is reduced by $700 / month.

What happens to Medicare under that scenario? Some medical procedures, particularly for old people, can exceed that.

Current federal government revenues top out at $3 trillion. Dividing it by a rough population number of 300 million (and ignoring the fact that portion of it comes from corporate income tax, excise taxes, etc.), the revenues collected stand at $10,000 a year a citizen. Distributing $8,400 a year back requires rather deep cuts to every single entitlement program and then some (defense, USPS, air traffic controllers, national parks, etc.)


Medicare and UBI would have to be separate programs, just like Social Security and Medicare are today. Poor old people living off of Social Security don't pay their medical bills out-of-pocket, they have Medicare to pay for them.

In a system with UBI, we'd really need to have universal healthcare ("Medicare for all"). Someone making only the basic income isn't going to have any money for sky-high Obamacare premiums, and would likely be on Medicaid. But that whole system is a complete mess, with a lot of people unable to afford Obamacare because their state didn't expand Medicaid enrollment. And now with one of the biggest insurance companies pulling out of the Obamacare exchanges, rates are going to skyrocket even more. There's only two solutions to this: 1) repeal Obamacare and change to a system where people who have no insurance are denied healthcare and are left outside the ER to die on the street, or 2) universal healthcare.

The way politics are going in this country, I predict we'll see #1 before we see #2.


If one is keeping the largest entitlement program of them all, the originally quoted $700 a month is a bit pie in the sky number.


Check out these pie charts to see what money get's spent for each different entitlement programs [1].

It seems like we currently have 2 buckets:

- living money for people who, for whatever reason, have no source of income

- publicly funded medical insurance

It doesn't seem totally unreasonable to classify medical expenses separately from routine living expenses.

The amount of spending in the routine-living-expenses bucket is enough to pay about $350 per month to each of the country's 320M residents.

I think a good proposal is to instate that $350 universal half basic income, replacing social security and unemployment insurance, and then reduce the minimum wage to $0. Even with the rise of a robotic workforce, just about anyone should be able to find work that will pay the remaining 350 if they're allowed to work for little enough.

[1] https://www.nationalpriorities.org/budget-basics/federal-bud...

Edit / Afterthought: No one currently receiving social security or unemployment will support this proposal because they are all receiving way more than that. More than 700/month, and certainly more than they need to survive.


I think you're going to have a hard time eliminating Social Security; the voters won't stand for it. They paid into it, so it seems unfair for them to not get paid back out of it.

What would work, I think, might be a phase-out: for anyone who's getting less in SS payments than the UBI, just replace their SS with UBI. For everyone making more, they don't get a UBI, they just keep drawing SS. (Or, you could say they get UBI plus the difference between SS and UBI.) Then eliminate the SS portion of the FICA tax and stop everyone from paying into it going forward. Then there'll be some math involved in figuring out how much people who partially paid into it get, but the end effect is that SS will cost less and less money until finally everyone's aged out (to the point where the amount they'd draw is less than UBI so we can just cancel SS altogether). It'll cost a bit more in the short term to do it this way, but it's more fair to people who paid into the SS system and it won't get the AARP voting against you.

>Edit / Afterthought: No one currently receiving social security or unemployment will support this proposal because they are all receiving way more than that. More than 700/month, and certainly more than they need to survive.

Again, you'll have to phase it out. Unemployment is an insurance program that people have paid into, just like SS, so of course they expect it to be there if they need it. And it may (or may not, depends on the person and their income) pay more than they need to survive, but if they have a lot of expenses like a big mortgage then that's irrelevant. They've been forced to live in a society where having a job is basically required for survival unless you get on the dole (which prevents you from working, so it's a trap), so unemployment is something the society has created to mitigate risk.

But like SS, it could be phased out (and the taxation from that eliminated). It could probably be replaced with privately-run unemployment insurance though, but it wouldn't be as necessary with UBI.

But your $700/month sounds low to me. I know it's supposed to be a bare minimum, but even that seems too little to me to live on with today's rent prices. I do think the government has a responsibility to do something about that; rents have been driven up far too much by Wall Street, foreign investors, speculation, etc. UBI needs to be enough for someone to live on with roommates (and not more than 1 per bedroom at market rates), in an average cost-of-living area, plus reasonable grocery store bills and a bit extra to cover transportation costs. If it isn't enough for that, it won't work, and it needs to be jacked up until it is. If that means instituting a big tax on Wall Street, then so be it, since they're largely responsible for the cost of living being what it is.


I agree with you 100% about the lack of political viability.

But I also think a system that requires taxpayers to fund more than basic living expenses for non-taxpayers is unjust.

Everyone should be able to stay warm and dry, safe and clean, with a soft bed and a healthy diet. Anything beyond that is luxury.

In particular:

- Just because you don't have enough income to pay your big mortgage doesn't mean others should have to pay so you can live in a massive house. Regardless of your previous income, you should sell it or let it be repossessed (and continue to live safely and healthily elsewhere). Otherwise you're asking people who live less extravagantly to fund your own extravagance.

- Likewise, many hardworking people take a roommate to save money. Should they have to pay for other people to live more extravagantly? There is nothing unhealthy or unsafe (in general) about sleeping in the same room with another person, or turning a room that fits 2 people into two smaller rooms.

I think in an average cost-of-living town in the US, you need 300 to 350 to rent a room (all to yourself!), 250 for groceries, soap, razor blades, etc. That leaves 100 or 150 to get around. Certainly not enough for a car or taxi rides. But I think just about everyone should be able to find a place within walking/biking/city-bus distance from the grocery store, though in some sprawly towns it might take a couple of hours to get there.


> Everyone should be able to stay warm and dry, safe and clean, with a soft bed and a healthy diet. Anything beyond that is luxury.

The definition of "luxury" changes over time. Today, you should include internet access in the list of basic needs since it is needed for many forms of social interaction.


Here again is another place where we need a lot more government regulation. People who don't work should not be getting $100/month or whatever for internet access. Instead, they should be able to afford a $15/month plan. Over in Europe, they have stuff like that, because they have real regulation, so internet service is much, much cheaper (of course, their internet and telecom companies aren't as profitable as ours; boo hoo). We need to do the same thing here.


I've never seen a $100 internet bill that wasn't bundled with other kinds of services.

A more normal number, I think is $50.

If you couple that with the fact that people with out income most likely need to share housing and might as well share in internet connection too, you're already down to $17 per month for broadband.


$50 is more like a starting price; they jack you up to $75 after 6 months (been there, done that).

Also, you're assuming someone has internet service where they live and a stable enough situation to sign up for long-term service. I was thinking more like mobile internet service, which is how people in developing countries use the internet (and they don't pay the ridiculous monthly rates we do either).


So that I can think about this more concretely - what forms of social interaction do you have in mind?


>- Just because you don't have enough income to pay your big mortgage doesn't mean others should have to pay so you can live in a massive house.

Yes, they should. This is the way it is right now. That's how unemployment insurance works: you pay into it as you work, and then draw from it when you're unemployed. (Of course, a lot of people don't bother because it's a huge hassle, but that's beside the point.)

Do you also think that someone who has full insurance on their $90,000 Mercedes shouldn't get a full payout when someone crashes into it?

I do think that unemployment insurance (since it's a government program and not optional) should be phased out under UBI. But "phased out" is the key phrase here, just as with SSI.

>- Likewise, many hardworking people take a roommate to save money.

>Should they have to pay for other people to live more extravagantly? There is nothing unhealthy or unsafe (in general) about sleeping in the same room with another person, or turning a room that fits 2 people into two smaller rooms.

This is illegal. Most municipalities have codes which prevent more people from living in a place than a certain number, based on the bedrooms (usually 1 per bedroom, except with kids). And yes, I think asking people to have roommates (in the same bedroom) is going too far. Housing is this country is cheap: it's cheaply constructed, with cheap materials, and land is plentiful outside of downtown metro areas. There is absolutely no reason for rents to be as high as they are. Instead of trying to force people into unsafe living situations with strangers, the government needs to fix the housing problem. They're not going to do that as long as people like Hillary are in bed with Wall Street and allow speculation on residential real estate.

>I think in an average cost-of-living town in the US, you need 300 to 350 to rent a room (all to yourself!), 250 for groceries, soap, razor blades, etc. That leaves 100 or 150 to get around. Certainly not enough for a car or taxi rides.

This is what I'm proposing. If that's enough for someone to get by in an average location in the US, that's what the UBI should be set at. And $150/month for a car is actually doable: you can get a pretty decent used car for $5k, and if you're mechanically handy (buy tools at Harbor Freight) you can maintain it yourself for next to nothing, and then as long as your commute is short, and with liability-only insurance, the monthly cost for your transportation should be in that range, even better once you get the vehicle paid off (which you can do by doing some extra work for more money, then after it's paid off you can relax and not work as much or at all). But really, affording a car shouldn't even necessarily be part of it (though as I pointed out, if you're frugal and able to do your own maintenance, it's not that expensive; insurance might blow the budget though). There is public transit in places (though it mostly sucks and needs serious revamping; see SkyTran), and people at the minimum could just get by with a bicycle.

The whole point of UBI is so people can get by and not have major financial stress; it literally kills people, by shortening their lifespans. Sticking them in a room with some stranger and not allowing them any privacy at all is not the answer. So the UBI should be set so that they can afford to rent a room (the whole room), buy groceries, and have a little extra (maybe riding a bicycle) so they don't feel completely miserable, and then can go seek employment as they wish for more money.

I do think unemployment insurance and SSI should both be phased out, and maybe unemployment insurance can be a private matter instead, and I also think universal healthcare needs to be instituted. I also think the UBI should be the same for everyone; it's too complicated otherwise, and I don't think people who want to live in Manhattan or other high-rent areas should be given that luxury and funded by the rest of us (otherwise, we'll all move to high-rent locations). People living in high-rent places like that now with government benefits will have to move under UBI; too bad. If $700/month is enough to make all this work, then great, let's set it at $700/month.


  If you were to implement the Fair Tax, which includes a stipend for 
  basic needs, you'd get bipartisan support as well
Poe's Law is pinging.


I think the comment was earnest. Check out this article: http://www.vox.com/2015/4/2/8332115/rubio-lee-basic-income

  It's called the FairTax, and it would replace nearly all federal taxes with
  a 30 percent national sales tax. That on its own is a regressive idea —
  low-income people spend more of their incomes than the rich do, so would pay
  a greater share of their incomes in sales tax — so the FairTax would give
  each household a "prebate" equivalent to the sales tax they'd pay on
  poverty-level spending. For example, in 2013 the FairTax "consumption
  allowance" for a family of four (two parents, two kids) was $31,020. If you
  spent that much money in a FairTax world, $7,135 of it would go to federal
  sales taxes. So the FairTax provides a $7,135 annual rebate to families of
  four, distributed monthly.

  Make no mistake: this is a basic income. There is no work requirement. You
  get it regardless of whether you make any money. It is a straight-up basic
  income. FairTaxers object to this characterization, saying that because the
  prebate is meant to compensate for taxes you pay on necessities, it's "your
  money being returned to you." But if you live below the poverty level, you
  come out ahead from the rebate. It's just a cash transfer program.


Or instead, give it universally to children, but require a certain percentage be saved in some sort of fund that they are given full control of when they turn 18. That way the parents don't have to shoulder all of the expense of a child, but the child isn't screwed over by irresponsible parents either.


When they turn 18 they are already going to have access to the BI. I'm not sure of the benefit of a fund rather than directing it to school funding.

Prior to school it would allow parents to pay for daycare, diapers, food and subsidize paternity/maternity leave.


I know of folks who end up many kids to maximize on the welfare per kid. Can you really trust all parents? I've seen some abuse of welfare in my days in Australia.


Cool idea. I'd advocate for an age of 25 though.

An 18 year old these days is still a child. Give them a couple years into the drinking age to get their bad decisions out of the way.


That is mainly because "these days" 18 year olds are no longer empowered to make any relevant decisions. You propose to keep treating them like children for seven more years. The day they become 25 you'll say "My gosh, they're 25 now but they're STILL like children!".

It is my opinion that this huge collective distrust towards youth is one of the biggest hidden problems of today's society. If it was up to me, kids would get a basic income from the age of 14.


I think it's mainly because these days, it's much harder for an 18 year old to make an indipendent living than it was back in the day. Today, most people don't even begin their careers until after college, which is usually around 23 at the earliest. When my Dad was growing up, it was not unusual for 16 year olds to begin working full time to support themselves. By 25, most people were already well on their way to marriage. This is not the case today. Today, people who are 18 are usually still dependent on their parents.

It's not the children's fault, either. It's just a fact of the times. More schooling is required than before, and continuous schooling shelters people from having to make many real world decisions. It's easy to live a "don't care" lifestyle during college, only to be hit with reality hard once you graduate. I've personally experienced this.

There is a major difference in meltalities of someone who's been in school their entire life and someone who's been in the "real world" for a few years.

I'm not sure of your age, nor am I suggesting that it would have any negative impact on your perception here, but we seem to have different perceptions of the youth of today. I am 25 years old and I can only speak on my experiences.

And my experience shows that there's not much of a difference in maturity between an 18 year old senior in High School and a 22 year old Junior in college.

However, there's a huge difference between a 22 year old Junior in college and a 24 year old who's been working for a year.


There are plenty of biological changes from ~18-25 which impact reasoning. http://www.npr.org/templates/story/story.php?storyId=1411647...

In the end all society's have a baby-elder process with many stages. We let 15 year old's risk their and others lives driving multi thousand pound vehicles at 70+MPH. We keep prescription medication behind many additional hoops even for well educated 60 year old's.

IMO, the real difference is how much education people need. A 15 year old can dig a ditch just fine, but cancer research takes quite a bit more. In the end society simply values 15 year old's time less.


That's offensive. I am 23 and have lived away from home since I was 17. I've been financially independent since I turned 18.

Don't stereotype.


That's quite the accomplishment, and is by far not the norm. I am 25 and have only been financially independent since 23, and even I am the anomaly amongst my peers.

I don't see what's wrong with my stereotype in this case. Most people under 25 are not financially independent, and it's mainly due to the society we live in, not the children themselves.

When my Dad was growing up, people had full time jobs at 16 years old and were married with kids by 25, where as today, the average person doesn't even graduate college before 23.

I'm not blaming the children for that.


Stop calling us "children." It's offense and rude. How very convenient that the cutoff of adulthood is your own age—if you're going to insult vast numbers of functional adults, at least insult yourself in the process. Silly child.

First of all, you are in fact wrong. The majority of young adults do in fact live independently. [0]

Second of all, if you think that adulthood isn't reached until 25, why would you be advocating for reinforcing this supposed infantilization?

[0] http://www.pewsocialtrends.org/2015/07/29/more-snake people-living-with-family-despite-improved-job-market/


> [0] http://www.pewsocialtrends.org/2015/07/29/more-snake people-living-with-family-despite-improved-job-market/

Um, has that url been through this?

https://chrome.google.com/webstore/detail/millennials-to-sna...


The link you posted doesn't seem to work.

[How very convenient that the cutoff of adulthood is your own age]

I chose the number 25 because it is usually a few years after most people have graduated college and have entered the work force. The number 25 is used in many places as a "special" age. Insurance companies, rental car companies, hotel bookings, etc...

[you're going to insult vast numbers of functional adults, at least insult yourself in the process. Silly child.]

I don't know about your peers, but from my graduating class of ~1000, I would guess there were less than 100 who were completely independent by 23.

[First of all, you are in fact wrong. The majority of young adults do in fact live independently.]

I'll do some research on that.


I'd like to lend my support to "old enough to realize that the real world sucks".

By that measure, I reached adulthood two weeks short of my 25th birthday. That, of course, was when I was laid off for the first time, just after signing a year-long lease on a new apartment.

That's probably just coincidence, though. I'm sure that many people realized the real world sucks earlier than I did.


Most people don't get college degrees, so that's a poor jumping off point to begin with. Near 68% of Americans do not have a bachelors degree. Many who do enroll simply drop out long before graduating.


I see plenty wrong with the stereotype. I've been on my own since 17, too. I'm 28 now. In that time I've worked at nearly every job you can imagine, with no parents to beg money from or go back home to live with. I know what grinding poverty feels like, and how it's all the worse when you actually have a full time job. Doesn't mean I wasn't financially independent. There's lots of us in the same boat.

I eventually ground out night classes while working and job-hopped my way into industrial automation and a halfway comfortable life, so I understand the appeal of passing judgement from a high and mighty place - but don't. It's a particularly pernicious intellectual weakness.


I'm not trying to condescend people who aren't financially independent. Maybe the use of the word "children" wasn't the best, because I can see how it gives off that vibe. I am just pointing out what I have observed.

Most people at the age of 23 are not in a position to support themselves yet, which is kind of off-topic w.r.t my original point anyway.

The fact that there are people like you who were able to work hard and make good things happen at a young age doesn't nullify the fact that the average 23 year old is still dependent on their parents.


But what I was really getting at is that there is a certain level of judgement/wisdom that is obtained by working hard and living on your own/supporting yourself.

This can be learned at any age (as pointed out by my comment about my Dad working at the age of 16). However, many people today are not exposed to these types of desicions until after they get done school, which is usually at the age of 23.


If that's offensive, I'm not entirely sure you have been participating in the real world. You'd be offended by damn near everything.


Some people are forced into an adult mindset earlier than others. I've known 14 and 16 year olds that could be trusted with more responsibility than most 30 year olds. I've also met 60 year olds with a child's mindset. Clearly, age doesn't cause maturity, but it's certainly correlated with it.

An outlier can't be treated like the center of a distribution. Your own experiences don't mean that most 18 year olds aren't still children. It's not like the government is going to start maturity-testing people to decide when to start dispensing a basic income. They're more likely to test a "representative population" and set the age to the point where 2/3 test as "adult", or use one of the traditional age-cutoffs like 18, 21, or 25.


Many adults make bad decisions their whole lives.


Probably one of the biggest mistakes is not learning more skills and different skills. In this era of online learning, there is really no excuse for not spending a couple hours bere and there to learn something new or different.


Sounds like you should advocated for a drinking age of 25 instead. Or move all those other things you get to do at 18 to 25 also.


I think we should actually lower the drinking age. It's currently 21 here. In fact, being 18 really gains you nothing here other than the ability to join the military and get into trouble with the law.

My main point is that a few years should go by after a child enters into the adult world before they have access to a fund left for them.

There's usually a short "reckless" period immediately after graduating high school and college. However, this usually calms down after the initial shock of having sudden freedom wears off.

I have two friends who inhereted $20,000+ sums of money from relatives when they were in their late teens, and both of them pissed it away in under a year. Looking back, both of them seem to regret it.

(Me and my friends are all around 25 years old).


> I have two friends who inhereted $20,000+ sums of money from relatives when they were in their late teens, and both of them pissed it away in under a year. Looking back, both of them seem to regret it.

Would they have learned that lesson without making that mistake? Are you even sure they really wouldn't do the same again?

To quote Time, "About 70 percent of people who suddenly receive a windfall of cash will lose it within a few years, according to the National Endowment for Financial Education."

Just to make the anecdotes match the statistics, I inherented roughly 30k. It remained in my education fund until I finished undergrad. At 22, I opened an investment account. It's been paying dividends for the better part of a decade now.


[Would they have learned that lesson without making that mistake? Are you even sure they really wouldn't do the same again?]

It's hard to say. However, I think one really learns the value of money after having been in the work force for a while. I think that experience may have had a positive impact on their decision making had this happened later on in their life.

[To quote Time, "About 70 percent of people who suddenly receive a windfall of cash will lose it within a few years, according to the National Endowment for Financial Education."]

I believe it. But I also believe that the likelyhood of making good financial choices increases with some time spent in the work force. In this case, they had been living a nice lifestyle under their parents when they received the money.

[Just to make the anecdotes match the statistics, I inherented roughly 30k. It remained in my education fund until I finished undergrad. At 22, I opened an investment account. It's been invested in the TSX60 for the past 6 years now.]

You are also on hackernews, a website which consists of generally well-educated people. I'm not trying to sound snotty here, but there's a good chance that you have better judgement than most people.


> I think one really learns the value of money after having been in the work force for a while.

Perhaps you should consider using that as your criteria rather than discriminating based on age. I'd still disagree, but that policy would deprive fewer people than your current proposal.


True. Even though there's a correlation, basing it off of age would screw some people who are otherwise capable. Point taken.


Let me know when you have this thing in place: I will start a "Spring Break Holiday Park" somewhere in the south where beer is $20 and a Rum&Coke goes for $40. Only people from 25 are allowed in.


Mildly related, but for a while I've felt we should change the age of majority / self responsibility to age 25. It would improve a lot of things about society...


Personally I think the opposite is true to some degree. Age does not guarantee that you are a rational and well informed citizen. I've also read numerous articles about how young people are more tolerant (gay marriage is a good example), moving back into dense urban areas (causing less sprawl and a renewed interest in better public transport and urban planning), and willing to at least admit that major challenges like anthropogenic climate change are real. Society can learn from people of all ages, but often the enthusiasm and free time of youth is what is needed to drive real societal change.


I'm not sure what that has to do with age of responsibility? The statistical facts are there to show that people under the age of 25 have generally impaired judgement compared with those over. (Among other things that's why you can't rent cars until 25.)


Okay, lets also ban anyone under 25 from joining the army.


I think the article is talking more about the difference from the current system.

> But by excluding 45 million retirees who already receive a basic income through Social Security, the cost falls to $2.7 trillion.

These retirees can be excluded from the calculation because they are already being paid, they wouldn't add any additional cost to the system.


Is it fair to say they're being paid if they paid into the system paying them for their entire working lives? Can someone please explain why people call Social Security an entitlement? Am I missing something?


In Germany at least, public retirement funds are "pay-as-you-go", i.e. you don't pay in to save up money for yourself, you pay in to finance the current payouts to other people who previously paid into the system (and so on). Of course nobody treats it that way -- you'll hear a lot of "my pension" talk especially from people close to retirement and those who are unaware of how low their pensions will be a the current rate.

Theoretically the system could be justifiably stopped at any second and simply drained by the current pensioners (which would probably happen almost instantly). But good luck explaining that to people raised under the false assumption that the public pensions are "safe" (as politicians like to announce so frequently).

Our best bet would probably be "universal basic income for everyone below retirement age" but pensions are "topped up" to parity with basic income. A not-insignificant portion of pensioners already gets pensions below social security levels (meaning it is topped up to social security levels -- not that they get welfare on top). You could then fade out the pension system and replace it with basic income.


Social security works basically the same way in the USA.

Once a system like that is in place, it's very hard to stop the pipeline.

I honestly don't see the purpose of that type of system either.

Why create this pipeline of money anyway? Why not just take the contributions that everyone makes and put them into individual retirement accounts?

Assuming the system is stable (which it's probably not), it seems there would be virtually no difference between me paying for the current retirees (and expecting my children to pay for my retirement) vs. me paying into my own retirement.

I'm not too familiar with these concepts, so maybe someone will school me.


> I honestly don't see the purpose of that type of system either. Why create this pipeline of money anyway? Why not just take the contributions that everyone makes and put them into individual retirement accounts?

Because after WWII, there were no retirement accounts in Germany (simplified and not completely correct, but you get the point). Should they have let old people starve?


Makes sense. And no, but a temporary program could have been put in place I guess.

It seems you're now stuck with a program that was designed to address a problem of 70 years ago.

I'm especially curious about the history of Social Security in the USA. I can read about this on my own time, though.

It does seem like it was a tool used for polotical gain.


I despise social security, mainly because it's a wealth transfer tool masquerading as retirement savings. I would love to eliminate it and have everyone just save their own money.

The reason that it's not done that way is three-fold:

(a) People's contributions are not enough to cover their social security. Instead, they depend on the current workers paying in more than the previous generation did (in a perpetual cycle).

(b) Liberals oppose the idea of personal responsibility. If you don't save any money for retirement, they think society still has an obligation to fund your retirement.

(c) It's a benefit which goes to old people and old people vote a lot.

In reality, it's just a cleverly marketed way of stealing money from the youth and giving it to old voters.


In reality it was a cleverly marketed way of ensuring old people did not continue to live in utter destitution, given that a substantial proportion of the population even of "wealthy" countries are unable - not unwilling - to save enough to retire without ending deep into poverty.


I think your point (b) is overly contentious and shows you don't really know much about Liberals.

In fact, most liberals I know are very much about personal responsibility - including towards society and the environment.


>I despise social security, mainly because it's a wealth transfer tool

Wealth transfer is not necessarily a bad thing.


I don't mind some wealth transfer from the rich to the poor. It's generational wealth transfer (including from poor youth to wealthy elderly) that I oppose.


Those systems were put in place when the population was robustly growing.

Also, the pay-as-you-go systems allows the politician to hand out money straight away. Making the programs instantly popular and entrenched.


SS provides a minimum guaranted pension, in large part as a safeguard against the failure of private pensions and retirement investments (adopted after a major financial collapse took out a lot of people's retirement investments); redirecting it into risk-exposed private retirement investments would rather miss the point.


Yes. The SS system is clever, but it required a lot of sleight of hand to get it into place -- but that approach has kept it alive for 80 years so far.

First, SS is universal rather than means tested in order to garner enough support to keep it in place. It's ridiculous that someone with millions in assets will receive a relatively small SS payment each month once they turn 70, but if the system had any decision making in it, it would eventually be gutted by those who "only want it to go to the deserving", with all the misty, hoop-jumping etc that you get with welfare assistance. Essentially money is wasted on the wealthy in order to make sure those who really need it get it.

Second: "they paid into the system" is deliberate propaganda. We all "pay into the system". Dollars are fungible -- one marked "social security" on your paystub is no different form the one marked "federal income tax" any more than the electrons in your GPU are the same as the ones in the CPU. And we are entitled to the benefits of air traffic control, food safety, schools etc. And in practice the SSN money does work that way: how do you think it's "invested"? It buys government bonds.

It's a cumbersome fiction, with rich kabuki elements (I myself appreciate the wasteful "statements" that some idiotic congressman decided should be sent to every recipient). Claiming you paid for it so you were entitled to it was a clever idea.

This crazy system arrived because the model people had was private pensions; many people didn't or couldn't invest in them so the Roosevelt administration developed "a pension fund for everyone" in the face of stiff opposition. It was very similar to the difficulty of implementing Obamacare: the whole ludicrous infrastructure was designed to bring insurance companies into the system rather than sit beside them. So SS is much more efficient than Obamacare because the opposition wasn't as effective back in the early 1930s.

This whole "you paid for it" scheme has other pathologies as well: the tax is regressive. The people who need it pay a higher proportion of their income than the people who don't. That's just cruel.


The reason why "You paid for it" is a valid argument is that Social Security is explicitly advertised as a forced retirement system.

Imagine if you put money into your 401k, and then the government came along and decided that you didn't need that money so they just took it all away from you. Do you believe THAT would be OK?

Because if SS is a retirement system, that's effectively what the government would be doing.


Your argument is circular: it was advertised as X so it is X.

I described why it was advertised that way and it is operated to resemble that, but that is not in fact how it operates.

In fact I do think it is ludicrous that the US government will pay me SS money when I get old, even through I certainly won't need it. But I am glad they will do so because people have a screwed up model of how things work, so if they have to pay a bunch of people who don't need it in order to make sure those who do need it get their money, well, it's worth the cost. But what a waste. How much better not pay Bill Gates an SS payment and give it to someone else who needs it more?

You should be more outraged that a huge chunk of your taxes is wasted on beating up random people in other countries rather than fixing the bridges or giving it to people who are suffering. You should be more outraged that you are told that ISIS is some sort of existential threat to the republic, which is of course absolute nonsense.

How about the fact that the US created and underwrites all the "conforming" mortgages (i.e. essentially all of them outside a few pockets like the Bay Area and Manhattan). Another program from the 1930s that is taken for granted today with a cover myth a private mortgage market.

Look, I'm no flat-earther, gold-standarder, or conspiracy theory loony. I am hugely in favor of SS payments, welfare, Obamacare, FDA, etc etc -- in fact I think they should be stronger. But if you read history and some of the original debates and documents from the Roosevelt administration it is clear they are good medicine wrapped in a sugar coating of fakery in propaganda in order to get them implemented.


The money you put into SS is used to pay the benefits of the people drawing on it today. Anything left over is loaned to the government (yes an IOU to itself). There is no account with your name on it that holds the dollars that have been taken from you all your life. There is no trust fund. It's a giant pyramid scheme.


> It's a giant pyramid scheme.

No it isn't.

> The money you put into SS is used to pay the benefits of the people drawing on it today.

That doesn't make it a pyramid scheme.


It's language war. Entitlement spending is a great way to negatively frame social security.


To be clear, the money I'm paying into Social Security today is being consumed by current Social Security recipients.

It is not being set aside for me to use when I theoretically begin to draw Social Security in the future.


Well, now I understand why all those pesky employees of mine feel so entitled to getting their paychecks. It must be because they're millennials or something...


I'm not certain... My first job as a programmer my boss use to bust my balls and joke that I must not care about getting paid because I often let my checks pile up before asking for them... (and I wasn't exactly flush with cash from another source...)


I'm thinking from the government's perspective. It's still money that is being removed from the treasury that they have to factor into the budgets.


> Can someone please explain why people call Social Security an entitlement? Am I missing something?

Because it is. What you're missing is what the word entitlement means. They paid into the system, they are entitled to get those checks, i.e. they have a right to it. Calling it an entitlement is not an insult.


> Yes, you can reduce the amount paid out by making it not a universal basic income scheme any more. But that rather misses the point.

You are entirely correct.. but I think you're missing the point.

Think of that first description as the marketing pitch to the general public. By saying it is universal and "free" to administer, it gets people behind it who don't think through the consequences.. which is a large chunk of the target audience. They are also the people who could put amicable politicians in power and keep them there.

But a "no-strings-attached" basic income would force politicians to give up the one thing they desire more than anything: power. So the second description with the actual mechanics of it, is for those people who actually get to administer the "free" program and tie their strings to groups, situations, and behaviors they want to punish or promote.

I am as free market as they come and find myself intrigued by the UBI... but the thing that prevents me from supporting it is that politicians and political systems DO NOT give up power so the "we can get rid of everything else" line is obviously a lie.


> But a "no-strings-attached" basic income would force politicians to give up the one thing they desire more than anything: power.

I tend to think the exact opposite is true: a universal basic income is conceivably one of the most massive power grabs imaginable.

If this comes to pass in America, you're going to have a large chunk of the population COMPLETELY dependent on the government's teat. And ultimately, a population that's dependent on the government for their means of survival (even if its spun as "no strings attached") is indirectly under total political control.


> If this comes to pass in America, you're going to have a large chunk of the population COMPLETELY dependent on the government's teat.

You won't, without substantial productivity improvements, because economics; UBI at any level that would, in the short term, make people willing to accept it and not seek outside income will rapidly lead to inflation from the increased cost of labor from the mass workforce exodus, rendering it no longer adequate to such lavish support.

In the long-run, with massive improvements in productivity and automation, sure, its conceivable that a well-designed (I mean this in terms of sustainability and stability) UBI could eventually result in a large portion of the population relying on it for their main source of income, but that's essentially a post-singularity economy by that point.


“Therefore a wise prince ought to adopt such a course that his citizens will always in every sort and kind of circumstance have need of the state and of him, and then he will always find them faithful.” -Machiavelli


I agree that instating UBI may become an excellent strategy for existing power structures to preserve themselves by paying out the minimal amount to prevent social unrest.

However, I think it will be nearly impossible to succeed in spinning it is "no strings attached" unless everyone really can continue to exercise all of their current rights (to free speech, to the democratic process, etc) without losing the benefits.

You make it sound like the state will be able to say "Don't speak in opposition to our policies or we'll let you starve". I'm skeptical.


The only way I can see UBI working is if most people get no benefit. So someone making the average US income of $50,000/yr would get a check for $20k from the government and then see their taxes go up by ~$20k. Rich people would pay much more, effectively transferring their wealth to the poor. People who are solidly middle class wouldn't see much change, except having a new class of potential customers (the people that used to be poor).


I fear it will only increase inflation to a level that the 10k people get is representing about the same in goods as the current level is they have. Free money is fake: it doesn't work in my opinion. It either increases the price level (hey - even the poor bum gets 10k a year, so he can afford a $10 bread, isn't it?) or it will stop people from over-achieving. My motivation to earn extra with a job only to see it go to taxes would reduce significantly if I can remain at the same level without a job and just 2 or 3 extra kids :)


Well, buts it's NOT free money. The money is coming from rich people and being given to poor people.

The 'amount' of money in the system stays the same and therefore inflation stays the same.

Also, at least recently everyone has been talking about how inflation is too LOW not too high.


Yes but rich people are not spending thier money on rent and food. I think that giving the poor this money will mean basic necessities will just get more expensive and the poor will have the same as they have now, and landlords and Wallmart will pocket the cash.


This is not how supply and demand should work in a functioning economy. Higher demand will up the price at first, but then some market player should be able to step in and make it work for less (thus upping the supply), until the market has found a new steady state (which, as long as supply isn't restricted, should be around the same price as before or lower because of a higher scale).

Now obviously, if what you have isn't actually a free market but an oligopoly with government protections, price fixings etc., this won't work. You'll have some of these problems in some markets, but that would just have to be next thing to concentrate on.


Can someone explain to me how a true basic income would be expected to work? If you're not excluding anyone, where does this massive amount of money come from? I suppose it has to be taxed out of the wealthy? So they still receive the income but pay it back in taxes? This is an honest inquiry.

Yes you can save money by cutting these programs, but that argument doesn't add up for me yet because you still have to pay EVERY person in the country. (or is it every adult)


Yes, you tax it back. Typically proposals include a flat tax (or flat tax increase) to pay for it. In that case, you net extra money from the system if you make more than the mean, and you net pay into the system if you make more than the mean, but there are no hard cliffs and your next dollar earned still means more money in your pocket at any point.


Most proposals I've seen include progressive tax, and usually an increase in progressivity. Also, some proposals are simply no change to funding, with the UBI directly using the funds of other benefit programs that it replaces.

A flat tax (or even just a decrease in progressivity) directly works against the purpose of adopting a UBI.

EDIT: Changed "all" to "most"; I've definitely seen right-wing proponents advocating varieties of UBI + Flat Tax schemes and UBI + National Sales Tax schemes, which are not funded by progressive taxes; also added the note about no-new-funding programs.


To clarify, most proposals I've seen have involved one of the roughly equivalent options of a separate flat tax specifically to fund UBI or an increase of the same amount across all tax brackets.

I have seen some proposals involving replacement of taxation generally with a flat tax coupled with a UBI - sold specifically as being able to still produce an overall progressive curve with the simplicity of a flat tax. While I think those are both positive things, I find this oversold - most of the complexity of taxation has little to do with brackets, and while the resulting curve is progressive it is only a particular family of curves and it's plenty possible that the optimal curves (by whatever metrics we assign) are not in that family.

I have seen some proposals that involve a progressive increase in taxation; these have been (in my recollection) fewer and less detailed than the first category - mostly, I expect, because they are a bit harder to analyze.


Ok, combining this with a flat tax does make sense.

> your next dollar earned still means more money in your pocket at any point

This is critical as well, I've known people who get trapped in welfare because they are so far into it that going to work isn't really advantageous.

Thanks for your input!


Yes the rich would probably pay more even with getting their basic income. The point of giving it to everyone is to reduce the administrative cost of figuring out who qualifies, and to get rid of "welfare cliffs" that give poor people a disincentive to earn more for fear of losing assistance programs.


Essentially, it avoids duplicating income-based computations across tax system and multiple benefit programs, and concentrates then in the tax system (once you have a mature UBI that has displaced other benefit programs.)

In this sense, it can be seen as an application of the DRY principle.


(Pardon the incredulous-sounding intro but...)

Actually you can pay for it. Exactly because any regular ordinary person can pay for it. Exactly because abundance is inherently free. (For the rest of the comment I'll redefine the label "you" to be one single ordinary person who wants to make a basic income happen IRL.) [0]

Abundance is free because it defeats the fundamental condition required for a scarcity-allocating market. That fundamental condition is: there is not enough for everybody. For example, try selling stray kittens in a neighborhood overrun with stray cats. No scarcity, no market price. In contrast, basic income requires abundance otherwise you have no business trying to universally share something you don't have enough of. Everybody can't have formula one race cars and red bottom heels. So just to be explicit:

With a universal basic income, you should only seek to share only those things you have in abundance. And since abundance is free, you are merely

  **seeking to share free shit**.

  **Abundance cycles**
A) Armed with the above perspective, you launch a form of self-sustaining loop called an abundance cycle. You take out a home equity loan for $25K. You use $15K of that $25K to build [1], or buy [2], a THOW ("tiny house on wheels").

B) You give the tiny house to a handy builder-type who redirects the savings in rent towards spending more time building, you guessed it, more tiny houses. You use the remaining $10K to cover materials for the initial THOWs that the builder builds from scratch.

  **Ride free**  
C) The next THOW is gifted to a mechanic. The mechanic brings transportation into the abundance cycle. D) Y'all build, then sell a third THOW to buy requisite parts/materials for the mechanic's transportation phase. E) Mechanic personage, freed from financial shackles of keeping a roof overhead, begins spitting out reliable autos restored from $3K jalopies and hoopties found on craigslist [3]. They alternatively build electric bikes [4] and velomobiles [5] if requested over a car.

  **Gotta eat**  
F) Your circle of three, all saving on rent and transportation, is now able to repeat the process to bring a grower into the loop. A house and car is gifted to a combination aquaponics [6] grower, diy soylent [7] mixer, mealsquare [8] baker and cricket powder [9] integrator.

  **Zap that**  
G) Next, the self-sustaining circle does its amoeba thing to encompass a solar installer. The installer works with the builder to produce, or retrofit, THOWs topped with solar panels [10]. The circle goes off grid if/when desired. Now you've got food, shelter, transportation, and energy all covered.

  **Highly contagious**  
H) You assemble the circle, affectionately calling itself the "amoeba initiative". It meets and decides to split into two organisms. I) The first organism focuses on gifting houses, transports, foods and electricities to as many people as possible as fast as possible. "Build two, sell one, gift one, repeat" is it's poorly-chosen motto. Gifts are first made to contagion vectors, namely giftees most able to produce more gifts.

  **Umm, water?**  
J) The second organism does the research [11] and entrepreneur thing to find the best way to cover the last and most difficult and most critical basic need, water. Strategically selected expertises seek to bring to the masses a Slingshot-like [12] water purifier. Delivering clean water from polluted urban water sources-- think Flint, MI --means full grid independence. Kowtow to ~~immorten joe~~ the water MUDs only when you want unnaturally relocated grass species growing unnaturally green.

  **No fossils**  
K) You assemble the AI ("amoeba initiative") again. You task them with extending arms to cover energy storage with air batteries the size of shipping containers, ala LightSail [13], which solves the weight and toxicity problems with time-shifting power from the solar panels. This in turn is crucial to weaning the last tenacious supplicants of the fossil fuel teat. You also task the assembly to polish cel-tower-obsoleting [14] laptops and mesh-connecting [15] smartphones, in order to deliver i) internet, ii) more importantly mobile data, and iii) most importantly carrier independence.

  **Better markets**  
L) While the AI is still assembled, you reluctantly but necessarily task them with a PRA ("public relations arm"). The PR arm demonstrates and clarifies, in preemption of forseeable change resistors, how freer and larger and healthier private markets result from all the free and scary sharing of abundance. A market economy will always precipitate from the phenomena that is the human appetite. By design the human appetite, even when fed all essential nutrients, is infinite and will always find more to want beyond need. "Built to crave perfection", "continuous improvement necessitates an infinite appetite", "trust good instincts" are among catch-phrases tossed onto the annoyingly named ideate wall that triggers your early escape from PRA's first session. Exhausted, the assembly decides to table whether to engulf the tailors' guild; apparently folk suffering about naked isn't enough of thing.

  **Zero net cost** (nee Shit's free yo!) 
M) One day, the AI throws a recognition ceremony. A sizeable surplus resulted from delivering requests for customization of the "basic" AI houses, transports, and recipes. From the surplus, the AI assembly symbolically pays back your original $25K loan. They hand you a wordy plaque that truthfully states "You did it for free" as the last line.

  **tl;dr**  
Because of something called abundance cycles, even you can cover the world's basic needs, eliminate missed human potential and consequently bend hyper-exponentially the curve of human progress. The 13 "unlucky" steps are just an "off the top of the dome" illustration. A serious treatment can do much better exactly because a basic income focused on sharing abundance is free to do, exactly because abundance is intrinsically free.

tl;dr($tl;dr) Because abundance cycles

  *p.s.*  
Seriously... imagine bending the curve of human progress for $25K. Recoupable. That is a fraction of the cost of 1 basic income trial or study. It's not my place to tell any advocates who do _actual better more_ work than myself to "Stop studying, Start doing", so maybe you can find a lesser hypocrite than myself to tell YC Research. ;-)

=====

[00] precedent https://www.reddit.com/r/BasicIncome/comments/3m8x3d/hey_guy...

[01] http://www.tumbleweedhouses.com/pages/plans

[02] http://www.tumbleweedhouses.com/products/amish-barn-raiser

[03] http://www.mrmoneymustache.com/2016/01/28/the-man-who-gets-h...

[04] http://www.mrmoneymustache.com/2015/08/31/electric-bike-revi...

[05] http://www.lowtechmagazine.com/2012/10/electric-velomobiles....

[06] http://www.mrmoneymustache.com/2014/10/20/aquaponics/

[07] https://diy.soylent.com/

[08] http://www.mealsquares.com/faq.html

[09] http://static1.squarespace.com/static/52524dbbe4b0b242f8ce4c...

[10] http://defyingnormal.com/blog/2014/08/26/tour-solar-setup-va...

[11] http://simonthorpesideas.blogspot.com.au/2015/05/science-and...

[12] http://science.howstuffworks.com/environmental/green-tech/re...

[13] http://www.lightsail.com/

[14] https://myriadrf.org/projects/novena-rf/

[15] http://www.technologyreview.com/news/516571/build-your-own-i...


Can't we just taper it "on" and see what the effects are? For instance, in the first year everybody gets 10% UBI, second year 20% UBI, etc. until 100% UBI.

If by year 10 the economy still functions as desired, we keep UBI. Otherwise we taper it off again.


The only way for this approach to work would be to define the metrics of "success" before starting this taper process. Also, it would need to be implemented in such a way that makes the process unstoppable.

Otherwise, it will be nearly impossible to taper "off" in the event of a failure.

It's easy to start giving people money that they never had, but once they have a taste, it's going to be hard to take it away.


I also think there's never been a pattern of having "success metrics" tied to laws. Laws are LAW. The best we could get using current legal technology would be a built-in expiration of the law. And if the people think it's good, then we'd vote for representatives who will retain it.


You lose support from many people if the plan doesn't include dismantling massive government agencies responsible for other support/giveaway programs.

You can't dismantle those until you're at the 90+% range of any reasonable UBI payout.


I'm one of the people who supports excluding people under the age of eighteen from basic income.


Most countries have dozens to hundreds of government programs (a dozen federal, a dozen per state, another dozen per city, …) to support parents of underage children. You'd get rid of a lot of administrative overhead by outphasing all of them in favour of including children into basic income (maybe at a fixed reduced rate if expenses are a concern).


No, I'd rather we raise the basic income for every adult enough to the point where the adult can support themselves and ONE (1) child at least for bare necessities like food and shelter.

For what it is worth, I don't think anyone sane would have kids to get money. In fact, you couldn't pay me to have children and raise them. I know what a shitty brat I've been and I'm sure if God or karma exists, I'll get an equally shitty child or worse I'll make a very shitty parent. (Parents: yes, people without kids also have nightmares about fucking up as parents)

Thankfully though many if not most people want children even though it makes no sense. This is good for me because these are the kids who will build and maintain roads, hospitals, and electric lines when our generation can no longer walk without a cane.

I don't think we need to encourage people to have many children. Those who want multiple children should find alternate ways to fund their lifestyle.

Edit: I assume above that basic healthcare for everyone exists with $0 out of pocket even if it is some couple's 99th child.


Unfortunately, the racist caricature of the 'welfare queen' who will go out of her way to work 24/7 for 18+ years for welfare benefits that equate to less than the pay of a part time job has been used to drive conservatives to the polls since the 1980's.

It's well cemented in the public consciousness as a result, so you'll see it trotted out whenever monetary benefits are proposed to help children.


The key is to arguing that it is a minor drain on the proposed system and appeal to the moral high ground. Don't deny all the good people help because you want to deny a few bad people help. There will always be leeches on any system.

No idea at all how to do that though.


>I know what a shitty brat I've been and I'm sure if God or karma exists, I'll get an equally shitty child or worse I'll make a very shitty parent.

Man, that kept me up many a night before my kid was born! She turned out to be amazing, though. Definitely didn't get it from me.

We had to rely on EBT (food stamps) and Medicaid when she was little and we were both in college. Medicaid was amazing, at least for someone who couldn't afford to go to a doctor for a decade or more beforehand, but besides that perk the welfare benefits for having a child basically balanced out the increased costs of raising one. Can't say how well this would scale with n+1 kids though.


Can see it now. Pop out more children, get more money. This incentives baby making. Which might actually be a good thing in countries with declining birth rates.


If you think it's so rational to have children for cash, you can go do it. I've never met anyone who actually thinks it's a good idea. It's always a hypothetical to malign the poor. Because people who malign the poor know exactly how poor people think, or something.


> I've never met anyone who actually thinks it's a good idea.

I see you haven't met my mother. Count yourself lucky.

Those people exist – there's some quite generous child benefit programs in some EU countries, and the math seems to be simple –, but they're far more rare than the "OMG WELFARE PARASITES" would want you to believe. (And in many cases child protection agencies intervene and get the kids off to safety, because as it turns out, people using kids as money presses tend to have a screw loose or five.)

And honestly, I don't see the problem. People get kids for all the wrong reasons, people abuse their kids for all the wrong reasons; that won't get significantly worse. At the same time, fewer kids will grow up in crippling poverty and have their lives ruined before they turn 10 because their parents can't afford to give them any useful education outside the bare minimum provided by public schools.


Do you really not believe that some people would start having children for the sole purpose of income if there was suddenly a program that provided people with $10,000 per year in cash for every child they have?

Having children for financial benefits is a real thing.

It's not just something people accuse the poor of for the purpose of hate (although it is commonly used in such a way).

It's usually not as direct as "let me have this kid so I can get my rebate check", but it's certainly a consideration for many people who are poor. The mentality is more along the lines of "I can't make it by myself, but as a family, we might be able to sustain ourselves".

Most people are aware that it will probably end up costing them more in the long run, but people do crazy things in desperate times.


And the bad thing is, that it's in general not the cleverest set of people that make extra kids to get a higher income. Overall, the more educated people are, the smaller their families are. So this will effectively reverse everything that Darwin claimed: no survival of the fittest, but victory by the 'stupid' by overpowering the educated...

Edit: yes, I do, but I am unsure if it will stand the test of Hacker News readers :)

https://www.jstor.org/stable/2172480?seq=1#page_scan_tab_con... http://www.iqtestexperts.com/iq-family.php


Do you have a citation for your belief?


This runs smack into Bismarck's Welfare/Warfare State idea - the "excess" were cannon fodder for use in further conquest.


You do realize that there are people less than eighteen years old who are parents ?


So? They will get the money when they are 18, the rules work the same way for everyone.


Ah - and that is where the problem starts...

What I've picked up from 'rule-making' so far is that rules in general are OK for 80% of the users. It's the 20% that is the exception (to the rule) and that requires additional rulings. And then the problem starts: of this 20% again only 80% is fixed by the extra rule, so more rules are needed. Then the third rule to fix things actually allows some to profit extra, so... well, you get the idea. Wherever there are rules, some people suffer, and fixing it breaks things...


This is not an excuse to fix problems.

You're seeing pitfalls in rolling this out, that's great, we can fix those. But saying it shouldn't exist at all (like many commenters are in this thread) because of potential problems here and there is nothing but defeatism.

If you don't like it, attack it at the principal. If you do like it then let's make it happen. None of this in between bullshit.


Sorry, I have to clarify myself a little here. Until single payer healthcare becomes a reality, I would like to see an expansion of WIC from at risk mothers and infants to all mothers and infants and children under five. I know it sounds a little sexist but I think the qualification and means testing brings a little stigma to WIC which shouldn't exist.

It is not just money for formula. WIC has a potential to be so much more to new families. I know I sound hypocritical now but I'd like to think of it as being practical. Sorry, I'm not very articulate.


How about children are included, then provide X% to parents for child care expenses, and X% to a fund that the child can't access until 18. That way we don't have to do free higher education. Public universities can expect each student to have close to XXXXX dollars saved away and set tuition accordingly.


Hmm... So with everyone getting free money, including the children, there is no need for a father to take care of the family when he decides to diforce, right? Afterall, the family gets a good deal of income even when daddy is gone. So marriage will no longer be a bond forever, it will be a bond until something nicer comes along since there is no financial penalty anymore: no pressure to stay together for the kids. Mom and Dad can simply split up and move elsewhere. Wonder how that incease in broken families works out for the future kids...

Edit: my mother had me checked - I am not insane. Anyway: while you are right that keeping two unhappy people together might be much worse than them splitting up, I can imagine that a big organisation like the church (any church) will be a force opposing this idea once they figure this one out.


Having economic shackles as the only incentive to keep two unhappy people together for longer than necessary seems like a terrible environment in which to raise happy and healthy children. Having experienced that as a child, it was miserable and set me up with unhealthy ideas about relationships.

Might as well make divorce illegal again. After all, something nicer might come along.

If the only thing holding your marriage together is needing to pay the bills or a judge, being forced to stay together only serves to make people like you feel righteous.

Your comment makes me wonder about what other unhealthy ideas about relationships you want to force upon others. Perhaps you should spend less time on r/MRAs and r/TheRedPill.

> So with everyone getting free money, including the children, there is no need for a father to take care of the family when he decides to diforce, right?

Having to pay child care costs and alimony above the poverty line are things that exist now and will have reason to exist even if a BI is implemented.


Equally snarky:

Is a family that's only together for the money worth keeping around?


It's worked for my family in a slightly different context.


> So with everyone getting free money, including the children, there is no need for a father to take care of the family when he decides to diforce, right?

It certainly would mitigate the social harms caused by deadbeat abandoning parents, but since neither child support nor alimony are currently limited to the amount necessary to provide basic survival necessities, a UBI mature enough to provide basic necessities would not seem to be a basis for eliminating existing child support and alimony provisions.

Obviously, even with existing formulas, the fact that more of the family's income wouldn't be leaving with the prime breadwinner would reduce the amount of support and alimony orders.

> So marriage will no longer be a bond forever

Marriage, in the US, is only a "bond forever" now to the extent that the parties decide to make it one; divorce is readily available, and frequently chosen.


Sooooo, what you're saying is that a significant number of families are currently together for economic rather than emotional / social reasons? I (a) find that somewhat difficult to believe and (b) find that somewhat troubling if true. (disclaimer: I'm in a love-filled marriage and my partner and I have decided to have no children)

Honestly, I'd rather see families split up, if by "split up" you mean "find independence from someone with whom you do not want to spend your life". There's levels here- children are a responsibility that someone needs to shoulder (and emphatically not just Mom), but if the alternative right now is being trapped economically in an emotionally traumatic relationship, that's not good either.


You can be more precise by only excluding actual dependents.


Ah, this is a great point. Yes, I agree. My point is nobody should collect basic income for anyone else. The prison system shall not collect it on behalf of prisoners. Creditors (even the IRS) shall not garnish it. No one collects it in behalf of detained/imprisoned/kidnapped people.

There shall be no back pay. If you could have gotten basic income but didn't accept it last year, you can't get that money this year. (You might still get this year's distribution.)


How long until prisons start charging room, board, and security fees that just coincidentally amount to the UBI payment?

For "true" criminals, I believe that's economically fair, but it raises terrible questions about incentives for the guy caught with a joint.


Just reduce the amount. Start with any no-strings-attached amount and climb from there.

As soon as you give people as little as 100$/month you will see some people tweeting about all the tricks they found to make it enough. Of course it wont be enough to bring most from poverty and those who can live off that will often start off some possessions, but the goal is to lower the bar of entry into that situation.

Only under these conditions can we transition from the bullshit-job economy we have and make sure that the general automation of production will benefit most instead of a few.


You forget that the thing voters want and the law that hits the books are often very different. By the time any measure gets out of Congress, it will, by necessity, have been carved up and divvied out, with all sort of exemptions and special cases and kickbacks.


>This article says it's talking about a universal basic income, and makes the usual point that a completely universal, no-strings-attached income is simple to administer, doesn't have poverty traps, etc.

Does anyone advocate giving it to everyone?

What about children? Does a child get the same as an adult?

What about non-citizens who are in the nation legally?

What about non-citizens who are in the nation illegally?

What about citizen children of non-citizens who are in the nation illegally?

There are consequences to saying yes to any of these we need to think through, but perhaps more importantly, is there even a chance of passing some of these (could you imagine the Republican attack on answering yes to either of the last two?).


The only feasible approach in my opinion:

[What about children? Does a child get the same as an adult?]

Yes, but the funds are stored in an account and are inaccessible to them until a certain age is met (or they qualify as an independent, similar to how the FAFSA (doesn't) work).

[What about non-citizens who are in the nation legally?]

No.

[What about non-citizens who are in the nation illegally?]

No.

[What about citizen children of non-citizens who are in the nation illegally?]

Yes.


On the issue of children, non citizens, etc., my personal view of the best way for a UBI to work are:

> What about children? Does a child get the same as an adult?

Maybe; if so, the child's allotment goes to the legal guardian (and, like the guardian's own UBI, is treated as income for tax and other purposes), but you also eliminate child-care related tax deductions and credits.

> What about non-citizens who are in the nation legally? What about non-citizens who are in the nation illegally?

I would lean toward saying citizens and legal permanent residents (green card holders) get UBI. Others do not (note that this includes non-immigrant work visa holders, like H-1Bs), though in the odd case of a non-UBI-eligible (but legally present) parent with a UBI-eligible child, the parent would be eligible to draw the child's UBI, just as a parent with their own UBI eligibility with a UBI-eligible child would.

> What about citizen children of non-citizens who are in the nation illegally?

That's...trickier. My preference would be that the citizen child would get an allotment, but that the guardian would have to normalize status to draw that allotment. The details of that are more for a discussion of immigration policy than UBI policy though.

An even trickier question is non-resident citizens, and particularly non-resident U.S. citizen children of non-resident non-citizens.


A UBI (usually, that "unconditional" not "universal", though "universal" seems to be becoming popular among outlets that are newly jumping onboard the idea) is distinguished from other social benefit programs in not being means-tested or behavior-tested. Obviously, there has to be some bounds on who is qualified (everyone on the planet? Probably not. Adult citizens are usually the narrowest category suggested, all legal residents regardless of age or citizenship usually the broadest. Any of these are still UBIs, so long as they aren't means- or behavior-tested.)

But, the big problem is the idea that the UBI should initially be sufficient to lift everyone out of poverty. The immediate goal should be to have a UBI which reduces poverty and addresses the fact that capital increasing takes the reward of economic growth, rather than it being broadly distributed. The long-term goal should be to displace and go beyond existing means-tested anti-poverty programs in lifting people out of poverty, but the best way to do that is to build a system that grows naturally.

As an example: eliminate preferential treatment of capital income in income taxation, maintaining otherwise general structure of the existing progressive income tax system, and set aside a portion of the total income tax revenue equal to the initial increase in tax revenue for the "Common Welfare Fund".

90% of the new money in the fund is distributed as UBI by equal division among qualified recipients (e.g., all citizens and LPRs, if that's the group defined to receive the UBI), the remainder is retained as a stabilization fund (with returns on the stabilization fund treated as "new money" in future years, and rules providing for some distribution from the stabilization fund to current benefits to reduce calculated benefit declines.)

Each year, reduce the actual minimum hourly wage from its nominal level (which I'm presuming gets inflation-indexed before this) by 1/2000 of the annual UBI level (for wages covered by overtime mandates, the minimum overtime wage is calculated first, and then reduced for the UBI) -- over time, the UBI displaces the minimum wage.

Other (e.g., means-tested) benefit programs aren't directly eliminated (immediately), but income from the UBI is treated as normal income for both income tax and benefit calculation purposes, so (assuming economic growth such that real tax revenues pre capita increase faster than inflation), even with eligibility criteria indexed for inflation, growing UBI will reduce the proportion of the population eligible for any such programs, eventually to 0 as the UBI crosses the maximum threshold for each program, allowing the programs to be retired.


> Yes, you can reduce the amount paid out by making it not a universal basic income scheme any more. But that rather misses the point.

If you consider as a method to introduce an income floor it makes sense. At 100k+ I really don't need any sort of basic income. A senior citizen getting paid social security is already getting the money out of that bucket (arguably that bucket should be phased out and everyone should be entitled to their basic income instead, perhaps with extra breaks for seniors).

I really don't support just giving out 30k a year to everyone. I can see the logic in giving out money to get everyone to that level (or whatever sensible number). I also think it's sensible to say that the benfit doesn't just go away if you start a job making 35k a year, but it does start to reduce as your income goes up. This gives you an incentive to work, even if your job isn't that high paying, but makes the program cheaper by not giving out money to people who really don't need it.


It's not just wealthier people who will be worse off - it's everyone.

Basic income is known to create a large disincentive for work. In previous experiments (Mincome) labor supply dropped by about 10% - double what happened during the great recession.

This means that fewer working mothers can find child care, fewer laborers to mow your lawn, fewer nurses, fewer teachers, etc. No matter how much money you give to people, fewer services provided makes us all become poorer. That's simple arithmetic.


> fewer working mothers can find child care, fewer laborers to mow your lawn, fewer nurses, fewer teachers, etc.

First of all, even if the people in positions like this were only working for sustenance and UBI provides it for them, it doesn't mean some wouldn't want to continue working to make even MORE money. UBI is a baseline, not welfare. If previously a lawn mowing job was only enough for rent and food, maybe now with UBI it'd be enough for rent, food, and the occasional dinner and a movie. Ain't nothing wrong with that.

But you're right, at least some people would definitely completely exit the work force. Well, that just means the salaries of the rest would go up. Simple economics. Does that mean that some working families can no longer afford to pay a new immigrant bottom dollar to mow their lawn and instead have to pitch in themselves? Maybe so. Is that so bad.

Okay, you say, but what about those working mothers that are barely making enough money to be able to afford the most basic child care while they make their income? Good news - UBI also helps THEM too so either they no longer need to work if all they're doing is getting by to keep a roof over the child's head, or they have enough extra to pay for the increase in child care.

I'm not saying "don't worry about, it'll all sort itself out". This is a very complex policy with millions of consequences to our societies - intended and unintended. A lot of research must be done, and also experimentation. But to say that with UBI everyone would be worse off is ridiculous bordering on propagandistic.


Your arguments are interesting, but they hold only in systems with artificial inflation controls. UBI increases the amount of money in the economy, which has the same effect as simply printing more, thus the value (scarcity) of the money decreases. A poor mother without UBI will be a poor mother with UBI because costs will simply go up, something you acknowledge.

As costs for services go up, costs of products go up as well. For example, if I'm in the beer business, and the cost for me to bottle a single beer is $.10 per bottle on my assembly line. If labor costs increase under UBI to double that ($.20/per bottle) (because cheap labor is now harder to find), I must increase my sale price by at least the same or go out of business.

Now somebody buying my beer has to pay $.60 more per six-pack, potentially wiping out that fraction of new income UBI was providing them.

The government could come in and say "the price of beer may not increase at all" and set some kind of price control. So now I need to cut $.60 of cost somewhere else in my product.

But wait, it gets worse!

Bottling isn't the only cost for me to make and sell my beer.

- Grain harvest is more expensive - increasing my cost

- Transport costs are more expensive - increasing my cost

- Blank bottles are more expensive - increasing my cost

- Brewing is more expensive - increasing my cost

and so on...

So to prevent inflation I have to cut costs everywhere else. Cheaper glass, worse grain quality, worse brewing methods, worse water supply, and so on. If I can't balance the cost equation I simply go out of business, decreasing the supply of products in the economy and increasing unemployment.

In effect, nobody gets paid more because everybody gets paid more, which drives up prices, which is the definition of inflation. If inflation is artificially capped by price controls, then product quality either goes down, or I go out of business.

It's basic economics.


Your entire theory is based on the idea that the labor market will decrease AND it will decrease so substantially that all markets will have to increase prices to a 1:1 ratio with the new UBI.

Sounds more like fantasy than economics.


Why wouldn't labor markets decrease? Isn't that the principle idea floating by UBI advocates entirely throughout this thread?

https://news.ycombinator.com/item?id=11619803 https://news.ycombinator.com/item?id=11619677 https://news.ycombinator.com/item?id=11619716 https://news.ycombinator.com/item?id=11619722 https://news.ycombinator.com/item?id=11619700 https://news.ycombinator.com/item?id=11619538 https://news.ycombinator.com/item?id=11619598 https://news.ycombinator.com/item?id=11619476 https://news.ycombinator.com/item?id=11619477 https://news.ycombinator.com/item?id=11619730

> AND it will decrease so substantially that all markets will have to increase prices to a 1:1 ratio with the new UBI.

No, all money will devalue with the increase in supply and increase in labor costs. That's pretty basic economics.

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


> Why wouldn't labor markets decrease? Isn't that the principle idea floating by UBI advocates entirely throughout this thread?

They will, and I never said they wouldn't. The problem with your "theory" is that they are going to decrease at a 1:1 ratio with increase in labor costs from the UBI resulting in an overall "0 gain" from the UBI.

> No, all money will devalue with the increase in supply and increase in labor costs. That's pretty basic economics.

True, but that's not the argument you are making. You are arguing that nobody will be better off because the decrease in available labor will be entirely offset by the increased costs in goods/services based exclusively off of labor losses from the UBI.

That is a nonsensical argument. There is ZERO evidence to support it. The overwhelming likelihood is that the price goods will increase, but no where near enough to offset the UBI. The remaining difference in the economy will come from wealth redistribution.


> The problem with your "theory" is that they are going to decrease at a 1:1 ratio with increase in labor costs from the UBI

Actually, I never said 1:1 ratio with UBI. I just claimed the labor markets would decrease and monetary supply would increase.

> True, but that's not the argument you are making.

No, that's exactly and precisely the argument I'm making. I'm not an opponent of UBI for wishy washy wealth redistribution reasons, but because of the lousy labor markets it would create and the inflation it would create.

The models for what would happen under UBI are not clear, but there are not positive economic models under a UBI scheme by major economists.

UBI proponents have failed to provide any model whatsoever and fall back on vague handwaivy feelings that seem to always only show extremely positive outcomes with no possible negatives and a reliance on magic automation technology that doesn't exist.


> Actually, I never said 1:1 ratio with UBI. I just claimed the labor markets would decrease and monetary supply would increase.

But that is what you said:

> In effect, nobody gets paid more because everybody gets paid more, which drives up prices, which is the definition of inflation.

Emphasis is mine. That's a pretty clear indication that they will entirely offset each other.


I 100% agree with you, but unfortunately, you're talking to technology people. The amount of ignorance when it comes to economics on HN has led me to almost never even talk about it.


Yeah, same argument raises every time is time to discuss minimum wage.

Fact is, labor is not 100% of the cost.

If UBI makes HALF of the worforce quit -which is not very likely- salaries wouldn't go up 100%. So it's not a 1:1 ratio.


UBI would only cause inflation if 1) it is not covered by taxes, 2) production does not increase in proportion, and 3) debt does not decrease in proportion. It is extremely likely that a combination of 1, 2, and 3 will keep inflation in check. Ideally, 3 would dominate, because that would greatly dampen the business cycle (i.e. the boom and bust cycle).

The potential for number 3 is the reason I think UBI is a macroeconomic necessity. Currently, our monetary system is based almost entirely on debt; only if that debt (private+public) grows is there an incentive to invest and further grow the economy. When the country and its citizens reduce their debt load, the currency deflates, which distinctivises investment and growth---a depression. With UBI, we could potentially replace this system with a much more stable and robust one, while simultaneously eliminating poverty and poor working conditions.


It's currently believed by most economic models that debt would wildly increase in proportion as there's few tax schemes that would tax the wealthy enough (and in the right ways) to make it work. For example, even a WW2 level progressive income tax scheme would not provide enough money because the wealthy have learned how to acquire wealth without it being their personal income.

Capital gains taxes only occur if money is made from investments, and there's lots of wonderful ways to show losses or get around that kind of tax system by reinvesting or working the books over to show losses.

You don't want to tax asset ownership too much, because then you'll be taxing people's stock and bond ownership and their retirement accounts and it produces a disincentive to invest in businesses that would need that money to produce the kind of automation revolution that would make UBI work (your #2). A great many assets also only have value and not intrinsic worth. For example, Donald Trump is on record saying that he believes his personal fortune can vary by billions of dollars on any given day given how he "feels" about his brand image. We all know about VC valuations. Do we tax paper billionaires who are pulling down $100k in real income? How can they possibly pay that?

Consumption taxes have been demonstrated to have an outsized impact on the poor.

and so on.

A notion that "well we'll just close all the tax loopholes to make UBI work" is quite frankly a fantasy.

I agree that UBI would stabilize boom bust cycles, but it's not clear that that's a desired end-state. Boom cycles are often when major innovation happens.


Labor should get substantially cheaper though. As it stands, people will only accept a job if it covers all their living expenses. Even if you offer to pay enough for half their bills, they'll keep looking for a job that can pay all their bills. With most of their expenses covered by the government, they would be willing to work for a lot less money than before - assuming they're willing to work at all.


I am not sure your argument does not suffer from the lump of labor fallacy. But it's not like there is a coherent definition of inflation, much less a working model for it.


There's actually very good models for inflation. They're basically the models the entire global macro economy is run on. They about as good as weather models, and sometimes they don't work well, but they're generally pretty good at this point.

e.g. When the Fed raises and lowers rates, it's using inflationary models to inform that decision. With a desired goal of sustainable and controlled minor inflation.


What if we phase UBI in with increasing automation. Maybe the opposing problems caused by both will cancel each other out?


Let me know when we have sufficiently advanced AI to complete most of the jobs on "Dirty Jobs" and it might just could work.

An amazing amount of work is not mindless factory work.


How many bottlers are running on such razor thin margins?


All of the ones that operate in a competitive market.


Why is it the bottler's job to absorb the impact of the UBI out of their profits?


But you're right, at least some people would definitely completely exit the work force. Well, that just means the salaries of the rest would go up. Simple economics. Does that mean that some working families can no longer afford to pay a new immigrant bottom dollar to mow their lawn and instead have to pitch in themselves? Maybe so. Is that so bad.

Yes, it's bad because now we are all poorer. We have fewer goods and services to go around. The fact that salaries (paper) go up doesn't change this fact.

Okay, you say, but what about those working mothers that are barely making enough money to be able to afford the most basic child care...

I'm referring to highly productive women who should be designing self driving cars, automating business processes, and other such valuable things. Instead they are stuck at home changing diapers.

We, as a society, lose the value of their output.


If someone's that highly productive they'll still be able to earn enough that going out to work would make economic sense. Or they could have the fathers change the diapers.


If someone's that highly productive they'll still be able to earn enough that going out to work would make economic sense.

This is absolutely true in a free market with no labor distortions (BI, tax, etc). However, we already live in a world with distortions (taxes, welfare, regulations) that drive a wedge between economically optimal and actual choices. How would adding an even bigger wedge help?

Also, due to women's sexual choices, most likely the father is also highly productive. So your "fathers change the diapers" is not really a viable solution - it just means you lose his output rather than hers.


Actually I can't imagine anything closer to the "free market" utopia than a labor market with basic income.

The current market is not free because people are forced to offer their services if they don't want to starve. That's a huge distortion that you would remove with basic income.


you really don't understand what a free market is then. i would suggest any econ 101 book


I don't think it's even true without market distortions. The whole point of BI is to give people without adequate income some means to support themselves. In other words, it changes the compensation to our hypothetical woman from $0 to $X,000.

At the margin this will certainly cause people to drop out of the workforce. Heck, as I get closer to having enough assets saved to be able to require, I'd probably choose the pull the trigger on that decision sooner.


However on the other side it should be easier to remove the welfare cliffs that exist in current systems. In the UK there are points where the marginal tax rate is iirc ~75%. In the US there are points where you end up with less money if you work more.

So we may be removing other large disincentives at the same time.


I wonder how big of a basic income you could pay out while keeping the distortion from the basic income about the same size as the distortion from the replaced programs.

Later: Which is not intended as more than hand-wavy thinking out loud. Regardless of the impact, a basic income is a political pipe dream in the US. More immediate improvements in quality of life might come from better aligning incentives in the healthcare system and fixing cliffs in existing programs.


You have been arguing against basic income for years now, and with some really good points[1], but I think you consistently miss the main attraction of the idea to the HN crowd.

Many here believe that if people weren't forced to work for income, they would be doing things that are more valuable but also more difficult to monetize (at least initially but perhaps generally), like open source development. There is an underlying belief that vast creative talents are untapped or wasted because of the need to work for money. It's the intellectual's dream lifestyle. One that used to be possible for writers and academics.

Other reasons are largely an afterthought. That's why basic job for example is not a convincing counterargument despite the numbers. This is not really about helping the poor, that would be an auxiliary benefit at best.

[1] https://www.chrisstucchio.com/blog/2013/basic_income_vs_basi...


Why would anyone clean toilets when they could write/paint/sleep all day?


Because you don't really need a creative outlet, the toilet cleaning job now pays double what it used to and combined with your UBI you can save enough money every few weeks to hit up Vegas, buy a new sports car or fund your wild consumption.


Because doing those activities in what is still poverty isn't fun or fulfilling.


It depends on what it pays, remember even though your basic needs are met that doesn't mean you have zero aspirations.


You're basically asking why would anyone want to make more than the minimum; if you think about that for 10 seconds, the answer would be obvious to you.


Can you do a back of the envelope calculation to figure out how large those "more valuable but also more difficult to monetize" effects would be?

As I noted in the blog post you cited, most of this discussion is just meaningless verbiage. No one even attempts to quantify the the effects they claim are so important. (In the HN comments on that post, many people suggested such effects; the minute you crunch numbers they turn out to be tiny.)

It's the intellectual's dream lifestyle. One that used to be possible for writers and academics.

It still is possible - go live in a rural area, consume very little, and survive with bad internet (still vastly better than the no internet of previous eras). People just don't like to do it because of the low status it entails, and because they've grown used to modern consumption that they'd need to give up.


No one even attempts to quantify the the effects they claim are so important.

Perhaps I didn't phrase that strongly enough but growing the economy or making it more efficient is not the point. It's at most a rationalization.

go live in a rural area, consume very little, and survive with bad internet

That's not a realistic advice. It's extremely difficult, puts having a family largely out of reach, and places you away from potential collaborators. Even Joey Hess[1][2] has to resort to crowd funding and grants.

[1] https://joeyh.name/

[2] https://usesthis.com/interviews/joey.hess/


That's not "realistic advice", but that's what people did back in the day.

Also, the only reason it "puts having a family largely out of reach" is due to women's sexual choices - most women prefer a man who lives a higher status lifestyle. Sorry, but you aren't entitled to a wife; if women prefer a different lifestyle, that's their choice.

And again, what fraction of people who stop working in the for-profit economy will actually be as productive as Joey Hess?


No, that's not what people did back in the day. Those who managed lived off advances from their publishers, inheritance, sponsors, or Church sinecures. It's not possible nowadays. You need to promote your works and it became much less socially acceptable.

It's a weird observation that going off the grid would price you out of the dating market. Plenty of "starving artists" and outright bums have more success with women than salarymen.

And again, what fraction of people who stop working in the for-profit economy will actually be as productive as Joey Hess?

That's the direct counterargument to most BI hopes. Of course, it's very difficult to verify empirically and mostly depends on what you already believe about human nature. We don't even know if Joey Hess is more or less productive than he would be otherwise.


Have you ever lived out west?

It's literally how it was done. Go west, steal some land from whatever non-white people are there. Have many babies and bootstrap civilization on the empty land.

yummyfajita's is missing that this isn't possible now because we're out of land to steal, and the state gets pissy about building a log cabin in national forest service land.


Non-empirically-validated numbers obscure a lot more than they clarify. The scarmig comment you link to shows that almost all of the effects you included were irrelevant and this whole exercise was worse than useless. Using this much precision at this level of accuracy can only ever mislead.


It's not about precision, it's about knowing if we are even in the ballpark. And it's an incredibly valuable exercise.

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

It's also about knowing what facts need to be true for a BI to work. Then we know what facts we need to verify to determine if it's true, in contrast to all the meaningless verbiage in this thread.

Also, Scarmig's comment was quite valuable. It showed exactly what the driving effect is - that's precisely why you should do a back of the envelope calculation. And as all the non-quantitative comments show, it's also why any comments suggesting an effect but not doing such a calculation are worse than useless.


> Also, Scarmig's comment was quite valuable. It showed exactly what the driving effect is - that's precisely why you should do a back of the envelope calculation.

And the driving effect turned out to be a disputed premise that we already knew about from our directional, non-quantitative discussions. The quantitative side is just a meaningless overcomplication (the monte carlo part especially), especially when none of the parameters was empirically validated. You wouldn't value a company you were thinking about investing in that way.

A quantitative examination would be valuable if we agreed on the premises, or if we disagreed on conclusions but weren't sure where the disagreement on premises that was driving this was. Neither of these scenarios is the case for basic income. We know what the questions under dispute are; it's time for empirical experiments.


You wouldn't value a company you were thinking about investing in that way.

That's exactly how you value an early stage company - back of the envelope calculations and monte carlo.


I'll have you know that money itself tends to disincentivise work for a lot of people. In this economy, monied relationships are too often wage slavery. People think that they can pay me to work on something I don't love. You are sitting here talking about people mowing your effing lawn. Are you kidding me? If you aren't gonna do that yourself, why in the dear beloved earth should you expect some stranger to do it except out of either good will or fear? Sure, you can get some deeply fearful stranger to sit in the same building day in and day out, doing your dishes and pouring you coffee, putting their own individuation on hold for your career, just to have basic economic security. But in the big picture, a whole world of people out of touch with what they love is bad for the planet itself.

Many people never get a chance to discover a passionate relationship with work. Collectively, when we kick the habit of forcing people into doing things out of fear (with money) means that a lot of people are gonna be feeling like fish out of water. Generations of slaves don't just jump out of their chains eager to get working again.


So much for sanitation. How am I going to get someone to pump out my septic tank, except to pay him some amount that is sufficient to compensate for the displeasure of the job?

Believe it or not, there are jobs that need to be done, but nobody in the world has a passion for them.

Employment isn't about fear or force. It's about two parties agreeing that they each come out better after the transaction of selling labor. I may not love what I do every day, but the sacrifice is worth it to have the benefit of the salary and other benefits that my employer gives me. And she probably isn't enamored with having to give up that money to pay me, but values the productivity I deliver (when I'm not on HN) more than that money.

The ability to trade labor for goods or money is the single greatest invention in the history of humanity. Without it I'd have to grow my own food and fibers, weave my own cloth for clothing (in the house I had to construct myself), sitting in a dark drafty room wishing that some altruist would come cure my illnesses.

But instead, we found that people can decide they value one thing more than another, and engage in voluntary commerce so that they can trade in kind.


Employment is in fact often about fear or force.

I work a day job because the state will literally show up with police and guns if I went out into the mountains and lived off the land. Therefore unless I want to starve I must work. Even when it's on shit I hate.

I am lucky enough to have a skill that is sufficiently valuable that I can survive despite disabilities making it difficult to work.

If you imagine that the labor market is free because it happens to mostly be positive sum, you haven't lived at the bottom of the labor market for any length of time.


the state will literally show up with police and guns if I went out into the mountains and lived off the land

Why? Is it someone else's land that you're trespassing on, using up their resources, hunting their animals, etc?

Shall all of us who don't feel fulfilled do the same thing as you propose? When you hurt yourself and get an infection, are you going to crawl back out of the woods and expect there to still be other people to care for you, supply your antibiotic, and yes, clean your bedpan while you recover? What right to you have to expect the bedpan cleaner to serve you?

unless I want to starve I must work.

Who do you expect to plant, harvest, and distribute the food you want to eat?

When you want something from someone - food, medicine, etc. - you're going to have to offer something in return, else why should they provide it? For almost all of us, our labor is the product we can offer in trade. Only by all of us making this tradeoff does society survive.


>When you want something from someone - food, medicine, etc. - you're going to have to offer something in return

What if the value of someone's labour is not enough for the things they need to survive? There's no function of the market that ensures it will be.

At some point, you either have to help people out without anything in return, or choose to let them die.


What if the value of someone's labour is not enough for the things they need to survive?

Sure, we can make a moral argument about that. But that's not what this branch of the debate is about. We were debating the proposition that "money itself tends to disincentivise work for a lot of people" and employment is force.

But since you bring it up, my biggest concern about BI is along the same lines as your moral question. Suppose that every year we hand out $X,000 to each person. Some people are going to waste that on booze, gambling, etc., and still be left with nothing to eat. What's our moral obligation to those people?


> What's our moral obligation to those people?

I think we can all agree it to be none.


> Why? Is it someone else's land that you're trespassing on, using up their resources, hunting their animals, etc?

Yeah. Just about every bit of land is owned by someone. In order to have my own land to live off of I need to produce some income to pay property taxes, lest the state confiscate it from me.


And it's not a question of 1% owning "too much", either. A hunter-gatherer life is hideously inefficient. There isn't enough land on Earth to support even a small fraction of the population living this way.


> How am I going to get someone to pump out my septic tank, except to pay him some amount that is sufficient to compensate for the displeasure of the job?

Fortunately, given your basic income in this scenario, you have more money to do so!


How do you know the guy who mows my lawn isn't passionate about it? He helps beautify people's property and takes lots of satisfaction in that.

Why are passion projects only ones that have no economic value?


I said that the guy mowing the lawn is either doing it out of "good will" or "fear". The way I read the post I was responding to was: if UBI existed, less people would be forced into doing stuff they didn't want to do, so there would be less people to mow my lawn because a lot of people wouldn't mow my lawn if they weren't coerced into it therefore we shouldn't stop coercing people into mowing my lawn cause that would mean it would be more expensive and not as many people would be around to mow my lawn.


Except not if my lawn care cost goes up too much, I'll just fire my lawn guy and do it myself.

I'm not holding a gun to my lawn guy's head to coerce him in any way. This is what he chose to do to make money, in the face of all other money making opportunities.

If he took another job or income source tomorrow, and simply didn't show up again and didn't let me know, I have no power or authority to get him back behind a mower.

If he's doing it out of fear, it's not fear I'm placing into him. He has plenty of other ways to make money, so if fear of doing those jobs is what's driving him into the lawn care business, then nobody but him is responsible for cultivating that fear.

There's nothing wrong with mowing somebody's lawn, he beautifies my property, saves me from working in the heat, and in exchange I pay him slightly more than what he asked.

There's innumerable other things he could be doing for money, but he chose this one. Since he's good at his job, reliable and reasonably priced, I and my neighbors benefit from his choice and he benefits from having blocks of contiguous neighbors all hiring him.

Bonus, he even has two employees who he keeps in the labor market.


You're might not be holding a gun to his head, but at the end of the debt collection chain there is more than enough coercion and disenfranchisement to keep people doing things they don't want to do.


you know, most people in the US are capitalist. if you want to push the idea of a basic income, it's probably not a good idea to get all communist-y and stuff.


because pointing out the non-state chain of force is so much more out of fashion than the "taxes=theft" of the ur-capitalist rand worshipers?


ooh boy, you have a lot to learn about sales and marketing of ideas.

but i guess that would make sense, .. since.. well, you know.


There will always be work that some find unglamorous but has to be done. I doubt that garbage collectors see their job as a higher calling or a passion, and yet without solid waste collection society would literally collapse.

Somehow, you're assigning lesser intrinsic value to lawn mowing than you are to (eg.) jobs in STEM. Society may have assigned a lesser monetary value to it, but that's a function of supply and demand, and not a suggestion that the job is somehow "lesser" in some way.

It doesn't make sense to judge another person's job decisions using your own value system. Many (perhaps even most?) people see their job as a means to an end -- a way to make money to do the things they love. That's a perfectly reasonable and honorable way to live your life.

What we do need is equal access to the means to do other things. If you're interested, capable, and willing to have a career in (eg.) STEM, you should be able to do so without having to fight the socioeconomic conditions into which you were born.


I bet you anything there are people who love collecting garbage. Driving huge trucks, being in tune with the scale of human life, seeing the guts of the city, routine... some people love that kind of thing. Where I'm from, there are people who go around picking up trash at the local park out of personal fulfillment in their spare time. They enjoy making the park beautiful.

Where do you read me assigning more value to STEM work? You're totally injecting that into what I wrote.

On the contrary, I'm saying that all work can be fulfilling, not just STEM work. But all work can also be degrading if it forces people to compromise themselves unreasonably.


I think the mere fact that someone knows they don't need their job to survive can help them enjoy it a lot more.

Also I think a side effect of Basic Income will be greatly increased quality of jobs, because I'd imagine for a lot of jobs, making them less shitty is a lot more attractive for the cost than a higher wage.

For example, a lot of service jobs have polices of putting up with extremely obnoxious behaviour, because it marginally increases revenue at the expense of the employee's sanity, which is effectively free. But if you're not quite as desperate for a job, you're much more able to price that in, and choose to work for less at the restaurant next door, that lets you tell jerks to GTFO.


I meant the STEM work as an example (hence the eg.) -- sorry if I wasn't more clear. You could just as easily substitute any "skilled" profession -- medicine, etc.

All work can certainly be fulfilling, but more because of the reasons I described (it's a means to an end) than the reasons you're describing. Certainly, people shouldn't be forced to take particularly degrading jobs when they don't want to in order to survive. But do they find it degrading, or do you? Those are two very different things.

It's impossible that there are enough people in the world passionate about garbage collection -- allocated perfectly across the correct geographic regions, mind you -- to fill all of the available positions.


> It's impossible that there are enough people in the world passionate about garbage collection -- allocated perfectly across the correct geographic regions, mind you -- to fill all of the available positions.

And you base this claim on what?


It's just my opinion, and I have no factual basis. It's an appeal to common sense, but I stand by it nonetheless.


Well, given that people right now tend to mostly do whatever makes them the most money, it's impossible to quantify how many people might like doing gargabe that aren't just because they're doing something else for the money. If no one had to work and only did what they wanted, no one has any idea how the numbers might play out for who wants to do what. It's entirely possible there's plenty of people who might like driving those big trucks enough to do it.

I'm not saying it's likely, but it's certainly not "impossible."


There's lots of work that needs to get done, whether anybody likes it or not. If the intrinsic motivation to do it is not there, people are willing to offer rewards to other people for it to be done.

I feel like your ideals are very far away from a gritty reality of the working arrangement for most people.


Don't mistake my conviction for idealism. What I'm saying is that if "the intrinsic motivation to do it is not there", then we're on thin ice, because people are detached from a basic aspect of life, which is developing the relationships we form to, and through, work.

The foundation of society is people working for each other and for themselves, regardless of whatever so-called "economy" is imposed on top of that. Underneath the money (or in some societies the lack of money), what do you have? People doing work, getting in the flow of life, sharing and receiving with the people around them. That's the basis of living life.


> labor supply dropped by about 10%

Isn't this the exact effect you would want, if you are instituting basic income partly as a response to structural unemployment as a result of automation?

> fewer working mothers can find child care, fewer laborers to mow your lawn, fewer nurses, fewer teachers, etc.

Maybe these jobs start paying more. How is that bad? With basic income, more mothers would be able to stay home with their kids, more people would care for their own homes, and the nurses and teachers we need would see bigger paychecks.

Net, I don't see how society is worse off under that arrangement. It sounds a lot like how life was in this country before huge income disparities made hiring servants normal for people with means.

> It's not just wealthier people who will be worse off - it's everyone.

You assert this, but your comment doesn't successfully back up your assertion.


Isn't this the exact effect you would want, if you are instituting basic income partly as a response to structural unemployment as a result of automation?

If we don't have robots providing child care, cleaning houses, and all these other services, then "structural unemployment as a result of automation" is not actually a problem we have.


Are you suggesting that workers who are laid off in other industries will all find work as servants working for the other people who haven't been laid off yet?

That's not how our economy works. Only a small percentage of the population can afford to hire maids, nannies and gardeners, and even the wealthiest people will only hire a certain number of them. Just using simple logic should show that if 1% of the working population were all able and willing to maintain a staff of 5 full-time servants, this would only be able to absorb 5% of the unemployed population.

Structural unemployment has nothing to do with these servant-type jobs, and there is no way that these kinds of jobs can absorb unemployed workers laid off in other industries.


Only a small percentage of the population can afford to hire maids, nannies and gardeners...

This is true because we live in a situation of scarcity. In other economies (e.g. India) where labor is not so scarce, far more people can afford help.

If people were actually willing to work, but simply couldn't find work, prices should drop so that a much larger percentage of the population could afford maids and nannies.

Also, the unemployment rate in the US is 5.5%, i.e. the natural rate of unemployment. We simply don't have the problem of not enough jobs.


Yes, the middle class in India can afford help, but those servants live in conditions that in the US would be considered scandalous. India is not a good example at all to support your position, for this and a whole host of other reasons.

> We simply don't have the problem of not enough jobs.

I would argue that the proof of the emergence of structural unemployment is not in the current rate of unemployment, but in how long it took for us to return to this level after the housing crisis. Structural unemployment will manifest itself in longer and longer recovery times, always returning to near full-employment as the economy adjusts, until the point at which demand collapses and recovery becomes impossible.

Like the tipping point that climate scientists talk about with regards to climate change, we have to implement a solution before we get to that point, because it might not be possible after. Basic Income, above all, should be embraced as a mechanism to stabilize consumer demand during the periods of radical realignment in the labor markets that will be brought on by robotics and AI.


Yes, India is a poor nation. Virtually everyone there - including the software engineers - is poorer than a burger flipper in the US.

I would argue that the proof of the emergence of structural unemployment is not in the current rate of unemployment, but in how long it took for us to return to this level after the housing crisis.

So your claim isn't that jobs don't exist, but merely that it takes people time to find them.

How is a massive labor force disincentive like BI a solution to this problem at all? We already know that unemployment benefits make this problem worse: https://www.nber.org/papers/w20884 Why would BI - essentially permanent unemployment benefits - help?

If anything the solution to this problem is just making labor markets more flexible. E.g., NGDP targeting, making it easier to hire/fire workers, eliminating employer mandate in Obamacare, discouraging home ownership, etc.

[edit: here is non-paywalled link: http://econweb.umd.edu/~davis/eventpapers/ManovskiiEntension... ]


> So your claim isn't that jobs don't exist, but merely that it takes people time to find them.

No, my claim is that it will take more and more time for new jobs to be created, and for laid-off workers to retrain for them. At the beginning of a recession, the jobs don't exist because they have been destroyed, and they are only re-created because the persistence of demand for goods and services--driven primarily by consumer demand--compels it.

I believe that at a certain point, in some future recession, that process will take so long, and will be so expensive, that supporting the levels of consumer demand necessary for economic recovery will be infeasible without government intervention at a scale even larger than what is envisioned with regards to basic income itself. That is, unless basic income is instituted first.


Aren't you assuming that leisure time is worthless there?

Suppose country A consists of 99 peasants and 1 plutocrat. The peasants work full-time and the plutocrat consumes their entire economic output living a life of fabulous luxury. Country B consists of 100 people who work part-time and live simple lives that they can afford. Country A produces more goods and services and has a higher GDP than country B - let's say twice as high. Nevertheless it is reasonable to consider country B better-off.

Edit: The above is probably conflating some unrelated issues, so let's just simplify: country A works full-time (40hrs/week) and spends their leisure time expensively, country B works part-time (20hrs/week) and spends their leisure time cheaply. Country A's GDP is twice that of country B in the obvious way. Is country A really better off than country B? (If you're going to make a revealed preferences argument about working hours then bear in mind that there are very few less-than-full-time jobs on offer, partly an artifact of the way current regulations treat full- and part-time jobs)


In some ways, yes, country A2 is better off. I personally would much rather work hard and take vacations by airplane to experience other parts of the planet than to work half as hard and have my only leisure options be within a walking/biking radius of where I was born, lived, and died.


Interesting. I've never really got why people enjoy travelling so much - I've done a fair bit but as I get older I'm spending more and more of my holidays in my home country or nearby, and would far rather have a 2-week holiday close to home than a 1-week holiday far across the world.


For me, I enjoy experiencing the different ways other people live, work, and think and the different climates and natural splendor of the world.

The blue waters and great snorkeling of the Caribbean, the rugged landscape and Northern Lights of Iceland, the various cultures and climates across Europe, the stark differences between rain forest and desert. There's a massive variety in the world and I'd much rather experience that (and share that with my wife and kids) than to stay in my ultra-luxe Cambridge/Rt 128 bubble world.


If you don't work as hard you have time to go by bike whereever you want - your biking radius is anything with solid land.


Which is indeed a problem, as I enjoy going to the Caribbean and Europe. (And Central America, which is technically land connected, but 7000 km one-way makes it fairly impractical to vacation there by bike from Boston.)


Except it's not simple arithmetic, because the normal economy doesn't count - cannot assign - a value to work done for yourself or your family.

Someone going out to work and paying a large fraction of their income for child care is counted, whereas someone staying home and looking after their children is not. Only the first has value in an economic sense. Is it the only work that has value in a moral sense?


It's not true to say a stay-at-home parent isn't rewarded in an economic sense. They're rewarded by not having to pay a large fraction of their household income for child care.

It's a tenable line of argument to argue that the opportunity cost of child care - typically less than earnings foregone - isn't as high as the social benefit from taking care of one's own child, but I can't really think of a less efficient means than BI to try to redress that imbalance.


I was arguing about the effect on GDP, where "not having to pay for child care" appears as a negative effect, a smaller GDP.

From a GDP-maximising point of view, it's better for everyone to contract out every aspect of their household than it is to do it themselves. An economy built on taking in each other's washing has a much higher GDP than one where each does their own. Stepping back from GDP makes that look nonsensical.


Is reward the same as not being penalised? I don't feel that's true.


Sure it does. A highly skilled working mother produces $X value per hour, and she can afford to spend $Y < $X on an hour of child care.

In contrast, the unskilled woman who might otherwise work in day care only produces $X value/hour.

By taking the unskilled woman out of the labor force, you've destroyed $Y - $X of value.


Aren't you missing a variable for the cost the unskilled woman pays to have someone watch her children while she's being paid to watch the skilled woman's children?


Why would she do that? She'd just watch her own children at the same time.


Depends what level of income disparity you're operating on, rich people don't share nannies - the nanny's kids go to a nursery or more likely are looked after by a grandparent (maybe in a different country).


I can say this with some experience, rich people definitely hire nannies with children, and those children definitely often stay with the rich kids. Rich people get free playmate service for their child, nanny gets to raise their child in a nice environment and their child gets access to a wealthy social network.

It's even a common trope that shows up in literature fairly often.


You're ignoring the value the children bring to society by growing up and entering the labour force themselves. The highly skilled woman making a lot of money is unlikely to have her child make significantly more than her (regression to the mean).

On the other hand, empowering an impoverished woman to provide higher quality care for her children will significantly increase their upward mobility.


The highly skilled working mother can only spend less than (1 - marginal_tax_rate) * (1 - employer_profit_margin_on_labor) * $X on an hour of child care.

It was this exact calculation (and a high marginal rate) that led my own highly skilled wife to conclude that it wasn't worth working when we had our second child.


Do you have children? By what stretch of the imagination is caring for children an activity best performed by unskilled individuals?


I think you overestimate the training and skill level of most childcare providers.


No, I'm fully aware of the fact that childcare today is often provided by people who are under-qualified for the task.

Which is one reason I think that basic income would broadly improve the level of care given to children. It would enable the people most qualified to give care--children's own parents--to provide that care instead of working excessive hours just to put food on the table.


>Basic income is known to create a large disincentive for work. In previous experiments (Mincome) labor supply dropped by about 10%

So what? Those people spent their time on things they valued more than the money they could earn by selling it. This just shows that they were underpaid for the value of their time through the threat of imminent pain of starvation or homelessness.

The market will adjust and pay those people more if the value they create and the profits reapable from their labor make that paid labor worth it.

Low value jobs will go away.

Some of that freed time will be spent on consuming, no doubt, but much will be spent on longer horizon value adding activities like schooling or starting businesses or more efficient uses like taking care of children.


"Participants who worked had their mincome supplement reduced by 50 cents for every dollar they earned by working." - that is not Universal Basic Income.

"... found that only new mothers and teenagers worked substantially less. Mothers with newborns stopped working because they wanted to stay at home longer with their babies, and teenagers worked less because they weren't under as much pressure to support their families, which resulted in more teenagers graduating."

And that does not sound bad at all and it rather counters the lack of supply of nannies (if there was such).

(Quotes from wikipedia: https://en.wikipedia.org/wiki/Mincome)


Funny thing happens when labor supply drops...prices for labor go up. In this case, the market would determine how much they'd need to go up by to get enough people doing things to meet demand. It may be more than many want to pay, but such is life.


a huge amount of work today is done by people instead of machines because people are cheaper than machines. If you make people more expensive than machines, the machines will do the work, and the people can stick to doing something they actually want to do (like playing with their kids, working on a hobby, or exploring the world)

Look at the response to a higher minimum wage - McDonalds, which typically runs a store with 8 to 10 people at $7/hour discovered that most of those jobs could be automated (with better results) for the capital expenditure equivalent of less than $15/hour. So now there are McDonalds stores that run with 2 people instead of 10. People still get their hamburgers, but now orders are taken by a computer screen, hamburgers are assembled by a machine instead of a person, etc.

Lawnmowers, street sweepers, taxi cabs, factory lines, farms can all be nearly fully automated these days, but it's cheaper to put a person there right now.


I didn't get into this aspect but you're spot on. This upward pressure on prices for certain services could drive innovation into automating them, which benefits society as a whole. It could also transform jobs such that you no longer need a gardener to mow your lawn, but rather a lawn mower drone controller who parks his truck in a neighborhood, and manages a fleet of mowing drones for all his customers there.

This will produce a constant back-and-forth impact on labor markets as jobs are automated, then new jobs are created as a result, and then those jobs are automated. Having the basic income in place allows society to remain functioning while this happens and makes it more able to weather the changes and adapt.


A counter would be that when wage costs go up prices go up as well, right?

FWIW I'm in favor of a UBI to replace almost all other assistance programs.


Is 10% less work necessarily a bad thing? Couldn't this be supplemented with technology via automation?


No, Americans fetishize work.

If the work is so valuable and necessary, compensation should then reflect a price that incentivizes people who are no longer completely desperate for food, housing or healthcare because of a Basic Income.

I speculate that a BI would bring compensation closer to labor's real value, rather than the stagnant wages we see now because people have no other recourse to negotiate higher pay. The elimination an underclass that absolutely needs exploitive work to survive would drive pay higher as well.


Think about all the automation improvements blocked by unions. With UBI you'd likely have much less of that.


Where are you finding a drop of 10%? All I can find is "On the whole, the research results were encouraging to those who favour a GAI. The reduction in work effort was modest: about one per cent for men, three per cent for wives, and five per cent for unmarried women. These are small effects in absolute terms and they are also smaller than the effects observed in the four US experiments, a result that once again confirms the importance of not simply importing US research results and applying them to the Canadian context, with its different labour market institutions, practices, attitudes and social support programs."

From http://archive.irpp.org/po/archive/jan01/hum.pdf

Meanwhile, other studies have shown productivity actually increased when basic income was instituted amongst extreme poverty - http://www.bignam.org/BIG_pilot.html


"The total amount of work hours decreased by only 13%."

https://decorrespondent.nl/541/why-we-should-give-free-money...

Either way, whether it's 13% or 5%, it makes us all poorer.

The Namibia experiment is not remotely comparable. That was a) a transfer of wealth from outside the community into it (closer to imperialism than redistribution), b) poverty in Namibia is not remotely like poverty in the US, and c) a big chunk of the BI in Namibia was directed into investment.

The closest analogue of (c) in the US would be funneling money to rich people (who invest) rather than poor people (who consume).


It only makes us poorer if the 13% work hour reduction is going to something less efficient than work, with regard to overall economic effectiveness.

With mincome didn't they determine that the work hours decreased was dominated by 1) young males entering the work force later due to increased high school completion rate and 2) females talking longer maternity leave?

If thats the case, then its possible that it made everyone richer if over the lifetime more educated workers and more cared for infants are more efficient.

*Note: I actually am a huge skeptic of basic income schemes as the math seems dramatic, but I think a simple "people work less hours" counterargument is overly simplistic.


One can always postulate hard to measure second order effects, such as the ones the Mincome study claims (note that it doesn't actually quantify them, but merely hints as to their direction).

However, it's a bit strange to expect that all the second order effects will happen to point in the direction of our preferred policy. The only quantified effect here - labor force disincentive - has been measured and agrees 100% with economic theory. It also agrees with other related (but not identical) results, namely that welfare/unemployment also has a huge labor force disincentive.

Why are we appealing to unquantified second order effects when the first order effects are measured and shown to be large, shown to be in 100% agreement with basic economic theory, and viewed by many proponents of BI as a desired feature [1]?

[1] https://news.ycombinator.com/item?id=11619712 https://news.ycombinator.com/item?id=11619690 https://news.ycombinator.com/item?id=11619691


Reducing the hours worked in the US by 13% would make us comparable to other civilized countries.


What you left out is that the Mincome program also lowered hospital visits and work-related injuries. Yes, I hear you saying, "of course, less work == less workplace injuries." But what's important is the effect fewer injuries has on productivity. This happened with the 40 hour workweek laws introduced by the New Deal. Fewer injuries, better productivity numbers over the long run. [1] This study was short-lived and should at least be repeated with better controls before we make blanket statements about what will and won't work.

You also gloss over the fact that it allowed mothers to stay home with their children. The benefit to society and productivity of stronger families shouldn't be understated.

Finally, you assume that people would stop cutting lawns, nursing, and providing childcare – why?

1: The Rise and Fall of American Growth: http://press.princeton.edu/titles/10544.html


The price of servants will go up, yes. And the price of prostitutes, too - nobody's thinking about that!


There are many jobs that will need to considerably change - and I think that's a good thing in the end. For example no more restaurant staff working for tips, at crazy hours, without proper days off. That's one I'm familiar with (in the UK though) - these people work in absurd conditions and are so used to it they don't even realise because there's 10 other people lining up to take their position. Your restaurant steak will get more expensive, and it really should.

If someone's doing an effectively-below-minimum-pay job at 30, I hope they just quit if universal basic income is introduced.


It's so strange. It's almost as if people don't work if they don't have to.


> This means that fewer working mothers can find child care, fewer laborers to mow your lawn, fewer nurses, fewer teachers, etc. No matter how much money you give to people, fewer services provided makes us all become poorer. That's simple arithmetic.

This is, in fact, precisely backwards. There are plenty of jobs that people simply cannot do because they cannot make a living at them both through lack of money as well as lack of stability. Social workers, elderly healthcare support, child care, etc. are all very poorly paid and basically not worth doing if you have any other choice.

With a UBI, people can work those jobs for very small amounts of money knowing that they are covered.


This is a fact that I first learned in high school 45 years ago.


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

Not sure where you got your numbers from. Wikipedia suggest that it was not even half that.

>The results showed an impact on labor markets, with working hours dropping one percent for men, three percent for married women, and five percent for unmarried women.


I am wondering how bad the disincentive to work really is. In the microcosm of my family home, our kids have their basic needs (and then some) met, they receive allowances, and yet they still seek ways to earn extra money. My expectation is that there are plenty of humans in our nation (let alone the world) who will have desires that will outstrip the about $10,000 of basic income. For anyone in business fretting on available labor, it seems the costs of wages, benefits, and maintaining a work environment suitable for human activity is a much bigger issue - which are mostly addressed by ever growing use of automation. There's already talk of $15/hr wages spurring on ever more automation at fast-food restaurants and retailers - and that $15/hr push being made largely because of the number of people who receive government assistance while holding down jobs (http://blogs.wsj.com/economics/2015/04/13/get-a-job-most-wel...).

Anyway, per https://en.wikipedia.org/wiki/Mincome, this 5 year study has many qualifiers placed upon why the drop in labor, with the more interesting of these involving child care, education, and mental health: The results showed an impact on labor markets, with working hours dropping one percent for men, three percent for married women, and five percent for unmarried women. However, some have argued these drops may be artificially low because participants knew the guaranteed income was temporary. These decreases in hours worked may be seen as offset by the opportunity cost of more time for family and education. Mothers spent more time rearing newborns, and the educational impacts are regarded as a success. Students in these families showed higher test scores and lower dropout rates. There was also an increase in adults continuing education. ... Manitoban economist Evelyn Forget conducted an analysis of the program in 2009 which was published in 2011. She found that only new mothers and teenagers worked substantially less. Mothers with newborns stopped working because they wanted to stay at home longer with their babies, and teenagers worked less because they weren't under as much pressure to support their families, which resulted in more teenagers graduating. In addition, those who continued to work were given more opportunities to choose what type of work they did. Forget found that in the period that Mincome was administered, hospital visits dropped 8.5 percent, with fewer incidents of work-related injuries, and fewer emergency room visits from accidents and injuries. Additionally, the period saw a reduction in rates of psychiatric hospitalization, and in the number of mental illness-related consultations with health professionals.


Doesn't less participate also increase pay rates? Those who do work will end up making more because there are few people to drive down their wages?


Any lack of production will be made up for easily by eliminating redundant positions in many businesses and automation.


Not only are your numbers misleading (we've dug into that in depth in previous conversations - the students who choose to spend more time on their studies are not producing tremendous, irreplaceable value), but the comparison is absurd. The problem in Great Depression was not that too many people chose not to work because they had sufficient other sources of income - pretty close to the opposite.


Taxes would go up. But previously blocked productivity would be released, and socially desirable but marginal services would become viable.


With high tax rates my perviously released productivity would get blocked though. I sure as hell wouldn't do the work I'm currently doing with a 80% tax rate attached.


That's a significantly more optimistic outlook than the idea that prices would inflate relative to the UBI stipend handed out. Particularly around staples like food, rent, etc.


Why would there be inflation? No new money is being printed to accommodate the extra income for the recipient, those funds are distributed by reallocating money already in circulation


Any redistribution is going to have some upward pressure on prices of goods demanded more by those receiving the redistribution than those who are, in net, paying it, and downward pressure on prices of goods demanded more by those paying the redistribution than by those who are receiving it.

For most goods, the ratio of the new to old price should be less than the ratio of the post-distribution to pre-distribution income of the group demanding the item, though this may not be the case for, e.g., goods where there are monopoly rents being extracted.


WE NEED TO LOWER THE COST OF LIVING

Its unacceptable that food in the US is 2x the cost of that of china, for instance.

http://www.numbeo.com/cost-of-living/compare_countries_resul...


Regulating food safety costs money. I'm happy to pay.


Is that the only driver of increased food costs? Does China have a lot of food related deaths?

There needs to be solid evidence to justify a 2x increase in the cost of food.


You'll have to reduce the value of productivity. Many have tried, but no one has ever pulled it off successfully because it only takes one asshole who realizes the whole scheme is trivially exploitable just by working harder to ruin it for everyone.


What does that even mean?

Productivity decreases costs, not the other way around.

Did you mean to say the value of unskilled labor?

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